Prices of Grade A offices in the capital have been forecast to rise over the next three years due to low supply (Photo: VNA) Hanoi (VNS/VNA) - Prices of Grade A offices in thecapital have been forecast to rise over the next three years by seven percentannually due to low supply.
Do Thu Hang, Director of the Research and Consultancy Departmentat Savills, Hanoi, said Grade A offices accounted for 28 percent ofthe total supply of 1.8 million sq.m2 of office rentals in the city.
Currently, Grade A office rental costs are 31 USD per sq.m per month onaverage. Some offices in the inner city cost 35 USD.
“It is the highest price in seven years,” Hang said, adding that inthe high-end office catalogue, Hanoi ranked fourth in terms of capacity andthird in terms of rental prices in the country.
While high-end office spaceattracts 60 percent of foreign tenants thanks to strong developments in FDI andM&As in Vietnam, there are not many options left now. In the inner city,due to limited space for building due to local regulations, manyoffices are old and lacking modern utilities.
Offices in the Old Quarter were unlikely to be upgraded in the next 10year, according to Savills, so in Hoan Kiem and Ba Dinh districts, therewould continue to be a shortage, so tenants are being forced to move into newareas in the west of Hanoi.
At the same time, Grade B offices with the highest capacity and occupationrates of 94-95 percent have remained stable with rental price of 18 USD persq.m per month, an increase of 1 percent per year.
Savills Vietnam stated that co-working spaceswere becoming increasingly popular thanks to their flexibility interms and hiring services. Co-working spaces have attracted a lot ofstart-up tenants and would draw others looking for offices with a varietyof rental solutions.
In Hanoi, co-working spaces are increasingly popular with many differentbrands such as Regus, Up, Toong, Cogo, Tiktak, CEO Suite, Dreamplex andWeWork.
Over the past twelvemonths, Up has opened four new locations with a total size of about 15,500sq.m; Toong has opened three new locations covering about 7,000 sq.m andCogo has also opened five new facilities with a total area of about11,500 sq.m.
According to Savills,innovation in real estate had continued after realty technology (Proptech)started to attract up to 1 billion USD per month globally./.
VNA
