Average rentals and occupancy increase in all grades quarter-on-quarter.
Hanoi’s office market witnessed better performance in the first quarter of the year as average rentals and occupancy increased across all grades, according to the latest Savills report released on April 4.
In the first quarter one new project entered the market, supplying approximately 40,000 sq m.
The capital’s office stock increased 5.5 per cent quarter-on-quarter and 8.7 per cent year-on-year. In 2016 nine projects will come online, providing approximately 127,000 sq m, Savills forecast.
Compared to the previous quarter average rentals and occupancy increased across all grades. In rentals, Grade A grew 0.2 per cent quarter-on-quarter, Grade B 1.8 per cent and Grade C 2.1 per cent.
In occupancy, Grade A was up 0.4 percentage points (ppts) quarter-on-quarter, Grade B 0.6 ppts and Grade C 0.1 ppt. The performance of Grade A in the CDB improved compared with the fourth quarter of 2015, with increases in both average rentals and occupancy, while the performance of Grade A in non-CBD areas was stable.
Vietnam’s office market will see good performance in the time to come, according to Mr. Christopher Marriott, CEO of Savills Southeast Asia. He pointed out that the country’s office market has a lot of growth potential compared with other markets in the region. While commodity and financial markets in countries such as Singapore and Malaysia are slowing down, Vietnam’s manufacturing market is very strong, driven by the appearance of many Japanese companies coming to Vietnam.
The strong growth in manufacturing investment will contribute to increased demand for office for research activities. “Vietnam is not just a location for manufacturing but also a location for research and development (R&D) activities,” Mr. Marriott said.
In the retail segment, the Savills report showed, average rentals and occupancy decreased. In serviced apartments, occupancy and average room rate (ARR) fell while the hotel segment recorded soft performance in the first quarter.