CBRE: HCMC office rents to remain stable

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The real estate services firm has been tracking 175 new small and medium-sized mixed use commercial buildings in the southern economic hub, said Greg Ohan, national director for office services at CBRE Vietnam. Half the buildings are being built by State-run companies and 50 per cent are ready to be occupied.

Ohan said the tracking fund helps large tenants planning for an occupancy solution and that the market would remain tight until the end of 2014. “As a result, rent levels will remain stable until at least the first quarter next year when the next wave of supply comes online.”

In the first quarter this year, only one new Grade B office building is slated to be finished in the city. The MB Sunny Tower on Tran Hung Dao street in District 1 is opposite the five-star hotel Pullman Saigon Centre.

During 2013, unlike the Hanoi market where Grade A office supply continued to rise, particularly in outlying districts, the Ho Chi Minh City market was stable with limited new Grade A and Grade B office supply in both the CBD and further districts, Ohan said.

According to CBRE, the southern market offers few options for multinationals seeking international standard and quality buildings with large availability until the year-end. The reason is that in the CBD, just seven Grade A buildings and three Grade B buildings are able to provide 1,000 square metre spaces at adjacent levels. In particular, the Union Square complex is converting serviced apartments into offices.

As for last year’s leasing, the tracking fund showed the top five most active sectors were technology, manufacturing, finance, education, and retail. When it came to countries, Japan held the lead. Ohan said the statistics also showed relocation and expansion was and continued to be the major driver and this was expected to last through the end of this year.