Hanoi’s office market increasingly attractive to foreign tenants: Savills Hanoi

Illustrative image (Photo: VNA)

Hanoi - Hanoi’s office market is said to be more attractive than its counterparts in other Southeast Asian cities and even in the Asia-Pacific region because of cheaper rentals and greater supply, according to real estate consultants Savills Hanoi.

It is also believed to possess the factors necessary for it to develop further in the future.

According to the director of Savills Hanoi, Matthew Powell, Vietnam is a target market of multinational companies, especially those operating in technology, financial services, and life insurance.

Hoang Nguyet Minh, commercial leasing director at Savills Hanoi, said the capital welcomed three Grade A office projects in the fourth quarter of 2020 and the first quarter in 2021 - Capital Place, with 93,000 sq m, Thaiholdings Tower with 23,000 sq m, and Leadvisors Tower with 18,000 sq m.

Occupancy at Grade A buildings stood at over 80 percent in the period, she added.

As of the end of the first quarter of this year, the total office area available for leasing in the market amounted to more than 2 million sq m, a 10 percent increase year-on-year.

Grade A posted the highest growth, of 24 percent, while the figure for Grade B was 9 percent.

Foreign direct investment (FDI) directly influences the number of foreign tenants and has been on the rise in recent years, except in 2020.

Vietnam attracted 38 billion USD in FDI in 2019 - the highest in a decade - then 28.5 billion USD last year. The figure for the first quarter was 10.13 billion USD, up 18.5 percent year-on-year.

Over 70 percent of tenants in Hanoi are local businesses and those from Japan, the Republic of Korea, the US, and Singapore, and the figure is predicted to continue to increase in the time to come.