Ho Chi Minh City office rents continue rapid rise

CBRE’s comments on the southern hub’s property market were given last week in a press briefing, minutes before the opening ceremony of its new offices in Vietnam.
It detailed that the average rent per square metre per month (including service charge and VAT) for grade A spaces ranges from $25-28, grade B from $19-22 and grade C from $14-17.
CBRE’s managing director Marc Townsend was quoted by CBRE global rent report as saying that grade A office rents in Ho Chi Minh City were now the fifth highest in Asia with only Tokyo, Mumbai, Hong Kong and Seoul more expensive (refer to table below left).
Looking ahead to the fourth quarter of 2003 and the year 2004, Townsend said: “Office rents will be on the rise due to high demand.
“Demand is increasing due to the number of newly-established companies, relocation and expansion from multinational companies that have a long term commitment in Vietnam.
“Demand is also coming from local companies that are expanding their businesses and require international standard offices,” he said.
“We are seeing foreign investors, who left their already-invested property projects behind due to the regional financial crisis in late 1997, return. This is a positive sign,” he said.
Regarding the retailed market, CBRE said most retail centres in the central business centre were achieving high occupancy rates of nearly 100 per cent.
“The market is now seeing a new trend of luxury and high-end product in response to higher local spending power and international tourist arrivals,” the report read.
The Caravelle Hotel is offering four boutique retail floors with an average rental rate of $60 per sqm per month; 50 per cent was leased at the soft launch.
There is a wholesale retail market located in an air-conditioned commercial centre. Five-floor An Dong Plaza in District 5 (including the mezzanine floor with a total net area of 7,500sqm) is expected to be completed by next April.
On the serviced apartment market, CBRE said there were 13 grade A and B serviced apartments located in Districts 1 and 3 with occupancy rates of over 90 per cent due to the growing number of expatriates employed by multinationals on project and consultancy work.
The average rent for grade A ranged from $1,800 to $2,000 for one-bedroom units, $2,200-$2,500 for two-bedroom units, and $3,000-$3,600 for three-bedroom units.
According to the consultant, there is also a trend of moving from separate villas into more modern serviced apartments with better facilities due to the change in the type of expatriates being posted to Vietnam, now younger, project-focused specialists.
The property consultant also said that a high-quality condominium market was emerging with more well-designed projects located in the CBD.