Office demand sees high rise in rentals

The office market is recovering from the Asian crisis

Released last week, the report said the capital city’s office buildings were on average 95 per cent full at the end of the second quarter.
After the economic crisis, Hanoi’s office buildings went from being almost full to only 40-50 per cent occupied.
Average rental prices however, have yet to recover from the crisis when a square metre fetched on average $30 per sqm. The report said average monthly rental was now $19 per sqm.
Private-sector demand combined with a lack of new office space was driving up occupancy rates, the report said.
“Due to the growing demand for office space and given that occupancy rates of all office buildings in Hanoi are reaching their limits, the rental rates are expected to continue increasing.”
Buildings that charge on average per month $12.10 per sqm, known as grade C buildings, are 98 per cent occupied thanks to high demand from small and medium enterprises, the report said. Newly-opened grade C buildings in Hanoi include the Thang Lang Ford and No. 14 Lang Ha buildings.
Grade A and B buildings are also doing well with occupancy rates of 96 per cent and 95 per cent respectively. On average, grade A buildings charge $24.20 per sqm per month. But the report said building in this sector had been particularly slow.
While the crisis has discouraged new developments, some investors have recently recommenced long-delayed projects. Among them was Ocean Park, to become the largest office building in Hanoi when it opens early next year.
“We expect that without other new office buildings in Hanoi, [Ocean Park] will have a high occupancy rate when it opens next year,” Hanoi Property Management director Nguyen Hong Minh said last week.
Other large office buildings such as the Ever Fortune Plaza in Ly Thuong Kiet Street, the Opera Business Centre in Trang Tien Street, and the Commercial Centre in Ba Trieu Street are expected to open in the next two years.
and Hoa Binh Towers in Hoang Quoc Viet street are all expected to open in the next two years.