Successful leased offices still rely on basic values

Quality and flexibility are key to successful buildings for lease   Photo: Duc Thanh

According to Nigel Smith, managing director of CBRE Hong Kong at the office leasing seminar in Vietnam last week, the relationship between owners, the buildings and the tenants was a business strategy that needed to be clearly understood.

“You only get effective business from an office building when you can balance these elements,” Smith told VIR.

Smith’s comments were made in the context where landlords in Hanoi are suffering from tougher competition due to huge oversupply.

“Of most importance is cost effectiveness. That means if the landlord wants to successfully maintain their buildings, it is about finding the right rental level but at the same time they also have to create the right environment. Creating this environment sometimes will increase the rental fees, so finding the balance between rental and occupancy is something building owners should be aware of,” he said, adding that landlords should think about branding and how to make the property stand out from the crowd.

According to Smith, during the golden period for office leasing in the 1980s and 1990s, investors often emphasised strategic location to raise the value of their buildings. However, in the recent context, they have switched to stressing stability and the working environment.

“One way to do this is in the arrival experience, which has become vital for companies when considering real estate options. The way people socialise and work is completely different today and landlords who design their buildings to accommodate this new breed of employee will ultimately attract more tenants,” Smith said.

“Containing and reducing costs is still common practice and for many companies they can only achieve this through either a reduction in floor area, a drop in quality or decentralisation,” he added, noting that savvy developers can help tenants achieve savings simply by providing a more efficient working environment, not just on the office floors but also in the common areas and facilities a project has to offer.

Developments such as the Lotte Hanoi Centre and Vietcombank Tower and Viettel Centre in Ho Chi Minh City have put Vietnam in the   property spotlight this year.

Vacant office space in Hanoi reportedly accounts for more than 30 per cent of the total 1.6 million square metres available. Meanwhile, the total office space by 2016 would double Hanoi’s current office supply.