Office rental prices in Thu Thiem increase against the market trend

HCMC While the entire market is decreasing, office rental prices in Thu Thiem are still increasing, catching up with prices in District 1, higher than District 3 and other inner-city districts.

Savills Vietnam has just released its latest report showing that the office market has a new factor, Thu Thiem, with positive developments while other areas show signs of adjustment. Specifically, office towers in District 1 have an average rental price of more than VND1 million per square meter per month, and Grade A offices have a rental price decrease of 2% quarterly and annually. Similarly, District 3 also recorded a 2% decrease in rental prices.

However, Thu Thiem is an exception compared to the rest of the office market, with rental prices increasing by 8% year-on-year, higher than in the inner city districts. New Grade A+ office towers with modern designs and "softer" rental prices are also emerging here compared to District 1. Office occupancy in Thu Thiem reached 99%, almost reaching 100%, the highest level in the market today, up 5% quarter-on-quarter and 13% year-on-year due to low supply.

Data from Cushman & Wakefield, a multinational research firm, also shows that in the first quarter, office rents in Thu Thiem reached $38 per square meter per month, breaking out of the more popular office group compared to the rest of the market. This average price has remained stable quarter-on-quarter and increased slightly year-on-year while the overall market has shown signs of adjustment within a narrow range.

A Grade A office building in Thu Thiem is set to open this quarter. Photo: Trung Tin — A Grade A office building in Thu Thiem is set to open this quarter. Photo: *Trung Tin*

Explaining the above developments, Savills said that this area is gradually forming a new center, attracting much attention from tenants. The traffic infrastructure in Thu Thiem conveniently connects to the old center (District 1) while the rental price is quite competitive compared to class A and class B office buildings throughout the city.

In addition, office buildings in Thu Thiem are all aiming towards green offices according to international standards, integrating technology, design and reasonable space arrangement to help save 20% of rental area compared to office models designed according to old standards.

In the second and third quarters, Cushman & Wakefield said the Thu Thiem area will welcome new Grade A supply officially coming into operation with asking rents of up to USD 52 per square meter per month. This new rental price milestone is approximately equal to the average rental price of Grade A and B offices in the core area of District 1.

Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, analyzed that the strengths of office projects in the new urban area of Thu Thiem are modern design, taking into account the health protection factor for office workers, and are all located next to the old central core, with convenient traffic connections to the administrative and financial area of District 1.

Ms. Trang added that in the future, with high-quality investment buildings, modern services and utilities, Thu Thiem will be a direct competitor to the old downtown area and the remaining districts of Ho Chi Minh City. Currently, the floor area of office towers in Thu Thiem can meet the demand for space up to 1,600-1,800 m2 on a floor, while District 1 is not easy to find office towers that meet the demand for space rental of more than 1,000 m2 on a floor.

Vu Le

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