Demand and rental prices are increasing.
According to the rental market report by Batdongsan.com, in the fourth quarter of 2022, the level of interest in rental properties, as reflected in online searches on their system, increased by 103%. Specifically, searches for office space increased by 244%, searches for street-front houses increased by 263%, and searches for apartments and boarding houses increased by 57-84% respectively.
Office space for rent remains an attractive investment channel.
For the office rental segment, the recovery trend has also been evident with high occupancy rates and a slight increase in prices. In Q4 2022, the overall office occupancy rate in Hanoi increased by 1 percentage point quarter-on-quarter and 7 percentage points year-on-year.
Regarding rental prices, Grade A properties commanded the highest rates, reaching VND 852,000/ m² /month, a 4% increase quarter-on-quarter and an 11% increase year-on-year. Similarly, Grade B and Grade C rental rates also increased by 6% and 7% quarter-on-quarter, respectively, due to improved rental prices in some projects.
Ms. Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi, commented: “About 5-7 years ago, the investment cost for a Grade A office building only ranged from 600-700 USD/ m² , but now, to build a Grade A building with international standards, the investment cost can reach 1,000 USD/ m² , or even 1,600 USD/ m² .”
However, price increases and occupancy rates are not the story of the entire market. While rental prices in the Hanoi office market did increase in 2022, this upward trend was mainly seen in high-quality projects.
For example, the Peakview Tower office and commercial complex. Located in the new administrative center of Dong Da district, with 21 above-ground floors and 3 basement floors, it boasts a high-quality office system, modern facilities and equipment, along with convenient supporting functions such as auditoriums and restaurants. Peakview Tower consistently maintains a high occupancy rate.
An attractive investment channel.
Currently, market demand remains strong, particularly from businesses in sectors such as information technology, manufacturing, finance, banking, and insurance. These are all segments where clients have very high technical standards for the office spaces they rent.
Compared to 2022, the office market in 2023 is expected to continue to see positive activity. Many businesses consider the Vietnamese market a bright spot in the economic development of Southeast Asia. Therefore, entering 2023, the office market remains an attractive investment channel.
Peakview Tower is a mixed-use complex comprising offices and commercial services.
According to experts, office space is one of the most profitable investment segments. When a building achieves an average occupancy rate, the return on investment is quite good. Furthermore, office tenants typically sign long-term contracts. Cash flow is therefore stable, even under adverse conditions such as epidemics or natural disasters like the recent COVID-19 pandemic. A representative of the investor of the Peakview Tower office and commercial complex stated that even during the months of the complex COVID-19 pandemic, the occupancy rate at Peakview Tower consistently remained above 90% and was largely unaffected.
Therefore, office space rentals remain a stable investment segment, especially for investors with strong cash flow and financial resources. With a significant supply of quality office space in the future, experts believe that rental prices in the capital city will continue their upward trend.
PV
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