70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Real estate
Hanoi office market in Q4/2019 sees launch of only Grade B buildings
Linh Pham 14:55, 2020/01/06
The new launch drives up the total supply of Grade B segment to 1.8 million square meters.

Only Grade B buildings joined Hanoi’s office market in the fourth quarter (Q4) of 2019, totaling the supply of this segment to almost 1.8 million square meters (sq.m).

Two new buildings namely Coninco Tower and Peakview Tower were located in Dong Da District, one of the main office clusters of Hanoi, JLL said in a recent report, giving no additional figure.

However, the leading professional services firm in real estate and investment management said with high construction quality and reasonable prices, the two buildings achieved an impressive occupancy rate in the first quarter of opening.

According to JLL, Dong Da also welcomed the largest amount of new supply in 2019.

Hanoi's total office supply. Chart: JLL 

In the quarter, demand for both Grade A and B submarkets remained stable which was recorded via a higher net absorption from that in the previous quarter, the report showed.

Meanwhile, the occupancy rate of the market continued to increase and reached 93.0%, in which Grade A submarket posted the rate of 94.0%.

The net absorption of Grade A offices was positive, mainly attributed to TNR Tower and ThaiHoldings Tower, the two latest additions to the market. Meanwhile, Grade B buildings recorded higher net absorption than Grade A due to its abundant supply.

Office average rents. Chart: JLL 

In terms of rental, the average rate of both Grade A and B office increased moderately by 0.3% on year during Q4, it leads to a considerable growth of 6% on year, JLL said, noting that positive demand helped sustain the growth throughout 2019, however, the pace started to show signs of weakening toward the year-end period.

By location, during 2019, central business district (CBD) area, in which Dong Da district took the lead, rose faster than the new office clusters including Cau Giay and Nam Tu Liem districts since the majority of supply was located in central areas. In addition, the new additions in the CBD area with high quality also benefited the trend.

Accordingly, JLL said the market is expected to welcome a large amount of new supply in both Grade A and B in 2020, of which Capital Place is the most notable one as it might set new standards for the office market, based on its first-class quality.

Demand is believed to stay steady, with relocation and expansion being the main drivers. However, with a large supply pipeline, landlords should employ a flexible strategy to quickly react to the changes in the market and tenants’ needs, JLL emphasized. 

TAG: Grade A Grade B new launch absorption TNR ThaiHoldings Dong Da District JLL Coninco
Other news
11:39, 2024/05/08
Hospitality real estate attracts remittances: VARS
Remittance volumes will be a new source of demand driving the property market, according to VARS.
13:31, 2024/04/30
Supply constraints keep housing prices high: expert
Rising value of Hanoi's residential segment calls for measures to reduce property prices.
15:16, 2024/04/15
Real estate prices are on the rise in downtown Hanoi
Demand for retail space in alleyways is rising as small and medium-sized enterprises seek to cut costs, given that most of their revenues come from e-commerce platforms.
19:14, 2024/04/09
Overseas Vietnamese excited about opportunities to buy local property
When the amended Land Law comes into effect in January 2025, more overseas Vietnamese will be able to own local property.
16:27, 2024/03/28
Vietnam real estate market in 2024 shows signs of recovery
In 2024, the housing market shows more positive signs than in 2023, but there will be differences in the timing of the recovery across segments.