South Korean businesses prioritize Hanoi for setting up an office when deciding to invest in Vietnam.

Capital Place 29 Lieu Giai project in Hanoi. Photo: Capital Place

Hanoi, with the vision to be Asia’s innovation hub by 2045, is an attractive destination for the South Korean business community. 

South Korea’s Samsung, the leader in terms of foreign investment capital in the north of Vietnam, set up its two largest manufacturing and technology development centers in the northern provinces of Bac Ninh and Thai Nguyen, the neighboring localities of Hanoi. 

According to real estate consultancy Savills Vietnam, office space by South Korean companies in Hanoi is 60% higher than in Ho Chi Minh City (HCMC).

Meanwhile, the office space leased by Japanese companies targeting the manufacturing sector is roughly equal in both cities, showing that they see the potential and business scale in both Hanoi and HCMC.

Most companies from the two Asian countries leasing premium office are operating in fields of tech, property, manufacturing, finance and insurance.

The office supply in the city hasn’t met the huge demand of businesses, according to Hoang Nguyet Minh, Director of Commercial Leasing of Savills Hanoi. “However, they may look for Grade A offices in the West or the mid-town for a wide range of flexible options,” she told Hanoitimes. 

Hanoi market witnessed prime office segment expanding, from focusing on the central business district (CBD) Hoan Kiem area, to two non-CBD areas including the mid-town (accounting for 38% of total Grade A office supply) and the West (35%) over the past 10 years. 

Though the rent in two new areas is lower than the CBD, tenants enjoy certain benefits and the high-quality of the buildings. “This made lease price in two areas increase compared to the previous years,” she said.

Source: Savills Vietnam, May 2021

By the end of quarter one (Q1), Vietnam’s office market recorded positive signals of recovery. 

Hanoi saw the launch of new prime office projects including Capital Place, jointly developed by CapitaLand Vietnam and Mitsubishi Estate Asia, Thaiholdings Tower invested by the Vietnamese Thaiholdings, and Leadvisors Tower developed by LeadvisorSanei Hospitality Holdings (a joint venture between the Vietnamese Leadvisors Capital Management and the Japanese Sanei Architecture Planning Co., Ltd).

By 2023, the city will have more Grade A projects concentrating in Ba Dinh district (situated in mid-town area) and Cau Giay district in the West. The average rent is expected to increase up to US$35 - US$37 per square meter per month.