Vietnam office rental market remains cheap
The Savills Prime Office Cost (SPOC) Index presents a quarterly snapshot of occupancy costs for prime office space throughout the world, as provided by our expert, local tenant representation professionals.
Hong Kong remains the most expensive prime office market in the world for occupiers. The impact to international occupier office expense structures may be seen below.Global occupancy cost volatility increased during the third quarter of 2017 as compared to a stable second quarter. Face rent increases drove up recorded costs in Paris, Frankfurt, Amsterdam, and Brussels as “post- Brexit” requirements materialized and leases were executed by occupiers in these markets. A stronger Euro also helped increase occupancy costs as recorded by our index.
Across the Americas, a weaker dollar impacted recorded occupancy expenses in Toronto while the US markets continued to trend in favour of occupiers with the exception of San Francisco.
The Hong Kong market has consistently been ranked as the most expensive prime office market in the world for occupiers. Global co-working / office suite providers have largely impacted the market in 2017 due to multiple significant acquisitions in a variety of buildings and across most office submarkets. This is recognised as a new trend of Hong Kong co- working market as previously providers mainly focused on small size operations. The recent influx of major providers such as WeWork, Naked Hub and Spaces has seen some interesting developments in the market as co-working providers are now making multi-floor acquisitions, and traditional serviced office providers are starting to feel challenged in their value proposition and identity.
Discussing Viet Nam prime office market, Ms. Hoang Dieu Trang, Senior Manager Commercial and Residential Leasing Savills Hanoi said: “In what is now considered one of the most expensive regions in the world, Viet Nam offers prime office at a relatively low cost. Savills Asia Pacific Prime Benchmark 2H/2017 shows Ha Noi and Ho Chi Minh city occupancy costs at 38.8 USD/m2 and 52.2 USD/m2 respectively. Being considerably lower than Taipei, Sydney, Singapore, Seoul, Shanghai and Hong Kong etc., certainly helps confirm our competitive advantage in the eyes of global occupiers. However, with low vacancy rates in many grade A buildings and limited new supply of prime office space, rents are likely to increase over the next 2- 3 years.”
“Co- working space is a recently emerging trend and similar to the early stages of this concept in Hong Kong, it’s still fairly small here. However, growing cooperation between international developers and local co- working office providers is expected to increase the scale and quality in shared office space, which will help facilitate and nurture growth in this sub segment.”
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