Coworking office space supply in HCMC up 16%, rents down 35%

Ho Chi Minh City has seen a 16% increase in leasable floor space in the serviced office and coworking sector this year but a commensurate fall in overall occupancy and asking rents, according to a new study by property services firm Knight Frank Vietnam.

July 2023 saw the southern metropolis offering a total of 95,300 m2 of space, 12,800 m2 more than last year’s same period, with the average occupancy of 81%, down five percentage points from a year earlier, the company’s 2023 HCMC flex space study shows.

Average asking rents for private offices within flex spaces have fallen by 34% to $209 per person per month, while monthly hot-desk rates have fallen by 35% to $139, likely due to the increase in supply, notably in non-central business district (CBD) areas.

Another finding in the new report is the 16% growth in floor space reflects broad optimism in a sector that – according to the sector’s leading player, The Sentry – is developing purpose-built spaces to attract and address the needs of the burgeoning creative industries.

This includes design, music and video production, and media. The player’s new Sentry P location in Thao Dien ward next to the Saigon Bridge is furnished using recycled and sustainable materials.

The facility boasts Fitwell Certification, an international green building certification system that focuses on improving, enhancing, and safeguarding the health and wellbeing of tenants and residents in office buildings, multifamily residential buildings, and retail space.

The Sentry and other leading brands are bucking the downward occupancy trend in the sector, with floor space take-up typically above 90% across its properties, according to the Knight Frank study.

“A reputable brand, impressive office facilities and amenities, stylish design, and prime locations are seen as the recipe for success for co-working operators,” said Leo Nguyen, director of occupier strategy & solutions at Knight Frank Vietnam.

Many companies are also looking for the flexibility to scale their businesses up or down, and co-working and serviced office operators are well positioned to offer this flexibility, he added.

In terms of a global trend of back to the office, companies in Vietnam are broadly looking for ways in which remote or hybrid working models can be made to fit with the local environment, the country’s younger workforce, and market dynamics, he noted.