Hanoi office occupancy rate reaches 87% in Q4/2022
The occupancy rate of Hanoi's office space was 87% in the fourth quarter of 2022, up 2.1 percentage points year-on-year.
Only one Grade B project with 22,350 square meters, Epic Tower, entered the capital city's office space market last year. The 30-storey office building is located at 19 Duy Tan street, Nam Tu Liem district in the west of Hanoi.
The absorption rate of the city's office market in 2022 was quite stable compared to 2021. The first half of 2022 witnessed good office demand, with recorded absorption exceeding 2021’s performance. However, in the latter half, tenants, especially SMEs, tended to withhold their expansion plans or scale down due to gloomy economic prospects into 2023.
Overall monthly rent remained at $24.75 per square meter in Q4, stable quarter-on-quarter but recording a 5.5% year-on-year increase due to the ongoing renovation trend at some older buildings to keep up with the competition, along with the entrance of new good-quality supply.
Overall occupancy recorded at 87% in the period, up 2.1 percentage points year-on-year, but slightly decreased by 0.7 percentage points quarter-on-quarter in part due to lower tenants’ sentiment in the last six months.
Compared to the previous year, both Grade A and Grade B office space increased in gross rent in 2022 (4.5% and 6.5% year-on-year respectively). This is in part thanks to the entrance of new Grade B supply with above-average rent, along with renovation and rent adjustment at multiple projects across the city.
While Grade A office space maintained rent growth in Q4 (up 0.62% quarter-on-quarter), a slight decrease of 0.35% quarter-on-quarter was recorded in Grade B rent.
Occupancy of Grade A and Grade B both increased year-on-year by 2.7 percentage points and 1.7 percentage points, respectively, but grade B’s occupancy slightly decreased by less than 1 percentage point compared to the previous quarter’s performance. Toward the end of the year, tenants were more cautious and hesitant to carry out their expansion plans due to the gloomy economic outlook.
Except for a few large international companies who can afford to relocate and/or expand to new, high-quality office spaces, most tenants are likely to remain at their current location or even downgrade to save costs.
In 2023, multiple projects are expected to enter operation, including those that have been completed at the end of 2022: Techcombank Tower (grade A, 8,104 sqm available for lease, CBD), Lancaster Luminaire (grade A, 21,400 sqm, secondary), BRG Diamond Park plaza (grade B, 31,205 sqm, secondary); Lotte Mall Hanoi (grade A, 20,500 sqm, secondary); Vinacomin Tower (grade B, 72,000 sqm); and Intracom Riverside (grade B, 24,000 sqm).
Into 2024, most supplies are of a smaller scale, ranging from 13,000-22,500 sqm, except for Shilla Hotel (grade A) with more than 47,000 sqm of expectant office space.
Currently, only three projects are expected to be completed in 2025: Landmark 55, Grandeur Palace, and Sunshine Empire contributing a total of 144,000 sqm of expectant office space. All of these projects are in the city's western part.
In the short term, demand for new office space may slow down as long as caution and hesitation remain the watchwords. High-quality supply will still be desirable among tenants who can afford expansion and upgrade.
Although tenants are willing to move out of the central business district (CBD) area to look for larger office spaces, strategic locations continue to play a significant role in office selection criteria. Good-quality buildings in too-distant locations are maintaining slow absorption.
Currently, Techcombank Tower is the only new supply expected to come online within the upcoming three years due to the limited land bank in the area. Meanwhile, new urban areas in surrounding regions (for instance, Starlake Tay Ho Tay NUA) are forming and expected to eventually emerge as new major business hubs in the future, partly alleviating the pressure on the CBD.
Due to limited space in the CBD, the West and secondary area are leading in terms of future supply, with multiple new projects expected in the upcoming three years.
Trends accelerating Hanoi's office market
Renovations and upgrades: Older buildings in prime locations have now begun the process of renovation/refurbishment to improve building quality and retain tenants.
Flexible workplace demand: Uncertain economic outlook has slowed down office expansion toward the end of the year. Interest in work-from-home, virtual office, and coworking space is likely to increase as companies consider options to save costs.
Sustainability: As wellness and sustainability become corporate priorities, more developers and tenants are considering green buildings and ESG performance. Greening and sustainability are also incorporated into office design.
- Read More
Vietnam becomes Australia’s fastest-growing inbound market
The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.
Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7
Study finds shift in Thai consumers’ spending patterns
Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).
Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7
Energy security, digitalization key to Indonesia's economic growth
The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.
Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7
Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM
Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.
Politics - Fri, November 1, 2024 | 9:25 pm GMT+7
Vietnam, Qatar look to tap potential for energy, oil & gas collaboration
Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.
Politics - Fri, November 1, 2024 | 9:02 pm GMT+7
Thailand bans export of raw palm oil until December
Thailand's Department of Internal Trade has temporarily banned the export of raw palm oil due to reduced production caused by drought and plant diseases.
Southeast Asia - Fri, November 1, 2024 | 8:31 pm GMT+7
Envision Energy to build $420 mln wind power plant in Vietnam from June 2025
Envision Energy Singapore Pte Ltd, under China-based Envision Energy, aims to kick off construction of the 300-MW Envision Nam Po wind power plant in Vietnam’s northern mountainous province of Dien Bien in June 2025.
Energy - Fri, November 1, 2024 | 8:30 pm GMT+7
Indonesia to ban plastic waste imports from 2025
The Indonesian government will start imposing a ban on the import of plastic waste from the beginning of next year, according to Minister of Environment Hanif Faisol Nurrofiq.
Southeast Asia - Fri, November 1, 2024 | 8:29 pm GMT+7
Islamic economy makes up 48% of Indonesia’s GDP
The contribution of Islamic business activities to Indonesia’s GDP has been estimated at 48%, local authorities reported at the 11th Indonesia Sharia Economic Festival (ISEF).
Southeast Asia - Fri, November 1, 2024 | 8:28 pm GMT+7
Restructured construction giant Tracodi gets set to execute ambitious plans
After changing its name and restructuring as a group, Tracodi Construction Holdings JSC (HoSE: TCD), a member of Bamboo Capital Group (HoSE: BCG), has completed a leadership shake-up and is poised to achieve rapid growth.
Bamboo Capital - Fri, November 1, 2024 | 4:43 pm GMT+7
Philippines requests companies to pay for plastic waste treatment
The Philippines expects its "Extended Producer Responsibility" (EPR) that came into force last year will help it curb plastic waste
Southeast Asia - Fri, November 1, 2024 | 4:30 pm GMT+7
Indonesia warns of rising online terrorism
Indonesia's National Counter-Terrorism Agency (BNPT) has warned of a shift in terrorism tactics, moving from public attacks to online platforms that target vulnerable groups, particularly women and children.
Southeast Asia - Fri, November 1, 2024 | 4:29 pm GMT+7
Singapore establishes global fintech network
The Monetary Authority of Singapore (MAS) on Wednesday announced that it has established a “Global Finance & Technology Network” (GFTN) to propel Singapore’s reputation as a premier global fintech hub into its next phase and enhance global connectivity.
Southeast Asia - Fri, November 1, 2024 | 4:28 pm GMT+7
Nokia, Viettel deploy 1.2 Tb/s optics transmission in Vietnam, to help 5G growth
Finnish giant Nokia and Vietnamese telco Viettel have rolled out high-capacity optical network after achieving an optics transmission speed record of 1.2Tb a second per wavelength in Vietnam.
Companies - Fri, November 1, 2024 | 3:40 pm GMT+7
Korea SK Group sells 76 mln shares of Vietnam’s Masan, no longer major shareholder
South Korea’s chaebol SK Group has sold 76.28 million shares of Vietnam’s conglomerate Masan, lowering its ownership in Masan to 3.67% of the charter capital and 3.86% of the voting shares.
Companies - Fri, November 1, 2024 | 3:16 pm GMT+7
HCMC-based Bamboo Capital's energy arm fulfils 98% of profit target in 9 months
BCG Energy JSC, a subsidiary of Vietnamese private conglomerate Bamboo Capital Group, posted a consolidated after-tax profit of VND504 billion ($19.94 million) in the first nine months of 2024, fulfilling 98% of the year's profit target.
Bamboo Capital - Fri, November 1, 2024 | 2:32 pm GMT+7
- Travel
-
Indian billionaire to visit Vietnam’s Ha Long Bay with 4,500 employees
-
Vietnam in talks on visa exemptions with 15 countries to boost tourism
-
Foreign businesses in Vietnam urge relaxation of visa, work permit requirements
-
AI can be a game changer for Vietnam tourism
-
Google Doodle honors world's largest cave Son Doong
-
Four Vietnam airports to suspend operations as typhoon 'strongest in a decade' approaches