Experts note a slight downward trend in office rental prices during the 2022-2024 period, as landlords flexibly adjust prices to retain tenants and attract new ones, creating many changes in the office rental market in Hanoi and Ho Chi Minh City.
The office leasing segment is emerging from the U-shaped trough with positive recovery. However, the rapid increase in supply, coupled with corporate health issues, is intensifying competition.
Over the next three years, CBRE forecasts that office supply will reach nearly 170,000 square meters in Hanoi and over 100,000 square meters in Ho Chi Minh City. By 2030, this figure could reach over 600,000 square meters in Hanoi and over 300,000 square meters in Ho Chi Minh City, creating intense competitive pressure for landlords.
The wind changes direction
Competitive pressure is causing a shift in the office market. Whereas office landlords used to hold the upper hand in negotiations, now, with a diverse supply, tenants are the ones with the advantage when negotiating contracts.
Ms. Hoang Nguyen Minh, a senior expert at Savills Hanoi, believes that the abundant new supply will give tenants more choices, while also increasing competitive pressure on developers in terms of rental prices, building quality, and other leasing incentives to attract customers.
In fact, in 2024, the Grade B office segment with favorable leasing policies is experiencing higher occupancy rates. Specifically, according to CBRE, the Grade B segment reached nearly 45,000 square meters last year, double the absorption rate of 22,760 square meters recorded in the Grade A segment.
Conversely, with rental prices continuing to rise, the vacancy rate for Grade A office space in Hanoi increased from 20.71% in 2023 to 24.41% in 2024. Many new buildings in the Ba Dinh, Dong Da, and western areas, with a large supply entering the market, led to high vacancy rates during the initial phase of operation.
Despite increasingly fierce competition, office rental prices in Hanoi and Ho Chi Minh City continue to rise significantly. Cushman & Wakefield forecasts that recovering demand will cause office rental prices in Hanoi to increase by more than 21% and in Ho Chi Minh City by 51% by 2025.
The upward trend in office segment prices is driven by a positive recovery in leasing demand from late 2024. This is when leasing demand at many corporations surges, as they can negotiate better prices and enjoy more attractive incentives. This trend helped the net absorption rate reach approximately 40,400 m² by December.
In the future, demand for office space in Hanoi and Ho Chi Minh City will continue to come from key industries such as banking, manufacturing, information technology, insurance, and logistics.
Notably, Cushman & Wakefield forecasts that the continuous launch of new supply into the market from 2026-2027 could increase the office vacancy rate. Specifically, Hanoi's total supply is expected to increase by 7.71 million square meters per year over the next four years, pushing the vacancy rate up to 27-28%. Ho Chi Minh City may welcome an additional 85,000 square meters of new office space each year, pushing the vacancy rate up to 24%.
New trends are reshaping the office rental market
In addition, experts have noted three prominent trends in the office segment in recent years and shifts in the coming period.
Flexible working trends
The trend toward flexible working is becoming increasingly popular due to the impact of Covid-19 and advances in information technology. This creates flexibility for workers and shapes the office market. This model helps reduce office rental costs, allows for space to be rented as needed, and saves resources.
Improve the workspace
Businesses are moving their offices outside the central business district (CBD) to reduce rental costs and improve workspace.
New buildings such as Phu My Hung Tower, CII Tower, and The Hallmark (Thu Duc City) meet this demand with premium amenities and green office certifications. Over 751,000 square meters of office supply from Q3 2023 to the end of 2025 in Ho Chi Minh City is expected to achieve green certification. This means providing a healthy and safe working environment for employees.
Diverse amenities and services
Today's offices focus on providing services and amenities to meet the diverse needs of the workforce. An office may have to accommodate up to 4-5 generations working together, each with their own specific needs.
Savills' survey of four generations of workers (Baby Boomers, Generation X, Millennials, and Generation Z) reveals differences in their preferences. The transition from traditional office structures and layouts to modern offices not only increases work efficiency but also creates opportunities for interaction and engagement among employees of different generations with the company.
Galaxy Office – A reputable and professional office consulting and leasing company in Ho Chi Minh City
Galaxy Office is proud to be a leading name in the office rental sector in Ho Chi Minh City, not only for its quality but also for the diversity and flexibility of its services. We not only provide modern and convenient office solutions but also focus on cost-effectiveness and efficiency in every transaction.
With over 10 years of experience, we have built a diverse and extensive network of offices throughout the city, from central areas to surrounding areas. This allows us to meet all customer needs, from newly established businesses to large companies expanding their operations.
At Galaxy Office, we don't just provide you with a workspace, we also offer a creative and dynamic business community. We always create opportunities for businesses to collaborate, share ideas, and create new business opportunities.
If you are looking for a reliable partner to rent an office, contact Galaxy Office immediately via our hotline: 0939.663.882. Our team of specialists will attentively listen to and advise you on all your requirements, helping you choose the office space that best suits your business's specific needs and accompanying you on the road to success.
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