Hanoi office rent in Q3 rose to highest in six years as occupancy remained high due to limited supply, a report says.
Office buildings in Cau Giay District, Hanoi. Photo by Shutterstock/Vietnam Stock Images.
The average rent in the third quarter was $21 per square meter per month, rising 4 percent year-on-year, according to a report by real estate firm Savills.
Total stock rose 10 percent year-on-year with an additional 59,000 square meters from six new projects, most of which were of Grade B and A. The west welcomed its first Grade A building in five years.
Occupancy was 91 percent, down 2 percentage points year-on-year due to new project launches.
"Low Grade A vacancy rates coupled with a confident business sector are placing huge demand on existing office buildings, which will lead to an inevitable jump in rent," said Hoang Nguyet Minh, commercial leasing associate director at Savills.
Grade A office rent was $31 million per month, up 6 percent year-on-year. Foreign-invested businesses accounted for 68 percent of Grade A rent in the first half this year.
But Grade A office supply is set to increase by 30 percent, or 150,000 square meters, by 2021 thanks to an addition of three projects, said Do Thi Thu Hang, head of research and consulting at Savills Hanoi.
The increase in number of businesses will increase demand for small and creative office space in Hanoi, Savills said. The number of new business in the first nine months in Hanoi went up 9 percent year-on-year to 20,562.