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Fast growth: A shopkeeper waits for customers outside his store in Vietnam. With the recovery of manufacturing, sourcing companies are coming back to Vietnam and actively seeking building space. — AFP

HO CHI MINH CITY: Ho Chi Minh City’s office market witnessed its first positive signs in the first half of this year since being affected by the Covid-19 pandemic for the previous two years, experts say.

A report from CBRE said that for leasing, relocation accounted for more than 50% of total transactions, and the remaining transactions were for expansion, renewal and new letting, at about 27%, 12% and 10%, respectively.

There were no more contractions as there were in 2020 and 2021, the company said.

In the first half, the company said, there was one new Grade B office building, CMC Creative Space in District 7. The total net leasable office supply in Ho Chi Minh City was roughly 1.5 million sq m.

The average vacancy rate of Grade A decreased by 1.6 percentage point quarter-on-quarter and 2.1 percentage point year-on-year to 10.1%, mainly due to major absorption in District 7.

Meanwhile, the average vacancy rate of Grade B remained at 9.7%, almost the same as last year.

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Information technology (IT) and service industries accounted for more than 50% of total transactions. IT firms with growing business and investment continue to expand their leasing and quickly finalise their decisions within three to six months.

With the recovery of manufacturing after the pandemic, sourcing companies are coming back to Vietnam and actively seeking office space, making up a rising percentage of new leases.

Cushman and Wakefield confirmed that despite many changes in behaviour and habits of office users in the past two years, Vietnam’s office market including Ho Chi Minh City in the first half of 2022 showed recovery and growth.

Forecasts for demand continue to look positive largely due to growth in office-based employment, weaker adoption of flexible working practices, and the enduring vital role of offices.

The future workplace will be an ecosystem that offers many options for employees both in terms of workspace types, working time, and amenities around the office, according to the real estate service firm.

The second quarter report from the company saw office rental prices remain relatively stable, even at final units in prime location buildings. Grade A and Grade B average rents were US$60 (RM266) per sq m per month and US$34 (RM151) per sq m per month, up 1.9% year-on-year and 1.2% year-on-year, respectively. — Viet Nam News/ANN

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