Total new supply in Hanoi office market is estimated at 103,600 square meters in 2022.

Rents in Hanoi's Grade A offices are predicted to increase by 1% to 2% between now and the end of the year, thanks to new offerings with high-quality specifications and modern amenities. 

Gelex 10 Tran Nguyen Han. Photo: Savills

The latest report by CBRE shows that the overall office supply in Hanoi exceeded 1.623 million square meters of Net Leasable Area (NLA) by the third quarter, with Grade A projects accounting for 37% of the total supply. 

 According to the property consultancy, the office market saw positive growth in the occupancy rate and rent.

 Specifically, in Q3, asking rents for the Grade A office reached $26 per sqm per month, up 0.6% quarter-on-quarter (q-o-q) and 6% year-on-year (y-o-y). 

Vacancy rates of existing Grade A office buildings decreased by 28.2%, down 0.5 ppts q-o-q and four ppts y-o-y. 

Regarding demand, office expansion demand continued to contribute to most transactions in Hanoi, accounting for more than 62% of the total.

 Information technology/Tech continued to dominate the market, accounting for 59% of all transactions. With good financial resources, the proportion of this group of tenants is gradually increasing with the rental area up to over 1,000 m2. 

 In the last three months of 2022, the Hanoi office market will welcome three Grade A office projects and one Grade B office project, bringing the total new supply during 2022 to 103,600 sqm NLA.

 The realty website Batdongsan also gave a similar view on the surge in office rent. Grade A rents rose by 5-8% this quarter compared to the beginning of the year, to VND450,000 (US$18.3)-VND620,000 ($25.2) per square meter. 

 The increase in office rents is attributable to the post-pandemic economic recovery, including infrastructure, government policies to help companies get back in business, and high prices for building materials. Occupancy rates are high in all office segments. 

 In the future, Savills predicted that the office market will see high-quality projects, including Gelex 10 Tran Nguyen Han, 36 Cat Linh, Tien Bo Plaza, Lancaster Luminaire and Taisei Office Building Hanoi in the 2023-2025 period.

 These properties will cater to green demands and premium tenants, thanks to reputable developers, high development quality, and green certificates like LEED Gold.

 Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi, told The Hanoi Times: "Businesses should plan when implementing changes. They should consider the quality of the project and the developer's reputation."

 She added they also need to consult with professional advisors. Thorough planning will reduce unnecessary costs during the leasing process, control risks, and bring greater satisfaction in the long term.