New trend for offices for lease

The real estate market is witnessing some positive signs of recovery, with office tower projects getting warmer in different trends, in addition to the high-quality apartment buildings.

A-Class offices for lease to be filled, B-class offices to be expanded

According to statistics by CBRE as a professional real estate management company in Vietnam, the office leasing market this year has received more positive signs than the past few years. The percentages of empty offices have decreased considerably, to 15.3% and 11.8% at A-class towers and B-class towers respectively, compared to 20% and 15.6% last year.

Such figures are positive signs for the office towers, especially in the current situation when other real estate services are still remained “stagnant”. The main reason is the gradual recovery of the economy. Besides the economic downturn has driven many companies to reconsider their plans of building new offices and branches and turn to another safer and more economical plan of leasing offices.

Research shows that the A-class office towers in Ho Chi Minh City have maintained high percentages of being filled and the situation has remained stable over the past several months. Such towers include Kumho Asiana Plaza, Metropolitan, Sun Wah Tower, Diamond Plaza, Saigon Center and Saigon Tower.

The stability of the A-class in office leasing market has mainly resulted from the fact that the business services of such high class offices were neglected in 2010 and 2011 before some A-class leasing offices like President Palace and Empress were put into operation in late 2012.

The shortage and high prices (USD30/m2) of A-class leasing offices have given the B-class offices a good chance for development. Though they are in the neighboring areas of the city center, the B-class leasing offices have become a choice for customers who have tight budget.

Some B-class offices increased the leasing percentage from under 50% to over 80% within the past year. Such buildings include Maritime Bank Tower, Petroland Phu My Hung Tower and Capital Tower.

Surviving over the worst period of the recession in the past few years, the office leasing market is now predicted to recover and develop following two trends: more A-class offices will be filled and more B-class offices will be expanded.

Moving toward neighboring areas

The slow development has caused the stability of A-class office towers. In contrast, the office towers of the B-class are developing dramatically that leads to a dynamic and competitive scenario in this section.

Few years ago, location was seen as the primary determinant when companies decide location for their offices. Hence leasing office towers in District 1, 2, 3 got lots of attention from companies that made a significant increase in renting price.

During the current situation of financial difficulties, however, companies, especially medium and small enterprises, care more about the prices when locating offices. Since 2012, they have often chosen houses in alleys or offices at towers outside the downtown area or in new urban areas.

Big companies also want to expand their market in the new urban and residential areas, so they also pay attention to office towers in the neighboring areas of the city center.

In recent years, the local government of Ho Chi Minh City has been trying to develop the neighboring areas and reduce the population density in the city center by building more bridges and better streets, making the trips shorter from neighboring districts like Districts 2, 12 and 7 to the city center. The office towers in new urban areas have also become more attractive to the customers.

The most attractive of all is Phu My Hung New Urban Area. The large number of customers in the area of more than 20,000 high- income residents and the complete infrastructure (streets and public services) have made this new urban area become a prominent location for many companies.

The good supplies have increased the needs from interested customers. Several investors with a strategic vision have chosen Phu My Hung Urban Area to build their office towers. The survey shows that the towers in Phu My Hung like Petroland Tower, Capital Tower and Saigon Paragon have had their offices filled at high percentages.

Saigon Paragon Tower at Phu My Hung City Center

Nguyen Buu Hoi, Vice President of Phu My Hung Development Co., Ltd, said, “Though there is a trend in moving office towers to new urban areas, all the projects at Phu My Hung Urban Area must strictly comply with the approved designs and planning (in 2012, Phu My Hung won the (USA-based) Urban Land Institute Award for Excellence for large master-planned community retaining local character with a sustainable approach).

“Some investors have taken quick action and built office towers here. Therefore, there are only a few land parcels for office towers in Phu My Hung, according to the master plan. We welcome strategic partners to make investments, which will meet the short-term and long-term needs of Ho Chi Minh City in general and of this excellent new urban area in particular.”

Obviously, the move and expansion of office towers to the city center’s neighboring areas and new urban areas will be the major trend of this business service in the coming years.

For further information about investment in Phu My Hung, please don’t hesitate to contact:

Mr. Hoang Hien

International Marketing Department – Phu My Hung Development Corporation

• Tel: (08) 5411-9999 ext: 988
• Fax: (08) 5411-5998
• Cellphone: 090.810.6869
• Email: hoanghien@pmh.com.vn

By Thanh Toàn
Nguồn: Saigon Times