10:15 (GMT +7) - Wednesday 26/09/2018

BUSINESS SPOTLIGHT

Offices in the heart of the city: Location leads to success

Released at: 12:00, 15/05/2018 BUSINESS SPOTLIGHT

Offices in the heart of the city: Location leads to success

Photo: C.T Plaza

Located in the so-called “Wall Street of Saigon in District 1, HCMC, C.T Plaza Wall Street boasts a unique location that faces Vo Van Kiet street and Pho Duc Chinh street.

by Le Chi

Savills Vietnam has forecast that 2018 will see the rise of the office-for-lease market in Ho Chi Minh City, especially for offices located in the central district.

For many companies, having an office in District 1 right in the central business district beside the Saigon River is one of the top criteria for brand building.

Market thirsty for Grade A office apartments

Over recent years, strong foreign-direct investment into the country, the signing of many key trade agreements, huge opportunities for global integration and the robust growth of Vietnam’s tourism have given rise to an increasing number of representative offices and expats in Vietnam. There’s also been rising demand for high-end offices for lease, according to Savills Vietnam. About 95 per cent of all office buildings that were put into operation in 2017 were quickly occupied.

Ho Chi Minh City, in particular, is thirsty for Grade A offices and officetels that have modest areas but are based in prime locations close to administrative organizations, banks, enterprises, and such. As the city has a specific mechanism for economic development, it fosters a growing community of small and medium-sized enterprises (SMEs) or online businesses and start-ups with a limited number of employees. Moreover, starting this year, the city will move around 2,000 private businesses that have offices in condo buildings out of such developments. This will create a huge demand in the office-for-lease segment.

With such positive signs from the market, investments in office buildings or officesfor lease with areas from 25-40 sqm targeting SMEs will be a lucrative channel in 2018 and beyond.

C.T Plaza Wall Street Office Building boasts a unique location that faces Vo Van Kiet street and Pho Duc Chinh street

Investing in offices-for-lease: Stable profits, proliferating value

Quite a number of office-for-lease products have been launched recently and more are on the way. However, it’s forecast that demand will still exceed supply as not all of these products can totally satisfy customers’ diverse needs in terms of location, amenities, leasing rate, and return on investment.

Every businessman knows that “location makes success,” and an office located in the heart of District 1, the central business district of the city, on the side of Saigon River is still one of the top criteria for brand building for many companies. Positioned in the so-called “Wall Street of Saigon” in District 1, C.T Plaza Wall Street office buidlingboasts the unique location facing Vo Van Kiet street and Pho Duc Chinh street. Separating itself from normal houses for lease or street houses, C.T Plaza Wall Street offers a full array of built-in amenities that are designed in line with international standards.

Office rent and cost of investment are other key factor to consider after location. With an initial investment of around 3 billion VND ($131,692), which isn’t too high compared to investments for officesin the city’s center, investors can own an office space right in the heart of the city that can make a monthly profit of $1,000 - $1,200. With the same amount of money, they can find offices in adjacent areas for lease at a monthly rate of just $500 - $600. Offices for lease bring about long-term stable income. A Savills report shows that the profit margin of the office segment of Ho Chi Minh City reached 8.5 per cent in 2017. This indicates that investments in the office-for-lease sector yieldmore stable profits than other channels like stock, gold or bank savings.

To enterprises, it’s worth it to pay office rents of around $1,000 - $1,200 to own superior and unique amenities in the so-called “Wall Street of Saigon”. Moreover, they can enjoy immeasurable intangible values when it comes to promotethe company’s image and location.

Investors who own officesin such prime locations can rest assured that the value of their property will increase in time. Leasing rates will also be continuously adjusted to follow market demands. Office rents in Ho Chi Minh City could increase by 20 per cent in some Grade A properties this year and will keep rising year from 2018-2020, according to a Cushman & Wakefield report which was published in early 2018. This means that individual and corporate investors need to make careful considerations before deciding whether to rent or own properties in order to ensure profits.

 For more information, please contact:

 Hotline: 0942 493 663

 Website: http://ctplaza.vn/

 Facebook: https://www.facebook.com/CTPlazaVN/

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