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Property

JLL: Office demand in HCMC & Hanoi to grow

Released at: 11:41, 04/09/2018

JLL: Office demand in HCMC & Hanoi to grow

image from ezproperty.vn

Real estate consultant releases outlook for Southeast Asia in second half.

by Linh San

Based on the latest outlook report from JLL for the second half of this year, entitled “Southeast Asia Set for Further Outperformance”, Ho Chi Minh City and Hanoi can both expect greater demand.

As at the end of the second quarter of the year, total stock in Ho Chi Minh City’s office market had increased to 1,945,000 sq m, with overall Grade A and Grade B occupancy rates standing at above 95 per cent. The overall rental rate is expected to continue its upward trend with support from healthy demand and increased quality in future supply. A large volume of high-quality Grade B supply is also projected to be completed by 2020 and will likely put pressure on the Grade A sub-market in the future, especially long-standing Grade A projects with deteriorating quality.

In Hanoi, demand for Grade A and B office space in 2018-2019 will increase on the back of positive economic growth. Higher occupancy rates were observed in both as new set-up and relocation purposes continue to be the main drivers of office demand.

“Vietnam is considered to be one of the fastest-growing e-commerce and flexible space markets in the region,” said Mr. Stephen Wyatt, Country Head of JLL in Vietnam. “This rising trend will have a positive impact on the office market as companies, both foreign and local, will be looking for a suitable place to set up operations in this promising economy.”

The report also noted that as Southeast Asian economies expand, office demand, particularly from technology, e-commerce and co-working space companies, is expected to rise by an estimated 6 per cent annually between 2018 and 2021.

Office take-up in the region accelerated over the last six quarters as demand continued to surprise on the upside, notably in Manila, Singapore, Ho Chi Minh City, and Jakarta.

“Technology, e-commerce, and flexible space operators were key demand drivers,” said Ms. Regina Lim, Head of Capital Markets Research, Southeast Asia. “Looking forward to 2018-2022, we expect office take-up in Southeast Asia to stay strong, growing at 6 per cent annually, amid GDP growth of 5 per cent per annum.”

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