HCMC Office Market 4Q21

Two Grade B buildings in Non-CBD entered the market in 4Q21

In 4Q21, the market welcomed two new Grade B buildings namely Pearl 5 in District 3 and The Grace in District 7, adding 19,000 sqm NLA to the total supply. Meanwhile, the market recorded no new supply in Grade A segment.

New supply drive the demand 

Net absorption of Grade A & B offices was improved, at 20,030 m2 transactions in the quarter, mainly from the new Grade B buildings with large vacant space, thanks to landlords offering attractive rental concession policies. However, most of existing buildings in both segments recorded negative absorption due to tenants terminating early, reducing occupied areas or relocating to lower rent buildings under the impact of the pandemic.

The Grade A vacancy rate remained tight at 7.0% in 4Q21, thanks to the large lease deals that occurred in the quarter. Meanwhile, Grade B vacancy uplifts due to new completions during the year.

District 3 witnessed largest rental change q-o-q 

In 4Q21, the average rent of Grade A & B offices remained at USD 30.6/m2/month[1], stable q-o-q and y-o-y. District 3 witnessed the largest change q-o-q, up 6.3% thanks to a new high-quality supply namely Pearl 5. Rents have remained resilient in most buildings across districts, with new transactions mainly happening in some new buildings.