APPD Market Report Article

Ho Chi Minh City

May 26, 2024

Trang Le, Head of Research, Vietnam


USD 48.3


HCMC Grade A office net absorption remains resilient in 1Q24

  • In 1Q24, net absorption in Grade A office in CBD recorded approximately 5,000 sqm, driven by the healthy uptake and new lease commitments in new sustainable and premium projects. This trend showed tenants’ preference for premium spaces within green-certified buildings. Meanwhile, net absorption in non-CBD areas remained stable from the previous quarter, with no significant fluctuations.
  • Notable leasing transactions in the CBD were from those seeking premium office spaces, including UOB, Michael Page, Alvarez & Marsal, VPS Securities, L’Oreal, Sanofi, Medtronic and others. Overall, HCMC’s Grade A vacancy rate remained stable at 13.3% (-1.1% q-o-q), reflecting the resilience of the Grade A office market in HCMC, even amid economic challenges.

No new Grade A completions in the quarter

  • In 1Q24, the HCMC Grade A office market supply remained stable at more than 433,700 sqm with no new supply. The CBD continued to dominate this segment, accounting for 89% of the total space, while non-CBD areas made up 11% of the remaining market.
  • The E.Town 6 project in the non-CBD area (Saigon North submarket) is currently in its final stages of completion and is set to commence operations in 2Q24. It will be the first green Grade A building offering international-standard office leasing solutions in the Saigon North submarket with LEED Platinum, Lotus, Edge and Fitwel accreditations.

Rents in CBD remain solid despite macroeconomic challenges

  • Grade A net effective rent in CBD recorded marginal rent growth of 1.8% q-o-q to USD 48.3 per sqm, per month during 1Q24, largely driven by rent appreciation in prominent existing projects, despite macroeconomic challenges. However, on a y-o-y basis, the CBD witnessed a slight decline of 0.6% in its net effective rent.
  • On the other hand, the non-CBD area experienced a slight decline of 1.6% q-o-q and 1.7 % y-o-y in its net effective rent. This was primarily due to rent adjustments made by landlords in response to vacancy pressures and new high-quality supply entering the market.

Outlook: HCMC office market maintains its attractiveness

  • In 9M24, HCMC’s Grade A office market is set to expand with the launch of E.Town 6 in the non-CBD area, adding 38,000 sqm NLA to total supply by year-end. The demand for high-quality, international-standard Grade A spaces, particularly green-certified projects, is anticipated to grow as premium tenants look to expand and upgrade their offices to meet specific needs.
  • Demand for green-certified, sustainable and premium-quality spaces to meet international Grade A standards is expected to continue its upward trajectory, carrying over from end-2023. Multinational tenants continue to seek to expand their operations and upgrade their workplaces, with specific requirements to meet their global mandates as we move towards a carbon neutral milestone in year 2030.   

Note: Ho Chi Minh City Office refers to Ho Chi Minh City's Grade A office market.

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