The CBD and non-CBD areas continue to witness positive absorption

• A positive net demand trend continued during this quarter, reaching approximately 10,300 sqm. New leases in Capital Place, Diamond Park Plaza and Grand Terra accounted for around 3,800 sqm absorbed in the CBD.
• The non-CBD area saw more positive movement of 6,500 sqm net absorption, with completed transactions at Taisei Square Hanoi and Lotte Mall West Lake driving net absorption in this submarket.

No new supply is introduced in the quarter

• Overall supply of Grade A offices remained stable at 556,100 sqm, with no new openings in the quarter. Vacancy remains concentrated in older buildings. Coupled with consistent tenant move-ins in new quality buildings, vacancy rates fell to 19.4%, down 185 bps q-o-q.
• There are currently two projects in the supply pipeline under construction, totalling 34,400 sqm, and set to be complete in 2025.

Net effective rent remains stable

• In Q1 2025, both the CBD and non-CBD submarkets demonstrated stability in their rental markets. The CBD maintained its Grade A net effective rent at USD 32.9 per sqm, per month, with capital values showing little fluctuation, settling at USD 5,477 per sqm, per quarter.
• Similarly, the non-CBD submarket held steady, with its Grade A net effective rent remaining at USD 23.6 per sqm, per month, during the same period.

Outlook: Starlake NUA to emerge as a new Grade A office cluster

• This year will see a rise in new office space availability in Hanoi. Notable developments include the Hanoi Centre Office in the CBD and Oriental Square in Starlake. Starlake is quickly evolving into an appealing new business hub outside the traditional city centre.
• Rents in the CBD are anticipated to continue rising modestly. Non-CBD rents are likely to see rent increases, driven by the introduction of premium-priced new buildings. However, rent growth on a project basis is limited by substantial upcoming supply.