New high-quality projects drive demand

• Grade A offices saw net absorption of 5,800 sqm in the CBD, bolstered by steady demand and a flight-to-quality trend as occupiers move to newer, greener buildings. Non-CBD absorption was around 5,000 sqm, mainly driven by E.Town 6, a new green-certified completion.
• Notable leasing transactions in the CBD and fringe areas were driven by firms seeking new premium office spaces for relocation purposes, including prominent companies such as KIM Vietnam Fund Management, Castrol BP, KEB Hana Bank and others.

No new Grade A supply records in the quarter

• There was no new office supply introduced in the quarter. Grade A office supply in the CBD remained unchanged at 500,756 sqm NLA. Quick fitting-out progress was seen in Marina Central Tower. The building has started its pre-leasing efforts in the quarter.
• The market saw improvements in quality as developers pursued green certifications; e.g., E.Town 6 and Vietcombank Tower both achieved LEED Platinum in Q3 2024. This showed landlord commitment to sustainable development to entice environmentally friendly tenants.

Net effective rent increases slightly at an aggregated level

• Grade A CBD rents stayed stable q-o-q, yet were up 6.1% y-o-y to USD 49.6 per sqm, per month. While most projects kept rents stable, rent improvement was recorded in a new completion as it was more than 70% filled during the quarter.
• Capital values in the CBD decreased by 1.5% q-o-q, while the market yield increased slightly to 6.4% in the quarter. This temporary deviation from the long-term yield compression trend is due to adjustments in investment expectations in the face of economic headwinds.

Outlook: Upcoming new high-quality projects to reinforce market quality evolution trend

• Grade A office supply in the CBD will stay at 500,756 sqm NLA through end-2024. In 2025, the market is set to welcome Marina Central Tower, offering approximately 67,700 sqm NLA.
• Rents in new offices will likely stay resilient, although older offices may adjust rates to compete with new high-quality, green supply. Multinational clients will continue to upgrade workplaces to meet sustainability standards and global commitments.