Positive net absorption continues in Q4 2024

• Grade A office net absorption in the CBD remained stable at approximately 8,300 sqm in Q4 2024, totaling 17,400 sqm for the year. This positive absorption was driven by key leases, mostly in high-quality buildings such as Capital Place and Lancaster Luminaire.
• Non-CBD demand favoured newer buildings, with positive absorption in new developments like Taisei Square Hanoi and Lotte Mall West Lake. Net absorption was 2,200 sqm in Q4 and 15,400 sqm in 2024, showing rising interest in high-quality offices outside the CBD.

No new supply is introduced in the quarter

• The overall supply of Grade A offices in Hanoi remained stable at 558,300 sqm, with no new openings in the quarter. In 2024, the market saw 36,500 sqm from two new sources: Grand Terra in the CBD (Dong Da) and Taisei Square Hanoi in the Non-CBD (Cau Giay).
• In Q4 2024, the vacancy rate for Grade A offices in the Non-CBD increased slightly by 1.8% y-o-y to 17.8%. The CBD’s vacancy dropped from 25.4% in Q4 2023 to 23.5%. A relatively stable occupancy rate, despite new completions, indicates resilient leasing demand.

Rents in the CBD increase slightly, while those in the Non-CBD remain stable

• In Q4 2024, Grade A office net effective rents in the CBD rose slightly by 0.4% q-o-q and 1.7% y-o-y, reaching USD 32.9 per sqm, per month. This increase was due to some landlords applying new lease pricing, while most existing offices maintained stable rates.
• Net effective rents in the Non-CBD remained unchanged from the previous quarter at USD 23.6 per sqm, per month. Annually, rents rose slightly by 0.9%, driven by higher prices for new supply completed in the western area in 2024.

Outlook: Starlake area, with its substantial supply, is expected to be the market’s focal point

• In 2025, new supply will increase with notable projects like Hanoi Centre Office in the CBD and Oriental Square in Starlake, an emerging non-CBD hub. Starlake’s rapid development is set to establish it as a new, attractive commercial cluster in Hanoi.
• Rents in the CBD are expected to continue rising, yet at a modest level. Non-CBD rents are forecast to increase due to high-priced new supply in the area. However, rent growth on a project basis is limited by significant expected future supply.