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HCMC office, serviced apartment rentals drop
Office rents in Ho Chi Minh City dropped in the first quarter of this year as demand continued to weaken amid the economic downturn, leading real estate services firm CB Richard Ellis (CBRE) said last week.
Grade-A asking rents, for instance, have dropped 20 percent to an average of US$57.30 per square meter per month on the ground floor.
‘Total absorption’ dropped by 45 percent quarter-on-quarter and 85 percent year-on-year, CBRE said.
UK-based property consultant Savills’ first quarter survey calculates there are 34 office Grade A and Grade B buildings in HCMC with a built up area of approximately 390,000 square meters.
The first quarter’s sharp decrease in foreign direct investment of 40 percent over the same period last year has had a significant impact on the downward trend in office rent and occupancy, CBRE Managing Director Marc Townsend told a press briefing in HCMC last week.
Townsend said, “Some Grade A landlords are offering discounts of up to 30 percent on asking rents. The rates are likely to fall much lower to an average of $30-40 per square meter per month by the end of 2009.”
The competition in Grade A and Grade B rental markets will heat up further as major projects come on line in the second quarter, he said.
According to Savills, some major office buildings will be completed this year, including Crescent Plaza, Asiana Plaza, Centec Tower and CentrePoint, adding about 98,000 square meters of office space to the market and exerting further pressure on the already declining rent.
Meanwhile, retail rents remained steady during the first quarter. Savills said rents in shopping centers and department stores in the first quarter ranged from $30-150 per square meter.
Saigon Paragon in the Phu My Hung Urban Area opened in March with 80 percent occupancy and ground floor rents of $60-70 per square meter per month.
Despite the current economic crisis, long-term prospects for the retail sector are compelling, as evidenced by Vietnam’s number one ranking in the A.T. Kearney 2008 Global Retail Development Index.
Townsend said, “Seeking to enhance brand awareness and visibility, Vietnamese retailers will remain the most vigorous players in the market.”
For the city’s serviced apartment sector, Grade A rents declined by 4 percent over last quarter, the first fall since the second quarter of 2007. Grade B and C rents also fell by an average of 5 percent over the corresponding period, according to CBRE.
Savills said the highest monthly rents for smaller Grade A apartments are currently in the order of $25-40 per square meter.
It expects the steady trickle of departing expats will continue to erode the demand base for serviced apartments over the course of 2009.
Vinh Bao
thanhnien
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