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Office leasing fees may continue to decrease in Hanoi
There have been no signs of the recovery of the office leasing market in the capital city, while real estate consultancy firms think that office leasing fees will continue to decrease in the time to come.
The global economic crisis has heavily influenced the office leasing market. According to Cenvalue, a real estate valuation firm, the average office leasing fee in the first months of 2009 decreased by 11 percent, or $4 per square metre per month, over the end of 2008. The occupancy rate of office buildings in central areas dropped to 91 percent, or three percent lower than in the fourth quarter of 2008.
Other real estate firms also said that A-class office leasing fees decreased in the first quarter of 2009 by eight percent, which was expected, over the end of 2008 to $49 per square metre, nearly equal to the price of the first quarter of 2008. By the end of the first quarter of 2009, the percentage of unoccupied A-class offices had increased by 2.6 percent. The occupancy rate of these offices decreased in the subsequent months.
B-class office leasing fees dropped to $33 per square metre in the first half of 2009, a decrease of five percent from the same period of 2008. The occupancy rate of B-class offices is now about 81 percent, mostly seen at newly operational buildings, while the occupancy rate of old buildings is 92 percent.
The office leasing fees in the city are tending to decrease further as investors are competing fiercely with each other to attract big clients.
According to Cenvalue, though the current leasing fee is now relatively low, the more important thing for investors is to try to obtain a high occupancy rate, as they know that there will be 100,000 square metres of B-class offices and 130,000 sq.m of A-class offices put into operation this year.
Pham Thanh Hung, General Director of Cenvalue, said that both domestic and foreign companies now have to consider thoroughly their plans to set up offices or expand business. Hung said that if Hanoi wants to attract more foreign enterprises to open offices or branches, it needs to have more competitive office leasing fees in comparison with other office leasing centres in the region. He said that the office leasing fees in Shanghai, Bangkok, Seoul and Kuala Lumpur are lower than those in Hanoi.
The real estate consultancy firm has forecast that 1.1 million square metres of offices for lease will be put on the market by the end of 2012. Of this amount, more than 190,000 square metres will be available by the end of 2009 and 400,000 will be added in 2010.
vietnamnet, vneconomy
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