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Hanoi office renters heading west
Businesses lease offices in the west of the city instead of the central areas, claming they are overcrowded and over priced.
Though located far from the centre of the city, the western area has been attracting the attention of more and more businesses thanks to the reasonable leasing fee, high quality of offices and diversified choices.
Pham Duc Toan, Director of EZ Vietnam, said that while the leasing fee in the central area could be high up at $47 per square metre, the leasing fee in the western area is just one third, hovering around $13-17.
According to VnExpress, the office buildings on Pham Hung and Nguyen Phong Sac Roads in Cau Giay district in the west of Hanoi have seen the number of renters increase by 20-25 percent compared to the first quarter of the year. The clients are mostly small and medium companies and smaller branches of IT companies that need to expand their business scale.
Panasonic Vietnam’s Research and Development Centre has signed a contract with the CMC building on a 1000 square metre space for three years at $18 per square metre. The company has decided to leave the more expensive cramped central area for My Dinh area in the west that is larger and offers reasonable prices.
“The office building where we stayed previously does not have the parking lot large enough to contain all our motorbikes and cars. Therefore, we have decided to relocate our office,” the company’s representative said.
The high quality of new offices is a major factor in companies decision to move. Buildings on Pham Hung and Nguyen Phong Sac Roads can meet all the requirements of leasers. To meet the ever-increasing demand for space, the office buildings have large parking areas thanks to the profuse land funds.
Hoang Thu, representative of a South Korean company which has signed a contract on leasing 128 square metre at 3D Creative building also said that the ‘soft’ leasing fee is the reason behind the company’s decision to move there. While the rents are around $30 per square metre in the central area, the fee is just $16 per square metre in the west of the city. The company will save $1800 a month when leasing office in the west.
Nguyen Phung Thang, Managing Director of CMC Building in Cau Giay district said that everyday, CMC receives 4-5 groups of renters, 30 percent of whom are foreigners. Thang said that the occupancy rate of the building is now 70 percent and he hopes that the building will be fully occupied in two months.
Having realized about the increasingly high demand for offices, more and more office buildings have arisen on Pham Hung Road and Cau Giay district area. Nguyen Phong Sac area also has seen 20 office building becoming operational.
With more leasors flocking to the west, the leasing fee offered by buildings’ owners has increased by $1-3 per square metre. The rental at CEO building on Pham Hung road has increased to $25-27 per square metre, while the rental at CMC and 3D are now between $18 and $22. Lucky Building, which offered for lease at $15 per square metre in the first quarter of the year, is now requiring $17.
According to CB Richard Ellis, a real estate service provider, the office buildings in the western area have been successful in attracting clients. The fact that some A-class office buildings are put into operation in 2010, like Crown Plaza, Grand Plaza, Keangnam Hanoi Landmark Tower, will make the leasing office market in the west become more bustling. The western areas have taken away a big number of leasers at big offices in the central area, located on Tran Hung Dao, Hai Ba Trung and Ba Trieu streets.
vietnamnet, VnExpress
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