Hanoi office market will see large changes after pandemic

The office market in Hanoi is experiencing many changes amid the COVID-19 pandemic in terms of rental prices, occupational profile and new demands for office spaces, according to Savills Vietnam.

Grade A rents in Hanoi are predicted to be stable in the upcoming year. With the Capital Place project in the secondary area entering the market, total grade A supply in Hanoi reached about 90,000 sq.m in the first half of this year, up 24 percent year on year while the average rent was up 7 percent year on year.

As take up has been stable over the past three years, it will take some time for this volume of space to be absorbed. Rents are expected to also remain stable as there are limited prime projects coming until 2023.

In 2021, the Information and Communication Technology (ICT) sector as well as industries such as manufacturing, finance, banking and insurance are expected to grow.

Hoang Nguyet Minh, Director of Commercial Leasing, Savills Hanoi, said: “With the incredible growth rate of ICT or e-commerce enterprises, the office space for rent may currently remain only 1,000 sq.m but may double in size in the next three years. Therefore, the required space can double or even triple.”

“In the case occupiers want to expand and their business sector has a very good growth rate, landlords need to provide support in terms of spaces or rental packages to help the occupiers further expand, avoiding circumstances where there is not enough space for expansion, meaning occupiers have to look for other suitable space.”

Rents are not the main priorities of occupiers, rather they now have more requirements for the location of their headquarters, the quality of the construction, services that will be provided, as well as whether the building space can meet the demand for future expansion, according to Savills.

In Hanoi, companies now focus more on flexible and people-centric office design, creating space for interaction and collaboration.

In the pre-pandemic period, office design focused on the efficient use of space with high work density. Grade B or C office buildings can have a work density of 4-6 sq.m per staff member whereas it is 10 sq.m per employee in Grade A buildings, Minh said.

However, as most office workers have adapted to working remotely amid the pandemic, it is necessary to reconsider the workspace density to better suit needs. For example, a company with a scale of 100 staff may only need to arrange workspace for 60-70 staff and others can work remotely. Companies may consider other amenities such as pantries or more meeting rooms.

Besides that, “Due to the changes in the way of approaching and constructing offices, investors are also expected to become more flexible with rental packages. Office leasing terms normally last three years,” Minh said.

“However, occupiers recently want longer-term contracts, lasting five to seven years, or even up to 10 years. In addition, the rental price of these contracts is also seeing significant changes.”

For instance, at the moment, occupiers have the tendency to expect a lower rent in the first year, and by the third or fourth year the rent will increase again to make up for the discounted rent at the beginning. The first purpose behind this trend is to support the occupiers during the pandemic. The second is to ensure a long-term rental commitment between occupiers and owners.

Office property is still considered the most stable sector as occupiers often rent and use the space as their representative offices or company branches with a relatively long rental period, Minh said.

Savills also reported that many companies are considering a shift to hybrid working – a mixture of office and remote working.

The pandemic has changed people’s working lives and the office market. Most workers want to be in the office at least some of the time, and most firms want a degree of attendance to ensure mentorship for newer and younger employees and to boost creativity, collaboration and productivity.

However, some roles such as banking will continue to need traditional offices for oversight and scrutiny, which can only take place in an office environment.

Troy Griffiths, Deputy Managing Director of Savills Vietnam, said: “Influences of demand change quickly in a dynamic business environment, such as Vietnam. With Ho Chi Minh City’s recent rapid growth in finance, insurance, real estate and ICT industries then the formal office occupiers will continue to require highly functional and pleasing space to satisfy the young workforce.”

“However, with a recent long lockdown, and with solid growth in small and medium sized enterprise (SME) forecast then the traditional office models will be challenged, thereby promoting more flexible hybrid offices.”

Vietnam has a strong SME base and a very active start-up environment. These users do not typically take formal office space and so co-working space has grown extensively. As these occupiers’ businesses mature then they will require formal office space and therefore increase demand, that may be best satisfied with hybrid models, Troy said.

Source: Vietnam News Agency

Going digital vital for development of tourist sector

Technology has helped people who love to travel satisfy their desire to explore the world in the context of staying at home to prevent the spread of COVID-19.

As for travel firms, digital transformation enables them to access new potential customers, solving problems relating to human resources, operating costs, and duration time. It also effectively supports the introduction and promotion of tourism products. Digital transformation is considered as the future of the “smokeless industry” and Vietnam is no exception.

The country has quickly applied technology into tourism development, creating virtual products to attract tourists, including Son Doong tour.

Last year, Son Doong Cave in the central province of Quang Binh has been named among 10 of the best virtual tours of natural wonders by British newspaper The Guardian.

Also last year, a virtual tour was made for the first time in the northwest. A set of 360-degree photos and virtual reality (VR) about Moc Chau tourist attractions, service facilities at the Moc Chau national tourist site have offered a panoramic view to visitors.

Recently, the Vietnam National Fine Arts Museum has rolled out a brand-new 3D virtual tour in both Vietnamese and English which is integrated on the museum’s website (vnfam.vn). The launch of the tour is expected to allow art lovers to enjoy the museum’s various collections of national treasures, paintings and sculptures anywhere and anytime, using their Internet-connected smartphones or computers.

According to a report by the Vietnam National Administration of Tourism (VNAT), domestic tourists in the first eight months of this year reached 31.2 million, down 5.5 percent over the same period last year.

Vietnam has yet to open its doors to international tourists since April last year. Total revenue from tourists is estimated at 136,520 billion VND (nearly 6 billion USD), a decline of 36.5 percent over last year’s figure.

Deputy Minister of Culture, Sports and Tourism Doan Van Viet suggested that the VNAT should focus on completing the assigned tasks in the remaining months of the year.

In addition to devising scenarios to welcome tourists back and restore the tourism industry when the pandemic is under control, Viet said that it is necessary to promote digital transformation activities towards strengthening the public-private partnership.

Despite facing many difficulties due to the COVID-19 pandemic, the VNAT has still paid attention to digital transformation. The administration has focused on taking advantage of such social media channels as YouTube, Zalo, and Facebook to popularise Vietnam’s tourism with diverse and updated content.

According to the Institute of Tourism Research and Development, smart tourism software are also developed in key tourism sites to support tourists. The application of technology is also promoted at involved enterprises.

Ha Van Sieu, Deputy General Director of the VNAT, said that the digital transformation process required the drastic participation of all levels, with the same sense, responsibility, and efforts from businesses, organisations, and local authorities.

Source: Vietnam News Agency

President leaves for Cuba official visit, UN General Assembly’s general debate

President Nguyen Xuan Phuc and a high-ranking Vietnamese delegation left Hanoi on the night of September 17 (Vietnam time) for an official visit to Cuba from September 18-20 at the invitation of First Secretary of the Communist Party of Cuba (CPC) Central Committee and President of Cuba Miguel Díaz Canel.

Later from September 21-24, the President and the high-ranking Vietnamese delegation will attend the general debate of the United Nations General Assembly’s 76th session and conduct several bilateral activities in the US.

The above activities aim to carry out external policy of the 13th National Party Congress and step up multilateral diplomacy till 2030.

The trip is meant to strengthen Vietnam – Cuba special traditional friendship and cooperation, and deepen cooperation between Vietnam and countries and international organisations, demonstrating that Vietnam is a friend, a trustworthy partner of the international community.

It also conveys a message at the highest level to international friends about a dynamic, innovative, thriving and peace-loving nation, upholds multilateralism and reflects its role and position as a responsible member and makes practical contributions to activities of the UN and international community.

Source: Vietnam News Agency

Vietnam – a friend, trustworthy partner of international community

President Nguyen Xuan Phuc’s visit to Cuba, attendance at a general debate of the United Nations General Assembly’s 76th session, and bilateral activities in the US aim to demonstrate Vietnam as a friend and trustworthy partner of the international community.

The President leads a high-raking delegation of the Vietnamese Party and State to pay an official visit to Cuba from September 18 to 20.

The visit is made at the invitation of Miguel Díaz-Canel, First Secretary of the Communist Party of Cuba’s Central Committee and Cuban President.

Later, from September 21 to 24, the President and the Vietnamese delegation will attend a general debate of the UN General Assembly’s 76th session and hold a number of bilateral activities in the US.

The trip is set to boost the special traditional friendship between Vietnam and Cuba, and deepen relations between Vietnam and other countries and international organisations.

It is also expected to send a message of a dynamic and peace-loving Vietnam that advocates for multilateralism and works to practically contribute to the UN and the international community.

Rare, special relations

Vietnam and Cuba established diplomatic ties on December 2, 1960. The special friendship between the two Parties, States and peoples have been consolidated by generations of Vietnamese and Cuban leaders.

Over the past years, the two countries have paid due attention to strengthening the solidarity, time-honoured friendship and comprehensive cooperation.

They have maintained the regular exchange of visits, notably the visits to Cuba by Party General Secretary Nguyen Phu Trong in April 2012 and March 2018, Prime Minister Nguyen Tan Dung in March 2014, President Truong Tan Sang in September 2015, President Tran Dai Quang in November 2016 and National Assembly Chairwoman Nguyen Thi Kim Ngan in November 2016 to pay tribute to leader Fidel CastroPresidents Fidel Castro and Raul Castro also visited Vietnam in February 2003 and July 2012, respectively, while President of the Cuban National Assembly Esteban Lazo Hernández paid a visit to the Southeast Asian nation in June 2017.

Given the impact of the COVID-19 pandemic, Vietnamese and Cuban high-ranking leaders and officials from ministries and agencies have engaged in online exchanges, with the latest online talks between Party General Secretary and State President Nguyen Phu Trong and First Secretary of the Communist Party of Cuba (PCC) Central Committee Raul Castro Ruz in February, Party General Secretary Nguyen Phu Trong and First Secretary of the (PCC) Central Committee and President of Cuba Miguel Díaz-Canel Bermudez in May and July, President Nguyen Xuan Phuc and First Secretary of the (PCC) Central Committee and President of Cuba Miguel Díaz-Canel Bermudez in August, and Prime Minister Pham Minh Chinh and his Cuban counterpart Manuel Marrero Cruz in July.

At the same time, the two sides have effectively implemented cooperation mechanisms, including the inter-governmental committee.

It is noteworthy that the Vietnam-Cuba trade agreement, signed on November 9, 2018, officially came into force as from April 1, 2020 with a range of commitments.

In agriculture, Vietnam has supported Cuba through many programmes and projects, focusing on rice, corn and soybean production, and aquaculture.

Vietnamese enterprises have stepped up investments in telecoms, infrastructure development and constructional materials. They have shown greater interest in the investment amid changes in economic management policy and investment environment in the Caribbean nation.

Vietnam and Cuba have also maintained their cooperation and mutual support at international organisations and multi-lateral forums, especially the UN.

Raising Vietnam’s image, position

Vietnam officially joined the UN on September 20, 1977. The relationship has contributed to protecting and promoting national interests, consolidating a peaceful, secure and favourable environment in service of national development, boosting international integration, raising Vietnam’s position and image in the international arena, and deepening ties between Vietnam and other countries, key partners and friends.

The two sides have actively implemented the 2017-2021 One Strategic Plan within the framework of the “One UN” initiative signed in July 2017, helping the Vietnamese Government realise the socio-economic development plan for 2016-2020, and sustainable development goals (SDGs).

During the COVID-19 combat, Vietnam has received more than 12 million vaccine doses via the COVAX Facility.

UN organisations have assisted Vietnam in different areas and given recommendations to the country.

In response, Vietnam has played an active role in UN efforts to deal with issues regarding regional and international peace and security, and human rights. It is the 10th country to ratify the Treaty on the Prohibition of Nuclear Weapons.

Vietnam has sent a total of 243 officers to UN peacekeeping missions in South Sudan, the Central African Republic, and the Department of Peacekeeping Operations in New York, and deployed three second-level field hospitals in South Sudan. The UN also holds Vietnam in high regard in terms of the percentage of female personnel in peacekeeping operations.

Vietnam officially won the election to become a non-permanent member of the UN Security Council (UNSC) for 2020-2021 after getting 192 votes out of the 193 member countries and territories.

The country has actively contributed to common activities of the UNSC, worked to promote bilateral ties with UNSC members, and carried forward its role as a non-permanent member of the UNSC and ASEAN Chair 2020 at the same time.

Vietnam has continued to actively cooperate with UN mechanisms on human rights, and is running for a seat in the UN Human Rights Council for the 2023-2025 term.

The country has also coordinated with the UN in the fight against the COVID-19 pandemic, and proposed designating December 27 as International Day of Epidemic Preparedness, which has been approved by the UN General Assembly.

Vietnam contributed 50,000 USD to the World Health Organisation (WHO)’s COVID-19 response fund, and 500,000 USD to the COVAX programme. For the first, Vietnam successfully received and treated a UN staff member infected with COVID-19 under the medical evacuation (MEDEVAC) mechanism.

A MEDEVAC centre would be established in Vietnam in the future after the two sides reached consensus.

Source: Vietnam News Agency