Vietnam to welcome large amount of new office supply: Cushman & Wakefield

HCM City: Vietnam will welcome a large amount of new office supply in 2024, concentrating on the two main markets of Hanoi and Ho Chi Minh City, according to analysts from Cushman and Wakefield. In the Asia Pacific Office Outlook Report 2024 released recently, Cushman and Wakefield said Hanoi will welcome a total of 80,700 sq.m of new office supply in 2024, mainly in the capital city's central districts. It noted that another 100,000 sq.m of new Grade A office space is forecast to be put into operation in Hanoi in the 2024-2027 period. Meanwhile, in HCM City, new Grade A supply is expected in central districts with the launch of three projects in 2024 - 2025, contributing a total of 118,700 sq.m of premium office space to the market, Cushman and Wakefield said. About 81,000 sq.m of additional Grade A supply is also expected in non-central districts during 2024-2026. Cushman and Wakefield said economic instability has affected general office demand in HCM City as tenants become more and more conce rned about costs. The absorption rate is expected to gradually increase from 2024, thanks to new, higher quality supply and improved economic conditions. Office vacancy rates are predicted to be above 20% throughout 2023-2026, driven by continued new supply, the report said. In Hanoi, market demand was strong in the first half of 2023, but slowed down in the second half and is expected to remain low throughout 2024. Vacancy rates are expected at 25-30% in 2023-2024 and then gradually decrease to about 20.5% in 2027. With abundant new supply throughout Hanoi, the market is hoped to be favourable for tenants in the coming time. Hanoi's total supply will averagely grow by 3.5% per year from 2023-2027, the report noted. The Asia Pacific Office Outlook Report is a comprehensive regional report that provides supply, demand, vacancy, and rent data forecasts for cities in Vietnam and other countries./. Source: Vietnam News Agency