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The Vietnam News

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Offices for lease seriously short

The market for offices for lease has seemed quiet recently, but in fact it has remained very hot as there has been a serious shortage of such offices. The quietness of the market has been attributed to the fact that there were no office buildings put into operation in the third quarter of the year. According to CB Richard Ellis, an international property consultancy company, there is a serious imbalance between the supply of and demand for offices.

According to the company, all A and B class offices have been 95% or 99% occupied. Meanwhile, the buildings which are under construction and will be put into operation in November and December, including North Asia Tower, Opera Business Centre, and Pacific Palace which will be operational in March 2007, are already 45-75% booked. The upward trend in leasing prices is continuing. The leasing fee for A-class offices has increased to US$35/sq m/month, not including service fees and value added tax.

Nevertheless, CB Richard Ellis said that once the new buildings become operational in the next few months, the market will cool down, and leasing fees will see slight decreases to US$30-34/sq m/month, including service fees and not including value added tax. Meanwhile, experts believe that if the supply of offices cannot be improved in the next three years, Vietnam will witness the outbreak of a so-called ‘office fever’ in the country.

They have warned that the demand for leasing offices will rise dramatically once Vietnam joins the World Trade Organisation (WTO). At that time, more and more international groups will come to Vietnam to seek investment opportunities. Experts have also voiced their concerns about the current bad planning of real estate projects, which will cause difficulties for investors and result in the appearance of standardised office buildings in Vietnam.

Vietnam Economic Times / Th?i báo Kinh t? Vi?t Nam - October 11, 2006.