Ho Chi Minh City Grade A office rents up 2.5% in Q2

This was due to the changes in the list of Grade A projects.

According to a recent JLL report, Grade A net effective rent in the CBD increased by 2.5% q-o-q, primarily due to changes in the list of Grade A projects. Rents remained stable on a project basis. On a y-o-y basis, rents in the CBD experienced a growth of 1.9%.

“Meanwhile, the non-CBD effective net rent recorded a decrease of 2.6% q-o-q and 4.2% y-o-y. The decline is due to the attractive rates offered by new projects to attract tenants during the initial lease phase,” the report said.

Here’s more from JLL:

In Q2 2024, Grade A office space in the CBD had a strong net absorption of 6,000 sqm, driven by international corporations relocating to new buildings. The non-CBD market also saw over 3,600 sqm absorbed, mostly from the recently launched E.Town 6.

Tenants prioritised newer Grade A buildings with better handover conditions, resulting in a shift from older properties. Sustainability and green features remained vital, as reflected in the interest in certified buildings despite higher rents.

New supply comes to the northern area of the city

E.Town 6, the first Grade A office building in a non-CBD area (North submarket), is now operating with 36,807 sqm of NLA. The project features international sustainable standards with LEED Platinum accreditation.

Furthermore, the Grade A office market witnessed several changes: Vincom Center was upgraded, VP Bank Tower opened for leasing, and one building was downgraded following evaluations. Thus, the total Grade A supply increased to 503,553 sqm in the CBD.

Outlook: Office market to see positive net absorption in new buildings

By end-2024, the CBD Grade A office supply is set to stabilise at 503,553 sqm of NLA. Rents in new offices should stay stable, while rents in older offices may be adjusted to attract tenants in the face of increasing competition from the new supply.

High-quality Grade A offices, especially those with green certifications, are preferred by tenants. Multinational clients are likely to expand and upgrade workplaces to meet sustainability standards and global commitments.