The demand for office rentals in Hanoi’s real estate market has significantly increased in Q3 compared to the first half of 2024. Meanwhile, office rental rates continued to decline, favoring tenants.
Regarding the office market in Q3, Ms. Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi, shared: “The office market in the first half of the year was relatively slow compared to the same period last year. The demand for office space was also slower as rental rates didn’t improve. However, at the beginning of Q3/2024, the demand for office space noticeably increased compared to the first half of the year. The occupancy rate in Q3 almost made up for the market’s lack of performance in the first six months.”
Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing, Savills Hanoi
According to Savills’ report, the office market maintained a stable occupancy rate of 87% year-over-year. The Class C segment maintained the highest occupancy rate at 91%, stable quarterly, and down only 1% year-over-year. This was followed by Class A with an occupancy rate of 86%, a decrease of 3% quarterly and an increase of 1% year-over-year. Class B had the lowest occupancy rate at 84%, a decrease of 1% quarterly and annually.
“By Q3 2024, businesses usually have a clear strategy for the first half of the year. This enables them to easily adapt to changes in their business plans, as well as their expansion or operational model adjustments for the latter half of 2024 and 2025,” said Ms. Minh.
“At the same time, the market is currently offering great opportunities for businesses seeking to rent office spaces. There is a diverse range of options, including many high-quality and green-certified projects. Rental rates are also attractive, with many Class A projects offering rates comparable to those of Class B,” she added.
(Illustration: KT)
Office rental rates in Q3 2024 witnessed a slight decrease. The gross rental rate remained stable quarterly and decreased by 1% year-over-year, reaching VND 533,000/m2. For Class A offices, rental rates dropped by 3% quarterly and 2% year-over-year. Rates for Class B remained stable quarterly but decreased by 3% year-over-year. Class C was the only segment that didn’t experience a decline in rental rates, with a slight increase of 1% quarterly and stability annually.
The office rental market is also seeing a shift towards the Western or inner areas of the city, where many new projects offer better amenities and reasonable rental rates. Central districts like Hoan Kiem and Ba Dinh have almost run out of available spaces.
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Office rental prices are expected to continue to rise in the short to medium term. This is why you need a long-term workspace strategy, whether it’s signing a new lease, relocating, expanding your office, or even investing in your own building.
