» » Office rentals a buyers’ market for now: CBRE

The office rental market in Vietnam offers great opportunities for tenants to strike good deals at the moment, a senior official with a major real estate services provider said Thursday.

Head of Office Services of the US-based CBRE, Chris Currie said at a press briefing that the office rentals market is entering a mature cycle with many advantages, he said.

Over the last six months, asking rents at Grade A office buildings have plunged by 30-50 percent in HCMC.

‘Total absorption’ dropped by 45 percent quarter-on-quarter and 85 percent year-on-year, CBRE said.

The asking rent is expected to reach its bottom in about 20 percent of the city’s office buildings in the coming months, Currie said.

The vacancy rate would be doubled to about 30 percent by the end of 2009 from the current 15 percent in the city’s central business district, he added.

According to CBRE, total existing vacancies and new office buildings in HCMC cover nearly 114,000 square meters.

However, the market is seeing first signs of activity in 2009, Currie said.

Incentives offered by new office buildings are standard now, but will decrease in the coming months, he said. Other recovery signals include increasing concern over VND/USD currency fluctuations from tenants and short term rent reviews.

The current asking rents of major office buildings in HCMC ranged from US$30-50 per square meter, according to CBRE.

Currie said tenants are still seeing that this is a buyers’ market and seeking the best deals they can get their hands on.

The newer buildings are now more competitive and will remain so in terms of efficiency, price, quality of construction and quality of services, he said.

He said the market could see some reckless speculative behavior in the coming months.
Anchor tenants (1,500 square meters or plus) are expected to make a move from existing to new locations, and new landlords will stop being very generous with their incentives when certain levels of occupancy are reached.

The market will move toward a more stable trend next year, Currie said.

Source: TNO
Photo credit: GMR

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