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​Commercial, office space rents continue to soar in Vietnam

Tuesday, July 17, 2018, 14:00 GMT+7
​Commercial, office space rents continue to soar in Vietnam
Customers shop at a shopping mall in Ho Chi Minh City's District 1 on December 23, 2017. Photo: Tuoi Tre

Businesses in Vietnam are facing difficulty in finding suitable commercial or office space as the rental rates have skyrocketed, especially in big cities.

Not a few enterprises had to discontinue renting space in urban zones in Hanoi and Ho Chi Minh City due to the inflated rents, driven by rising real estate prices.

According to a big real estate agency in Ho Chi Minh City’s District 1, rents for space on the metropolitan streets of the southern hub saw a rise of up to 30 percent from 2017.

D.A., owner of a store for lease on Le Thanh Ton Street in the same district, told Tuoi Tre (Youth) newspaper that he leased his premises for VND85 million (US$3,655) per month.

Tuoi Tre reporter observed that the landlord hung a for-lease sign, which reads VND65 million ($2,795), for the same store just one month before.

Meanwhile, just three kilometers away from Le Thanh Ton Street, a space of 150 square meters on Cach Mang Thang Tam Street in District 3, the second busiest thoroughfare in Ho Chi Minh City, is available for lease at VND80 million ($3,440) per month without value-added tax.

Not only commercial space, rents for warehouses and workshops in the city’s outlying districts are now as high as VND170 million ($7,310) per month for a 2,500 square meter premises, up VND30 million ($1,290) from the beginning of 2018.

With rents constantly soaring, many people are still racing to find places for lease at reasonable prices for their small and medium businesses.

However, rents for office in Ho Chi Minh City are expected to rise until 2020, as supply of new space won’t increase, while existing offices for lease in the city have been fully booked, according to the U.S.-owned realty consultant firm CBRE Vietnam.

Availability rates of both grade-A and grade-B offices in Ho Chi Minh City are less than five percent, said Dang Phuong Hang, managing director of CBRE Vietnam.

Likewise, data by real estate service provider Savills Vietnam showed that rental offices in the southern metropolis are being occupied at the rate of 96 percent.

Savills Vietnam also anticipated that the rents for offices will continue to soar in the upcoming time.

Industry insiders are concerned that the spike in space rents is a hint of a possible property bubble.

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Bao Anh / Tuoi Tre News

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