Vietnam’s retail property market will see a boom in rentals this year while the office market will remain weak due to increased supply, said the foreign real estate service providers.
Savills Vietnam said that office rents will continue its declining trend on higher office space supply would ensure that the market still belongs to tenants, not landlords.
The Vietnam office of the world’s largest real-estate broker, CB Richard Ellis Group Inc., said Grade A asking rents have dropped by 50% from the peaks of mid 2008.
In Ho Chi Minh City, over 100,000 square meters of vacant space in 2009 are still waiting for tenants, and more than 350,000 square meters of new space will come into the market this year.
CBRE said that with 53,000 square meters of Grade A and B space currently empty and over 150,000 square meters of more space coming in 2010, office rents in Hanoi will also continue falling in the mid-term until construction slows.
The prospects for the retail property market, meanwhile, are much better.
According to Savills, average rent in HCM City is around US$97.4 per square meter per month, up 25.5% from the third quarter last year.
Marc Townsend, general manager of CBRE Vietnam, said the highest retail rent has reached US$250 per square meter per month in the central business district.
CBRE said the average occupancy rate in HCM City’s retail market is now 95.3% while that of Hanoi’s is 83.3%.
Demand for retail space is expected to rise as Vietnamese retail chains expand and more international brands arrive in the country, the firm said. It noted that large international retailers including Tesco and Wal-Mart still “remain on the sidelines.”
Weathering the global economic downturn, Vietnam reached a positive GDP growth rate of 5.32% in 2009. Interest rates were increased by one %age point on December 1, a move designed to limit credit growth and rein in inflation. (VnEconomy)
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