The stock of Grade B offices in Hanoi in the fourth quarter (Q4) of 2018 rose 1.5% on quarter and 9.7% on year, according to Cushman and Wakefield (C&W).
Building for rent. Photo: Indochinaplaza
This quarter saw the completion of one Grade B building while there was no change in the supply of Grade A.
The occupancy rates of Grade A buildings exceeded 95% Q4, compared to 90% of Grade B buildings. The rates contributed to a total absorption rate of over 80% for the quarter.
Average rent remained stable for both grades in Q4 but recorded an increase of 2.5% for the year, mainly driven by higher rent of projects with improved occupancy and prime locations with a limited available area.
The market is expected to remain competitive in the short term with the imminent opening of two new buildings.
C&W attributed the short-term prospect for Hanoi’s office market to Vietnam’s economic growth accelerated in the fourth quarter, leading to an increase of 7% for the whole year.
This growth is thanks to a number of factors, including stable macroeconomic conditions, sustained FDI attraction, strong economic restructuring, and ongoing FTA implementation, C&W said in the latest report.