Average asking rents of offices continued the upward trend for the last eight quarters ending in late 2018, mainly due to the limited space available for lease, according to Cushman and Wakefield (C&W). 
Illustrative photo
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Both short and medium forecasts indicate that this rental growth is likely to continue in the coming quarters.
Alex Crane, managing director of Cushman & Wakefield Vietnam, commented: “Vacancy will continue to constrict in the first half 2019. New office buildings will launch in Q2 which will put some incentives back into the market, something that has been missing for the last 12 months.”
He added that oversupply or new vacancy through two or three high profile buildings in Ho Chi Minh City in 2019 are not sure to give tenants more choice and better cause for relocation. It means that rents across the market will then stabilize before reducing later this year.
Office rental in HCM City in Q4 2018. Photo: C&W
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Sometimes at low vacancy, Grade A buildings have been rent as much as US$75/square meter (sq.m)/month and Grade B at US$40/m2/month. These high-watermark prices will fall by the end of the year and likely stabilize at US$55 for Grade A and circa US$35 for Grade B.
Asking rent of offices in HCM City in Q4/2018. Photo: C&W
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Over the year, increasing supply led to positive performance. The total stock rose 1.9% on quarter and 4.7% on year thanks to the completion of two Grade B buildings.
As a result, occupancy rates remained high at over 95%. The quarter saw a large proportion of total net absorption attributed to new entrants in the market.
