Office leasing in Vietnam in top 50 costly groups in world

Property prices generally in Vietnam have been going down compared with 2011 but the office market in two big cities namely Hanoi and HCM City remained in the top 50 expensive cities in rental in the world last year.

Knight Frank real estate consulting firm has released the annual report on global property market in which Vietnam’s Hanoi and HCM City ranked among the top 50 cities.

Accordingly, Hong Kong jumped from the third position to the expensive city with over US$134 per square meter a month, followed by London with US$128/sqm/month, Tokyo with US$106/sqm/month. Ranking among the top ten cities were big financial hubs like Paris, Singapore, Geneva, Sydney, Perth...

HCM City fell from the 19th position in 2010 to the 27th in 2011 with U$50/sqm/month and Hanoi stood at the 32nd grade (against 21st position in the previous year) with almost US$40/sqm/month. Office rental in Hanoi and HCM City was very costly, surpassing other big cities namely Birmingham (UK), Munich (Germany), Helsinki (Finland), Boston (USA), Warsaw (Poland)...

Hong Kong led the ranking list, showing the rapid growth of the office-for-lease market in 2011. However, with the weakening demand, the rental of offices Grade A here is expected to fall in 2012, Knight Frank reported.

Quick jumper among the top 50 cities was Beijing, from the 29th in 2010 to the 19th in 2011 with the rental rise of over 46%. Growth rate of the office market in Beijing and Shanghai is predicted to be two-digits this year.

According to Knight Frank, the order of the top 50 cities with the costly office rental in 2012 will change. The markets in Europe will be under the pressure of lowering rental due to the impacts of public debt crisis, namely Madrid (Spain). In Asia, some places with huge supply like HCM City will face similar pressure.

CBRE consulting firm also reported that in Q4 of 2011, the vacancy ratio of Hanoi office market rose sharply against the third quarter. Offices Grade A and B in Hanoi saw a vacancy ratio of 34% and 24% respectively against 5% and 18% in Q3, bringing the whole market’s vacancy ratio to 28% in Q4.

The office-for-lease market in HCM City remains gloomy and continues being under the price reduction pressure this year. - Source: Vietbiz24