Decade-long surge in HCMC workplace rents drives exodus to non-CBD spaces

Ho Chi Minh City’s office-for-lease market has witnessed a noticeable shift away from the central business district (CBD) as rental prices have experienced an upward trend for a decade, according to a report by Savills Vietnam.

Last year, average office rents in the city reached VND816,000 ($32) per square meter per month, with an annual growth rate of 2-3% across all types of offices.

In 2024, 11 new office projects, totaling 133,000 square meters, entered the market. Of these, eight projects (65%) are located outside the CBD area, reinforcing the ongoing trend of office relocations away from CBD places.

This shift has become more pronounced since 2023, when non-CBD supply surpassed that of the central area for the first time, capturing a 51% market share.

The trend has also driven rental demand, with non-CBD offices representing 68% of the total leased space in 2024.

The Q4 occupancy rate rose by 1 percentage point quarter-on-quarter to 89%, driven by transactions from the information and communications technology (ICT), finance, insurance, and real estate (FIRE) sectors.

High-end and mid-end office segments led the market, with occupancy in both categories increasing by 1 percentage point (ppt) quarter-on-quarter to nearly 90%, reflecting sustained demand for premium office space.

Despite total sales exceeding 100,000 square meters in 2024, occupancy rates in these segments declined by two ppts year-on-year to 89% due to the influx of new supply.

Regarding specific office segments, the high-end market sees an abundant supply, while mid-end options remain limited, said Nhu Quynh, senior leasing manager at Savills HCMC.

She also noted that the office-for-lease market in HCMC has ample room for growth, with an apparent shift to the non-CBD area. With the development of transport infrastructure, office buildings near metro lines have a strong potential to attract tenants, she added.