What is the future of Grade A office rental market in East Saigon?

The Eastern area of Ho Chi Minh City (East Saigon), also known as the “Eastern City”, is a creative urban area consisting of three main districts: District 9, District 2, and the former Thu Duc District which is now Thu Duc City. With 70% of infrastructure investment capital from Ho Chi Minh City (HCMC), this area has superior development potential compared to neighboring regions. In this article, let’s explore the opportunity of Grade A office market in East Saigon, discover the latest trends and potential development of the office market in the current economic context. Also, the article will answer why Saigon Hi Tech Park office is suitable for business at the moment.

Understanding the office rental market in Saigon

According to the latest report from Knight Frank, a real estate consultancy firm in the UK, the office market in Ho Chi Minh City witnessed an increase in rent and occupancy rate in 2022. Grade A offices experienced a rent increase of 15-20%, with a vacancy rate of 15%. Grade B rent remained stable, with an 8.4% vacancy rate. Grade C, with an occupancy rate of 96%, had the lowest vacancy rate at 4%.

Therefore, in 2023, tenants looking for offices will have an advantage in contract negotiations. The market will shift towards favoring tenants. The rent of Grade A is projected to decrease by $2/m2/month. The vacancy and rent of Grade A are expected to increase again by the end of 2024.

A typical Grade A lobby in the central district of Ho Chi Minh City

Increasing discounts and lowering rent are factors being considered by office building owners. Over the next three years, the Ho Chi Minh City office market will welcome a series of new office projects with prime locations and a variety of office types. Furthermore, the higher demands of tenants are changing, including the need for flexible and more convenient workspaces. At the same time, building owners are working to improve tenant retention factors as new buildings enter the market.

Grade A Suburban in East Saigon

Key locations for market

In 2023, East Saigon sees an increasing supply of high-quality office buildings along with good transportation infrastructure connections to the city center. This creates favorable conditions for East Saigon to become a magnet for long-term investment by companies. Currently, Grade A in East Saigon is vibrant and promising. These Grade A are modern and fully equipped with amenities that meet the needs of large enterprises and international corporations.

East Saigon is an ideal location for Grade A Suburban

Peripheral areas like District 2 and the former District 9 are also witnessing an influx of new buildings due to ongoing infrastructure investments and development. In particular, Thu Duc City is experiencing strong growth with multiple projects under construction. Notably, the Saigon Hi Tech Park area has the potential to become a crucial hub for the development of Technology Industry 4.0.

Average rent

The average rent in the East Saigon area can range from $12 to $50/m2/month, depending on the location, quality and amenities of buildings. Prices in Thu Thiem and District 2 (old) are generally higher compared to other areas. The average rent of Grade A ranges from about $25 to $50/m2/month. However, it should be noted that rent can vary depending on the market conditions and negotiations between landlords and tenants.

Factors affecting office rent

To find a good office building with affordable rent, businesses need to consider the following factors.

• Location: Offices located in the city center, near commercial areas and densely populated regions, tend to have higher rent to suburban.
• Size: Businesses with large space requirements (ranging from 500m2 to 2,000m2) or those seeking to lease an entire floor of a building often receive favorable price and attractive lease terms from the landlord.
• Amenities: The facilities within the building, such as air conditioning systems, security systems, power and water supply, after-working hours services, etc. also impact office rent.
• Condition of handover: Fitted out floor will generally command higher rent than bare floor
• Lease term: Landlords usually prefer lease contracts ranging from 3 to 5 years. Therefore, long-term lease agreements often come with more favorable rental discounts compared to short-term leases.
• The market: The real estate market also influences office rent. If the market is facing challenges, the rental rates are likely to decrease. Conversely, during a developing market, the rent tends to increase.

In general, the economic situation remains challenging after the pandemic, and businesses tend to prioritize cost efficiency by reducing rental space or opting for office buildings located in suburbans. Therefore, OneHub Saigon can be an ideal suggestion for high-quality Grade A office.

Find out: Decentralization trend of businesses – Moving offices out of the central area

Necessary amenities of a Grade A office

OneHub Saigon – The ideal Grade A office in Saigon Hi Tech Park

The trend of Grade A office building for lease in suburbans, particularly in Saigon Hi Tech Park, let’s explore what makes OneHub Saigon stand out as a noteworthy integrated business park.

Overview of OneHub Saigon

OneHub Saigon is a new generation integrated business park, developed with the concept of “work – live – play – learn”. With the infrastructure development in Thu Duc City and the support from Saigon Hi-Tech Park, OneHub Saigon provides an ideal workspace for businesses in the fields of information technology, biotechnology, new materials, e-commerce, fintech and so on.

A new generation integrated business park for all kind of businesses

Reasons why to choose OneHub Saigon

OneHub Saigon has a prime location directly connected to Metro Station No. 12 and Saigon Hi-Tech Park Station of the Metro Line No.1 (Ben Thanh to Suoi Tien). Once this metro line is completed and operational in the future, it takes only 20 minutes to commute from District 1 to Saigon Hi-Tech Park. It promises to build a modern and sophisticated working culture in line with developed countries such as Singapore, South Korea and Japan.

The rent at OneHub Saigon is reasonable and competitive while maintaining comparable high-quality standards. This helps businesses save costs and enhance their competitiveness. Furthermore, OneHub Saigon is built with Grade A specification to meet international standards:

• Being a Grade A campus-style business park with 7 office towers, OneHub Saigon offers large contiguous floor plates up to 2,000sqm and 3 meter ceiling height each plate. This provides businesses with a flexible and collaborative working environment, fostering creativity and improving productivity.
• Being a 12 hectare campus-style development, it is entirely different from traditional office spaces. The park features low-rise office towers instead of high-rise office buildings surrounded by green spaces, providing recreational and working amenities to cater to employees’ needs.
• OneHub Saigon business park takes pride in being one of the Grade A office projects in Saigon Hi-Tech Park to receive LEED Silver certification, starting with Tower 1. This certification is awarded by the U.S. Green Building Council for energy-saving and environmentally friendly constructions.

Campus-style model with lush greenery at OneHub Saigon Hi Tech Park office

Additionally, the accompanying facilities and services at OneHub Saigon make it an ideal destination for businesses, serving purposes such as event venues, data centers, training centers, combined office and accommodation spaces, and many more.

Conclusion

Vietnam’s economy makes a robust recovery leading the office market in Saigon is witnessing the resurgence of high-quality Grade A office buildings for lease. Opting for office leasing at OneHub Saigon Hi-Tech Park could be a reasonable and cost-effective choice for businesses.

Read more: What to consider when searching for office for lease in Saigon hi-Tech Park?