9 Most Standard Criteria for Evaluating Grade A, B, C Office Spaces for Lease Today
Office space classification for lease has become a mandatory practice nowadays in office buildings in economic centers such as Ho Chi Minh City and Hanoi. However, why is it necessary to categorize offices, and what criteria are used to classify Grade A, B, C office spaces for lease? Let’s explore in the following article.
Office market situation for Grade A, B office spaces in Ho Chi Minh City Q3/2023
Ho Chi Minh City office market situation Q3/2023
In the Q3 report by Cushman & Wakefield, the office market for Grade A, B spaces in Ho Chi Minh City is experiencing positive changes. With the occupancy rate decreasing each quarter, landlords in the central area of Ho Chi Minh City are more flexible in lease policies to attract market demand. The reason is that more and more Grade A office projects outside the central area are entering the market.
Grade A offices in the central area have seen a 7.9% decrease in occupancy rates in Q3/2023. Meanwhile, Grade B buildings remain relatively stable with an occupancy rate fluctuation below 1% in the quarter. Rental prices for Grade A and B offices have increased by 2.2% and 2.0%, respectively, compared to the same period last year. The total supply of Grade A, B office spaces has exceeded 1.5 million square meters, a 6.1% increase from the previous year.
The occupancy rate of Grade A office buildings in the central area of Ho Chi Minh City decreased by 7.9% in Q3/2023
The increasing presence of high-quality office spaces, evident by certifications such as LEED, Green Mark, WELL, EDGE, or LOTUS, has become a trend. With the stability and improvement of high-quality office spaces today, office buildings in the central area need to be concerned about competition from counterparts outside the central area, where office rental prices of the same quality are often much lower. In the current economic situation, where stability is not fully established, many businesses still prioritize rental costs when choosing office spaces.
What are Grade A, B, C offices for lease?
Grade A, B, C offices for lease refer to offices categorized based on established standards to classify the quality of offices according to recognized criteria. These standards provide transparency for the office leasing market and serve as a foundation for buildings to adhere to during construction and operation. However, there are currently various standards based on the research results and market surveys of reputable real estate companies, creating different frameworks for evaluating office quality that are suitable for the respective time.
Grade A, B, C offices for lease are terms used to classify offices based on criteria related to the building’s quality
Evaluating and ranking Grade A, B, C offices for lease involves numerous criteria, ranging from major aspects like building structure, air quality, and location to secondary criteria such as surrounding services, elevator speed, etc. In general, determining office quality should be done before constructing the office to ensure design and construction adhere to the market’s quality classification standards.
See more: Grade A office space for rent in Saigon High-Tech Park
Why is it necessary to categorize offices for lease?
For construction units, categorization helps contractors and designers understand the technical requirements of the building. Different standards within each Grade A, B, C category require different techniques and materials. These units need to assess costs, supply sources, and other factors depending on the segment. This helps design and construction units plan and manage materials efficiently. Categorization also helps identify the scope and volume of corresponding work. This supports the bidding and design process, helping contractors and design units have a clearer understanding of the project’s scale and complexity.
For landlords, categorizing Grade A, B, C office buildings helps rental units determine appropriate rental prices based on the building’s quality and facilities. Grade A buildings, in the high-end segment, usually have higher rental prices compared to other segments. In the central area of Ho Chi Minh City, Grade A buildings can have rental prices double or even triple those of Grade B buildings.
Categorization helps rental units determine their target customer base. If they manage high-end buildings, they may target large businesses with high-end needs, and vice versa. From there, rental units can build an effective marketing strategy based on the specific characteristics and needs of each segment.
Categorizing buildings helps landlords determine the value of the office space in the eyes of customers
For prospective tenants, categorizing offices makes it easier for them to choose offices that meet their needs and budget. Tenants can select a building that accurately reflects its value and is suitable for their business. Tenants will also have an overview of the facilities and services available before deciding to visit the office for evaluation. Thanks to the detailed criteria in the grading table, tenants can choose a building based on their specific requirements and standards.
9 most standardized criteria for evaluating Grade A, B, C offices for lease
Here is a grading table for Grade A, B, C offices for lease in Vietnam by Savills, a leading global real estate company. These criteria are regularly updated based on the market’s real situation, but below are the 9 factors that Savills considers important for classifying offices in the current market.
Geographic location
- Grade A: Central location, near important economic areas, easy access, and convenient for business transactions.
- Grade B: Good location, possibly in the central or near-central areas, developing areas, easily accessible from multiple directions.
- Grade C: Medium to far from the center, possibly in suburban areas, may require additional travel time.
This is a top priority factor for office grading. However, due to the increasing presence of quality Grade A offices outside the central area, Savills recently introduced a new classification, Grade A Outside Central. The OneHub Saigon project in the Saigon Hi-Tech Park is an example of this classification, offering much more reasonable rent compared to similar quality offices in the city center.
The location factor in the central area has a significant impact on office rental prices
Transportation
- Grade A: Convenient transportation, accessible from multiple directions, close to public transportation such as subway and buses.
- Grade B: Good transportation, may have main roads, accessible from several directions.
- Grade C: Relatively accessible transportation, may require additional travel time to important areas.
The transportation factor emphasizes the building’s connectivity to other areas
Reputation
This is an “invisible” criterion but brings great value to the office building. The reputation of those involved in construction, management, or tenants will determine the building’s class and status.
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Design | Renowned design firm, unique and iconic architecture | Renowned design firm, standard architecture | Professional design firm, conventional architecture |
| Contractor | International organization | International organization | Domestic organization |
| Investor | Domestic or foreign | Domestic or foreign | Domestic |
| Management | International professional company | Management company, either domestic or foreign | Self-management |
| Tenant | Multinational corporation | Well-known businesses both domestically and internationally | Small and medium-sized enterprises |
Building Structure
The building structure encompasses various criteria that directly impact the operational efficiency and user experience of the building.
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Operating Age | New | Varies by building | Varies by building |
| Ceiling Height | From 2m65 and above | From 2m5 and above | From 2m4 and above |
| View | Expensive, in central areas | Standard | Normal |
| Floor Area | From 1000m2 and above | From 500m2-1000m2 | Below 500m2 |
| Floor Load Capacity | 500 kg/m2 | 300 kg/m2 | 250 kg/m2 |
| Hallway Width | From 2m2 | From 1m8 | From 1m5 |
| Total Floor Area | Spacious, column-free | Wide, minimum column spacing is 9m | Small, column spacing under 9m |
| Rentable Area | 75-80% | 70-75% | Below 70% |
| 5,500m2 | 5,000m2 | Approximately 1,000m2 |
View is also a factor for grading office spaces into A, B, C categories
Building Lobby
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Main Lobby | Luxurious, professionally manned reception, multilingual communication | Standard | Small |
| Reception Area | High-quality furnishings, comfortable seating | Small | May or may not be present |
| Corridors | Spacious, carpeted or tiled, standard lighting | Well-designed, ensuring adequate lighting | Adequate lighting |
The main lobby area is the face of the building
Elevators
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Waiting Area | Spacious, detailed signage in Vietnamese and English | Approximately 3m2 with directional signs | Moderate, under 3m2 |
| Elevator Types | Separate elevators for cargo and passengers | Separate elevators for cargo and passengers | Shared elevators |
| Number | Possibly more than 10 elevators | Average of 10 elevators | 1-3 elevators |
| Brands | Internationally renowned | Common | Normal |
| Load Capacity | 16 people | 12-16 people | 8 people |
| Speed | High, minimizing waiting time | Fast, short waiting time | Low, long waiting time |
Elevators in Grade A office buildings must have a large load capacity, spacious interiors, and fast speed
Amenities of the Building
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Parking Garage | Spacious, flat, separately designated entrances and exits, continuous staff service, a certain percentage of car spaces based on the total leased area | May or may not have a car park | Only motorcycle parking available |
| Cleaning Services | International standards, insect control services | International standards, insect control services | Daily cleaning service |
| Maintenance Services | Well-maintained, quick response to customer needs | Well-maintained, quick response to customer needs | Maintenance services available |
| Restrooms | 5-star standard, with facilities for people with disabilities | 4-star standard | 3-star standard |
Management and maintenance services are indispensable for high-end office buildings
Furniture
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Quality | High-end | Good | Average |
| Layout | Square shape, optimal workspace with increasing distance from the core to the outer walls | Typical, reasonable distance between the core and outer walls | Different shapes |
| Door | Minimum width subtracting trim: 0.9m | Minimum width subtracting trim: 0.9m | Minimum width subtracting trim: 0.9m |
| Floor | Minimum 3cm concrete layer for convenient concealed cable routing | Minimum 3cm concrete layer for convenient concealed cable routing | Minimum 3cm concrete layer for convenient concealed cable routing |
| Air Conditioning Control Panel | One control panel per 30m2 | Central control | Central air conditioning or split air conditioning units |
| Completion level of floor, ceiling, walls… | Double-layer soundproof and fire-resistant drywall | Drywall | Drywall |
| Telephone, Internet ADSL Wiring | High-speed | Standard speed | Standard speed |
HVAC System
The HVAC system is a heating, ventilation, and air conditioning system within the building. The components of the HVAC system work together to create a space with a comfortable temperature and humidity level for the building occupants.
| Grade A Building | Grade B Building | Grade C Building | |
|---|---|---|---|
| Air Conditioning | Centralized air conditioning/BMS system | Centralized air conditioning/BMS system | Centralized air conditioning or split air conditioning units |
| Ventilation | Modern | Average | Average |
| Clean Water Supply | High standard | Average | Average |
| Backup Power | Ensures 100% capacity | Ensures 100% capacity | Available backup power source |
| Fire Protection | Sprinklers, hoses, regular drills… | Sprinklers, hoses… | Pipes, sprinklers |
| Waste Water Treatment | Standard | Standard | Standard |
| Security | CCTV system, access control, 24/7 professional security | CCTV system and security team | Security team |
| Lighting | 400 lux and above | 400 lux and above | Below 400 lux |
OneHub Saigon – Prestigious Grade A Office Space in Thu Duc District, Ho Chi Minh City
The trend of relocating offices from the central areas of Ho Chi Minh City to the suburbs has brought increased attention to projects outside the city center. One notable project in this category is OneHub Saigon in the eastern part of the city, located in the High-Tech Park of Ho Chi Minh City. This complex consists of office spaces and multifunctional buildings, aiming to become a high-quality destination for many businesses.
OneHub Saigon is constructed to Grade A standards, offering spacious floor areas without columns, up to 2000m2 per floor, and a ceiling height of 3 meters, providing a wide and comfortable working environment. The building features high-quality elevators, professional management services, and high-quality technical elements, creating a refreshing and comfortable atmosphere inside the building.
Interior Space of OneHub Saigon Office Building
Outside the building, there is a diverse range of services, from dining to entertainment and relaxation. The most distinctive feature of this project is the outdoor space and the refreshing landscape designed by the renowned architect Colin K. Okashimo. This outdoor space is intended for employees to engage in sports activities, socialize, and relax after stressful working hours.
Green space outside OneHub Saigon Office Building
The OneHub Saigon project is strategically located at the gateway to the High-Tech Park in Ho Chi Minh City, directly connected to the Hanoi Highway. It takes approximately 20 minutes to travel to the city center. In the future, the project will have direct access to Metro Line 1 Ben Thanh – Suoi Tien, making commuting for the workforce here safer, faster, and more convenient.
Due to its construction to Grade A standards, OneHub Saigon is also managed and operated by a professional team with the ability to operate 24/7. The parking area is spacious, with a dedicated space for cars and ample parking space both outdoors and in the basement.
High-quality projects like OneHub Saigon have led Savills to introduce a new office classification, namely Grade A offices outside the city center, alongside the traditional three office classifications for rent: Grade A, B, and C.
Convenient Location Connecting Areas Within and Outside the City
Conclusion
The Ho Chi Minh City office market in Q3/2023 stands out with the participation of high-quality office projects outside the city center entering the market. As a result, landlords in the central area of Ho Chi Minh City have also implemented more flexible and lenient leasing policies to attract customers, given the current decrease in occupancy rates in the central area. Meanwhile, the situation for Grade B office spaces remains stable, with both prices and occupancy rates showing little fluctuation. Investors are increasingly focusing on high-quality office models that meet green and sustainable criteria.
The criteria for evaluating offices are crucial in determining the value and segment of a building. Office buildings for rent in Grades A, B, C will have different standards, providing various benefits for both construction companies, landlords, and tenants. However, the evaluation criteria are also updated over time. Evidence of this is Savills’ introduction of a new classification, namely Grade A offices outside the city center, for high-quality projects located outside the central area, in addition to the traditional three classifications for office rentals: Grade A, B, and C.
See more: What are the attractive tax incentives in the Saigon High-Tech Park?
