Competitive rent for office market to meet business needs
During the first half of 2023 in Ho Chi Minh City, many businesses are struggling due to a sluggish market and difficult economic conditions. Many companies have chosen to cut operating costs by relocating their offices or downsizing, particularly those located in the central business district. In this article, let’s explore solutions for reasonable rent for the office market while maintaining Grade A high-quality standards outside the CBD.
What is affordable office space for rent?
Affordable office space for rent is a term in the real estate and office rental industry. It refers to office spaces that are offered for rent at a lower price compared to regular office spaces. The goal of affordable office space rentals is to cater to businesses, companies, or individuals with limited budgets, such as newly established businesses, startups, or small and medium-sized enterprises. Affordable office spaces may have smaller areas, shared spaces, or less convenient locations, but they provide a cost-effective option for organizations and individuals with budget constraints.
The trend of office space returns for cost saving
2023 has been predicted to be a year of economic downturn, with the possibility of a recession occurring in major economies around the world. Many reasons have been cited to support this prediction. These include the lingering effects of the COVID-19 pandemic on the economy, the Russia-Ukraine war, energy crises, and other events that have had an impact on the global economy. WTO has reported a decline in global trade since late 2022, and Vietnam is no exception to the downturn.
Amidst the challenging economic landscape, numerous Vietnamese businesses are grappling with difficulties in their operations. Businesses have to reduce their workforce or return office spaces in order to save on operational expenses, aiming to sustain operations and overcome this challenging period.
Over the first five months of the year, the trend of returning office spaces in Ho Chi Minh City has continued, especially in the center business districts. The office market is slowing down with some large office space rental companies having over 50% of their floor space vacant (according to Zingnews).
According to specific data, in the first quarter of 2023, the GRDP growth rate of Ho Chi Minh City only reached 0.7%. The city recorded an increase of 13,500 businesses closed, along with 14,300 new businesses, a decrease of 18% compared to the previous year. The total registered capital of businesses reached only 88.9 trillion VND, a decrease of 39% compared to the previous year (according to VnEconomy).
It is evident that the contraction in both the scale and number of businesses has affected the demand for office rentals. According to JLL Vietnam’s findings, the office market has become sluggish with few transactions in the first quarter of 2023. Therefore, businesses have chosen options such as renting lower-quality or far from the CBD.
Some large office space rental companies have more than 50% of their floor area vacant
Businesses often opt to downsize, return large office spaces, or move to lower-tier office spaces. Additionally, closing unproductive branch offices is often a solution businesses are forced to choose.
Downsizing or closing offices often means reducing staff. Streamlining the workforce helps significantly reduce operating costs, but it is a double-edged sword that can affect the development of businesses when the market enters a recovery phase.
Meanwhile, moving offices from Grade A to Grade B or C can lead to a cramped and less comfortable experience for personnel compared to the previous office. This can have a negative impact on the morale and productivity of the company. Especially for those using Grade A office buildings, it is difficult to move while still maintaining the same office structure and layout. This can affect the operational efficiency of the business.
To illustrate this trend by Grade A office buildings, employees are accustomed to high-standard office facilities such as high ceilings, spacious areas, and fast elevator waiting times. Moving to a new Grade B or C office space may give employees a feeling of discomfort and inconvenience due to cramped space and long elevator wait times. How can they maintain high-quality and efficient work morale under such circumstances?
Reducing office space can also make the workspace feel cramped and uncomfortable
When the central business districts are no longer suitable, businesses tend to seek cheaper office rent in adjacent areas such as Thu Thiem New Urban Area, District 7, and Thu Duc City.
However, large office spaces in adjacent areas such as Thu Thiem are contrary to the general trend of decreasing prices in the market. For example, office rental costs in Thu Thiem in the first quarter of 2023 have reached $40/m2, nearly equal to District 1 area (according to data from Cushman & Wakefield – a multinational real estate research and service provider).
Many other businesses are also struggling to find an optimal solution to the cost operation problems. Is it impossible to find a high-quality, convenient, and affordable Grade A office rental space?
Amidst businesses struggling to balance their budgets and the quality of workspace for their employees, some developers are taking advantage of this opportunity to offer impressive office packages.
Read more: What’s noteworthy about the future Grade A office rental market in the East Saigon area?
Exploring affordable and high-quality Grade A office space
OneHub Saigon – A solution for businesses seeking reasonable rent for new office
OneHub Saigon is a Grade A Business Park project situated outside the CBD, located at the entrance of Saigon Hi-Tech Park planning to provide over 160,000 square meters of office space. This project serves as a solution for enterprises seeking to move away from the CBD while still ensuring access to top-notch Grade A office accommodations.
The biggest advantage of OneHub Saigon is its reasonable and competitive rental costs when compared to other Grade A office buildings of similar quality in Ho Chi Minh City downtown. Alongside this, the project offers a variety of office space solutions. It stands as a promising destination for businesses seeking new office spaces, especially those changing in scale, structure, and workforce.
Grade A Suburban building of OneHub Saigon
The second advantage is its geographical location. Although not situated in the CBD, the position of OneHub Saigon is considered strategic. It is located along the Hanoi Highway, taking just over 20 minutes to commute to the downtown areas of Ho Chi Minh City. Furthermore, the project is seamlessly connected to Metro Station No. 12 of the Ben Thanh – Suoi Tien Metro Line. In the near future, when this metro line becomes operational, employees can easily travel to OneHub Saigon without facing the concerns of traffic congestion or unpredictable weather conditions.
Learn more: The importance of the Metro line to office buildings in Ho Chi Minh City High-Tech Park
The convenient location of OneHub Saigon
Built in a campus-style with person-centered, everything is designed to serve the workforce within OneHub Saigon. The space at this integrated business park boasts ample areas for recreational and sports activities amidst lush greenery. In addition, a range of entertainment, commercial, and service facilities are also available.
Lush greenery for sports, relaxation… and entertainment activities at OneHub Saigon
In summary, OneHub Saigon can fully meet the criteria of affordability, good location, and quality outdoor spaces. So, what about the interior space of the offices in OneHub Saigon? What makes it stand out?
What is inside the office building at OneHub Saigon?
Despite having competitive rent to compare in the central business district of Ho Chi Minh City, each building in OneHub Saigon is of Grade A quality. Tower 1 features spacious single floors with areas of up to 2,000m2. It also features high ceilings of 3 meters and is equipped with dual-layer soundproofing as well as thermal insulation glass. Particularly noteworthy, the cluster of 7 office buildings within OneHub Saigon all boast expansive floor spaces. OneHub Saigon offers a wide range of office space solutions covering a range of sizes, starting from 100m2 and going up to 2,000m2 per floor. Additionally, there is a whole office building available spanning an impressive 16,000m2, which efficiently caters to the diverse needs of enterprises.
Currently, Tower 1 of OneHub Saigon has been put into operation. The space of Tower 1 as well as other office buildings, is optimized for width, length, and height. It is designed almost column-free to maximize space utilization. This increases the spaciousness of workplaces to the maximum with large windows that offer views of the green landscape. This creates a comfortable and relaxing atmosphere.
Extensively spacious and column-free office layout in Tower 1 at OneHub Saigon comes at an affordable rental cost
Despite its affordable rental cost, Tower 1 has obtained the LEED Silver certification from the US Green Building Council, which evaluates the environmental friendliness of the building. This certification includes quality of the outdoor space, indoor environment, optimization of energy use and more.
Criteria and scoring system for evaluating the quality of green offices are based on the LEED Certification
In addition to the seamless floor space and generous layout, offices at OneHub Saigon meet various other safety standards. The walls and tempered glass are noise-resistant and fire-resistant, providing a quiet and safe work environment. The floors are designed to withstand a load of 5kN/m2, allowing businesses to easily and securely work. All of these advantages are present in the buildings at OneHub Saigon, which are difficult to find in those located in the CBD.
Furthermore, to ensure maximum security, the buildings are all operated and managed by specialized partners. This enables businesses here to operate 24/7. It effectively meets the requirements of enterprises with specific working hours, such as those in the IT sector or multinational corporations.
Read more: Reasons why OneHub Saigon is an ideal choice amidst the current trend of office rent reduction
Conclusion
With the current real estate market downturn and economic slowdown, many businesses in Ho Chi Minh City choose to close or downsize their offices. With predictions of this situation persisting, reasonable rent office for lease while maintaining high quality like OneHub Saigon is an excellent solution for businesses looking for quality offices while optimizing operational costs.
