Outlook 2023 Vietnam

KEY MESSAGES BRISBANE HO CHI MINH CITY

SUPPLY

DEMAND

RENTS

KEY OUTLOOK

 No new supply is expected in the CBD area (District 1) until 2024 when The Nexus is launched, adding more than 30,000 sqm of Grade A office space into the market. However, this is still subject to laws and government regulations.  After 2025, the CBD is expected to welcome an influx of Grade A supply, with a total of more than 120,000 sqm coming on stream.

 Given instability in the global economic context, demand is likely to slow. Net absorption in 2022 is expected to be at 6,300 sqm, mostly due to low availability of Grade A supply in the CBD area. Accordingly, the new supply in Thu Duc City is expected to be absorbed quickly and achieve approximately 50% occupancy by the end of 2023, resulting in about 34,000 sqm in net absorption.  Overall vacancy is expected to increase to 11.7% in 2023 from 4.9% in 2022. Vacancy of

 Rents are forecast to remain stable with less than 2% growth until at least 2025 due to limited supply in the CBD and new supply in non-CBD areas having lower rents.  Accordingly, the net rent of the Grade A office to be maintained at US$51.5/sqm/mo by the end of 2022 and reach US$52.3/sqm/mo in 2023.

 District 7 is likely to rise as a new business hub thanks to its

affordable rents, newer projects with advanced

technology, abundant space for new development, and prospective infrastructure being developed.

above 10% is expected to endure, leading to tenant favourable conditions.