Asia Pacific Office Outlook 2024

HO CHI MINH CITY

K E Y M E S S AG E S

SUPPLY

DEMAND

RENTS

KEY OUTLOOK

 New Grade A supply is expected in the CBD area (District 1) in 2024–2025 with the entry of 3 projects, contributing a total of 118,700 sqm of office space to the market.  About 81,000 sqm of additional Grade A supply is also expected from the Non-CBD area during the 2024–2026 period.  All prospective projects are either pursuing or have attained ESG certifications, highlighting the shift in interests toward more sustainable development.

 Economic instability has impacted general HCMC office demand as tenants become more cost conscious.  With low market sentiment,

 Rents are forecast to remain stable with less than 1% change until at least 2025 due to rising competition within both the CBD and Non-CBD.  Accordingly, the net rent of the Grade A office is to be maintained around USD 56 sqm/mo in 2023–2024, before rising to USD 58.5 sqm/mo in 2025 with the entry of the largest Grade A project at the heart of the CBD area.

 New supply from Thu Thiem New Urban Area (neighboring the CBD) marked a significant step for this submarket to be an extension of the current CBD area.  District 7 and Thu Thiem New Urban Area will rise as new business and commercial hubs of the city thanks to affordable rents, newer projects with advanced technology, abundant space for new development, and prospective infrastructure.

net absorption in 2023 is modest at around 21,000 sqm. Absorption will

gradually rise from 2024, driven by higher-quality new supply and improved economic conditions.  Overall vacancy is expected to increase to 12.5% in 2023 from 3.7% in 2022. Vacancy above 20% is expected through 2023–2026, resulting from the constant stream of new supply.