Outlook 2023 Vietnam
KEY MESSAGES BRISBANE HO CHI MINH CITY
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.
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