With limited vacancies and high rents in the central business district in HCM City, non-CBD supply will continue to deliver affordable office space and keep a ceiling on rents, according to Savills Viet Nam.

More than 43,300sq.m of new supply entered the non-CBD area, 55 per cent of it in Go Vap District and Thu Duc City.

Decentralisation continues amid limited vacancies and high rents in the downtown area.

The average occupancy was 89 per cent, down 8 percentage points year-on-year, and average monthly rent was US$31 per square metre, down 3 per cent.

The deals were mostly for 100-300sq.m of space, nearly 70 per cent by small and medium-sized local enterprises, with only 4 per cent being for more than 1,000sq.m.

Distribution businesses accounted for 24 per cent, consultancies for 18 per cent and transportation companies for 13 per cent.

As against a negative figure of 8,000sq.m in the previous quarter, the take-up was almost 38,000sq.m.

Small businesses continue to drive demand for office space, Tu Thi Hong An, Savills’ commercial leasing director, said.

The quality of non-CBD buildings is gradually on par with CBD buildings but rents are lower, making them more appealing to potential tenants, she said.

Meanwhile, according to CBRE, new supply of 74,000sq.m will enter the market this year in five grade B buildings, AP Tower, Pearl 5 Tower, Cobi Tower, The Graces, and Saigon First House.

By 2022 two new grade A buildings are expected to come online. — VNS