According to the latest report by Cushman & Wakefield Vietnam, in 2024, the Hanoi office market will record nearly 35,000 square meters of new supply, coming from two projects in the non-central and western areas.
By the end of 2024, rents are expected to increase slightly by only 0.2%. Accordingly, the average office rent in the city is forecast to reach 32 USD/m2/month. Landlords are willing to negotiate prices and incentives with businesses to quickly fill vacant spaces and create favorable conditions for leasing the remaining areas.
Net office absorption by the end of 2024 is expected to reach around 40,400m2, mainly driven by corporations with regular demand for large office space, taking advantage of the market slowing down to benefit from better negotiating power and more attractive incentives.
In 2025, the city is expected to welcome 24,500 square meters of new supply. Rents are expected to increase by about 1.7% to 2.2% in 2025-2026, with vacancy rates falling to about 23-24% as rental demand begins to recover.
From 2027, rental growth is forecast to stabilize at around 1.0% per annum. During 2025-2029, Hanoi’s total supply will increase by 7.7% per annum. Starting from 2027, vacancy rates will increase to 27-28% due to the increase in new supply.
Leasing demand remains strong in key sectors such as banking, manufacturing, IT, insurance and logistics. Grade A office tenants continue to focus on sustainability standards and flexible workspaces. Green and sustainable buildings will be an inevitable trend for new developments.
In 2024, HCMC will see 117,500 square meters of new supply from five Grade A buildings, including three projects in the CBD. With economic challenges causing rental demand to slow down and new supply from non-CBD districts, businesses are likely to remain cautious in setting rental rates and adjusting prices throughout 2024.
Manufacturing, IT, retail and healthcare are strong office occupiers. In 2024, expansion and relocation activities will be most active in Grade A buildings, indicating that new supply will play a role in driving demand in Vietnam.
In 2025, the HCMC office market will see an additional 165,000 square meters of new supply from two projects in both the central and non-central areas. The citywide net absorption rate of Grade A offices is forecast to remain stable next year. From 2024 to 2029, the average rent in HCMC is forecast to remain stable, with a change of less than 1% per year, except for 2025, when it is forecast to increase more.
HCMC office rental growth is forecast to increase sharply by 5% in 2025, but the upward trend will tend to be more stable at about 0.4-0.5% from 2026 when new supply outside the center is completed.
From 2026 onwards, the market is expected to have approximately 85,000m2 of new supply per year. Thu Thiem New Urban Area and Phu My Hung New Urban Area continue to emerge as new office hubs. With new supply continuously increasing, the vacancy rate is expected to remain high, possibly exceeding 24%.
