In this context, tenants, especially high-value industry enterprises, have the opportunity to negotiate and upgrade the working space more smoothly than ever.
According to Savills' Q1/2025 market report, the total supply of offices in Hanoi reached about 2.33 million m2 of floor space, up 10% over the same period. While the central area is still sparsely populated with Grade A land, the western and inner-city areas are expanding, accounting for 41% of new supply, opening up many flexible options for tenants.
Ms. Hoang Nguyet Minh - Senior Director, Commercial Leasing Department, Savills Hanoi - commented: "The market is currently leaning towards tenants. Businesses not only have the advantage of negotiating prices, but also enjoy more flexible lease terms and more diverse services. With the rental capacity in the whole market down to 82%, because the new supply is not fully absorbed, tenants can take advantage of the time to strengthen their negotiating position.
Notably, 78% of total transaction volume in the first quarter came from relocation needs instead of expanding areas. The company is prioritizing space optimization, improving work quality and controlling costs. New buildings with high ceilings, natural lighting, integrated technology... are gradually becoming mandatory standards to retain tenants.
Competition also forces existing buildings to be renovated to maintain adequate services and infrastructure, creating better service premises that tenants do not necessarily have to spend more. Buildings that cannot be upgraded can be eliminated in the context of increasingly clear quality differentiation.
From now until 2027, more than 95% of the new supply will be class A offices. After 2027, there will be about 864,500 m2 of offices from 28 projects, of which 64% are also in the class A segment. With large supply, businesses - especially international corporations, ICT companies, finance, real estate - can proactively plan long-term, access early and negotiate from the completion stage to optimize costs of fit-out, human resources and interior design according to the brand.
The FIRE (finance, insurance, real estate), ICT and consulting industries are leading rental demand, with high requirements for a working environment and traffic connectivity. Investors are also clearly oriented towards this group of visitors, as shown through projects such as Taisei Square Hanoi, Grand Terra or Oriental Square (expected to be completed by the end of 2025).
A prominent trend is the need for green offices. Although the rental price at green-certified buildings in Hanoi is over 20%, it is mainly due to the outstanding quality of the project. For European companies and businesses that value ESG, this is a top choice criterion, helping them stay ahead of trends and meet the requirements of partners and shareholders.
Faced with competitive pressure, Ms. Minh recommends that investors focus on closing deals, instead of setting price increase goals: "The market is currently owned by tenants. Increasing rental prices at this time is very risky". She also believes that this is an ideal opportunity for businesses to review lease contracts, assess medium and long-term needs and take action.
