Office classification helps increase market transparency

Office building rankings will encourage the market to improve building quality, helping tenants accurately evaluate products with reasonable rental prices for each segment.

According to Mr. Jonathan Flexer - Deputy Director and Head of CBRE HCMC Tenant Representation Department, classifying office buildings for lease will bring transparency to the market. As demand increases, developers also bring higher quality buildings to the market by applying new, advanced technologies.

CBRE representative said that countries around the world have specialized agencies responsible for office classification, such as the International Building Owners and Managers Association (BOMA) in the US or the Real Estate Council of Australia, which publishes definitions of standards and public guidelines.

Vietnam currently has no legal documents to evaluate office building standards, only general building classifications. Market research units often evaluate buildings by referring to international standards and practices, thereby providing criteria suitable for implementation in Vietnam... In general, the classification is often divided into levels according to overall quality, as well as the functions and services provided to tenants of the building.

The central area of District 1, Ho Chi Minh City gathers many class A office buildings. Photo: Bee Huy — The central area of District 1, Ho Chi Minh City gathers many class A office buildings. Photo: *Bee Huy*

According to Savills, classifying office buildings into classes A, B, C helps parties in the industry have a specific framework to evaluate the quality of office buildings for lease. These standards are used by design units, construction contractors, investors, lessors and tenants to carry out related work.

For example, design units and construction contractors base on office standards to plan construction. Leasing units rely on criteria to have appropriate rental price frames. Tenants rely on that to search for office buildings corresponding to their needs.

Diverse classification standards , towards modernity

In Vietnam, service providers such as CBRE, Collier, Savills... all classify high-rise buildings according to their own criteria, with adjustments suitable to market conditions and existing buildings on the market.

Specifically, CBRE assessed the building as meeting Class A office standards when located in the city's financial and commercial center; with a notable architectural design. These high-rise buildings will have design units, contractors and development units that are international organizations or joint ventures. Class A office buildings have ceiling heights of 2.65m; floor areas of 1,000m2; corridor widths of 2m2 or more; a minimum of 4 elevators per floor with a maximum capacity of 16 people...

Meanwhile, Colliers Vietnam applies the rating system of the Australian Property Council and adjusts some standards to suit the Vietnamese market. The unit classifies the ranking of Class A buildings: floor area of over 700m2, building area of over 10,000m2 with beautiful scenery, views and natural light, impressive lobby, complete and high-quality elevators; close access system, fire exits on each floor, 100% backup power guaranteed, on-site building management and operation of 15,000m2, parking lot: one motorbike parking space is 19m2 and 170m2 for cars...

Colliers also mentioned the sustainability criteria or ESG (Environmental - Social - Governance) model to assess the impact of the building on the environment and human health. Currently, the Vietnamese office market has many office buildings applying "green certificates" such as EDGE of IFC - a member of the World Bank Group, Green Mark of Singapore, LEED of the US and Lotus of Vietnam, issued by the Vietnam Green Building Council.

Jonathan Flexer said that including green certification as part of a classification system could improve the quality of new developments, while also promoting retrofits and upgrades of older buildings. A clear example of this trend is the development of the office market in Ho Chi Minh City.

Improving the quality of supply in Ho Chi Minh City

In the development orientation until 2045, Ho Chi Minh City will develop on par with major cities in the world, becoming the economic, financial and service center of Asia. In the future, Ho Chi Minh City will also attract international financial institutions and economic groups, leading to an increasing demand for high-end offices.

Over the past few years, many Grade A office buildings have been built with international standards and modern amenities to meet the diverse needs of businesses.

Deutsches Haus, a luxury office building built in 2017. Photo: Deutsches Haus — Deutsches Haus, a luxury office building built in 2017. Photo: *Deutsches Haus*

Attracting much attention and being filled up are Deutsches Haus, Saigon Center 2, Friendship Tower... mainly concentrated in the central area of District 1. With large floor area, beautiful architectural design and full facilities such as security system, air conditioning system and fire protection system, these buildings become the top choice for businesses wanting to locate their headquarters in the central area.

With the increasing demand, the supply of luxury offices is expanding to the adjacent areas of the city center. The Hallmark and The METT in the Metropole Thu Thiem new urban area are typical examples. These new buildings are designed with modern amenities and advanced technologies. With prime locations, complete infrastructure and more convenient transportation, the buildings are now attracting the attention of many businesses wanting to locate their headquarters in the areas adjacent to the city center.

The Hallmark office building will receive Singapore’s Green Mark (Gold) green building certification this June and is ready to open to tenants. The project is rated A+, the highest quality office building on the market.

The Hallmark - Grade A+ office building to open in June at the gateway to Thu Thiem. Photo: The Hallmark — The Hallmark - Grade A+ office building to open in June at the gateway to Thu Thiem. Photo: *The Hallmark*

The tower has a total floor area of 68,000m2, a ceiling height of 2.75m; a 100mm raised floor and a column-free design, maximizing natural light and optimizing visibility. The entire exterior is covered with 30mm thick double-layer high-quality SYP glass, which is heat-insulating, soundproof, and UV-resistant; the interior is equipped with a medical-grade HEPA air filtration and ventilation system. The passive cooling system also helps to minimize the building's energy and electricity usage.

CBRE representatives said the main difference of The Hallmark is the large floor area (from 1,600 to 2,300m2), which gives tenants more flexibility in office design. The building also stands out with its quality finishing, "touchless" technology, outdoor area on the 5th floor with trees and panoramic views of the city.

"The green certification for minimizing environmental impact that the building has is also very important in making a difference compared to other buildings in Ho Chi Minh City," commented a representative of CBRE.

According to Colliers, the number of green buildings in the Asia-Pacific region will increase by 22% in 2022-2023. By 2030, it is expected that up to 42% of buildings will be "green". Starting later than Western countries promises to give Vietnam many opportunities to learn in the journey of sustainable development.

The report also assessed that the trend of building offices according to the ESG model will be increasingly researched and invested in by many investors. Most multinational corporations must meet ESG requirements, so ESG-compliant real estate projects are considered good investments, helping to minimize risks and optimize business efficiency.

Hoai Phong

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