Experts expect that the market in 2025 will maintain growth in both supply and demand by taking advantage of the good momentum in the second half of 2024 with a series of recorded transactions. However, investors need to provide quality supply as well as attractive rental policies to "retain" tenants in the face of rapid changes in demand as it is today.
Ms. Hoang Nguyet Minh - Senior Director of Commercial Leasing Department, Savills Hanoi commented that the market in 2024 has recorded a good rebound in the second half, when a series of companies have begun to have their plans approved to relocate, expand existing areas or open new offices. This will help the market demand in 2025 to be more prominent, expecting the absorption rate of vacant areas in the office market in 2025 to be higher than in 2024.
In 2025, the market will have many new sources of supply, which will be one of the advantages to help tenants have more choices. At the same time, it will increase the heat of competition for investors in terms of rental prices, building quality as well as other rental incentives to attract customers, thereby increasing the building's occupancy area.
Although the abundant new supply may lower the overall market occupancy rate, it is necessary to recognize that the market will have much more positive activities in both supply and demand in the new year. The demand for office space of tenants is also different from previous years - Ms. Minh commented.
According to Ms. Hoang Nguyet Minh, at the end of 2024, Savills conducted a survey of nearly 500 businesses that are currently tenants in Class A and Class B offices with the aim of better understanding the demand of the office market in 2025-2026. The results of the survey provide interesting information about the continuous shift in office demand of tenants.
First is the selected office location. If previously the main source of demand was for the Hoan Kiem area, now the first priority location is Ba Dinh and the second is Cau Giay. The percentage of tenants interested in the Hoan Kiem area has decreased from 45% in 2021-2022 to only about 25% in 2024.
In addition, tenants have expanded their search options, instead of focusing on just one area to find rental space as before. Almost all tenants are interested in at least 2 different areas when looking for a new location, it can be Hoan Kiem, Ba Dinh or Ba Dinh, Cau Giay or Ba Dinh, Dong Da or Tay Ho.
Explaining this, Ms. Minh said that the Hanoi market has achieved diversity and differentiation in terms of administrative and office locations. Therefore, tenants have more choices and their choices will no longer be limited to one area. This means that tenants will have more ability to negotiate with landlords to achieve better rental conditions than before.
According to Savills' prediction, in the coming time, information technology and manufacturing will still be the leading industries in terms of office space for rent. Because these industries often require very large rental spaces, the average area of tenants related to this industry group is up to over 1,000 m2 of floor space.
If calculating the number of office leasing transactions in the period from 2025 - 2026, companies in the consulting sector, including financial consulting, legal consulting or the distribution channel and education industry groups will be able to lead thanks to the rapid development of this industry group in the coming time.
With a large supply spread across the districts as it is now, it is clear that the office rental market in Hanoi is more beneficial for tenants. Tenants have more choices and more demands. Savills believes that until the end of 2025, even into 2026, the market will still be largely tilted towards tenants. Therefore, investors need to change their financial calculations to bring more attractive incentives to tenants - Ms. Minh recommended.
Savills experts believe that landlords need to make necessary changes to attract tenants in 2025. If in the past landlords simply needed to build a building and rent out the empty space, now they have to provide more services, utilities... to tenants.
Because the market is very competitive, most buildings are built in a methodical and meticulous manner and Class A buildings are aiming for green certification. A building with a green certification is now almost a matter of course and mandatory, especially in the context of climate change, air pollution, environmental pollution as it is today, along with the need for business operations to ensure the requirements of achieving Net-Zero goals.
Along with that are the services in the building. Currently, the buildings that are built later tend to compete by providing more services to customers. Dining areas for employees, gyms, green spaces or services that many landlords have added to retain tenants.
There are also investors who are very flexible in business calculations and rental policies, even supporting tenants to invest in complete interiors. Many tenants can sign management and operation contracts in cooperation with service offices, co-working spaces (shared offices) will be able to add many amenities to provide to tenants.
Therefore, for investors, to compete with the large office supply, it is necessary to pay more attention to expecting reasonable prices, attractive rental policies along with providing internal services, bringing convenience to employees of the leasing businesses.
According to VNA
Source: https://doanhnghiepvn.vn/kinh-te/thi-truong-van-phong-ha-noi-chieu-long-khach-thue/20250124095351663
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