Ho Chi Minh City’s net office absorption hits 25,700sqm in Q4

Thanks to the healthy uptake at The Nexus.

According to a JLL report, in 4Q23, despite economic challenges, Grade A office space in the CBD recorded a net absorption of 25,700 sqm, led by strong uptake at the newly-completed The Nexus. 

With a nearly 55% occupancy rate at launch, The Nexus highlighted optimistic demand for new, quality office space. Net absorption in the Non-CBD area stayed steady, mirroring the previous quarter’s performance.

Here’s more from JLL:

Noteworthy leasing transactions in the CBD and fringe areas by tenants seeking premium office spaces included Saigon Paper Company, CIMB Bank, Shinhan Bank, Takeda Pharmaceuticals, Keyence, BASF, MSIG, and The Executive Centre.

CBD welcomes The Nexus, a new Grade A international development

In 4Q23, The Nexus project increased market supply by 32,000 sqm, with total Grade A office space in HCMC reaching 488,200 sqm. The CBD accounted for 89% of the space at 433,700 sqm, while Non-CBD areas remained at 54,500 sqm, representing the remaining 11%.

In the CBD, the vacancy rate was recorded at 14.4%, a slight increase of 0.4% q-o-q, mainly due to the completion of new projects in the area. Meanwhile, the vacancy rate for Grade A offices in the Non-CBD area remained at 9.4%. Overall, the stable vacancy rate, despite new supply and economic challenges, reflects the resilience of the Grade A office market in HCMC.

CBD rents increase slightly due to new completions

The Nexus, the country’s first sustainable, premium-quality project to achieve WELL and LEED certifications, has markedly heightened competition in the Grade A office market. Its premium rent, reflecting top-notch facilities and location, raised the net effective rent of CBD Grade A offices in 4Q23 to USD 47.5 per sqm, per month, a 1.6% increase from the previous quarter.

Net effective rent in the non-CBD area remained stable at USD 27.1 per sqm, per month, a 1.5% increase y-o-y, but with no significant changes from the previous quarter.

Outlook: Strong demand for high-quality space is expected

The demand for high-quality, international-standard Grade A space, particularly green-certified projects, is anticipated to grow as premium tenants look to expand and upgrade their offices to meet specific needs.

In 2024, HCMC’s Grade A office market is set to expand with the launch of E.Town 6 in the Non-CBD area, adding 40,000 sqm NLA to the total supply.

Note: Ho Chi Minh City Office refers to Ho Chi Minh City's Grade A office market.