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Trends Influencing the Premium Office Market in Ha Noi

According to Savills latest market report, the office market will perform well this year and ICT and FIRE tenants will lead demands. According to Ms Hoang Nguyet Minh, Senior Director of Commercial Leasing, Savills Ha Noi, the rent of Grade A offices will also depend on the future supply. Increasingly, tenants are selecting offices in buildings with green certificates that also cater to hybrid or agile working.

Ha Noi's Office Performance in the First Half of 2022

After Grade A and B increases, occupancy this quarter improved by 2 percentage points compared to Q4/2021. By the end of 2022, six new projects are expected; the only Grade A building will be Techcombank Tower – 6 Quang Trung, an elite property in Hoan Kiem. This project follows the opening of another international Grade A building, Capital Place.

Ms Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Ha Noi, commented: “Tenants can pick from a variety of new high-quality Grade A properties entering soon, mostly in Hoan Kiem, Ba Dinh and Tay Ho districts. New properties will compete with existing buildings in terms of quality, services, and pricing. Ha Noi’s office supply is lower compared to regional peers like Singapore or Bangkok. However, the rents are lower, the quality is high, and there is great potential for economic growth. These factors mean that foreign investors are still keen on developing projects in the city, creating a healthy outlook for premium office supply.”

Two Main Trends Influencing the Premium Office Market in Ha Noi

According to Ms Minh, leasing decisions are driven by green credentials and if the space can cater to hybrid or agile work.

Certified green buildings in Ha Noi include high-end properties like TechnoPark Tower and Capital Place. New properties like Techcombank Tower - 6 Quang Trung, Gelex 10 Tran Nguyen Han, 36 Cat Linh, and Tien Bo Plaza will have LEED Gold green certificates; Lancaster Luminaire and Taisei Office Building Ha Noi will have LEED green certificates. These properties will add nearly 90,000 m2 of green office space.

Offices in green buildings have a competitive advantage compared to conventional offices in prime locations. This is as these spaces are more than just rooms filled with desks. Therefore, occupiers often feel more productive and are more engaged at work.

Savills Vietnam

Certified green buildings in Ha Noi include high-end properties like TechnoPark Tower and Capital Place. New properties like Techcombank Tower - 6 Quang Trung, Gelex 10 Tran Nguyen Han, 36 Cat Linh, and Tien Bo Plaza will have LEED Gold green certificates.

The pandemic has accelerated the implementation of hybrid and agile working. According to a global survey by Savills, although the speed of adopting hybrid work differs from place to place, the transition will be inevitable in the long term. Leading players like ICT, manufacturing, healthcare, and FIRE (finance, insurance, and real estate) tenants are keen on adopting hybrid and agile working. These models differ from co-working. Co-working is more about having a shared space and services such as concierge, security, and cleaning. Despite its popularity, co-working has certain restraints and is more suitable for start-ups, project-based companies, and short-term leases.

Ms Minh added: “When companies implement hybrid and agile models, they need an office with more open-planning and breakout areas. Crucially, these models promote teamwork and interaction while having dedicated space for online meetings and focused work. Such offices will increase productivity, and most importantly, connect people. Hybrid working will likely be adopted much faster than the co-working model as the application has broader appeal.”

Savills Vietnam

Ms Hoang Nguyet Minh, Senior Director, Savills Ha Noi, added: “When companies implement hybrid and agile models, they need an office with more open-planning and breakout areas. Crucially, these models promote teamwork and interaction while having dedicated space for online meetings and focused work.

For example, at Techcombank Tower - 6 Quang Trung the column-free floorplates promote collaboration, and its air purification system also means that employees can feel safe and comfortable when they work in the office. These are very valuable for tenants. Techcombank Tower - 6 Quang Trung will be the only office building in Ha Noi’s central business district (CDB) to enter the market in 2022, this will create great competition over other office buildings in Hoan Kiem which were built over 20 years ago with old design and technical standards.

At an upcoming event, Savills experts will reveal insights on how tenants and the market should interact with hybrid models and how the new high-end supply will influence the market. Experts in Ha Noi will host “Ha Noi Office Market Trends and Forecasts” on the 16th of June 2022. Visit www.savills.com.vn for more information.

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