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| Office rental market faces oversupply crunch |
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02/Jun/2009 Intellasia | Nguoi Lao Dong |
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2 Jun, 2009 - 12:27:53 PM |
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It’s predicted that at the end of 2009, about 100,000 square metres of offices for lease in HCM City would be left vacant. The investors currently have to reconsider whether they should continue their construction projects of office buildings in the context of plentiful supplies and low leasing charges.
The owner of a B-class office building located near the centre of HCM city said that at the time when his building was officially put into operation, the rate of lessee was posted at about 70 percent, however, since Tet holiday up to now, the customers have moved out by 15 percent and then 10 percent. The rest lessees now required to re-negotiate the leasing price due to economic recession.
According to the company’s business report in Q1 of 2009 offered by CB Richard Ellis Vietnam Co (CBRE), the demands for offices for lease in HCM city continued to reduce. The total area of leased offices dropped by 45 percent against the previous quarter and by 85 percent year on year. The capacity of A-class offices for lease dipped about 3 percent and that of B-class ones also slumped by 5 percent against last year.
In the coming time, a series of new office buildings such as Kumho Asiana, Centre Point, Sailing Tower would be put into use, that would make the office vacancy rate increase sharply with about 100,000 square metres that would remain vacant.
Some investors for projects of office buildings have decided to temporarily halt the construction. Saigon Fuel Joint Stock Co (coded SFC) has recently transferred the project of offices for lease at 143-145 Dien Bien Phu St, HCM City for its partner because cheap prices for offices for lease would result in low effectiveness if the company continues to implement the projects. Hoa Binh Real Property Construction and Trading JSC has lately sold the project of office building in Phu My Hung new urban area to a domestic enterprise. Many other companies have also withdrawn the capital in their projects of offices for lease to invest in other business sectors.
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