Office for lease in high demand
Office for lease in high demand
The transformation of the office market and office occupiers' growing care to consider office occupancy costs were the key topics of a seminar held on September 27 in Ho Chi Minh City.
The exclusive seminar provided invaluable insights from industry leaders as well as networking opportunities with experts, delivering in-depth updates on regional and Vietnamese office trends.
Adam Evennett, regional director worldwide occupier services, Savills Asia-Pacific, commented that during the first half of 2018, regional Grade A office rents sustained strong performance, led by Hong Kong and Tokyo, with prices continuing to rise. Regional market risks include core vs. non-core commitments, price sensitivity, as well as flexibility.
Neil MacGregor, managing director for Savills Vietnam, added that after Grade A rental grew by more than 7 per cent in 2017, momentum has continued in 2018 and is set to remain at record levels well into 2019 and beyond.
“It is crucial for office occupiers to carefully analyse their office needs, plan ahead, and manage future occupancy costs effectively,” said MacGregor.
Providing an introduction to Atlas—a co-working space in the future Grade A Alpha Town office building—Tu Thi Hong An, associate director, commercial leasing at Savills Ho Chi Minh City, expressed confidence that Vietnam has the potential for unprecedented growth in the office sector.
“The Vietnamese market has the potential for the development of more sophisticated office projects, following all current global megatrends. The design, resources, and functionality of offices will change completely in the coming years. If you consider all the demand drivers and the requirements of today’s modern office occupiers, the opportunities are infinite,” said An.
Meanwhile, Yann Deschamps, head of Workthere, stated that the upsurge of co-working spaces has set a new milestone in the office market.
“Co-working is not only about the sharing of infrastructure and costs, it is about belonging to a community. Spaces are designed to provide a productive and collaborative environment for dynamic inhabitants and created without corporate constraints on what is perceived to be an “office” environment,” said Deschamps.
He added that the co-working realm is evolving faster in Asia than the rest of the world, and flexible workspaces will account for 15 per cent of the total office supply in Southeast Asia by 2030.
In Hong Kong, there are now more than 300 flexible workspaces, whilst Singapore hosts 176 spaces. Five major brands (TEC, Regus, CEO Suite, WeWork, and Fast Five) account for 80 per cent of the total co-working and serviced office space in Seoul, whilst Kuala Lumpur currently has 100 flexible workspace centres operated by more than 60 operators. Major players are now seeking future markets, such as Vietnam, Bangkok, and Jakarta.
In Vietnam, the number of co-working spaces rose by 62 per cent in 2017, driven by growth in startups and the need for cost-effective spaces, whilst the entry of international operators like Atlas will usher in a period of partnership agreements and mergers and acquisitions.
The first half of 2018 saw the Vietnamese office sector witnessing record occupancy levels with strong tenant demand, limited new supply, and rapidly growing office rents.
