New offices open in Thu Thiem New Urban Area
New offices open in Thu Thiem New Urban Area
The Ho Chi Minh City office market has shown signs of vibrancy in Q3 with the introduction of two new office buildings in Thu Thiem New Urban Area of Thu Duc City, spanning 85,000 square metres in total.
The Mett and The Hallmark are both Grade A buildings in a convenient location only five minutes from Nguyen Hue Boulevard – the heart of Ho Chi Minh City – with green certificates. Both have achieved positive pre-commitment leasing results.
According to Savills Vietnam, both these projects quickly reached 50 per cent of occupancy with a monthly rental price of $50 per sq.m mere months after opening.
“With its close location to the central area and high development quality of new projects, this area has attracted tenants from the finance, banking, real estate, IT, and communication sectors. Prominent customers come from Australia, Korea, Taiwan, Malaysia, and Vietnam,” said Giang Huynh, deputy director at Savills Ho Chi Minh City.
“The rapid rising occupancy rate in The Mett and The Hallmark shows the positive demand of the tenant group in banking and finance, as well as the attraction of Thu Thiem New Urban Area,” Huynh continued.
Office space in the Thu Thiem New Urban Area makes up 90 per cent of the total market share of new spaces in Ho Chi Minh City in 2023. This proves demand for quality office stock in prime locations from tenants, especially multinational corporations, remains strong. Thanks to this new supply, the total net lettable area of Ho Chi Minh City office space reached 1.6 million sq.m as of October.
Pham Ngoc Thien Thanh, associate director, Research & Consulting at CBRE Ho Chi Minh City believes that new high-end office space in Thu Thiem has more competitive rent than the central area. This will give tenants more choices between three areas: District 1, Thu Thiem and District 7 when they want to set up offices according to international standards.
“Although these two office buildings do not currently have a strong impact on the office market in District 1, in the long run, Thu Thiem will also be an important counterweight to draw in a large number of visitors. Especially when buildings in the central area no longer have a large enough supply to serve multinational companies,” Thanh said.
Before these two projects, Thu Thiem only had the Sonix Tower belonging to the IIA Complex launched in 2019, providing about 21,000sq.m of high-end office space for lease.
In addition, some office areas are integrated into other multi-functional projects such as GS E&C and Lotte. However, these projects are now at the design stage, so the amount of office space for rent that to be brought from these projects is unknown.
Thu Thiem is a new metropolitan hub on Thu Thiem Peninsula in Thu Duc city, located opposite District 1 across the Saigon River. Covering 730 hectares, Thu Thiem desires to be akin to Manhattan in New York, with an ambitious plan to develop into a new financial hub of Ho Chi Minh City, the country and region.
According to the detailed planning approved by Ho Chi Minh City People’s Committee in 2005, the area hopes to one day be the new central district of the second city with the commercial and financial centre including many 40-storey buildings and residential areas with accommodation for 130,000 people, as well as one million visitors.
Office projects on Thu Thiem Peninsula will benefit from a series of core infrastructure projects that have been gradually completed, such as Thu Thiem Tunnel, Mai Chi Tho Avenue, Thu Thiem and Ba Son bridges.
The next six months will witness big competition in the office space in the southern metropolis with six new office projects launched, including The Nexus, VP Bank Saigon Tower (District 1), and E. Town 6 (Tan Binh), covering nearly 100,000sq.m in total.
The demand for high-quality premises with international Grade A standards is expected to continue to increase, especially for projects following green standards, as high-end tenants need to expand and upgrade.
Landlords are increasingly under more pressure to retain customers, and are doing so through a series of measures, such as building renovations, upgrading management quality, and increasing no fee time-slots. It is hoped that such initiatives will give a boost to a market that has much potential but is struggling in the short term.
