Retail market shows positive signs of recovery, and office rents will increase
This comment was standed by CBRE in the report announcing the focus of the real estate market in the first quarter of 2021 on the morning of April 07
Retail market shows good signs of recovery
In the first quarter of 2021, the retail market showed positive signs of recovery. Total revenue of consumer good retail and service in Hanoi increased by 6.8% over the same period last year (decreased by 0.01% year-on-year in the first quarter of 2020), showing that people's consumption demand has increased again. Besides, according to statistics from Google, the number of people visiting commercial centers or retail spaces also begun to increase and has good prospects for recovery.
Regarding market activities, the ground floor and first floor offer rents (excluding VAT and service charges) at non-central commercial centers continued to decrease slightly because some projects having high vacancy rates discounted prices to attract tenants, averaging at 24.4 USD/m2/month, down 1.8% YoY and 0.4% QoQ. Vacancy rates in these areas remained high, reaching 14.5%, 2.2% higher QoQ and 6.4% higher YoY. In terms of supply, Hanoi market did not record any new projects to put into operation in the first quarter of 2021. Retail lease floor area remained unchanged at over one million square meters.
In the central areas, the average offer rent on the ground floor and first floors was 108.1 USD/m2/month, up 0.4% QoQ and 10.2% YoY. The central areas recorded an average vacancy rate of 10.8% as some vacant spaces on the upper floors have not been leased yet to new tenants. However, this ratio fell by 3.5% over the previous quarter.
Regarding lessees, the retail market in Hanoi in the last quarter witnessed the expansion and entry of many brands such as Pandora, Haidilao, Weekend Max Mara. It is expected that in the coming quarters, fashion, culinary and supermarket brands will continue to launch in Hanoi to make the retail market more vibrant.
In the next three quarters, the Hanoi retail market is expected to welcome 73,000 square meters of new space, including the Vincom Mega Mall Smart City project. In addition, after 2021, about 200,000m2 is expected to enter the market. These new projects are concentrated in the non-central area. The residents in the north and south of the city and surrounding areas will have more options to shop and use services when two large-scale projects, Lotte Mall Hanoi and Aeon Mall Giap Bat, are officially put into operation.
Grade A office rents are expected to increase by 0.5 to 1%
Also in the first quarter of 2021, the Hanoi office market did not record any new projects being put into operation. Total office supply in Hanoi in both grades was maintained at 1.5 million m2, with 35% of total supply from Grade A projects.
Due to the absence of new projects in the first quarter of 2021 and the increase in absorption rate of the office market, the vacancy rate in Hanoi decreased in both grades. In terms of premises, rents of Grade A offices were 26.9USD/m2/month, up 0.4% QoQ and 2.7% YoY. Meanwhile, Grade B office rents remained at 13.9USD/m2/month, unchanged from the previous quarter. Despite the return of the Covid-19 epidemic in the first quarter of 2021, Vietnam's economy recovery continues. As a result, the performance of the office market in both Hanoi and Ho Chi Minh City is at a positive level in this quarter. The total absorption area of the Hanoi office market in the first quarter of 2021 reached 24.00m2 while that of Ho Chi Minh City market reached 19,600m2.
Also according to CBRE's research, the Hanoi market is expected to welcome a lot of new supply with more than 200,000m2 of office spaces, the most since 2011. Among new projects in 2021, in addition to projects the traditional office areas, Hanoi market is expected to receive a number of projects in new areas such as Techno Park Tower project in Gia Lam District or Intracom Riverside project in Dong Anh District.
Regarding demand, according to CBRE's survey, in the first quarter of 2021, the banking, finance, insurance and manufacturing industries continued to be the main driving forces driving demand of the market. Regarding the lease area, office tenants look for offices of less than 300m2. In addition, some tenants are also looking for a flexible workspace to be an office.
In 2021, the Hanoi office market is expected to reach an absorption rate of 80,000m2. Excluding the impact of new projects in 2021, rents in the Grade A market are expected to increase by 0.5 to 1% this year.
According to Construction Newspapers
Real estate is still an attractive investment channel, trusted by many people
At the Honor Ceremony of the leading real estate brand in 2020 - 2021 and the Spring Real Estate Talkshow recently organized by Vietnam Real Estate Online Magazine (Reatimes) and Vietnam Real Estate Research Institute (VIRES), experts have recognized, evaluated and forecast common problems of the real estate market in the period of 2020 - 2021.
Outlook for the real estate market in 2021
According to the survey results recently conducted by Vietnam Report Joint Stock Company (Vietnam Report), economic experts and businesses operating in the real estate field expect that in the first half of the year and for the whole year of 2021, the real estate market will continue to recover and grow, even boom in some certain segments and regions.
3 driving forces for the office market to grow steadily in 2021
In the context of macroeconomic recovery, the office market maintains stable gross rents and average occupancy rate. Many businesses have changed from fixed working style to flexible one to prioritize efficiency through the requirement of less fixed workspace and many shared areas.
Which real estate segment benefits from macroeconomic indicators
The internal force of the economy is the foundation that promotes the prospect of the real estate market. Accordingly, looking at the current macro indicators, real estate in 2021 will witness very good growth in some segments.
Office rents increase despite the epidemic
The average offer price of Grade B office spaces in Ho Chi Minh City increased sharply in the third quarter, while that of Hanoi only decreased by 1% over the same period last year.
Office market faces difficulties until the end of 2020
In the last coming months of the year, the office market will continue to face challenges when demand decreases and the vacancy rate is expected to increase further.
Retail and commercial premises: Changing strategies to "overcome the storm"
The Hanoi market records an increase in the vacancy rate in commercial centers and prime locations. And for the first time, the market have witnessed lessors negotiating prices with lessees.
The real estate market before a new cycle: After rain comes sunshine
Although starting the new development cycle with depression and difficulties, experts say that these are only objective factors, while the nature of Vietnam's real estate market still has a lot of room and opportunities for investment.
“Real estate will recover fastest compared to other industries”
“The supply-demand mismatch makes it difficult to reduce real estate prices, especially in quality real estate products. It is one of many notable remarks at the conference "Vietnam Real Estate in 2020 - 2021: Ready for a new cycle".
How does office market survive the 2nd time?
In the second quarter, the average rent of the Grade A segment decreased by 4.9% compared to the same period of last year and the vacancy rate increased by 9 percentage points year-on-year, at 11.8%. Grade B office rents remained unchanged without decrease tendency and the vacancy rate increased slightly.
Offices for lease in Ho Chi Minh City: Negative net absorption area was recorded for the first time in a decade
Real estate consulting company, JLL, has just released its Ho Chi Minh City Office Market Report in the second quarter of 2020, accordingly, the net absorption area was recorded negative for the first time in a decade.
