| Prices of offices for lease down by 30% in HCM City |
| Wednesday, 15 April 2009 | |
|
The office-for-lease market in HCM City is coming down. In the future, it is likely that the benchmark of office-for-lease prices will change and reduce by 30-50%. The current ceiling price is US$70 a square metre a month.
The main reason for such a move is that several domestic and foreign businesses are reducing business, production activities and employees due to the global economic recession. Additionally, supply for high-sky offices for lease is increasing. A-level office-for-lease towers in 2008 priced at US$60-100 a square metre have now fallen to US$40-70 a square metre a month. Similarly, prices of B-level towers reduced to US$30-35 a square metre a month from US$40-45. Meanwhile, prices of C-level towers have reduced to US$10-15 a square metre a month from US$20-27 a square metre a month. Rental prices are declining to stimulate demand however many high-sky office-for-lease buildings remain vacant due to lack of clients. At the seminar titled "office-for-lease buildings are facing various challenges" held on February 19, CBRE said that offices for lease are facing reduction of prices and there are no clients. In the worst case scenario, investors should consider transforming part or all usage purposes of buildings thoroughly to rescue themselves. CBRE emphasized that lessees are now like shoppers in a big commercial centre and have more choices. If a store fails to meet the shopper's demand, the shopper will immediately go to another store to find products that can satisfy his/her demand and at a more reasonable price. Many real estate analysts forecasted that the golden time of office-for-lease buildings has passed. However, when the economy in Vietnam improves, prices of commercial premises are certain to increase. While prices of offices for lease are declining, commercial centres are forecasted to see an increase in rental prices. According to CBRE, total supply of retail centres in HCM City is 200,000 square metres with the occupancy rate of 96%. |
