Office space rentals crash in HCM City

Hanoi (VNA) - Office rents in Ho Chi Minh City have plunged by up to 50 perent and the trend is tipped to continue as belt tightening and office construction ensure that supply far outstrips demand.

Foreign real estate companies Cushman & Wakefield, Savills and CB Richard Ellis said
top quality office space rents have fallen from a peak at the beginning of last year
of 70 USD per sq.m to 43 USD this year and could go as low as 30 USD.

Rents for second-class space had fallen from about 45 USD per sq.m to 28-40 USD and
third-class office space from 39 USD to 14-25 USD.

The rents do not include service fees and VAT.

CB Richard Ellis managing director Marc Townsend said office demand is closely
linked with employment and financial stability and firms were tightening their
belts, cutting jobs and also cutting costs on office rents.

They are assisted in this regard by an increase in vacancies and 1.25 million sq.m
of new office space predicted to come into the market this year, adding to the
downward pressure on rents.

Savills, a foreign-owned real estate firm in Vietnam , said construction in the
south has slowed significantly with only 930,000 sq.m of office space under
construction till 2012.

Vinaconex Investment and Tourism Joint Stock Company general director Tran Ngoc
Quang said the office investment market is gloomy and a recovery is difficult to
forecast in light of the financial crisis.-Enditem