Savills Vietnam forecasts growing demand for industrial, office property

Government policies and market forces are expected to propel the real estate sector for continued growth in 2024, with demand in industrial and office leasing segments expected to increase, according to experts from Savills Vietnam.
Savills Vietnam forecasts growing demand for industrial, office property
Illustrative image (Source: VNA)

The latest report of the company said hi-tech investment incentives are generating significant demand for industrial real estate, including warehouses, cold storage facilities, logistics and data centres. Tax incentives, favourable land policies and streamlined administrative procedures have attracted high-tech investors to Vietnam, notably giants from the US, the Republic of Korea and Japan.

To meet the ever-growing demand, developers have heavily invested in industrial real estate projects, especially in areas with potential in attracting hi-tech projects such as Ho Chi Minh City, Hanoi, Binh Duong, Dong Nai, Bac Ninh, Bac Giang and Thai Nguyen.

According to Savills Vietnam, the Vietnamese office market has defied the global trend, maintaining a high occupancy rate with stable rental growth. Notably, Ho Chi Minh City stands out as one of the potential office markets in the Asia-Pacific, boasting an occupancy rate of over 90%, while Hanoi also witnesses a high occupancy rate of 85%.

Foreign enterprises and technology companies are increasingly interested in Environmental, Social, and Governance (ESG) standards, leading to a growing demand for certified sustainable offices. In Ho Chi Minh City, around 28% of Grade A office supply is green certified, and it is predicted that by 2026, 80% of Grade A and B office supply will be certified.

In Hanoi, 20% of Grade A office supply was already green certified as of December 2023, with an additional 68,400 sq.m of green office space expected from new projects such as 27-29 Ly Thai To, Grand Terra, and Tien Bo Plaza.

General Director of Savills Vietnam Neil MacGregor said there is a growing demand for offices in suburban areas where rental prices are lower and commuting to industrial zones and high-tech parks is more convenient.

By the end of 2026, Grade A and B office supply in Ho Chi Minh City is projected to increase by an additional 200,000 sq.m, representing a 20% increase from the current supply. Hanoi is expected to add 220,000 sq.m, up 13% from the existing supply.

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(Source: VNA)