Offices are traditionally separated into Grade A, B, and C, determined by the score according to criteria such as age, location, security, design, facilities, and services. With the pandemic accelerating change in how we use and experience offices, then how has their grading changed in 2023? 

Defining Office Grades

Savills introduced office grading to Viet Nam in 2004, utilising internationally accepted industry practices, synthesised with Vietnamese market conditions.  

Given the change since 2004, Savills updated its office grading system in Q1/2023.  This now incorporates an additional classification, Grade A Suburban. 

Grade A Office

Located in an area with high commercial density and proximity to public transportation. These buildings have distinctive architecture and landscaping, high development standards, cater to ESG commitments, and have adopted technology, good safety and security, and highly regarded operators. These properties must score higher than 85. 

In Ha Noi in Q1/2023, Grade A offices had a 27% share of the stock of 2.17 million m2 NLA. Rent was highest at VND 818,000/m2/month gross, decreasing by -1% QoQ but increasing 6% YoY. In HCMC, Grade A only had a 12% share of stock and rent was softer QoQ at over VND 1,460,000/m2/month. 

Grade A Suburban Office

This is a new rating and is classified as a good development in a planned urban area with medium commercial density and good accessibility. The other features are the same as traditional Grade A properties and they must also score 85 and above. 

As this is a new segment, it will have a greater influence on future classification. After the reclassification of several properties, the new segment had a 2% share of stock in HCMC in the first quarter of 2023.

Grade B Office

These properties must have proximity to other commercial projects and public transportation have ‘medium’ ESG features, development standards, lift services and technology. They still offer good safety and security and experienced operators. These properties must score at least 65

In Q1/2023, in Ha Noi, Grade B was the largest segment with a 49% share of stock. In HCMC, Grade B had a 42% share of HCMC stock, decreasing by -4 ppts QoQ with several regraded projects.

Grade C Office

The lowest grade, properties have generic architecture, small floorplates, and basic lobbies. They must span at least 1,000 NLA, internal specifications and facilities are not essential, and management can be modest. These properties must score at least 35.

In Q1/2023, Grade C had the largest share of stock in HCMC at 44%, but it was the smallest segment in Ha Noi with a 24% share. However, it has the highest occupancy in Ha Noi at 92%.

Download Savills Quarterly Market Report for more insights on the office markets in Ha Noi and HCMC. 

What Makes a Grade A Office? 

Grade A offices are prized properties in Ha Noi and HCMC given high demand and limited stock; upcoming development like The METT, Grand Terra - 36 Cat Linh, and Lotte Mall Ha Noi will be welcome additions. Grade A offices offer the best of what offices can be, including location, efficiency, wellbeing, and technology.  

The Ha Noi and HCMC CBDs are home to significant Grade A developments. The historical CBDs remain business hubs; however, with increasing ICT demand and the lack of CBD land, then decentralised areas are desirable. Offices in the non-CBD can offer more experiential facilities, coffee shops, large receptions, showers, and even break pods. 

As decentralisation and change increase, the definition of Grade A office required revision, thereby introducing ‘Grade A Suburban’.  

Post-Covid, office efficiency is viewed differently, with flexible working cited as a mechanism for employees to be more efficient. Increasingly, employees are not tied to desks but can utilise different workspaces like cafes, focus booths, or lounges.  

Increasingly, the built environment is catering to the wellbeing of its occupiers. Buildings must now consider health through fresh air, natural light, or smells. Savills Head of Workplace Strategy APAC Simon Raper said that noise and its minimisation is a key element to the useability and desirability in offices post-Covid and that considering wellbeing in offices is becoming standard practice.  

To cater to occupier wellbeing, stakeholders are obtaining certifications like WELL, which assess how a building caters to human health and wellbeing with markers like air and light quality, water, sound, and temperature. Ensuring high scores against these criteria has been proven to increase productivity. See how Savills Ha Noi office delivers on WELL criteria.  

Grade A properties deliver high levels of technological integration. Technology makes access and usability more efficient, but it also can monitor and track how buildings operate. This facilitates greater sustainability efforts and can shape healthy ways of working for occupiers. Grade A properties must have at least two of the following features, including. automatic sensors, automatic management, smart security, automatic parking, or a smart app.

Explore: 12 Grade A Office Buildings in Ha Noi of Interest

Conclusion

Understanding office grades allows developers to create quality products, and occupiers to find the most suitable offices. While Grade A offices will remain prized assets for many occupiers, they now utilise different technologies, spaces, and features.  

Learn more about Savills updated office grading in Spotlight: Office Grading in Viet Nam.  

For detailed metrics on Savills office markets on a national or city level, contact Savills Advisory Services.