Ha Noi is a top office destination in the Asia Pacific with increasingly diverse products, stable performance, affordable rents, and proximity to key markets such as China, Japan and Korea. With insights from Savills Viet Nam Q3/2023 Market Brief and an overview of supply, performance, prices and demand, this blog explores the potential of the Ha Noi office market.

Growing New Supply with Large-Scale Developments Entering

Ha Noi office stock in Q3/2023 increased 1% quarter-on-quarter (QoQ) and 2% year-on-year (YoY) to 2.16 million m2 NLA with the entrance of Lotte Mall West Lake Ha Noi with 23,000 m2 NLA. In terms of location, the West was the largest supplier while the Secondary had the greatest growth.

Strong Grade A Performance

In Q3/2023, take-up reached 44,500 m2. Grade A offices rent increased by 2% QoQ to VND 824,000/m2/month, while Grade B and Grade C rent remained unchanged. With foreign companies scouting premium projects, Grade A offices in Ha Noi have the potential to attract significant tenants, especially given that the grade will have a 77% share of the future supply. Future Grade A projects in Ha Noi include Taisei Hanoi Office Tower, Tien Bo Plaza and 27-29 Ly Thai To.

Browse the diverse office developments in Ha Noi.

Active Leasing

According to Savills Regional Office Prime Benchmark, in terms of occupancy costs, Ha Noi ranked 17th of the 21 studied Asia Pacific cities in H1/2023. Gross rent of VND 513,000/ m2/month in Q3/2023 increased by 2% QoQ, and occupancy reached 85%, increasing by 1 ppts QoQ.

Leasing was active in the first nine months of 2023, with manufacturing tenants securing the most deals and the largest leased area. ICT, FIRE and education tenants followed closely behind. Relocation dominated leasing activity; tenants relocating liked the Secondary area with its new and office high-quality projects, budget-friendly rents and proximity to the CBD.

Sustainability is a Must

Green real estate in Viet Nam is a growing segment, especially in the commercial space. Savy corporates realize that ESG reporting is responsible; moreover, it will be mandatory in the short term. More than 85% Viet Nam's fastest-growing companies have ESG commitments. This trend has driven a surge in demand for green-certified offices. Upcoming projects such as 27-29 Ly Thai To, Grand Terra, and Tien Bo Plaza

are forecast to deliver 68,400 m2 of green office space by the end of 2025, which can partially meet the rising demand. Read Savills Viet Nam ESG Spotlight.

Conclusion: Look Out for Opportunities in Ha Noi's Dynamic Commercial Landscape

Savills Viet Nam Q3/2023 Market Brief has provided a comprehensive analysis of the Ha Noi office market. High-profile tenants have shown interest in the city, with growing Grade A supply and the adoption of green standards. With appealing occupancy costs but also affordable rents and diverse products, the office market in Ha Noi offers lucrative opportunities for investors and occupiers alike. For detailed insights into real estate markets in Ha Noi and Ho Chi Minh City, get your copy of Savills Q3/2023 Market Brief