Amid ongoing efforts by the economy to adapt to global fluctuations, Viet Nam’s office leasing market in Q1/2025 recorded notable movements in terms of supply, rental prices, and tenant demand. In the country’s two major economic hubs, HCMC and Ha Noi, patterns such as office relocation, workspace optimisation, and the pursuit of higher-quality premises are increasingly shaping how businesses approach their workplace strategies.

Q1/2025 Market Brief was recently released and offers a comprehensive overview of market dynamics. It covers key segments across Grade A, B, and C office space and the trajectory of future supply to serve as a valuable reference for investors, landlords, and occupiers in formulating strategic decisions. 

1/ HCMC Office Market Q1/2025

Stable office supply maintained

The Ho Chi Minh City (HCMC) office market maintained a stable supply, with a total stock of 2.8 million square meters across 394 existing projects. In Q1/2025, new supply primarily came from small-scale Grade C projects, including:

• District 1: One newly launched project,
• District 3: One project re-entering the market,

District 7: Five projects that were converted for office use — helping offset the withdrawal of one project.Grade C dominated the market, accounting for 43% of the total stock, followed by Grade B (40%) and Grade A (17%). With a total Grade A supply of just over 490,000 square meters, availability in this segment remains significantly lower than that of regional peers such as Jakarta, Bangkok, and Singapore.

In the upcoming quarter, Grade A supply is expected to increase by 11% with the launch of Marina Central Tower, a premium, LEED-certified office development located in the city centre, near Metro Line 1, offering approximately 56,000 square meters of gross floor area.

HCMC Office Market Maintains Stability

Despite a slight decline in occupancy, the HCMC office market remained stable in Q1/2025, supported by continued rental growth.

• Average rent reached VND 833,000/m²/month, increasing by 2% quarter-on-quarter (QoQ) and 4% year-on-year (YoY), due to the depreciation of the Vietnamese Dong and annual rent escalation policies.
• Average occupancy fell to 88%, a decrease of 1 percentage point QoQ and 2 percentage points YoY, as vacancy rates rose across most segments—except for Grade A offices in non-CBD areas.

Net absorption was negative at 5,628 m², stemming from Grade A offices in the CBD and Grade B offices, highlighting the challenge of maintaining high occupancy in core locations.

In contrast, Grade A offices in non-CBD areas outperformed the market with a 90% occupancy rate, reinforcing the growing trend of businesses relocating to high-quality buildings outside the city centre where rental costs are more competitive.

This segment is experiencing a supply shortage, with only 130,000 m² of stock, rapid absorption rates, and near-full occupancy, an indication of clear future growth potential.

Active Leasing Market

According to Savills’ Q1/2025 report, relocation and expansion continue to dominate tenant activity, accounting for 80% of newly leased space and signalling business movement and growth in HCMC.

Among tenant industries, the Information and Communications Technology (ICT) sector led with 35% market share, followed by:

• Finance, Insurance, and Real Estate (FIRE): 14%,
• Manufacturing: 13%,
• Consulting: 10%.

Foreign direct investment (FDI) enterprises remained the primary demand drivers, contributing 82% of total leased space. Compared to 18% from domestic firms, this highlights the segment’s strong reliance on international capital flows.

Market Outlook for HCMC Office Sector in 2025

Over the remaining three quarters of 2025, the HCMC office market will welcome eight new projects, adding approximately 105,000 m² of office space. The central business district (CBD) will continue to dominate, accounting for 76% of new supply across five upcoming projects.

In 2027, future supply is forecasted to reach 223,000 m² from 17 new developments, broken down as follows:

• Grade C: 40%,
• Grade A: 39%,
• Grade B: 21%.

This supply structure reflects a diversification trend in the market, with a strong push in the Grade C segment to meet rising demand from SMEs, while Grade A developments remain a focus to attract multinational corporations.

2/ Ha Noi Office Market Q1/2025

Shortage of High-Quality Grade A Offices

In Q1/2025, total office supply in Ha Noi reached 2.33 million m² across 193 projects, remaining stable quarter-on-quarter (QoQ) and up 10% year-on-year (YoY). The Inner City and Western areas contributed 41% of the total supply, indicating balanced development beyond the central business district (CBD).

However, the CBD continued to experience a severe shortage of high-quality Grade A office space, with limited new additions. In contrast, non-CBD areas witnessed a significant increase in supply, driven by a wave of new projects. This shift supports the ongoing trend of office decentralisation to peripheral zones that offer better infrastructure connectivity and more competitive rental costs.

High Rents Struggle to Retain Tenants

Average gross rents across the market increased by 1% QoQ and 3% YoY, reflecting the rising operating costs amid a volatile economic environment.

Occupancy rates remained stable QoQ but fell by 5 percentage points YoY to 82%, a concerning level, particularly for landlords and investors.

Both Grade A and Grade B segments saw declining occupancy rates, largely due to new projects launched at the end of 2024, resulting in short-term oversupply.

Despite these challenges, net absorption remained positive, indicating continued leasing demand, primarily in mid-range segments:

• Grade A recorded negative net absorption, highlighting intense competition among premium buildings in the CBD.
• Grade B posted a positive net absorption of 96,700 m², mainly attributed to the reclassification of several properties, which enhanced their market appeal and better aligned with tenant demand.

High-Quality Spaces Attract High-Value Industries

Q1/2025 saw a notable increase in large leasing transactions, primarily driven by high-value sectors such as:

• Consulting,
• Information and Communications Technology (ICT),
• Finance, Insurance, and Real Estate (FIRE).

These industries are leading office demand and represent ideal target tenants for high-quality Grade A and Grade B buildings due to their elevated expectations for modern, professional, and well-equipped work environments.

Significantly, 78% of total leasing volume originated from relocation demand, suggesting that companies are focusing on:

• Optimising workspace layouts,
• Upgrading working environments,
• Controlling and reducing operational costs rather than simply expanding in size.

This shift also reflects a marked decision leaning towards newer, more modern buildings that can flexibly meet increasing requirements in functionality, amenities, and employee experience, a key element in attracting and retaining top talent.

Outlook for Ha Noi’s Office Market in 2025

Ha Noi’s office market is projected to remain vibrant, with several key projects set to launch in 2025, including:

• Tien Bo Plaza,
• 29 Ly Thai To,
• The Marc 88,
• Oriental Square.

 The 2027 forecast will welcome approximately 258,000 m² of new office supply from 11 projects, 95% of which will come from nine Grade A developments, mirroring a strong focus on prioritising workplace quality. Beyond 2027, the market projections will expand further with an additional 864,500 m² from 28 projects, of which 64% will be Grade A offices—underlining a continued push toward premium office space to meet rising demand from domestic and international corporations.

See more details in the Q1/2025 Market Brief from Savills just released.