Hanoi, Ho Chi Minh City among most expensive office markets: report

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Hanoi and Ho Chi Minh City were among 50 cities in the world with the highest prime office rents last year, even after a sharp fall, according to a new report by real estate group Knight Frank.

The report says that Vietnam's capital city ranked 32nd with an average rent of US$44.59 per square feet per year, down from 21st position the previous year. Ho Chi Minh City dropped eight spots to 27th with a rent of $50.17.

The cities were the second and third most expensive office markets in Southeast Asia, only after Singapore, which was ranked sixth in the top 50.

Hong Kong's Central overtook London's West End as the location with the highest prime office rents in the world in 2011.

"There is a mixed outlook for our top 50 markets in 2012, with rents forecast to rise in 18 of them, remain broadly flat in 21, but to fall in 11 locations," Knight Frank said. "Among the markets where rents are most clearly under downward pressure are those in European economies affected by the sovereign debt crisis, including Madrid, and Asian markets where availability is high, such as Ho Chi Minh City."

Matthew Colbourne, senior international research analyst, said Asian cities are experiencing mixed fortunes.

"[W]hile confidence remains high in mainland China, falling office rents were observed in late 2011 in markets dependent on demand from international financial occupiers, such as Hong Kong and Singapore," he said.

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