Q4 demand for office space slips in southern Vietnam hub

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The demand for office space fell slightly in Ho Chi Minh City in the last quarter of 2012 as companies were reluctant to spend amid the tough economy, according to property consultancy firm Knight Frank.

In HCMC, "many companies have been forced to cut costs" and it was "very rare" that companies upgraded their office buildings or moved into new ones, the report said.

Rents in the mid-range segment, which accounts half the market's supply, decreased slightly to $21 per square meter last quarter though it received "most enquiries" from lessees.

Luxury buildings offered rental rates at US$31 per square meter, slightly down compared to last quarter.

The Bitexco Financial Tower and the President Place were able to lease 65 and 35 percent of their available spaces respectively, while six other office towers remained at 90 percent occupancy.

It is expected that such office buildings will have to further decrease prices over the first half of this year, due to increased supply due to the launch of new mid-priced office towers including the Lim Tower and the HTMC Building.

The two downtown buildings will infuse the market with an additional 60,000 square meters of office space.

Meanwhile in Hanoi, Knight Frank reported that the demand for office space inched up last quarter, as just a few downtown buildings would hit the market in early this year.

Companies are seeking to relocate from their current buildings to new ones and from mid-town to downtown areas, it said.

The Keangnam Hanoi Landmark office building
A "significant number" of companies are considering moving their offices to the high-end CornerStone Building while several other companies have finalized rental contracts with it in advance of its upcoming opening later this quarter.

The CornerStone Building along with the mid-range 19-12 Building will add a total of 32,500 square meters of downtown office space.

The advisory firm labeled deals made by FPT Information System and Nissan Techno with the office building Keangnam Hanoi Landmark "big" rentals for the fourth quarter of 2012.

The 18,000 square meters rented helped the building achieve a 50 percent occupancy rate.

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