Average office rents in both Hanoi and Ho Chi Minh City continued to fall in the last quarter of 2010 as supply kept growing, according to UK-based real estate service provider Savills.
In Hanoi, the market saw a decline of approximately 1 percent quarter-on-quarter, which hit a year's low of US$26 per square meter per month. Savills said the total office supply was over 740,000 square meters, an increase of 26 percent compared with the same period of 2009.
"In the next four years, approximately 1.5 million square meters of office space from approximately 125 projects is planned to enter the market," the company said in its latest report this week.
The situation is the same in Ho Chi Minh City, where the average office rent decreased slightly by 2 percent compared to the third quarter, at approximately US$30 per square meter. Savills also predicted that the city's office market supply will grow to a total of 562,000 square meters in the next two years.
Meanwhile, the retail sector enjoyed a better last quarter. While rents also declined, mostly in HCMC's suburban area, the market still performed strongly with average occupancy over 90 percent, Savills said. The retail market in Hanoi was also stable, with average occupancy at 93 percent.
As for the residential apartment sector, HCMC saw weaker sales in the last quarter compared to Q3.
But in Hanoi, although 13 new projects added more to the available supply, primary projects showed quite a good performance in sales. Savills noted that 80 percent of primary supply was sold out in the quarter.