Empty Office Space Looms as Property Slump Bites

Office rental rates in HCM City fell by 50 per cent against the end of 2008 and could continue declining in the coming months, according to the latest Property-report edition on the real estate market of Asia Pacific.

 

The edition cited the assessment of foreign real estate consulting firms like Cushman & Wakefield, Savills and CB Richard Ellis that the office rental of HCM City slumped from US$70 to US$45 per square meter this year and could jump down to US$30 per square meter.

 

The leasing price of offices Grade B also has slid 50 per cent to US$28 a square meters while that of lower grade offices fell from below US$40 to US$15-US$25 a square meters.

 

Marc Townsend, managing director of CB Richard Ellis said that the demand of renting offices had a close relation with companies' recruitment, business expansion and financial strength. In the context that all are tightening belt and cutting down labor force, companies will reduce costs for office rental.

 

As companies cut down business expense, the continuous construction of office buildings will lead to the big gap between supply and demand of offices for lease.

 

About 1.25 million square meters of new offices will be supplied to the market this year. Savills also said about 930,000 square meters of offices a year is under construction.

 

Investing in office construction at this time is not a good choice. The office market now is very gloomy and it is hard to predict the recovery time when the world's finance still is stuck in crisis, Property-report concluded. (VnExpress)