Office leasing fees in Vietnam keep increasing as the country welcomes more and more foreign investment.
Three years ago, an A-class office in the center of HCM City had a leasing fee of US$27 per sq m a month. The level is now at US$36 per sq m a month. Foreign investors said the office leasing fee levels in Vietnam are the highest in the region.
There are three leasing levels for offices in Vietnam. A-class offices are the best ones located in the center of the city, and command leasing fees of between $27 per sq.m and $36 per sq.m a month.
The softer levels are applied to B-class offices, at $23-25 per sq.m. The C-class offices, far away from the center, can be leased at $16-22 per sq.m.
Experts all said that the office leasing prices will be higher in 2007, especially for the A-class offices.
Nguyen Huu Tri, Human Resource Manager of M&C Company which has been leasing an office on the 19th floor of the San Wah building, said the company had to wait for a long time before getting the leased office at $27 per sq.m a month three years ago. Now, the company has to pay $33 per sq.m a month for the same office.
Tri said that in May 2007, the leasing contract will expire, and while power and land prices are both increasing, the leasing fees will increase accordingly.
Tri said the San Wah building now has no idle room. “Though the offices in HCM City have the highest leasing fee levels, they are still fully occupied,” Tri said. “If you move out of the building, others will jump in at once”.
Hotels in HCM City have decided to jump onto the bandwagon by leasing rooms for offices. Located in an advantageous position - on the crossroad of Nguyen Hue, Le Loi, Le Thanh Ton and Pasteur - the Rex Hotel offices have been fully occupied although the Rex does not specialize in office leasing.
Not only A-class offices enjoy large demand, B-class offices are also attracting clients. The Quoc Hung Building in Nguyen Van Troi street, put into operation in April 2006, has been fully occupied. The leasing prices are $20 per sq.m a month for low floors, while they are $15 per sq.m for higher floors. Nearly all the contracts are due in two years.
Many leased office building projects are running in every district in HCM City. Many of the buildings are expected to be completed in 2007, including the Binh Phu in Hau Giang Road district 6, Phuc Long Plaza and Sky Garden in Nguyen Van Linh and Nam Saigon, Larkhall in Nguyen Hue street in district 1, and the Hoang Trieu building in Tan Binh district.
Analysts forecast that 2007 will be a good year for real estate developers, as Vietnam joins the WTO and receives big foreign investment. (
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