Dynamic office markets are now more likely to be found outside traditionally prime locations, says Savills, as mixed-use and co-working space becomes increasingly popular, challenging the view that trophy office buildings will be desirable to investors in the coming decades.
Serviced office and co-working space have a lot of room for further development. (Photo: zelmarconsulting.com)
New trends in working practices are changing demands and rent levels in new locations within cities. In the mid- to long-term, fringe neighborhoods could emerge as 'the new prime,' which can be as desirable as grade A conventional offices.
Jeremy Bates, Head of Savills Worldwide Occupier Services, comments: “New generations will drive the demand for certain types of buildings and locations. This trend will potentially lead to a shift in what constitutes a ‘covenant.’”
Agreeing with Bates, Hoang Dieu Trang, Senior Manager Residential and Commercial Leasing of Savills Hanoi believes Vietnam will not be an exception from that global trend.
Hoang Dieu Trang, Senior Manager Residential and Commercial Leasing of Savills Hanoi
“In 2017, prime office occupancy in Hanoi and HCMC remained high at above 90%. There was hardly vacant space in central business districts (CBD). Limited office space supply pushed rents up and is expected to increase rents in a few years further," she said.
Naturally, as observed by Savills Vietnam, there has been a trend of relocation to office submarkets, making them the new central location for office occupiers. The West of Hanoi, for example, is becoming the tech hub, attracting technology and telecommunication companies.
Another emerging trend is office alternatives such as serviced office and co-working space. These new concepts in Vietnam have a lot of room for further development as they cater the commercial space needs of the increasingly large number of SMEs, start-ups and fit the working behavior of generation Y and Z who prefer a more open and social workspace”.
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