Q3 2017 recorded a reduction in new launches with only 7,651 units launched from 21 projects, mostly in July and August, leading to a 25 per cent q-o-q decrease in the total number of sold units.
Ho Chi Minh City condominium, accumulated supply from 1999 (source: CBRE)
The mid-end segment accounted for 60 per cent of Q3 2017 new launches. High-end segment dropped significantly by 32 per cent q-o-q. While most projects are being developed by local developers, projects like Garden Bay and River Panorama are being developed by a joint venture with a Japanese developer. Newly launched supply achieved good absorption rate in all segments, ranging from 77 per cent to 84 per cent. Mid-end products accounted for more than half of sold units in the review quarter.
Due to the expansion of mid-end segment, the average selling price experienced a 15 per cent y-o-y decrease. In contrast with the market average, high-end segment increased by five per cent q-o-q and ten per cent y-o-y thanks to the introduction of high-quality products from well-known foreign developers such as D’edge and Tilia Residence. These projects also recorded sold rates of 100 per cent each.
Besides, the office market performance in Ho Chi Minh City continued to be stable in Q3 2017 with strong net absorption from the new supply added between Q2 2017 and the reviewed quarter, with Grade A at 25,510 square meters NLA and Grade B at 9,831 sm NLA. Positive net absorption is due to the level of new properties released to the market as well as good leasing activities recorded at huge quality supply coming from Saigon Centre Phase 2, Mapletree Business Centre and Viettel Complex. Regarding tenant trends in this quarter, CBRE’s enquiries revealed a rising demand for space larger than 700-1,100 sm, accounting for 28 per cent of total enquiries. Making up 79 per cent of total enquiries, relocation is the leading purpose for larger space.
Ho Chi Minh City office market (Source: CBRE Vietnam)
2017 is looking at a strong finish for the office market with the upcoming addition of E-town Central in Q4 2017 and Deutsches Haus in Q1 2018. Future pipeline witnessed larger quality floorplates being planned and under construction, therefore the market will continue its good leasing momentum with larger leasing sizes. Asking rents are at its peak and will continue its stable moderate growth along with the steady decrease in vacancy rates.