Vietnam – most attractive office yield globally

As per Savills’ World Office Yield Spectrum 2017, Vietnam, once again since January 2017, proved to be the market that offered to most attractive office yields in the world.
 

Vietnam – most attractive office yield globally

For instance, in its comparison of 54 cities in Asia, Europe, the US and Australia, the top two markets that offered the highest yields in the world remained Vietnam’s gateway cities including Hanoi at the first position with 8.65 percent yield and Ho Chi Minh City at the second position with 7.86 percent yield.
Additionally, increasing capital inflows and currency movements have resulted from cap rate compression. However, buoyant demand has inevitably lead to more new prime office completions and vacancy rates are finally beginning to creep up.
Investors have generally adopted a positive outlook for local office markets, their confidence bolstered by strong economic growth expectations.
The most active markets have been China, followed by Japan and Hong Kong (
China) . However, the supply is limited, investors have increasingly turned their attention to development projects in secondary locations.
Savills Vietnam manager said that Vietnam’s office market had shown excellent performance, especially A-grade segmentation with occupancy rates exceeding 95 percent in downtowns in big cities such as Hanoi and Ho Chi Minh City.
Because Vietnam’s economy has grown well lately and it integrated with the world, the Southeast Asian nation welcome more investors.
Accordingly, Savills announced in the third quarter of the year, demand of realty market in Vietnam will increase. Optimism has dominated the Asian office sector as cheap money has continued to flood local markets and rents and capital values have continued to rise across the region. Supply of office in HCMC will soar by 8 percent per year along with growth of rental output.
Savills predicts within three next years, the rate of office rent maintain high and rental cost will leap by 8.4 percent yearly in average.

By MINH HUY – Translated by UYEN PHUONG

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