Office leasing fee soars to record $100/sq m
Saturday, 26. September 2009, 14:51:57
VietNamNet Bridge – Many companies seeking offices to lease can’t believe their ears when hearing that they would have to pay $100/sq m for offices at Petrol Tower in district 1, HCM City.
Petro Tower which has the highest leasing fee in Vietnam
Office leasing fees have increased sharply by 30-50% compared to the beginning of the year. Petrol Tower has not officially opened, but its offices have been fully occupied for the last five months, though the leasing fee proves to be exorbitant.
Petro Tower’s offices are believed to have the highest leasing fee in Vietnam. However, one should feel happy if he can lease offices there, because he will not be able to find offices to lease elsewhere: all A-class offices in HCM City are fully occupied.
A-class buildings, including Diamond Plaza, Metropolitan, Saigon Tower, Saigon Centre and Sanwah, now offer the leasing fee of $70/sq m (including VAT and management fee), well exceeding the $50/sq m/month level forecast by Brett Ashton, Managing Director of Savills Vietnam, several months ago.
Despite the unbelievably high leasing fee, neither Petro Tower nor any of the other five buildings have more offices to lease now. The renters at Petro Tower are big corporations in the oil and gas sector, Mercedes Benz and Chinese banks.
An office broker said that he could arrange the lease of a 120 sq m office at Diamond Plaza for $70/sq m/month, but said five-year payment in advance would be required together with a brokerage fee equal to six months of leasing fees.
All office building owners say that they have no more offices to lease at this moment, and idle space will not be available until the end of 2008.
Meanwhile, B-class buildings including Lancaster, Miss Ao Dai, Sherwood Residence have also reported full occupancy, though the leasing fee has increased by nearly 40% compared to one year ago. Zen Plaza, which has narrowed the space for shops to enlarge its office area, has also nearly run out of offices to lease with only several offices left located in unfavourable positions.
Even REE’s two buildings and the newly built towers in Phu My Hung area, 5-6 km from the centre of the city, also do not have offices available for lease.
According to CBRE Vietnam, a real estate consultancy firm, the shortage of A-class offices will last for some 3-4 years more as no new office project will become operational in the near future.
The lack of offices has led companies to scramble to get the right to lease offices. The Deputy Director of a joint venture with a Hong Kong partner said that he had to pay $43/sq m to successfully lease an office in district 1, though he was initially told that the leasing fee was $34/sq m. He said that when he went to see the office owner to negotiate the contract, he met four other clients there and he had to push the leasing fee up.
According to Pham Phu Phuc, Head of the Business Division under the Phuc Loi Real Estate Broker Company, earlier in the year office leasing fees in HCM City were $45/sq m for A-class, $30/sq m for B-class and $15/sq m for C class offices. However, these have soared by 40-50%.
Lam Thuy Trang, who is seeking offices for three US companies to lease, said that many companies had to make reservations now, and be ready to jump into the offices when available. Renters have been warned that office leasing fees will increase by 15% per year at least until 2011.
According to CBRE, the shortage of A-class offices has become serious because more and more companies want to locate their offices in the city centre, while only one high-grade office building like Petro Tower becomes operational every 3-4 years. Big hotels like Rex, Park Hyatt, Sheraton, Sofitel and Caravel also reserve hotel rooms for lease, but supply still cannot meet demand.
Nevertheless, Mr Brett predicted that the office fever would be eased in 2011, when the market had new supplies. He said the A-class leasing fee would decrease to $40/sq m, making those who sign long-term contracts at high prices suffer.
However, real estate firms say that office leasing fees will not decrease unless there is an economic recession as occurred 10 years ago. They said that the good performance of the national economy would lead to the boom of companies, domestic owned and foreign invested, which would lead to the greater and greater demand for offices.
Nguyen Sa
Some related website: Quảng bá web - Xe oto - Iphone - Ha Linh - Cong ty du lich - Tour du lich - Dịch vụ thám tử - Vietnam travel - Vietnam tours - Q-mobile - F-mobile - Virtual Office - Quảng bá website - Apartments for rent in Hochiminh - Blackberry - Virtual office - Thám tử - Tham tu - Laptop - Iphone 3G - Blackberry - Van phong tham tu - Mỹ phẩm - Bảo vệ - VIETCRAFT - Laptop - Văn phòng cho thuê
Petro Tower which has the highest leasing fee in Vietnam
Office leasing fees have increased sharply by 30-50% compared to the beginning of the year. Petrol Tower has not officially opened, but its offices have been fully occupied for the last five months, though the leasing fee proves to be exorbitant.
Petro Tower’s offices are believed to have the highest leasing fee in Vietnam. However, one should feel happy if he can lease offices there, because he will not be able to find offices to lease elsewhere: all A-class offices in HCM City are fully occupied.
A-class buildings, including Diamond Plaza, Metropolitan, Saigon Tower, Saigon Centre and Sanwah, now offer the leasing fee of $70/sq m (including VAT and management fee), well exceeding the $50/sq m/month level forecast by Brett Ashton, Managing Director of Savills Vietnam, several months ago.
Despite the unbelievably high leasing fee, neither Petro Tower nor any of the other five buildings have more offices to lease now. The renters at Petro Tower are big corporations in the oil and gas sector, Mercedes Benz and Chinese banks.
An office broker said that he could arrange the lease of a 120 sq m office at Diamond Plaza for $70/sq m/month, but said five-year payment in advance would be required together with a brokerage fee equal to six months of leasing fees.
All office building owners say that they have no more offices to lease at this moment, and idle space will not be available until the end of 2008.
Meanwhile, B-class buildings including Lancaster, Miss Ao Dai, Sherwood Residence have also reported full occupancy, though the leasing fee has increased by nearly 40% compared to one year ago. Zen Plaza, which has narrowed the space for shops to enlarge its office area, has also nearly run out of offices to lease with only several offices left located in unfavourable positions.
Even REE’s two buildings and the newly built towers in Phu My Hung area, 5-6 km from the centre of the city, also do not have offices available for lease.
According to CBRE Vietnam, a real estate consultancy firm, the shortage of A-class offices will last for some 3-4 years more as no new office project will become operational in the near future.
The lack of offices has led companies to scramble to get the right to lease offices. The Deputy Director of a joint venture with a Hong Kong partner said that he had to pay $43/sq m to successfully lease an office in district 1, though he was initially told that the leasing fee was $34/sq m. He said that when he went to see the office owner to negotiate the contract, he met four other clients there and he had to push the leasing fee up.
According to Pham Phu Phuc, Head of the Business Division under the Phuc Loi Real Estate Broker Company, earlier in the year office leasing fees in HCM City were $45/sq m for A-class, $30/sq m for B-class and $15/sq m for C class offices. However, these have soared by 40-50%.
Lam Thuy Trang, who is seeking offices for three US companies to lease, said that many companies had to make reservations now, and be ready to jump into the offices when available. Renters have been warned that office leasing fees will increase by 15% per year at least until 2011.
According to CBRE, the shortage of A-class offices has become serious because more and more companies want to locate their offices in the city centre, while only one high-grade office building like Petro Tower becomes operational every 3-4 years. Big hotels like Rex, Park Hyatt, Sheraton, Sofitel and Caravel also reserve hotel rooms for lease, but supply still cannot meet demand.
Nevertheless, Mr Brett predicted that the office fever would be eased in 2011, when the market had new supplies. He said the A-class leasing fee would decrease to $40/sq m, making those who sign long-term contracts at high prices suffer.
However, real estate firms say that office leasing fees will not decrease unless there is an economic recession as occurred 10 years ago. They said that the good performance of the national economy would lead to the boom of companies, domestic owned and foreign invested, which would lead to the greater and greater demand for offices.
Nguyen Sa
Some related website: Quảng bá web - Xe oto - Iphone - Ha Linh - Cong ty du lich - Tour du lich - Dịch vụ thám tử - Vietnam travel - Vietnam tours - Q-mobile - F-mobile - Virtual Office - Quảng bá website - Apartments for rent in Hochiminh - Blackberry - Virtual office - Thám tử - Tham tu - Laptop - Iphone 3G - Blackberry - Van phong tham tu - Mỹ phẩm - Bảo vệ - VIETCRAFT - Laptop - Văn phòng cho thuê
WIDGETIZE