Are Offices Implementing Hybrid Solutions?

Office Real Estate is Recovering

According to Savills Q1/2022 report, the office market in HCMC had an average occupancy of 90% and rent of VND 716,000/m2/month. Although Grade A and B occupancy dropped slightly at -1%, Grade C had a 1% increase to 91% compared to the last quarter of 2021. Take-up in Q1/2022 was 16,500 m2, dramatically higher than the 1,500 m2 in Q4/2021.

In terms of demand, ICT tenants will continue to lead, especially as the government has implemented supporting policies for the sector. Forecasts show that the sector will have revenue growth of 15% per annum between now and 2025 and the number of ICT enterprises will reach over 100,000 in the same year. This will drive office demands.

Looking to the future, 17 projects spanning a total of 526,000 m2 GFA will enter by 2025. Two Grade B projects and three Grade C projects will provide an additional 60,000 m2 NLA by September 2022. As HCMC has a thriving economy, 310,000 new jobs are expected this year. With the assumption that each employee needs 8 m2 of office space, 140,000 m2 of office space is needed to meet the new demands this year.

Commenting on the market, Tu Thi Hong An, Senior Director, Head of Commercial Leasing, said that the office market is bouncing back after the pandemic. She added that hybrid working is a viable solution for businesses in the post-pandemic.

Ms An commented: “Hybrid working is now part of the future of offices. Businesses need to remember that hybrid solutions must be bespoke and cater to the needs and management style of the company. To ensure smooth transitions, management processes should be reviewed, and the changes should consider communication, responsiveness, and access.  We have done this at our office in HCMC, where we have implemented green working, redesigned our hours, and our management structure now supports a combination of flexible, remote, and office work. ”

Developers are also very aware that hybrid working is not just a luxury or fad but something that occupiers are looking for. This is why Alpha Tower 1, developed by Hoa Dao Real Estate Corporation, ensured its offices would cater to hybrid demands after its recent renovation.

Mr Dao Van Dang, Director of Hoa Dao Real Estate Corporation said: “We were excited to have the opportunity to implement hybrid solutions at Alpha Tower 1. We have considered a variety of elements from exterior aesthetics to interior amenities. This property differentiates itself as the offices are creative and inspiring but also uphold the corporate appeal. This is ideal for companies looking to establish themselves here.”

Are You Interested in Hybrid Working?

Savills Commercial Leasing provides bespoke solutions for a diverse set of clients. No matter your needs, be it expansion, relocation, or implementation of hybrid solutions, the team is here to help. Please do not hesitate to contact us for all your commercial real estate needs. Read more in our blog about leasing hybrid offices and what An has to say about hybrid trends here.