Bright Economic Prospects

Vietnam’s economy showed signs of a slowdown, but its longer term prospects remained positive, which will help to drive future office occupancy. GDP growth in Q1 2017 was 5.1%, but is projected to hit 6.3% for the full year. Investment remained strong. Total FDI reached over US$12 billion in the first 5 months of 2017, up 10.4% year-on-year. Most of the FDI came from Asian investors such as those from Japan, Korean, China, Singapore, and Hong Kong.

Boost in Manufacturing and Processing Industries

Total leasable area was recorded at nearly 2,480 ha from 19 industrial parks (IPs) with no new completions in the first half of 2017.Double foreign direct investment (FDI) inflow in H1 2017 accounted for 32% of total investment capital in the manufacturing and processing industries, which  led to a performance boost in Ho Chi Minh City (HCMC)’s IPs. Over half of the existing IPs  saw high occupancy rates of 95% and above. Although 11 IPs were fully occupied, Hoa Phu, Dong Nam and Tan Phu Trung IPs recorded large available spaces still for lease by the end of the quarter.

Marginal Increase in Rents

Average asking rent of HCMC IPs was currently recorded at VND2,990,000 per sq.m per term (equivalent to USD131.4 per sq.m per term), up nearly 5.1% y-o-y.  Rental increases from existing IPs with completed infrastructure, coupled with the increasing of currency exchange, resulted in  annual growth by 4% per annum over the last three years.

For more information, click Vietnam-HO-CHI-MINH-Industrial-2Q2017 and Vietnam-Hanoi-Industrial-2Q2017.


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