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.
Vacancy Rates Fall Below 10%
The completion of a shopping complex and a supermarket resulted in an increase in the total retail stock to more than 1.23 million sq.m across 139 outlets, recording an average growth of 13% per annum over the last three years from 2014 to 2017. Market performance saw an annual marginal improvement, as positive performance of new entrants contributed to a decline in vacancy rate to below 10% as of Q2 2017.
Rents Shows An Upward Trend
Market-wide average rent in Q2 2017 was recorded at a stable rate q-o-q, landing at VND1.27 million per sq.m per month. This brings up rental growth year-on-year by 6%, after initially suffering an average decline by 5% p.a from 2014 to 2016. The Central Business District (CBD) recorded the highest average rent at VND2.52 million per sq.m per month, which was triple the rent for markets outside of the CBD, and double that of the market average.
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