According to Savills World Office Yield Spectrum H22018, Hanoi crowned the city that offered the highest office yield in the world with market yield at 8.57%. Following Hanoi, Manila, Adelaide, HCMC and Perth round out the global top five.

 The average Asian office market cap rate dropped moderately by 3 bps over the first half of 2018 to reach 4.74%, supported mostly by robust domestic activity. The transaction volume recorded a 20% YoY growth rate over the first half of 2018 despite expectations of a general decline in global liquidity. China outbound saw significant shrinkage over the second quarter with activity restricted to a few large scale office deals in Hong Kong.

For the third time since January 2017, Hanoi ranked first globally for its CBD grade A office yield at 8.57%. Previous runner-up – HCMC, another Vietnam city dropped to #4 with market yield at 7.36%. Addressing the investment prospect of Vietnam cities, Ms. Hoang Nguyet Minh, Investment Manager Savills Hanoi said: “High yields indicate attractive rental income against capital value of office buildings and the fact that Hanoi & HCMC are among markets that offer the highest yields globally shows healthy rent & occupancy prospects for our cities. Ho Chi Minh City enjoyed its best performance of the last five years, with average rents increasing 8% YoY and a very high occupancy rate of 97%, while Hanoi recorded a 3% YoY increase in average gross rent in Q4/2018 and steady occupancy rate of 95% with improved Grade A performance in non-CBD areas. Understandably, these markets have been drawing significant interest from international investors, Singapore, Japanese and Korean in particular. Buyers’ demand remained high, yet there were very few investment transactions in 2018 due to the shortage of available properties for sale. A notable transaction was the January acquisition by Nomura Real Estate of a 24% ownership interest in Sun Wah Tower, a Grade A office building in Ho Chi Minh City.”

For more information, click 07032019 – Hanoi offers the highest office yield globally – EN


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