Demand rising for modern office space

Real estate analysts believe that demand for office space will rise for the time being, especially co-working spaces and hybrid and agile work spaces.

As noted by Cushman & Wakefield, Vietnam’s office market recovered and grew strongly in the first half of this year. Demand for office space has increased due to rising numbers of newly-established enterprises in the country and the expansion of foreign investment.

Co-working spaces have been sought out by many customers, especially startups, primarily because of their affordable cost. According to Savills Vietnam, demand for co-working spaces in Vietnam in general and in Hanoi in particular is being driven by growth in the number of small and medium-sized enterprises (SMEs) and the healthy startup environment, with Hanoi planning to add about 150,000 new startups over the next five years.

In addition to co-working space, which is popular among startups, project-based companies, or companies looking for short-term office space, hybrid and agile working space models have also appeared post-pandemic.

Ms. Hoang Nguyet Minh, Director of the Commercial Leasing Division at Savills Hanoi, said major transactions in the market are being seen in distribution, information and communications technology, manufacturing, finance, real estate, consulting, and healthcare. Most companies in these groups seek hybrid and agile working models, which are completely different from co-working spaces.

“The pandemic has driven demand for more flexible and creative office space and employee-friendly environments to boost productivity and creativity,” she said. “This is challenging old office blocks. Owners who differentiate themselves with complementary services and strict adherence to health and safety will increase their competitiveness. Leasing terms also need to be improvised more quickly.”