Office for lease market in Ho Chi Minh City
When it comes to the office space for rent in Ho Chi Minh City. In Ho Chi Minh City, this segment is divided into 4 large areas: the North (Cong Hoa area, Etown, large office areas have been located there for a long time); CBD (District 1 & District 3) with 85% of office supply located in this area and this continues to be a prominent position in the market; South of Saigon with a large area is Phu My Hung urban area; and recently the area of Thu Duc city. For real estate investors and market researchers, the office rental segment is always considered to be very efficient. There are impressive numbers such as the occupancy rate is always very high: 93% in the building in District 1, with an average rent of $43/m2. Similarly in District 3, the figure is 94%, and the non-CBD area is 87%- figures recorded in Q3.2021.
Mrs. Tu Thi Hong An, Director of Commercial Leasing Division, Savills Vietnam commented "During the process of social distancing in the City, these figures did not have much change. of tenants who want to find offices in the central area always reach a high level. The supply is low, the demand is always present, which is a positive lever for the deployment of the combined working model. Besides, we can see that the GDP growth index is also an important number that shows us the rationale behind the combined working model. It can be seen that the major transactions in the market are in the Distribution, IT & Media, Manufacturing- high growth groups, office users belong to Finance, Distribution, Real Estate, Consulting, Healthcare, etc. Most of the companies in these groups are trending towards the hybrid working model. After that, they still maintain the growth rate. Thus, this is also a factor to promote this combined trend to develop faster.”
Share about the difference between the concept of "combined office" With the emerging office types today, Ms. An said that "In the past, we always talked about flexible office and co-working office. These two models mean that different companies share the same space to save costs, and use common facilities such as reception, security or cleaning services. All services and costs are provided in a package, and they will have to share with each other in that office. Although this model is talked about a lot, it still has limitations when applied. The culture of this model is quite suitable for the group of startups, or large IT companies that still work on each project, or a certain department of a company when an office cannot be found. You can go to that shared office to sit temporarily. This is a temporary flexibility that works for some companies, and therefore not all companies and corporate cultures will adopt this model.”
“Hybrid working is understood as the office employees of a company still using their own office, so each company will still keep the core of the company. in work, in business. However, employees have the flexibility to work from home, at any time that feels best to them, or when their manager feels they are most productive. Therefore, the hybrid working model can be applied to a wider audience, including companies of the shared office group and the group of traditional office companies. It is predicted that the hybrid working model will be adopted and deployed much faster than the shared office'. Ms. An clarified.
Therefore, the core issue of the transition from the old model to the flexible model is the application of digital-digital platforms. Face-to-face meetings can be converted to online meetings or a combination of both, electronic contracts are applied, and forms of work assignment between managers and employees are also done online through software. applied separately for each department or the whole company. Since then, "digital offices" were formed
The structure of a digital office consists of 4 core elements:
For business owners, the combined office model will help save rental space, working time... As for employees, this model also brings a lot of benefits to them, such as:
In terms of leading companies and corporations in the world, this report also shows that the group of traditional companies such as banks, oil and gas, automobile manufacturing companies mostly want to employees return to work in the office, especially Goldman Sachs - a large financial empire – they even go so far as to want everyone back to work 100%. Meanwhile, emerging companies and technology-based companies such as Google, Facebook or Amazon all support and implement the remote working model.
In fact, there are various factors that drive the hybrid working model to be adopted where it's faster, where it's slower to convert. Ms. An added "For employees, when their houses are more spacious, they will want to work from home. A quick comparison can be made in HCMC and Hanoi as houses in Hanoi tend to be smaller. When the house is smaller, people will want to go out more because it is difficult to concentrate. Therefore, in Hanoi, the trend of working from home will be slowed down because employees want to go out, not work from home. The second factor is population. Areas with an older population will want to stay at home to take care of the family, and want more balance between work and personal life. As for young people, they will prefer to collaborate and interact more. Regarding commute time, if the way to the company is too far, employees will want to stay at home. For those who live near the office, especially young people who often rent a house near the company, they will prefer to come to the company. Besides, technology platform, internet speed and time of lockdown/social distancing are also influential factors. The longer the lockdown period, the faster the office transition will be because people have no choice but to change. If the blockade period is short, for example in Hanoi (2-3 weeks), the quick return to the office makes people not as motivated to switch as in Ho Chi Minh City (4-5 months of blockade). The last and very important factor, from Savills' point of view, which is high office prices and limited supply, is also a very strong catalyst for companies looking to expand but can't find it. where to buy, while the cost is increasing day by day. When applying combined office, the problem will be solved in a relatively long time. Where the right office space is available, the supply is plentiful, people are more comfortable providing employees with private seats as they used to be, and the speed of conversion is also greatly reduced in these places. It can be seen that the conversion speed in Ho Chi Minh City will certainly be much faster than in Hanoi. In addition, the trends of reducing pollution, reducing carbon in the office, pro-environmental protection initiatives and social commitments are also a big motivation for multinational companies and corporations when reduce office space.”
In short, the pandemic is a catalyst for the transition from a traditional working model to a hybrid model. There are factors that make this model successful, in addition to the transformation to a digital model, it is necessary to have the right set of governance to manage the quality of work. And a more macro issue – environmental protection – This promotes initiatives that reduce energy costs and protect the environment. This is an external factor that causes companies to increasingly actively seek solutions, and they may look to the hybrid model because this model plays a big part in achieving their goals. Therefore, Savills predicts that this collaborative working model will definitely be a new but inevitable trend in the near future.