New supply in 2010 will probably continue to be concentrated in District 1, which accounts for the majority of total new supply. There is also a predicted increase in supply in suburban districts, notably 4 and 7, due to the easy access they provide to District 1 and the high costs in the central business district area.
HCMC office market is least likely to see another booming period in the next few years until the huge FDI inflows resume and businesses consider expansion again, experts said.
The Asia Pacific region recorded the steepest decline year on year, with rents falling on average by 16 percent. The overall fall in rents was mainly driven by sharp falls in the key financial markets in the region. Singapore, recorded a fall of 45 per cent, Hong Kong, 35 per cent, and Tokyo, 21 pct.
Declining at a slower pace, Tokyo replaced Hong Kong as the world’s most expensive office location. London’s West End was the second most expensive district while Hong Kong slipped to third.
The global recession prompted companies to lease less space, causing rents to slump across the main business districts last year, Cushman & Wakefield said. The last worldwide decline in prime rents happened in 2003, according to the report. Companies also switched to cheaper premises and leased their excess space to other firms, hurting demand.
Global office rents will probably reach their low point this year as companies in some of the recovering economies regain confidence, the broker predicted. Rental growth is already being recorded in some districts, including the cities of London and Oslo.
This year “will not be without its challenges and risks, but it will be a year of recovery and cautious optimism for both landlords and occupiers,” Cushman & Wakefield said.
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