Co-working space rise presents new trend in Vietnam office space market

According to a report on the Hanoi real estate market published by commercial property and real estate services adviser CBRE recently, during the third quarter of 2016 the market saw a significant growth of “Co-working space”, serviced offices fully equipped with furniture and management facilities.

As a model, “Co-working space” not only offers a sense of community, but also convenience and flexibility. Tenants can book private rooms or choose to share everything, including working space, the pantry, Wi-Fi, printing area, etc. 

Not only does the ‘openness’ of the “Co-working space” remove the physical barriers from betweetraditional offices, it also tears down the mental preconception that each company, or  department even, is a separate and closed-off unit.

This year, “Co-working Space” is gaining popularity around the world, especially in Hong Kong, Indonesia, Malaysia, and China.  

Vietnam and Hanoi in particular do not stand apart from this trend, as there are now various developments offering shared office models: there has been a marked expansion in leasing size, the number of sites, and diversification in location and service types in the third quarter of the year.

Notable names include Regus Center, located inside Hanoi Tower in Hoan Kiem district, Elite Business Center in Thanh Xuan district, THT Center in Cau Giay district, CEO Suite in Ba Dinh district, Toong in Tay Ho district, and UP in Hai Ba Trung district.

CBRE observed that along with the development of “Co-working space,” companies and corporations have been altering their office models from the traditional cubicles to the activity-based workplace solution. 

Offices designed in this model must work to achieve three factors: health, working space personification capability, and comfort. In addition, up-to-date automative technology also holds certain significance.

“To achieve the best outcome for this model, it is necessary that office buildings provide effective floor plans with a large and open floor area, sufficient natural lighting, and standardised services,” the report advised.

During the third quarter, as the supply continued to increase, office spaces with good quality infrastructure at more affordable prices were getting easier to find. Hanoi’s office supply increased by 5,000 square metres with the newest addition of the VP Bank building in Dong Da District. 

The supply is expected to rise even higher by the end of 2016, as Horison Tower will be launched this year in Dong Da district, providing 7,000 sq.m. Additionally, GFA and MD Complex in Tu Liem District shall provide 22,000 sq.m. of gross floor area.

To overcome the pressure from future supply, developers are rushing to find occupants before their new projects start operation. As a result, the third quarter saw a dip in rent in both Grade A and B segments.

According to the report, the booming IT and software service business in 2016 has significantly shifted the number of companies and employees in this sector.  

As a result, Hanoi’s city centre and western side, both offering options with more than 2,000 square metres of floor area and relatively low rent compared to the central business district, have quickly become the hot spot for these organisations.