SUPPLY: MODEST NEW COMPLETIONS OFFSET BY WITHDRAWALS, TOTAL STOCK CONTINUES TO EDGE UP
Total office supply reached 1.74 million sqm. The Non-CBD office supply growth reflects a continuing market focus amid ongoing CBD limitations in short-term. Q1 2026 recorded 22,021 sqm of new supply, primarily driven by grade B completions in non-CBD areas. However, this was partly offset by outdated CBD building. The Hongkong and Shanghai Hotels has ceased ownership and operations of The Landmark Vietnam building, following the dissolution of its long-standing JV partnership. In addition, another building undergoing ownership transfer is currently classified as inactive, with leasing activities suspended temporarily. This reflects gradual attrition with the CBD core, while Grade B developments continue to support overall supply growth.
DEMAND: QUALITY-LED RECOVERY GAINS MOMENTUM AMID COST OPTIMISATION TREND
In Q1 2026, total net absorption reached 34,317 sqm (+106% QoQ; -5.2% YoY), marking a strong rebound as delayed leasing decisions resumed. This improvement was supported by both expansion and relocation demand, particularly as tenants took advantage of favorable rental conditions besides new office spaces were absorbed 70-80%.
• Grade A recorded 13,312 sqm of net absorption, pushing occupancy up to 88.3% (+2.4 ppts QoQ, -1.1 ppts YoY). This reflects a sustained “Flight-to-quality” as major tenants prioritize upgrades to premium spaces.
• Grade B remained the primary engine of demand, contributing 21,005 sqm (~61% of the total) and the occupancy rate reached 90.9% (+0.4 ppt QoQ and +1.0 ppt YoY). Interest remains high in non-CBD locations as companies pursue decentralization and cost optimization.
RENT: GRADE A RECOVERS ON PRIME POSITIONING, GRADE B SOFTENS
• Grade A rents increased to 53.5 USD/sqm/month (+1.3% QoQ; -0.9% YoY), reflecting a healthy rebound as leasing activity improved and newer projects in prime locations began to stabilize after initial leasing phases. The upward movement suggests that landlords of well-positioned assets with high-quality specifications are gradually regaining their price power.
• Grade B rents fell to 33.5 USD/sqm/month (-1.3% QoQ; -1.9% YoY), facing slight downward pressure as competition intensifies across Non-CBD areas. Despite, the segment remains resilient, underpinned by consistent demand from cost-conscious occupiers and the ongoing decentralization trend. Overall, the market continues to show a clear divergence in rental performance between Grade A and Grade B assets, alongside selective growth in prime locations. Grade A has entered a phase of price escalation supported by steady demand and limited new supply, whereas Grade B rents are beginning to adjust downward amid rising supply and intensifying competition.
MARKET OUTLOOK – DECENTRALIZATION ACCELERATES
The HCMC office market is projected to add ~318,763 sqm of Net Leasable Area (NLA) through 2029, with supply expanding from the CBD to the Eastern and Southern submarket. As the market segments, demand is driven by Tech/IT, Finance, and Manufacturing:
• Grade A: Attracts occupiers via ESG standards and branding
• Grade B: Supports cost-driven relocations and decentralization. Overall, a fucus on sustainability and workspace flexibility continues to underpin stable occupancy across both grades.
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