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HCM City office rents fall   2009-01-13 - Viet Nam News

The rental costs of Grade B and Grade C offices in HCM City have dropped recently, following a year of steadily increasing prices.

The average price for Grade B and C buildings stands at US$36 and $28.7 per sq.m a month, respectively, a drop of 15-30 per cent since January last year.

The average price for Grade B and C buildings stands at US$36 and $28.7 per sq.m a month, respectively, a drop of 15-30 per cent since January last year.

Prices dropped during 2008 as more buildings came onto the market and companies cut back in the wake of the global financial crisis.

David Blackhall, deputy managing director of VinaCapital Real Estate, said prices for these office buildings were expected to fall 2009 as well.

However, rental prices for Grade A office buildings, of which there is a shortage on the market, will continue to go up, real estate officials have said.

The average rental in a Grade A office building is $60 per sq.m a month compared to $35 per sq.m a month in early 2007.

Experts predicted the rental prices of Grade A offices could fall in the near future when two Grade A office buildings, the 27,000sq.m Centec Tower and the 3 1,000 sq.m. Asiana Plaza, open their doors, accounting for 70 per cent of the current Grade A office space.

However, the two buildings are now renting space at $70-90 per sq.m a month, which could keep prices high at other Grade A office buildings next year, other property experts said.

Criteria for Grade A office buildings include a minimum of 850sq.m on one floor, central air conditioning, a helicopter pad, at least one parking space for each 100sq.m, and management by an international company.

Requirements for Grade B buildings are less demanding, with smaller floor areas, parking lots and no helicopter pad.

According to real estate companies, the city is expected to have an additional 900,000 sq.m of office space in the next five years. Of the figure, 75-80 per cent will be in the city's centre.

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