Hanoi Office Market Enters New Phase with Surge in Grade A Supply, Offering Upgrade Opportunities for Tenants

The office market in Hanoi, Vietnam's capital, is entering a new phase with a continuous increase in the supply of high-quality Grade A properties. This surge in supply is expected to provide valuable opportunities for businesses to upgrade to superior office environments, contributing to the efficiency of business operations and the enhancement of employee experience. Globally, there is a growing trend for companies to invest in high-quality buildings with convenient locations, modern facilities, and comprehensive amenities, rather than simply increasing the number of offices. According to the Savills Global Occupier Outlook 2026 report, 89% of surveyed markets anticipate a rise in Grade A office rents, and 82% expect more active leasing activities in the future. From an international investment perspective, the office sector remains attractive. Savills World Research indicated that in the first half of 2026, offices attracted $22.3 billion, accounting for nearly a quarter of global cross-border transactions. This demonstrates that investor confidence in high-quality office assets is being maintained, despite changes in how businesses utilize workspaces. In Hanoi, Savills Vietnam forecasts that approximately 403,000 square meters of new supply are expected by 2028, with the majority being Grade A properties, primarily concentrated in the western areas and expanding inner-city districts. The increase in supply does not signify a decline in demand. On the contrary, many companies are leveraging this opportunity to upgrade their offices. In the first quarter of 2026, a significant portion of leasing transactions in Hanoi were driven by relocations to newer, higher-quality buildings, helping to maintain the overall market's occupancy rate at 86%. The criteria by which companies evaluate offices are also evolving. While cost and location were previously prioritized, the ability of an office to support business operations is now a key consideration. Factors such as building quality, flexibility of space, amenities, client reception areas, and the capacity to meet the needs of international expert teams are becoming crucial in leasing decisions. To meet these demands, Grade A office buildings within mixed-use developments, such as IFC Hanoi, are being developed. These integrate offices with hotels, serviced apartments, and commercial facilities, offering a single location for work, accommodation, partner reception, and various services, thereby optimizing daily operations. William Gramond, Director of Commercial Leasing at Savills Hanoi, commented, "The new supply provides tenants with more choices. Many companies are seizing this moment to transition to better-quality buildings rather than simply renewing contracts in their existing offices. This is an opportunity for businesses to upgrade their work environment while optimizing their long-term cost strategy." He also noted that in an increasingly competitive market, an office's appeal is no longer solely based on location or price. Instead, the ability to meet the increasingly diverse operational needs of businesses will determine a project's attractiveness. For developers, this means the necessity to create differentiated value through product quality, management services, and amenity ecosystems, rather than merely competing on new supply. Source: Nhan Dan