Cushman & Wakefield, a leading real estate management company based in NYC, has been present in Vietnam for over a decade. In that time, the country’s real estate scene has gone through a major transformation. The government’s decision to prioritize spending on infrastructure as a share of GDP has been driving residential, logistics, CBD, and high-end residential markets simultaneously.
In Saigon in particular, all signs are pointing to a real estate market at a crucial juncture. According to Alex Crane, the Managing Director at Cushman & Wakefield, in the city’s commercial real estate today all eyes are on the two emergent CBD hubs: in Thu Duc City and Thu Thiem. For Saigon’s office market, which until now has lacked a CBD in a traditional sense, the establishment and the subsequent “tug of war” between these two hubs will be an inflection point.
The logistics parks sector has matured in the past 3-4 years, too. In terms of the speed and sophistication of delivering such assets, Vietnam’s developers are now able to offer cleaner, more tech advanced and better-managed facilities, while, crucially, keeping prices affordable. Multinationals looking to improve their supply chains have responded favorably.
Quick to adapt to changes
In commercial property, too, trends are predominantly driven by international occupiers who expect their office space, in Vietnam and elsewhere, to come with top-notch preventive maintenance, energy-efficient AC units, and LEED certification, at the very least. A more recent trend that has been gaining momentum because of the pandemic is an overall focus on wellness in the workplace.
Conceived at the start of the pandemic, OfficeHaus in Celadon City is an example of how forward-thinking planning can help developers catch the zeitgeist and stay ahead of the competition. Designed for contactless operation and LEED Silver certified, it also boasts one of the city’s largest floor plans, which IT and media types find very desirable. In a market where competition for top talent is fierce, offering a healthy, welcoming working place helps attract and retain workers and improve output.
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Reshaping the workplace ecosystem
Whereas Vietnam’s offices are getting smarter, establishing high-tech parks of international standards remains an ambitious target. Not only is the country competing with Malaysia, the Philippines, and Indonesia in terms of logistics costs, it is also suffering from a number of outdated perceptions, such as concerns about supply chain integrity or lack of skilled tech workers.
Those worried about the future of department stores are right to be concerned, says Alex. Unless they are able to combine shopping with entertainment on a scale similar to what Aeon Mall is offering, they will find it increasingly difficult to compete with online retailers, especially if local players follow the likes of Amazon and venture into the brick-and-mortar space.
Neighborhood retail, on the other hand, is quite robust, with convenience stores and restaurants opening up in new locations. Just as long as you don’t take Saigon’s main arteries like Dong Khoi as your litmus test for the health of downtown retail, that is. Here, despite the absence of tourists, rents remain stubbornly high, so boarded-up shopfronts in heritage buildings will most likely remain an eyesore until someone comes up with a comprehensive plan for adaptive reuse.