Economic slowdown combined with Ho Chi Minh City’s skyrocketing office rents have forced many businesses to opt for virtual offices.
A receptionist of a website developer talks to customers at the firm’s virtual office in downtown HCMC. Many enterprises opt for low-cost virtual offices amid economic turmoil (Photo: Phan Hien)Nguyen Huu Huan, director of a HCMC-based building material supplier, told Dau Tu Tai Chinh Newspaper that he had rented a virtual office since his business started to slow down in the last couple months.
A virtual office is a service that offers an address, telephone number and secretarial service to a company that may need it. The service has been available in Vietnam since 2006.
“Just a few customers visited our representative office as trading was getting quiet,” Huan said.
“Meanwhile, we have to pay a monthly rental of tens of millions of dong, which does not include water supply and electricity costs. Rental of a virtual office amounts to only one third of common ones’.”
Statistics show there are tens of foreign and domestic virtual office service providers in HCMC, which are very busy to meet up the increasing demand.
Figures from the Ministry of Planning and Investment show more than 5,500 enterprises were established in the first five months of the year, with the total registered capital of over VND40.2 trillion (US$2 million).
Analysts expect the virtual office service will be booming on the surging number of newly-established companies this year.
“Vietnam is a very potential market for virtual office service providers. We have already had a remarkable number of customers although we have just made debut for a several months,” said Phan Van Dung, general director of Huu Lien Investment JSC.
Foreign, small- and medium-size enterprises favor low-cost representative offices, which are located in downtown and equipped sufficiently with office utilities, and virtual offices meet up their requirement, Dung said.
He added that many virtual office service providers also offer tax and accounting consultancies.
Ho Chi Minh City and Hanoi are ranked 19th and 21st respectively among the world’s 100 cities having the highest office rental, according to UK-based property market consultancy Knight Frank.
The monthly average rentals in the southern hub and the capital city amount to $38 per square meter and $36.5 per square meter respectively, which see both have higher rental than the US’s Manhattan, Germany’s Frankfurt, China’s Beijing, Belgium’s Brussels and Italia’s Rome.
Statistics from local real estate market consultancies show the amount of rental offices in HCMC and Hanoi is getting abundant. Nearly 100,000 square meters of offices for lease have been built in Vietnam’s two biggest cities.
UK real estate service provider Savills said in a quarterly report that office spaces in HCMC expanded 7 percent in the first three months of 2011, reaching 1.1 million square meters.
London-based DTZ Research said in a report last week that the vacancy rate in HCMC in the first quarter was 20.2 percent. That compares to 10.5 percent in Bangkok and just 3.3 percent in Singapore.
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