Office rents continued to drop across Vietnam’s big cities in the last quarter of 2010 even as the economic recovery gained pace, according to property experts.

More offices and less demand had pushed office rents down in Ho Chi Minh City and Hanoi.

The average office rent in Ho Chi Minh City, the country’s financial and economic driver, decreased slightly by 2 percent compared to the third quarter, at approximately US$30 per square meter, said UK-based real estate service provider Savills in a latest report.

Savills also predicted that the city’s office market supply will grow to a total of 562,000 square meters in the next two years.

In Hanoi, the market saw a drop of 1 percent quarter-on-quarter, which hit a year's low of US$26 per square meter per month. Savills said the total office supply was over 740,000 square meters, an increase of 26 percent compared with the same period of 2009.

In the next four years, approximately 1.5 million square meters of office space from approximately 125 projects is planned to enter the market.

However, the country’s property market will experience rising demand next year from economic growth, urbanization and companies’ expansion, according to CB Richard Ellis Group Inc.

An oversupply in major metropolitan areas from rapid development will be just a short-term issue.

Vietnam is preparing a rapid and sustainable development strategy that will lead to average gross domestic product growth of 7 percent to 8 percent a year from 2011 to 2020.

Source: Tuoi Tre