Press Release

CBRE Releases 2023 Vietnam Real Estate Market Outlook in Ho Chi Minh city

Turbulence amidst the Recovery

February 14, 2023

Media Contact

Ha Dinh

Senior Manager, Head of Marcom, Marketing & Communications, Vietnam

Photo of ha-dinh

Ho Chi Minh City – 14 February 2023

HCMC Office Market  
In 2022, the office supply in HCMC increased by only 2%, with three new projects and over 40,000 sqm of NLA. In Q4, no new building was launched, mainly because of the delay in constructing new buildings. The recent investigation into the developer’s misconduct has shown its backlash in the construction progress of future pipelines, especially the Grade A – CBD projects.

On a positive note, thanks to limited available space, the HCMC office market had a remarkable recovery from the Covid-19 impact in the first nine months, with the total net absorption improving from 55,000 sqm in 2021 to 75,000 sqm in 2022. Its average vacancy rate now is only 7.8%, 2.3 ppts lower than last year. Consequently, Grade A and B's average asking rent increased by 7.4% and 2.2% y-o-y to US$45.9/sqm/month and US$26.0/sqm/month.

Nevertheless, in Q4, the HCMC office market started to feel the heat under the macroeconomic headwinds. Net absorption started to slow down from 44,000 sqm in Q3 to only 8,000 sqm in Q4. The total net absorption of 2022 was approximately 75,000 sqm, equal to only 69% of the pre-pandemic level in 2019. CBRE expects expansionary demand to remain muted in H1 2023 as corporate revenue growth slows. Most companies will adopt a wait-and-see mode, focusing on short-term lease renewals.

CBD Fringe is still the most sought-after location thanks to its distance to the city center and competitive price, accounting for nearly 50% of total enquiries received by CBRE in 2022, followed by the CBD and the South area, comprise of 13% and 9%, respectively. Although the East accounted for 6% of the total enquiries received by CBRE, we expect to receive higher interest in this area with more new supplies coming. Expansion and relocation are still significant forces for leasing, with over 70% of total transactions recorded by CBRE within the year. New letting and renewal shared the rest equally, each less than 15%.

Flight to quality will remain a key theme in the HCMC office market in 2023. MNCs are setting ambitious net-zero targets and complying with ESG regulations. In 2023, the HCMC office market will welcome over 200,000 sqm of new supply, with the first two Grade A projects in Thu Thiem NUA and the first WELL-certified project in HCMC, providing occupiers with more opportunities to relocate to newer and ESG-compliant buildings.

Given the robust pipeline and the upcoming economic recession, the average vacancy is forecasted to increase to 21.5% in 2023. The elevated vacancy will weigh on the rental level, with Grade A rents decreasing by 4% in 2023. Grade B rents will be in a more stable condition, with the rental rate expected to fluctuate around the current rate, and the vacancy rate will increase in 2023 but will soon bounce back in 2024. In contrast, flexible office space will be a safe bet if companies have to look for expansion. Commenting on the office market trend in HCMC, Ms. Thanh Pham, Associate Director, Research and Consulting Department, CBRE Vietnam, said: “In 2023, HCMC office will introduce at least four new office buildings with green certificates. For developers, setting a sustainability strategy and developing a roadmap to achieve milestones are essential to attracting major anchor tenants. There is solid stronger demand for green buildings and green leases.” 


Ho Chi Minh City Retail Market

The retail sector is recovering relatively well from the pandemic's disruptions. According to the HCMC Department of Industry and Trade, the city's total retail sales of consumer goods and services in 2022 reached VND 1,089,446 billion, up 30.5% y-o-y. Retail sales of goods were VND625,520 billion, increasing by 20.5% y-o-y.

The market welcomed a variety of new brand openings and expansions from international and local retailers across sectors. Some notable transactions included MUJI Lifestyle at Crescent Mall, District 7, MANWAH Hotpot – F&B at Viettel Complex, District 10, Acme De La Vie (ADLV) – Fashion at Thiso Mall, District 2, etc.

Regarding the retail real estate market, as of Q4 2022, Thiso Mall, the first shopping mall in Thu Thiem New Urban Area (District 2) and Sala township, held a soft opening. The mall has one basement and four floors, providing 35,000 NLA sqm. With only one new supply in the year, the HCMC's retail supply reached 1,096,628 NLA sqm.

The average asking price on the ground floor and first floor in the CBD reached US$224/sqm/month, increased by nearly 45% y-o-y, or more than 5.5 times higher than the rent in the non-CBD area (US$40/m2/month) (Rent is excluding VAT and service charges). Ms. Thanh Pham, Associate Director, Research and Consulting Department, CBRE Vietnam, commented, "The average vacancy rate of shopping centres in CBD is around 6.5%, and all the prime locations are almost full. Retailers continue seeking high-quality retail space in the city centre and along prime high streets. However, as retailers try to navigate economic uncertainty and steadily rising costs, CBRE expects retailers to adopt a highly-disciplined approach to portfolio planning."

Regarding future supply in the next two years, HCMC is expected to welcome about 132,000 sqm, all in non-CBD areas. The supply of retail space in the CBD continues to be limited without progress being made on the construction of future supplies such as Centennial mall (Sun Tower), IFC One (Saigon One), and One Central (The Spirit of Saigon). Because of legal issues, the launch dates of these projects are expected to be delayed until late 2024-2025 and beyond. 

Sharing the prospect of Thu Thiem New Urban Area in HCMC, Ms. Thanh Pham commented: "Thu Thiem is rising as a high-income urban area with massive demand for shopping, dining, and entertainment in the East HCMC. Thanks to better connectivity with District 1 via Thu Thiem 2 Bridge since last year, the area expects to become the new CBD of HCMC with total new retail leasing space in this area estimated to reach about 135,000 NLA sqm."

Given the scarce availability of leasing space in the HCMC-CBD in the next two years, the average rent of shopping centres in this area is expected to keep the increasing rate from 3.0 to 3.5% y-o-y, while non-CBD sees a modest growth rate at 1.0-1.5% yearly. With the limited new supply, retailers may seek more space in non-CBD areas to launch pop-up stores.

Southern Vietnam Industrial Market

Industrial properties are considered the bright spot of the real estate market in 2022. The market witnessed continued interest from global manufacturers, especially electronics and energy sectors. Some big names include Apple, Quanta, Samsung, and LG, with up to multi-billion-dollar additional investment in Vietnam in the coming time.

Industrial land performed well across regions and markets. In Southern Vietnam, the average land price increased by 8-13% y-o-y and reached US$166/sqm/remaining leasing term at the end of 2022, which was about 38% higher than the average rate of the Northern region. The rents can be more than US$280-300/sqm/leasing term in prime locations in HCMC, Binh Duong, and Long An.
The Southern infrastructure is improving and developing for better connectivity within tier-1 and between tier-1 and tier-2 markets, namely, HCMC - Trung Luong – My Thuan Expressway (completed in 2022) and the future projects such as Dau Giay – Phan Thiet Expressway (Expected completion in 2023), My Thuan – Can Tho – Bac Lieu Expressway (Expected completion in 2023), Nhon Trach bridge (expected completion in 2025), etc.
The reopening of China, the world's second-largest economy, is expected to boost Vietnam's economy. Vietnam's local authorities are working closely with their Chinese counterparts to implement cooperation activities in the interests of both parties. 

Although supply chain disruption has now largely eased, companies are still looking to diversify risk by adding locations for sourcing and manufacturing. Recently, Chinese electric vehicle (EV) maker BYD Auto Co plans to build a plant in Vietnam to manufacture car parts to reduce the company's reliance on China and deepen its supply chain in Southeast Asia as part of a global expansion strategy.
Commenting on the prospects for the next two years, Ms. Thanh Pham shared, "The land price in the Southern region is anticipated to increase 7-10% per annum for Tier-1 markets and 5-7% per annum for Tier-2 regions. (Tier 1 markets include Ho Chi Minh City, Dong Nai, Binh Duong, and Long An. Tier 2 markets include Binh Thuan, Ba Ria-Vung Tau, Binh Phuoc, and Tay Ninh). Meanwhile, ample new ready-built factories and warehouse supply will pressure rents. The average rent of ready-built factories and warehouses is already at peak and is expected to remain flat in 2023-2024." 


Ho Chi Minh City Condominium Market

In Q4 2022, only 1,312 new condominium units were launched in HCMC, the record lowest new supply within a quarter over the recent ten years except for the two pandemic years, making the total launched units of 2022 to be 18,440 units, equal to the number of the year 2020 but only 70% of the pre-Covid 19's level in 2019. The East continued to lead the market with three newly launched projects and the next phase of one existing project, providing over 1,000 units, making up nearly 81% of the new supply. Besides the licensing issue in recent years, many developers have intentionally delayed their sales plan due to the concern of the economic recession that will affect the demand of the market.

The high-end segment remained the leading segment, with over 16,850 units, accounting for 90% of the total supply within the year. Remarkably, 93% of total supply in 2022 was launched in the first three quarters and 60% of them came from different phases of Vinhomes township in District 9. All newly launched projects in 2022 are developed by major renowned developers with landbank from previous periods.

Q4 2022 recorded 1,155 sold units, down 85% q-o-q. The number of units sold is also less than the newly launched units within a quarter for the first time since the pandemic. The borrowing rate for house buyers has hiked to a considerably higher level and can be up to 14-15% after the preferential interest period, which made capital accessibility difficult and created concern for home buyers, especially when macroeconomic conditions are still under various challenges. Frequent pessimistic news about real estate developers also holds buyers back from making any purchase. The total sold units in 2022 were 18,545, down by 37.3% compared to the pre-pandemic level in 2019.

The average primary price in Q4 2022 was relatively stable compared to the previous quarter. The luxury segment is the only segment that experienced a price growth at 1.4% q-o-q, 7.8% y-o-y, while other segments' primary prices stayed at the same level compared to the previous quarter. However, sales policy showed a major revision in the last quarter of the year when numerous developers offered more vigorous discount rates than usual. The discount rate ranges from 20% to 45%, depending on payment schedules and other promotional schemes. The high discount rate only comes from developers under substantial financial pressure, and the projects' legal status is still unclear.

Average secondary price started to decrease in Q4, but mainly in projects with many units and a high level of speculation. The price reduction can be up to 20%. CBRE suggested that this price decrease reflects the investor's expected profit adjustment but not the "cut loss" of the whole market yet. Investors that did not use financial leverage or have no cash flow pressure are still waiting for a better time to sell their assets.


In 2023, the HCMC market is expected only to welcome approximately 9,000 new condominium units from 20 projects. Among this, the high-end segment will continue to dominate with 75% of the total supply. The luxury segment and mid-end segment shared the same proportion of 12%. Most of the future supply will come from the subsequent phases of already launched projects, and only 6 out of 20 expected projects are first-time sales. The East area is the main development direction of the city, with over 48% of the total supply, and the West is forecasted to be the new highlight, with more than 2,000 units to be launched, most of them from Binh Tan District. Hoc Mon Ward is also expected to welcome its first commercial condominium project with a supply of nearly 800 units.
Commenting on the residential sector, Ms. Dung Duong, Executive Director of CBRE Vietnam, said: "The first half of 2022 witnessed the recovery of the residential market, and this trend was expected to continue. However, turbulence in the latter half amidst the recovery has affected the recovery speed, as well as the market sentiment. CBRE forecasts that difficulties will continue in 2023 with limited supply and low liquidity due to the challenging credit accessibility for home buyers. There will be adjustments in the supply with fewer luxurious products and the focus will be on high-end and upper mid-end segments. The average primary price will stabilize in 2023-2024.”
“The timing when the market can be back to normal will depend on the speed of the macroeconomics policy approval, including credit policy, revised Land law and the legal issues resolving to break the deadlock for the new supply."

Notes on CBRE condominium ranking criteria:
1. Ultra-luxury: projects that have primary prices over US$12,000 psm
2. Luxury: projects that have primary prices US$4,000 psm to US$12,000 psm 
3. High-end: projects that have primary prices from US$2,000 psm to US$4,000 psm
4. Mid-end: projects that have primary prices from US$1,000 psm to US$2,000 psm
5. Affordable: projects that have primary prices under US$1,000 psm
(Selling price excludes VAT)  


© 2023, CBRE, Group Inc. CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at