Hanoi and Ho Chi Minh City office yields are well ahead of the gateway cities.
Investing in property is popular. It is tangible plus it is a robust investment providing a safe haven for money. Many invest in residential property overseeing the potential in commercial space. However recent research revealed by real estate firm Savills point to the office market as a place to generate growth. This is despite economic and political uncertainties across the globe.
Savills looked at 54 cities throughout Asia, the United States, Australia and Europe in order to rank the highest yielding cities. Hanoi topped the chart with 8.75 percent. Ho Chi Minh City nipping at its heels at 8.5 percent. Impressive numbers when you consider Vietnam’s placing on the world stage against the gateway cities. The region’s powerhouse of Singapore is well behind at 3.97 percent, whilst Hong Kong only reached 2.5 percent and Taipei just under 2 percent.
For the gateway cities, Sydney topped the chart with 5.37 percent. This was followed by LA West with 5.03 percent and San Francisco with 4.6 percent. Demonstrating the sheer strength of the Vietnamese economy and property market, Tony Crabb, head of research of Savills in Australia, said, “This is an interesting time in the investment cycle where markets have responded to the inflation/growth trade by pushing bond yields and growth stocks, whilst also recognising office markets should perform well as demand grows”.
Crabb believes that office space will continue to be a lucrative asset choice. Stating that they offer good value that is driving demand, thus producing attractive yields. Plus a lack of good stock is playing its part too. Landlord’s are embracing the healthy leasing markets with higher vacancy rates that lead to more growth.
For Asia low interest rates have helped boast office yields. Having held the reign for sometime, Vietnamese cities are not expected to slowdown anytime. Record foreign direct investment is flowing into the country and the economy is going from strength-to-strength.
