How will office rent move?
At least three foreign property management and consulting firms in Vietnam, namely CB Richard Ellis (CBRE), Savills and Jones Lang LaSalle, have shrugged off Cushman &Wakefield's projection.
They share a view that office rent will remain firm or drop slightly rather than sharply because of high demand.
"We do not think rent will fall quite as dramatically as some are suggesting, particularly in the Grade A office sector," says Brett Ashton, managing director of Savills Vietnam.
He says there is office space available here but supply is not redundant to cause the rent to plunge as forecast by Cushman & Wakefield.
Toby Dodd, general manager of Cushman & Wakefield in Vietnam, says office rent in Vietnam will stabilize at US$30 per square meter for Grade A, US$20 for Grade B and US$10 at Grade C. These are the same as in regional cities such as Thailand's Bangkok, Indonesia's Jakarta, Malaysia's Kuala Lumpur and the Philippines' Manila.
"That's why I believe office rent in Vietnam will be lower", Dodd told the Daily after a seminar on real estate investment held in HCMC earlier this month by the European Chamber of Commerce in Vietnam (EuroCham) last week.
CBRE Vietnam's managing director Marc Townsend describes such a decline as a "collapse" if the office rent will go that way. But he concedes the current office rent is "extremely expensive" and is at least twice that in those cities.
"We do not see rental collapse," Townsend says, attributing the expensive rent to the biggest problem in relation to getting access to cheap land and infrastructure in Vietnam.
He also points out inflation, high construction cost and the "extremely difficult" chance of getting a license as other reasons. "That's the reason why Vietnam rents for hotels, serviced apartments and retail are more expensive than in the cities of the same size of population or less."
Ashton says the rent will depend much on the quality and location and management of each building. However, it will take time for the rates to come down though Savills predicted Grade A rents will reach US$100 per square meter by the end of 2008.
Townsend reveals the Kumho is looking to break a number of records in the rental market.
Ashton estimates the supply of Grade A offices currently stands at 75,000 square meters in HCMC and me latest rents, based on the most recent new leases in Grade A buildings, equate to some US$97 per square meter, inclusive of service charges, but exclusive of value-added tax.
This is what has been happening around King and Dufferin ; the buying and renovating of these old building by wealthier individuals which in effect has improved property values but pushed out those who could not afford it .According to statistics Canada 2011, this area has lost much lower rent housing after the process of gentrification started without replacement of subsidized housing. Between 1996 to 2006 development increased by 126 %, mostly the building of condominium and during this period rent has increased by 93 % . We can see how the expensive condos being built are pushing out people who can't afford the rent; for example when I was doing the neighborhood profile It was easy to note the change. King and Dufferin area is no longer occupied by immigrants but young professionals and I can see the how gentrification is continuing to push all the way west side of king
Roder, David, and Spielman, Fran. “Condo, town houses planned near Cabrini-Green.” Chicago Sun Times. 30 May 2002.
Trinh Vö, L. (2008). Constructing a Vietnamese American Community: Economic and Political Transformation in Little Saigon, Orange County. Amerasia Journal, 34(3), 85-109.
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Dawsey, Josh. "Apartments Rise as Shelter Option in New York City." WSJ.com. Dow Jones, 12
The decision of Young to rent the condominium will provide advantages in terms of security deposit and rental payments for previous months because she did not face a significant financial commitment to pay for it. If she wants to buy the condominium, large amount of down payment needed to be paid by her. Monthly sales broker fees, closing costs, condominium fees, deed-transfer taxes and property taxes should be taken into account in the cost of a condominium fees. The rental fee is more cheaper compared to the purchase of a condominium. Young also a very professional person in investment banking after completing her studies in master. Thus, if she expects to pay at a higher price in the future, this will change the ability to buy and ability to pay the mortgage nowadays. Young consider to rents because it gives her chances to make a distribution and expand its
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House prices have been affected by the number of people who buy houses to rent out and this has had an impact on younger people wanting to buy homes. Thus, the term ‘generation rent’ has come to the forefront in recent years. In A Century of Home-ownership and Renting (The Open University, 2016) census data presented supports the claim for the use of this term. In the video, they mention levels of home-ownership dropped for the first time since records began. From 69% to 64% in the space of 10 years and the percentage of households privately renting has been on the rise. 11% in 1981 compared to 18% in 2011. In addition, house prices have risen faster than previous years and banks have also restricted lending. These factors have all lead to more people not being able to afford a home of their own, especially at a younger age. So, as house prices rise this benefits the home-owners and allows them to gain more wealth and capital. The distribution of wealth has been affected by changes in these markets. There is evidence to support this claim. Table 3.5 (Investigating the social world 1, chapter 3, p. 96) shows wealth distribution in Great Britain from 2000 and 2005. The table shows results for housing wealth distribution amongst other things. It’s important to look at the look at the lowest and highest percentiles to look at any
As the United States economy grows and technology advances, many areas such as San Francisco, Silicon Valley, and New York City embrace tech companies with open arms. However, it turns San Francisco, once an affordable place, into a luxurious and costly city for people who earn six digit pay checks. The Golden Gate City currently tops the chart for the most expensive homes in the nation. Even techies rent are increasing each month. The people moving into these cities are raising rental and property prices. The middle class is being squeezed out of their
of rent will not increase as quickly as inflation. While the moral side of rent
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A few years later, the market shifted and people became more interested in detached homes than apartment homes. Once again, Go...
The main problem rent control can create to landlords is the case of the tenant do not move out because of the good rental price. That causes the landlords to lose money by not being able to increase the rental price of their units. Besides, the price of maintenance continues to increase, causing landlords to not earn any profit with their ...