By Ngoc Tran
HCMC - The emergence of Thu Duc City will set new borders for the appraisal and assessment of commercial markets, according to Alex Crane, managing director of Cushman & Wakefield Vietnam.
Since there are major infrastructure projects in the offing, including the Thu Thiem 2 bridge, the expansion of the Hanoi Highway and the under-construction metro line, the draw to the east will increase in pace in the post-Covid-19 world, Crane said.
Thu Duc City’s GDP will be higher than that of Binh Duong and Dong Nai combined, according to research by Cushman & Wakefield. The new city will also become the launchpad for many businesses in these two powerful manufacturing provinces.
According to the research, the average rents in Thu Duc City are approximately VND700,000/sq.m per month compared to HCMC’s VND 920,000/sq.m per month.
Thu Duc City currently contributes only 2% of office inventory to the office market between Binh Duong and Dong Nai, with 26,000 sq.m of space over a handful of buildings, Cushman & Wakefield noted.
Within five years, the real estate consultancy firm forecast that an additional 390,000 sq.m of A & B quality office space is planned for the city, with the majority in the new Thu Thiem urban area.
“If we look at the historic data of the new Thu Thiem City, office rents have risen faster than HCMC at an average of 9% per year versus 5% in HCMC,” Crane said. "So, the burst of new supply, particularly in the Thu Thiem area, will draw occupiers and create competition in pricing which will pressure it slightly in the first couple of years,” he added.
Thu Duc City, alone, is an important innovation and education area that will lead to high-tech jobs. And, it will, at the same time, raise a flag to investors as a center for investment into critical sectors, Crane said.
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