Hanoi’s office real estate landscape is undergoing notable changes in tenant preferences during 2023, with analysts from real estate consultants Savills highlighting three key factors shaping tenant decisions over the remainder of the year.

Firstly, the technology sector’s demand for office space shows signs of slowing down, especially among tech startups. This is in contrast to previous strong growth trends in the industry. Some tech companies have even downsized their office space or vacated it before their lease ended. While the technology segment led office leasing transactions in the first half of 2022, this number halved in the first half of 2023.

Secondly, the flexible workspace model has gained prominence due to changing work habits influenced by the pandemic. Savills’ survey of 447 tenants in Hanoi reveals that a flexible or remote work model has become a top priority in the workplace. Businesses are now adjusting their office design and corporate culture to cater to this new trend, leading to space optimization and reduced costs.

Lastly, sustainability and environmental consciousness drive tenants to seek green and sustainable office space. With Vietnam’s commitment to reducing carbon emissions, businesses listed on the stock exchange are required to disclose environmental, social, and governance (ESG) reports. As a result, there is growing demand for office buildings with high-quality green infrastructure.

The TechnoPark Tower project exemplifies this trend. This LEED Platinum-certified office building focuses on sustainability and community engagement. It’s also part of an all-inclusive urban ecosystem, offering a range of amenities and services within close proximity.

“In the next six months, the office market is likely to recover rapidly,” said Ms. Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi. “Average rental prices and occupancy rates will increase. Businesses in the manufacturing and education sectors, as well as private companies, will continue to drive demand for office space. This will serve as the primary catalyst for the development of Hanoi’s office market in the latter half of 2023 and the first half of 2024.”