With abundant supply and myriad economic difficulties, office leasing costs in Ho Chi Minh City are forecast to decline in the short term, according to a report from CBRE Vietnam.

Rental costs for Grade A office space are expected to be down 4 per cent this year while vacancies are tipped to rise 21.5 per cent.

The office for lease market began to feel the impacts of the difficulties in the macro-economy in the fourth quarter of 2022. The leasing area decreased from 44,000 sq m in the third quarter to 8,000 sq m in the fourth.

The total leasing area in 2022 was 75,000 sq m, equivalent to 69 per cent of the figure in 2019, prior to Covid-19.

Meanwhile, the supply of office space for lease in the southern city rose 5 per cent year-on-year in 2022, reaching 2.6 million sq m.