Market buzzes with commercial center transfer

Offices for lease and commercial and retail centers are usually leased out by property project developers, but the real estate market is seeing more project owners selling these spaces, wholly or partially, to their partners.
Property consultant firm Knight Frank Vietnam said it had just signed a cooperation contract with Inveskia Co., a joint venture between Prudential Vietnam Fund Management, Kien A and Invesco companies.

Under this contract, Inveskia will be a marketing and offering agency for the commercial area of the Imperia An Phu building in Ho Chi Minh City’s District 2.

Stephen Wyatt, director of retail service division at Knight Frank, said the Imperia An Phu project would offer investors as much as 4,200 square meters of retail space, including a supermarket, a wedding hall, a private school, and a healthcare center.

The project is developed on a two-hectare site and consists of four blocks of 24-28 storey buildings with some 700 apartments and a retail section. The total investment for this project is US$130 million.

Also at the Cat Lai T-junction area, The Vista project of Singaporean property developer CapitaLand is under progress for completion after offering its products to the market in 2007.

This project includes two blocks of buildings with about 850 commercial and serviced apartments, as well as retail and office spaces.

According to an unofficial source, CapitaLand has transferred the office building, serviced apartment and commercial center segments with a total area of 5,700 square meters to its partner.

Earlier, VinaCapital Real Estate Company chose property service provider Cushman & Wakefield as a broker to offer each floor or the entire Metroplex office building project in the Phu My Hung urban area in District 7.

Some experts said the offer of partial office and retail spaces provided investors with opportunities to purchase and possess commercial real estate instead of renting. The acquisition of partial office buildings is popular in many countries but still unfamiliar to the Vietnamese market.

However, from another angle, experts saw a shortage of capital in the property market driving investors to seek new financial sources.

Along with selling a complete project, offering a partial project is a new approach to capital mobilization for the construction of their other projects.

Regarding office and retail area businesses, market observers said the average price of the HCM City-based offices for lease has continued to fall for ten consecutive quarters.

In particular, rental prices dwindled to US$36 per square meter in grade-A offices and US$22.5 in grade-B ones.

Current market difficulties are forcing property project owners to launch preferential policies in order to attract new tenants as well as enforce their bonds with old customers.

Meanwhile, the retail market saw no new supply for lease in the city’s central area in the past two quarters to add to the available 353,000 square meters.

According to CB Richard Ellis (CBRE), the average rental price of commercial centers is US$109 a square meter, rising by 6% compared to the beginning of the year.

The price is US$33 per square meter for projects outside the downtown area.

Owners of these projects, due to location disadvantages, are offering competitive prices to attract more tenants. – Tuoitre

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