Office rental rates scorching hot after MOC’s decision

Just days after the Ministry of Construction (MOC) issued the decision that apartments cannot be used as offices, office rents have skyrocketed.

MOC, in its latest decree for six big cities, stipulates that the use of apartments as business offices is illegal and unsafe. MOC maintains that offices in residential quarters affect the daily life of families negatively. Owners of office spaces heard the news and realized that many businesses will have to relocate. In response, the property owners have raised the rent for offices, anticipating the higher demand.

Dan Tri newspaper quoted Nguyen Lan Huong, owner of a building for lease, as admitting that she now asks $5,000 a month in rent, while only one month ago in October 2009 it was just $4,000.

Le Hoang, a real estate developer, is offering to sell a series of apartments to invest in office spaces. “Office rents have been increasing day after day, which promises fat profits for investors,” Hoang surmised.

Real estate brokerage centres in Cau Giay, Thanh Xuan and Ba Dinh districts said they now focus on introducing offices for rent with much higher fees.

Xuan Tan, Director of a real estate brokerage centre in Thanh Xuan district, said that office rental rates have increased by five to ten million dong a month.

MOC’s decision has been strongly opposed by the businesses who must spend more money to rent real offices.

Le Diem Quynh, Director of a real estate company presently located in My Dinh, remarked: “The decision will create large difficulties for businesses, especially the small and medium ones.”

Dan Tri has found out that My Dinh 2, Trung Yen, Trung Hoa-Nhan Chinh, Dich Vong residential quarters and high grade apartments at buildings developed by Vinaconex and Vinashin are now often used as company offices. These businesses have all protested the decision by MOC.

Hoang Quan, a media company chairman, explained that businesses like his have only about 20 workers. He maintained that they have the right to work from the apartment where they live because their activities in no way affect neighboring families.

Hoang said that if he has to rent another office, he will have to spend additional sums of money because real estate is so expensive.

VietNamNet/DT

Tags: Vietnam real estate