Vietnam CRE market to pick up by end of 2012

Ho Chi Minh City office rents could recover by the end of 2012, following the opening of the city's tallest commercial building along with a lack of supply.

Binh Minh Import-Export Production & Trade opened a 262-meter, $270 million tower last year that has a total of approximately 37,000 square meters of office space, Bloomberg reports.

According to Marc Townsend, managing director at the Vietnam sector of CB Richard Ellis, rents in Vietnam's largest city may experience a 5-percent dip by the second or third quarter of 2012, but this figure could rally up as new space in the building becomes absorbed.

"We’ve got a few more months of falling rents and associated values," Townsend said in an interview. "Buildings like the Bitexco Financial Tower opening were bound to affect the market, but now there are only a few more big buildings to come on the market."

Although the commercial real estate market is expected to pick up pace by 2013, Townsend went on to say that investors that borrowed money for property development over the past three years are now suffering. New projects aren't expected to start as banks are currently hesitant to grant funds for property creation.