Hanoi office vacancy rate tops 26% amid rising supply

Abundant office supply heats up competition

Hanoi's office market added more than 95,700 square meters of new floor space in the first half of 2026, according to the latest report by global commercial real estate and investment management firm JLL.

Grade A and B office space in Hanoi grew by 60,000 square meters in the second quarter alone following the opening of IFC Hanoi in the West Westlake area, bringing the capital city's total stock to about 2.2 million square meters.

The increase in office supply sent the Grade A vacancy rate soaring to 26.2 percent, up from 16.5 percent at the end of 2025. 

The city's central area is facing growing pressure as tenants with expiring leases consider moving to newer, more suitable premises.

Average Grade A gross rents stood at around $36.8 per square meter per month, equivalent to nearly VND1 million, down slightly by 0.8 percent quarter on quarter. 

The decline was mainly due to new projects outside the central area offering lower asking rents to attract tenants.

To cope with rising competitive pressure, many landlords are offering more flexible leasing terms, including longer rent-free periods, while upgrading their properties to meet green standards such as LEED and EDGE and qualify for smart building certifications.

Retail market remains buoyant as global brands expand

While Hanoi's office segment faced mounting pressure, the retail real estate market showed more positive momentum, with JLL reporting strong net absorption. 

The opening of Hanoi Centre early in the year helped lift net absorption in the central area to 35,900 square meters in January-June.

In non-central areas, the vacancy rate fell to 6.4 percent despite changes in the tenant mix. Demand for retail space continued to come mainly from the food and beverage (F&B) and fashion industries.

Hanoi continued to demonstrate its appeal to global retailers, attracting major brands including Zara, Uniqlo, Urban Revivo, Victoria's Secret, and Pop Mart. 

Monthly rents in the central area remained high at $133.1 per square meter, while rents in non-central areas rose 2.1 percent year on year to $55.4 per square meter.

Le Thi Huyen Trang, country head of JLL Vietnam, said the market was becoming increasingly polarized, with a growing preference for properties that deliver tangible value to tenants. 

The West Westlake area is forecast to emerge as Hanoi's new Grade A office hub, with nearly 260,000 square meters of space expected to enter the market between 2027 and 2030, accounting for 85 percent of the city's new supply.

In addition, Hanoi's urban redevelopment, driven by major transport projects such as Beltway No. 4, urban railway lines, and bridges across the Red River, is expected to reshape the city's spatial structure and commercial real estate values over the long term.