A second quarter report by CB Richard Ellis (CBRE) puts average occupancy rate for all three grades, A, B and C, at around 69 per cent.
With no new grade A property entering the market in the first half of this year, the Indochina Riverside Tower is the sole occupier of this market segment in Da Nang. The tower has a modest office space of over 6,000sq.m and its occupancy is high at 84 per cent.
In the B grade segment, the existing six properties have had no new competitor emerge, so they have enjoyed average occupancy rates of almost 72 per cent.
Tenants had, by the end of the first six months, taken up 63 per cent of grade C space, which represent less than a half of the city's total office area.
Two new buildings entered the market during this period, offering an additional 1,500sq.m.
The CBRE report found occupancy rates posted quarter-on-quarter (q-o-q) increases of 11, 15.6 and 3 per cent for grades A, B and C respectively. Average monthly asking rent was US$11.31 per square meter, a decrease of 0.8 per cent over the previous quarter. There were no q-o-q changes in grade A, but a small fall of 0.24 and 0.16 per cent respectively for grades B and C.
The asking price for grade A was $19 per square metre and over $13 and $10 for B and C respectively. This compared to corresponding rates of over $34, almost $19 and $15.7 in HCM City.
Cushman&Wakefield, another property service provider, said that office space availability in Da Nang was estimated to triple by 2014.
"However, due to the current uncertain economic outlook, we anticipate that there will be extensive delays in the office development pipeline," said Robert Johnston, the firm's associate director for tenant strategies and solutions.
CBRE managing director Marc Townsend said the increase in manufacturing in Da Nang's industrial parks would require more back office and follow-on services, which was expected to support demand for office space over the next four quarters.
Da Nang gained a year-on-year GDP growth of more than 11 per cent in the first half of this year compared to the national rate of 5.57 per cent. The city currently has 27 buildings offering around 80,000sq.m of office space.
VNS