Gia Lam to the district - What opportunities for Hanoi office real estate?

Strategic advantages of Gia Lam district

Gia Lam is the gateway connecting the capital with the Northeast economic triangle, including Hai Phong, Hai Duong, Quang Ninh; Directly adjacent to the two provinces of Bac Ninh and Hung Yen, which is considered the "capital" of industrial zones in the Northern economic corridor.

Furthermore, Hanoi is also rapidly developing and improving transportation infrastructure to enhance connectivity and reduce traffic pressure in the inner city area. In particular, when becoming a district, Gia Lam will benefit from the mechanisms and policies of an inner-city district, including promoting investment in construction, renovation and upgrading of technical infrastructure.

Typically, Vinh Tuy bridge phase 2 with a length of 3.5km, nearly 20m wide, with 4 lanes opened to traffic on August 30, 2023. The bridge directly connects Ring Road 2 and Ring Road 2 overhead, creating a complete traffic axis from the center of Hanoi to the Northern and Northeast areas of the city.

In the future, the area will witness the development of waterway transportation systems across the Red River, (with projects such as Tran Hung Dao bridge, Ngoc Hoi bridge) or Duong river such as Duong bridge phase 2 starting construction in July 22, 2023. These works not only have important economic significance, but are also a lever for economic, cultural, social development and trade activities.

The event of Gia Lam coming to the district creates many opportunities for the real estate industry

In addition to the central city connecting system with the eastern region, Gia Lam also benefits significantly from key arterial roads such as Co Linh Street, the Hanoi - Hai Phong Expressway, National Highway 1A, and National Highway 5. This facilitates convenient and fast movement between economic centers within and outside Hanoi. Notable examples include the intersection connecting Co Linh Street with the Hanoi - Hai Phong Expressway (inaugurated in January 2021) and several ongoing projects, such as the intersection of National Highway 5 with Dong Du - Duong Xa Street, the overpass at the intersection of Ngo Xuan Quang Street with National Highway 5, the road from Thanh Tri Bridge to Phu Thi Overpass, and the dike road from Duong Slope to Dang Xa to Le Chi Commune, as well as the Yen Vien - Dinh Xuyen - Phu Dong connecting road.

Gia Lam is a rare area in Hanoi with convenient inter-provincial connectivity. With synchronized investment in transportation and technology infrastructure, Gia Lam is poised to become a crucial link in the supply chain and business operations between domestic and international enterprises in the capital and neighboring provinces within the Northeast economic corridor. With vast land reserves and low building density, Gia Lam is an ideal destination for future office real estate supply.

Future and Prospects of the Office Market in Gia Lam District

The trend of expanding beyond the city center continues to be evident, particularly as available space in the central area becomes limited. This will drive the development of new office projects in prime locations outside the city center, such as Gia Lam.

Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi, states, "Office space remains one of the most lucrative and attractive investment areas. Typically, when a building achieves average occupancy rates, the profit yield for an entire office building can reach up to 65%, even 70% compared to revenue. This is an exceptionally high profit margin. Moreover, as the trend of businesses moving outside the city center continues to be clear, and available space in the central area is limited, areas like Dong Da, Tay Ho, Ba Dinh, or even Gia Lam – now elevated to district status, need attention."

Savills' research indicates that the majority of office supply is concentrated in the western region, including Bac Tu Liem, Nam Tu Liem, and Cau Giay, accounting for approximately 50% of the market share, equivalent to around 873,700 square meters. In contrast, Gia Lam currently has not seen much office supply, especially high-quality and green-certified offerings. One notable project is the TechnoPark Tower, located in the Vinhomes Ocean Park urban area, with a total lease area of up to 110,000 square meters. This project is the first and only one in Hanoi to achieve LEED Platinum certification, the highest ranking in LEED for green buildings.

TechnoPark - A Promising Office Building in Gia Lam District

Chu Thanh Huong, representative of Vinhomes Office Leasing, states: "With the aim of developing an internationally quality office building and demonstrating a strong commitment to sustainable development, TechnoPark Tower is our first project to successfully achieve the stringent LEED Platinum certification. This achievement not only brings a high-quality international office building to the market, meeting sustainable development requirements and creating a healthy working environment for the tenant community but also makes a tangible contribution to Vietnam's journey towards Net Zero."

Savills experts conclude that Gia Lam is a unique business sector. Therefore, the tenant structure is relatively different compared to Hoan Kiem, which focuses on financial institutions, banks, government organizations, or the West Hanoi area with a high density of companies in the IT, insurance, and real estate sectors. Being situated around industrial and manufacturing centers such as Bac Ninh and Hung Yen, Gia Lam will attract FDI businesses and multinational companies with factories in nearby industrial zones.

Source: Báo Vietnam.vn

https://www.vietnam.vn/gia-lam-len-quan-phan-khuc-bat-dong-san-nao-se-len-doi/