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Ho Chi Minh City : Improvement in residential market - Q1 2014

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Economic growth in Vietnam reached about 5.0% in Q1 while inflation came in at only 4.8%, the lowest in the past 10 years. The trade balance also continued to improve with a USD1.0bn surplus for Q1. Lending and borrowing rates declined further by 0.5 percentage-points resulting in higher purchasing power. Foreign direct investments (FDI) however dropped significantly by nearly 50% in Q1, compared to the same period last year.

With an additional 33,370 sq m (NLA) of office space completed in Q1, average office occupancy rates showed some declines, particularly in the Grade A segment (Figure 1). Improvement in office demand was not strong enough for a significant change as negotiation power remained with tenants. Future demand is however expected to increase in the coming quarters on the back of an economic improvement.

Source : DTZ (Groupe UGL)