Why are Office Demands from the ICT Sector Growing?

ICT Continues to Perform Well

Information and communications technology, or (ICT), combines both manufacturing and service industries and works largely within information processing and electronic communications. The ICT sector is booming in Viet Nam. In 2021, revenue reached US$136 billion, increasing 9% compared to 2020. The government has created support policies for the sector, which is expected to have revenue growth of 15% per annum (pa) between 2022 and 2025.

Financial prosperity within the sector also means the number of new ICT businesses is increasing. According to the Ministry of Information and Communications, in Q1/2022, there were 65,700 ICT enterprises in Viet Nam, 1,700 more than in Q4/2021. By the end of 2025, the number of ICT enterprises is expected to grow by 12% pa to reach 100,000, nearly double that of 2020.

Globally, businesses and even governmental agencies are driving ICT demands as they carry out “digital transformations”. This has, unsurprisingly, led to increased recruitment demands and manpower needs for the sector. For example, the HCMC Centre for Manpower Demand Forecasting and Labour Market Information expects 310,000 new jobs in the city in 2022, with ICT being one of the sectors driving recruitment demands.

As the sector is growing in all aspects, it has and will continue to be a leading player within the HCMC and Ha Noi office markets. According to Savills Q1/2022 market report, ICT businesses had 16% of the leased area in Ha Noi. In HCMC, ICT occupiers had 54% of the newly leased areas, far more than distribution companies with 17% and finance, banking and insurance enterprises with 14%.

The Criteria For ICT Offices

Ms Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Ha Noi, has worked with many ICT businesses in establishing, expanding, or upgrading offices. She outlined the specific requirements ICT companies have.

Technical Criteria

The high-tech nature of this sector means that occupiers often come with an array of machines and electronic equipment, which means offices need to cater to very specific technical requirements.

Usually, businesses prioritise server rooms as they house the equipment that supports the entire business. As such, offices need large floor loading capacities. Offices also need electrical cabinets and generators that are large enough to maintain stable operations. As ICT enterprises consume a lot of energy, green office developments are preferred as they help minimise the impact on the environment.

Ms Hoang Nguyet Minh added: “As many ICT businesses have very specific leasing needs, Grade A offices are popular. This is as these products often come from reputable and experienced developers and investors, which creates a guarantee of quality. However, Grade B products are also popular with companies with less stringent requirements as they are more affordable.”

Expansion Criteria

Offices catering to ICT businesses also need to be big enough to support expansion in the long term. Ms Hoang Nguyet Minh has seen many businesses double or triple in size in recent years. For example, the Samsung Mobile Research and Development Centre at PVI Tower has grown from 8,500 m2 to 22,000 m2 within five years.

Design and Facilities

Design and facilities are also important for ICT occupiers. For example, workspaces with bright colours, glass, and flexibility promote collaboration, innovation, and creativity. As this is a sector that works on a 24/7 basis, services also need to be bespoke and cater to unique schedules. For example, at MoMo’s office at Phu My Hung Tower in HCMC, services run after conventional office hours to cater to employees.

ICT offices are more than just spaces with desks and a water cooler. They often need to be self-contained ecosystems that cater to work and life with facilities like gyms, canteens, rest and entertainment areas, and security systems. LINE's office in Ha Noi and MoMo’s office in HCMC are innovative examples in Viet Nam. The offices were carefully designed and foster efficiency, collaboration, and creativity and have unique spaces like gaming centres, lounges, sleep pods, and rooms for mothers to care for their children.

Decentralised Offices

As ICT businesses require large offices and many have expansion plans, decentralised offices are increasingly popular. In HCMC, many ICT occupiers want large offices of over 1,000 m2. As supply is limited in the CBD, the non-CBD and new urban areas like Districts 2 and 7 are popular.

Commenting on the Ha Noi market, Ms Hoang Nguyet Minh shared: “Currently, office supply is abundant and is spread out throughout the city. We find that most large ICT companies, domestic and international, are concentrated in the west of the city. Compared to central areas like Hoan Kiem, offices in western districts like Cau Giay are more affordable and have larger floorplates, which is great for businesses looking to expand in the future.”

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