Global Trends Shaping HCMC: A New Cycle Of Office Quality Upgrades

Table of CONTENt  1. Balancing operational performance and financial returns 2. Upgrade pressure driven by occupier demand 3. Office quality is the defining factor

A New Phase for the Global Office Market 

The global office market is undergoing a significant transformation, as operational efficiency, environmental standards, and sustainability become core strategic priorities. According to international research, 80% of the buildings that will still be in use by 2050 have already been built. This is creating growing pressure to upgrade and reposition existing office stock. 

Across many developed markets, regulations aimed at reducing building energy consumption are expected to tighten further over the next decade. At the same time, occupiers, particularly multinational corporations, are placing greater emphasis on workplaces that meet higher standards for environmental performance, employee wellbeing, and operational efficiency. 

These two forces are reshaping strategies among commercial property owners, with regulatory compliance on one side and occupier-driven demand on the other. The question is no longer whether buildings should be upgraded, but how they should be upgraded to remain competitive. 

Balancing operational performance and financial returns 

In practice, landlords have several options, ranging from operational optimisation and partial refurbishment to full redevelopment. Each approach offers different levels of performance improvement, along with varying trade-offs in capital expenditure, implementation risk, and potential value creation. 

According to the Savills Impact report, lower-cost solutions, such as operational optimisation or light refurbishment, typically account for 2 to 6% of asset value and will minimise disruption during operations, eventually delivering more modest rental growth. In contrast, more extensive refurbishment or redevelopment projects, which may require an investment of 8 to 12%, will support stronger long-term growth, despite higher upfront costs and potential vacancy risks. 

International case studies show that well-executed refurbishment projects have achieved rental premiums upwards of 57% above market averages in Madrid and 67% in New York over a four-year period. 

Beyond financial returns, upgrading existing buildings is also increasingly seen as a way to align operational performance with long-term sustainability goals, especially as embodied carbon from construction materials and building activities accounts for a growing share of a building’s total lifecycle emissions. 

Upgrade pressure driven by occupier demand 

According to Lai Thi Nhu Quynh, Associate Director of Commercial Leasing at HCMC, while the city has yet to face the same level of regulatory pressure as more mature markets, similar shifts are gradually emerging, primarily driven by tenant demand. 

Quynh notes, “The market remains relatively stable, but demand is becoming increasingly concentrated towards high-quality office buildings, particularly Grade A and B developments in central districts and Thu Thiem.” 

According to Savills Q1/2026 market report, HCMC currently has 3 million m2 of office space across more than 400 projects. However, Grade A offices account for only 19%, which is still relatively limited compared to major regional cities such as Bangkok, Jakarta, and Singapore.This imbalance has contributed to a growing gap between the quality of available supply and occupier demand. 

Leasing demand continues to be driven by sectors such as finance, technology, insurance, and retail, industries that increasingly require high-quality work environments to support business growth and employee experience.

 “The pressure to upgrade is not coming from regulations, but from occupiers themselves. Businesses are placing greater emphasis on workplace experience, operational efficiency, as well as environmental and wellness considerations,” Quynh adds. 

Office quality is the defining factor  

Against this backdrop, the city’s office market is gradually entering a new development cycle where quality, rather than quantity, is becoming the key differentiator. 

Upgrading, refurbishing, or redeveloping office assets is no longer seen as a short-term solution, but as part of a long-term strategy to maintain competitiveness. Landlords who actively reposition their portfolios, improve building quality, and align more closely with tenant expectations are better placed to attract demand and enhance overall asset performance. 

Over time, as occupier demand continues to shift toward higher-quality space, the market is likely to move toward a more sustainable structure. In this environment, value will be defined not only by floor area, but also by efficiency, user experience, and the ability to meet evolving standards. 

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