Ho Chi Minh City – Knight Frank’s Q1 2026 Market Report highlights performance across the office, residential, and retail sectors in both Ho Chi Minh City (HCMC) and Hanoi markets.
Office Markets Face Rental Pressure Amid Diverging Demand Trends
Average Grade A office rents reached US$58.8 per sq m in Ho Chi Minh City and US$34.7 per sq m in Hanoi in Q1 2026, both showing signs of softening amid rising vacancy and shifting occupier demand.
In Ho Chi Minh City, leasing activity slowed significantly, with Grade A take-up falling to a five-year low as occupiers favoured lease renewals over relocation. Vacancy rose to 12.6%, while landlords introduced more incentives to attract tenants. Despite limited new supply through 2027, future waves of development are expected to increase competition and place downward pressure on rents.
In contrast, Hanoi recorded positive net absorption, supported by strong demand for newly completed, green-certified buildings. However, vacancy climbed to 20.4%, pushing Grade A rents to a five-year low.
“Generally, we are seeing good demand for offices from international occupiers, but terms are now more tenant-favourable in both Ho Chi Minh and Hanoi. I believe this is the peak of the rent cycle in Ho Chi Minh City, and we are experiencing lower rents and greater incentives for tenants. Lower absorption is a result of slowing occupier growth and conservative expectations of headcount expansion and cost of relocation. International firms are particularly noticing high rents in Ho Chi Minh City in comparison to other markets in their portfolio of offices around the region,” said Alex Crane, Managing Director of Knight Frank Vietnam.
Apartment Prices Rise Amid Diverging Supply and Demand Trends
Average primary apartment prices reached US$4,078 per sq m in Ho Chi Minh City (up 11.8% y-o-y) and US$4,274 per sq m in Hanoi (up 38% y-o-y) in Q1 2026, both driven by a continued focus on luxury segments.
In Ho Chi Minh City, new supply remained limited, with launches concentrated in luxury developments, while broader supply in Greater HCMC was supported by affordable projects. Despite rising mortgage rates, demand stayed resilient, supported by developer-led financing schemes, with improved absorption levels. Looking ahead, future supply is expected to remain skewed towards high-end segments in the city core, while adjacent markets continue to provide more affordable options.
In contrast, Hanoi saw steady new supply led by luxury projects, pushing asking prices to a record high. However, rising price points softened overall absorption, with demand shifting towards mid-end developments.
Over the medium term, both markets are expected to see continued asking price growth as new projects launch, although affordability and buyer sentiment will remain key factors shaping demand.
We anticipate sales pricing to continue to increase this year, but largely due to supply through the upper end of the market. Sales volumes will be more pressured this year as a result of increased cost of lending; however, there is still strong demand from buyers in the mid and affordable ends of the market,” said Alex Crane, Managing Director of Knight Frank Vietnam.
HCMC Retail Rents Hold Firm Amid Limited Supply and Strong Occupancy
Prime ground-floor retail rents in Ho Chi Minh City averaged US$85.9 per sq m per month in Q1 2026, up 1.83% y-o-y, reflecting continued resilience in leasing fundamentals.
The market recorded no new supply during the quarter, keeping total stock stable at approximately 1.34 million sq m. With limited expansion opportunities in the CBD, supply remains concentrated in non-central areas.
Leasing demand stayed robust, with prime mall occupancy rising to 95.6% and net absorption reaching around 10,400 sq m. Demand was driven by expansions across fashion, lifestyle, beauty, and F&B brands, alongside notable transactions in key retail centres. The market is also attracting interest from a major technology brand eyeing entry into both Ho Chi Minh City and Hanoi.
Looking ahead, the retail pipeline is expected to remain constrained, with no new supply anticipated until 2028. This limited pipeline is likely to support stable occupancy levels and sustain rental growth in prime retail locations over the near term.
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Media Contact
Tien Pham
Manager, Marketing & Communications
Email: Tien.Pham@knightfrank.com
Mobile: +84 93 949 3735
Research Contact
Son Hoang
Associate Director, Valuation and Advisory
Email: Son.Hoang@knightfrank.com
Mobile: +84 977 282 930
About Knight Frank Vietnam
Operating in one of the fastest-growing markets in Asia with strong GDP, Knight Frank Vietnam offers full spectrum commercial advisory services in a lucrative and increasingly competitive commercial real estate sector. We help local and foreign owners, occupiers, investors and developers in every aspect of owning, occupying, developing and in commercial real estate across Vietnam focusing primarily on core markets in the country’s two biggest seats of business and commerce, Ho Chi Minh City and Hanoi. Please visit us at www.knightfrank.com.vn
About Knight Frank
Knight Frank LLP is a leading independent global property consultancy with 740+ offices in over 50+ territories and more than 27,000 people. The Group advises clients ranging from individual owners and buyers to major developers, investors, and corporate tenants. For more information, please visit www.knightfrank.com.
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