A Small Business Owner’s Guide to Navigate Office Rental Costs of Ho Chi Minh City

Your physical workspace is more than just a place to work. It’s where you create, connect, and deliver value to your customers. It’s where your small business grows and thrives. That’s why finding the right office space for your small business is crucial.

But how do you navigate the complex and confusing world of office rental costs? How can you find the best deal for your budget and needs? In this guide, The Sentry will show you how to find the perfect office space for your business in Ho Chi Minh. You will learn the basics of office space costs, what affects them, and how to lower them.

I. The Basics of Office Rental Costs

If you are looking for a place to run your business, you might be wondering how much it costs to rent an office space or building. The answer is not simple, as many factors can affect the lease price to rent office space.

1.1. Office Space Cost Per Square Foot

The cost of office space is often measured on a per-square-foot basis, serving as a standard metric for comparing rental prices across different properties and locations. This cost encompasses not only the physical space but also other factors like location, office quality, available amenities, and market demand.

For instance, spaces in prime business districts or upscale neighborhoods typically command higher rates per square foot due to their accessibility, visibility, and prestige. On the other hand, spaces in suburban or less developed areas may offer more affordable rates.

According to a report by Savills Vietnam, the average rent price for Grade A offices in Ho Chi Minh City was around $22 per square meter (or $2.04 per square foot) in the second quarter of 2022. The average rent for Grade B offices in the same location was about $13 per square meter (or $1.21 per square foot). These prices reflect the high demand and limited supply of office spaces in the city’s central business district.

When budgeting for office space, it’s also essential to consider the total, how much square footage is needed, the layout, and any other costs, like maintenance or utility fees. By understanding the cost per square foot, businesses can make informed decisions, ensuring they get the best value for their investment while meeting their operational needs.

1.2. Factors That Impact the Cost to Rent an Office Space

a. Location

One of the most important elements that determine the office rent rates is its location. Location affects the supply and demand of the building, as well as the accessibility and prestige of the area.

Generally, office spaces in central business districts or prime locations are more expensive than those in suburban or rural areas because they have higher demand, better transportation options, and more visibility.

For example, according to a report by CBRE, the average office lease price in Ho Chi Minh City is $29 per square meter per month in 2023, while the average office price in Hanoi is $25 per square meter per month in the same period.

b. Building Quality

Building quality is one factor that can affect both the cost of rent and the value of office space. Quality here refers to the age, condition, design, and construction of the office building.

Depending on these elements, office spaces are often classified into three categories:

• Class A: These are the best and most expensive office spaces in prime locations. They have high-quality materials, systems, and amenities and appeal to tenants who want a professional and upscale image.
• Class B: These are functional and comfortable office spaces that meet the standards of most tenants. They are older but well-maintained and have decent amenities and services. They offer moderate prices and flexible lease terms.
• Class C: These are the oldest and cheapest office spaces in less desirable locations. They have poor maintenance, systems, and amenities and cater to tenants who have low budgets or do not need high-quality office space.

Generally, Class A buildings have the highest rents, followed by Class B and Class C buildings. The difference in rent can vary depending on the building amenities, location, and demand for the office space.

For example, according to a report by CBRE Vietnam, the average rent for Class A office space in Ho Chi Minh City is $43 per square meter per month, while the average rent for Class B office space is $25 per square meter per month, and the average rent for Class C office space is $16 per square meter per month in 2023.

c. Amenities

Another factor that can affect the rental cost of office space is amenities. Amenities are the features and services that can enhance the office space experience and value for tenants and visitors. Some of the standard amenities that office spaces may offer are:

• Parking: Parking can make it easier for office workers and clients to get to the office space, especially in busy areas. The cost and availability of parking depend on the size and location of the office space. According to Colliers International, the average rent for a monthly parking slot in Ho Chi Minh City is $67 for a car and $6 to $10 for a motorcycle.
• Security: A necessary service for every office space, especially in high-risk areas or with sensitive data. Cameras, alarms, access controls, guards, and other security measures are available, and the cost will largely depend on the type of office and its location. As reported by JLL, Class A office buildings have higher security standards and costs than Class B or C office buildings.
• Internet: A vital utility for every modern business, especially in sectors that need fast and reliable connectivity. Internet services can include broadband, fiber optic, wireless, etc. Internet speed and cost depend on the provider and plan of the office space. According to Speedtest, the average fixed broadband download speed in Vietnam is 70.86 Mbps, while the average fixed broadband upload speed is 66.31 Mbps.
• Cleaning: A service that every office space requires to keep a clean and professional environment. The frequency and cost of cleaning services depend on the size and condition of the office and can include sweeping, mopping, dusting, and sanitizing, among other things. For example, the average monthly salary of a cleaner in Ho Chi Minh is $215.
• Maintenance: A service that every office space needs to maintain its systems and equipment in good order. Maintenance services can include repairing, replacing, upgrading, etc. Maintenance scope and cost depend on the office’s age and quality. A report by Savills Vietnam stated that the average monthly service charge for Class A office buildings in Ho Chi Minh City is $6 per square meter, while the average monthly service charge for Class B office buildings is $4 per square meter.

Depending on your business needs and preferences, you may want to look for office spaces that offer the amenities that suit you best. For example, if you expect to have a lot of clients or employees who drive to your office location, you may want to find an office space that has ample parking spaces or offers discounted parking prices.

However, you should also be aware that some amenities may be included in the base rent, while others may require additional fees or charges. Therefore, you should always check the terms and conditions of your lease agreement carefully before signing it.

1.3. Difference in Office Space Costs of Major Cities vs. Neighboring Towns

a. Major Cities (e.g., Ho Chi Minh, Binh Duong)

b. Neighboring Towns (e.g., Dong Nai, Long An)

As you can see, many factors can affect the cost of office space for your business. You should consider your business goals, budget needs and preferences before deciding where to rent your office space.

II. Office Space vs. CoWorking Space: Making the Right Choice for Your Business

2.1. Rental Office Space

Rental Office Spaces offer businesses a private and exclusive environment tailored specifically for their operations. They’re characterized by the privacy, security, and stability they bring, ensuring confidential discussions and business operations occur without external disruptions. With dedicated spaces, businesses have full control over the layout, design, and branding of their environment, providing a consistent and professional image to clients and partners. However, these benefits also come with their challenges. Rental offices typically involve higher costs, both in terms of monthly rent and potential maintenance responsibilities. Additionally, the commitment to longer lease terms can be restrictive, especially for businesses that might anticipate changing needs.

2.2. Coworking Space

On the other hand, Coworking Spaces provide a dynamic and flexible environment for professionals and businesses. These shared spaces offer cost-effectiveness, especially appealing to startups and small businesses with limited budgets. The communal nature of coworking spaces also fosters networking, presenting opportunities for collaboration and innovation. Nevertheless, the shared environment can sometimes be a double-edged sword. Privacy can be compromised, and the bustling activity might introduce potential distractions. Furthermore, the lack of personalization can limit a business’s ability to brand and customize its workspace.

III. Deciding Between Coworking and Renting Your Own Office Space

3.1. Business Goals

One of the most important factors to consider when choosing between coworking and personal office is how each option aligns with your business goals. Depending on what you want to achieve in the short-term and long-term, you may find that one option is more suitable or advantageous than the other.

Examples:

• If your business goal is to scale up quickly and expand your team, you may want to rent a coworking office space. Coworking offers are often more flexible and affordable, letting you tweak your setup as your business evolves. Traditional offices, however, come with longer leases and usually higher upfront costs, which might pose challenges when you’re in expansion mode.
• Conversely, if your business goal is to establish a strong brand identity and reputation, you may prefer office space over coworking. You can design your space to match your brand values and personality. You can also impress your clients, partners, and investors with a dedicated address, phone number, and signage. Coworking limits your customization and differentiation options. You may also lose your brand consistency and credibility across different locations.
• Additionally, if your business aims to diversify your products, services, or markets, you may prefer coworking over office space. You’re surrounded by a mix of professionals, offering chances for collaborations or even just some enlightening coffee break chats. On the flip side, with a traditional office, while you have your own space, you might miss out on those unexpected encounters that spark innovative ideas.

3.2. Business Needs

Another factor to consider when choosing between coworking and private offices is how each option meets your business needs. Depending on what you need to run your business effectively and efficiently, you may find that one option provides more or less value than the other.

Examples:

• If your business needs access to specialized equipment, such as printers, scanners, projectors, or video conferencing tools, you may prefer coworking over office space. Coworking provides various amenities and services at a low or no cost. You can also share resources and expertise with others. Renting office space means buying or leasing your equipment, which is expensive and time-consuming. You may also have to handle the installation, maintenance, and repair by yourself.
• Alternatively, if your business needs a lot of storage space for your inventory, documents, or materials, you may prefer office space over coworking. Renting office space offers more storage capacity and security for your items. You can store your items in a private and locked space that only you can access. You can also organize your items as you like. Coworking offers limited or no storage space for your items. You may have to carry your items with you or rent an external storage unit. You may also worry about the safety and confidentiality of your items in a shared environment.

3.3. Business Preferences

A third factor to consider when choosing between coworking and renting office space is how each option matches your business preferences. Depending on what you like or dislike regarding work environment and culture, you may find that one option is more enjoyable or comfortable than the other.

Examples:

• For example, if you prefer a dynamic and social work environment where you can interact with other businesses or professionals from different industries and backgrounds, you may prefer coworking over office space. Coworking lets you interact with diverse businesses or professionals from different fields and backgrounds. You can also join various events, workshops, or programs organized by the coworking community or operators. Renting office space may isolate you from other businesses or professionals. You may also miss out on the collaborations, referrals, or partnerships that could come from being part of a vibrant community.
• Conversely, if you prefer a quiet and private work environment where you can focus on your tasks without any interruptions or distractions, you may prefer office space over coworking. Renting office space gives you more privacy and peace than coworking. You can work in a secluded and enclosed space that blocks out any noise or disturbance. You can also set your own rules and boundaries for your space and your staff. Coworking may expose you to much noise and activity from other businesses or professionals who share the facility. You may also have to deal with the lack of privacy and confidentiality in a shared environment.

IV. Conclusion

Navigating the landscape of office rentals can be intricate, with factors like location, building quality, and amenities playing pivotal roles.

At The Sentry, we understand these complexities and are dedicated to guiding businesses through this maze. With our expertise in coworking environments, we offer spaces that combine flexibility, modern amenities, and a collaborative spirit. Our focus is ensuring that every business, regardless of size or industry, finds a space that aligns with its goals, budget, and operational needs.

In the world of office rentals, making informed decisions is key. With The Sentry, you’re not just renting perfect office space but joining a community built on insight, support, and unparalleled value. As the leading coworking solution in Ho Chi Minh City, The Sentry is more than just a workspace provider. We will be your partner in success, creating an environment that supports your work and matches your vision.