Many small enterprises in Hanoi have opted to move their offices to homes due to economic difficulties.
Many companies moved their offices to home to cut expenses
Office space has been moved to the homes of companies' owners or high-ranking staff.
Many other enterprises are trying slim down or move to other places to lower costs. This has added to an increase in the number of empty offices in the capital.
Nguyen Thi Dinh Street is home to over ten offices for lease. These were former headquarters of companies that have rented other places for less money, or even moved into homes.
A real estate company which was headquartered at a villa on Nguyen Thi Dinh Street moved to the director’s house in My Dinh Commune. By doing this, the company saved about VND50 million (USD2,394) per month.
When business was thriving, the company’s director decided to hired a villa in the heart of Trung Hoa Nhan Chinh. However, due to economic difficulties, they were compelled to cut expenses.
The company’s director said his 100-square-metre house is wide enough for around ten people to work, and would help slash expenses.
Another real estate firm was compelled to move their office to the new urban area of Dai Kim due to the business slump. Nearly a year ago they invested nearly VND1 billion (USD47,892) in upgrading their headquarters on Yen Hoa Street.
The company will now have to move their offices again, to the director’s home by the end of this month. They will also have to make compensation for breaking the five-year lease.
Tran Duc Minh, director of an investment company, said, “Moving the office to home is a last resort, as a company’s headquarter plays an important role in our business activities. A change of headquarter may result in loosing long-term clients, and there is also the additional expenses of reprinting cards and notifying clients."
Minh has decided to move his company’s office from Ha Thanh Plaza to Long Bien District in the near future.
According to a recent report by Savills Vietnam, the total area of office space in the capital has reached nearly one million square metres this year, up 32% from the same period last year.
By 2014, Hanoi will have nearly 1.1 million square metres of office space from 80 new projects.
An increase in company bankruptcies and a fall in newly-established businesses is expected to put further pressure on the real estate market.
CBRE estimates that the number of businesses seeking new offices will reach a record low this year despite a sharp rise in the number of available space.