Expert Opinion: Global Hybrid Trends

Ho Chi Minh City’s Office Market

Ho Chi Minh City’s office market is divided into four areas, first, the North (Cong Hoa) is an established ‘E-town’ and many large offices have been there for a long time; the CBD (Districts 1 and 3) has 85% of the office supply; the South, also known as Phu My Hung urban area; and ​​Thu Duc City. According to real estate investors and researchers, this is a successful market as occupancy is high. For example, in Q3/2021, District 1 offices had an average occupancy of 93%, offices were 94% occupied in District 3 and 87% in the non-CBD. Rent is also positive with a city average of VND 715,000/m²/month in Q4/2021.

Ms Tu Thi Hong An, Director of Commercial Leasing, Savills Viet Nam commented, “Although office supply remains low, the demand is always present with many tenants looking for offices in the CBD. This is a positive lever for the deployment of the hybrid working model. Sectors like Distribution, IT & Communication, Manufacturing, Finance, and Real Estate are growing, and many companies in these sectors are adopting hybrid models. This combination of remote and office work ensures business continuity and growth, despite periods of social distancing.”

Combined Offices

Talking about the difference between ‘combined offices’ and ‘hybrid offices,’ Ms An said: "In the past, we always talked about flexible offices and co-working spaces. These two models mean that different companies share the same space to save costs and use common facilities such as reception, security, or cleaning services. All services and costs are included within the rent. Although this model is popular, its application has limitations. This model is more suited to smaller businesses, start-ups or companies that work on a ‘project-by-project’ basis. This solution offers temporary flexibility that works for some companies. However, not all companies can adopt this model.”

“Hybrid working is when a business will have a core office that employees can use. However, they have the flexibility to work remotely at times that suit them. What is essential about this model is that while it provides flexibility, it also promotes company culture and team cohesion. Thus, this model can be applied to a wider audience. We forecast that this combined working model will be applied and deployed much faster than the ‘shared office’ model,” explained Ms An.

Transitioning to Hybrid Work

Undoubtedly, there are benefits for both employers and employees with hybrid work solutions. For business owners, hybrid solutions promote corporate culture, help save costs and ensure business continuity. Employees can cut their commute times, have an improved work/life balance, and can feel safer in the context of the pandemic. 

A key issue when transitioning from a traditional model to a flexible model is the application of digital technology. Face-to-face meetings can move online, electronic contracts can be used, and tasks can also be done digitally. Robust technological platforms and systems are key to successful hybrid offices.

Hybrid office solutions need  to consider four core elements:

• Core values of the company: Each working environment must enable cooperation and collaboration.

• Technology platforms:  At Savills hybrid office in Ho Chi Minh City, all server rooms and data management systems are now cloud-based. All employees can access the server from anywhere and tasks are also performed through applications. 

• Employee administration kit: A toolkit for managing employees should be created by the executive team and is essential for a successful transition. 

• Recording employee performance: It is crucial to ensure that employees are recognised for their efforts, even if they are working at home. Tracking performance will also allow managers to keep an eye on productivity. 

Global Hybrid Movements 

According to a global survey by Savills in May 2021, the degree of adaptation differs by country. For example, in China, the US, and France the transition to hybrid work looks like this:

In terms of leading companies and corporations, many technology companies, such as Google, Facebook, and Amazon are implementing hybrid work solutions. 

Several factors influence the speed at which hybrid solutions are implemented. These factors include the size of people’s homes, the age of a population, commute times, length of lockdowns, the price of offices, and ESG concerns. 

Ms An explained: “Employees with spacious homes are more likely to want to work from home. In Viet Nam, houses in Ha Noi tend to be smaller; therefore, the transition to hybrid working will be slower in Ha Noi. The second factor is the age of a population, younger employees want to be in the office to collaborate and interact, but older employees prefer working remotely. Thirdly, employees with shorter commutes prefer to work at the office. Technology platforms, internet speed, and length of lockdowns also influence the transition; the longer the lockdown, the faster the transition.”

“For businesses, the reasons to adopt hybrid solutions differ from employees. High office prices and the limited supply is a catalyst for companies to transition as this allows them to expand without immediately needing a new office. ESG trends like reducing pollution and carbon footprints, pro-environmental protection initiatives, and commitments to the community at large are also a big motivation for multinational companies and corporations to transition,” Ms An added.

In the context of the pandemic, increasing ESG requirements, improving technology, and the need to support employees, companies are looking for new office solutions. As such, Savills forecasts that hybrid working models are an inevitable trend for offices around the world and in Viet Nam.

Read Further:

• International Shifts to Hybrid Working
• European flexible offices