VNEconomyNews.com - Despite high office rentals, Viet Nam remains the most attractive investment destination for Japanese companies, at least for the next two years, the Japan External Trade Organisation (JETRO) has said.
According to a survey released by JETRO at the Viet Nam Business Forum held by the World Bank in Ha Noi last week, 58 per cent of Japanese companies operating in Viet Nam queried by the organisation said they had plans for business expansion in 2011. This rate is the highest in the Southeast Asia, above 50.9 per cent in Thailand and 31 per cent in the Philippines.
Low labour costs were attributed to the attractions of the country's investment environment.
Even though the minimum wage for Vietnamese labourers was raised earlier in 2010, labour costs in Viet Nam remain much lower than those in Thailand, India and Indonesia, JETRO was quoted by the online newspaper VnExpress as saying.
In addition, Viet Nam is among the Asian countries which have great potential in the development of telecommunications, software and construction industries.
However, Viet Nam's investment environment could be more attractive if rentals for office space in the country's big cities could be lowered.
JETRO has also warned Japanese firms of the sky-high office rentals in the country, saying rentals for office space in HCM City and Ha Noi are the highest in the Southeast Asia.
The survey reveals that average monthly office rental in HCM City amounts to US$57 per square metre, even higher the rentals of $46.4 per sq. m in Singapore and $19.8 per sq.m in Bangkok.
It is also higher than office rentals in Seoul ($49.8 per sq.m/per month). It says rentals in HCM City is just lower than those in Hong Kong ($72.8/per sq.m./per month), Mumbai ($70.8 per sq.m/per month) and Shanghai ($64.8 per sq.m/per month).
Ha Noi and Da Nang were also listed as cities in ASEAN countries which offer high office rentals. The average monthly office rentals in Ha Noi amounts to $42 per sq. m and Da Nang $18.3 per sq. m.
In addition to high office rentals, house rentals for foreigners in Viet Nam were among the highest in the region. The average rentals a foreigner must pay for accommodations in Ha Noi amounts to $3,050 per month, even higher than average rentals in Hong Kong, of $2,062, reports JETRO.