Reading occupancy beyond the headline vacancy rate

Owners often open a portfolio meeting with one number: the vacancy rate. That figure is useful as a headline, yet it rarely explains where income is soft. Two buildings can share an 8% vacancy rate while carrying very different renewal risk.

Start by separating physical vacancy from economic vacancy. A unit listed as leased with three months of free rent still occupies the roll, but cash flow tells another story. Annotating free-rent periods on the same chart as physical vacancy keeps both views honest.

Next, break occupancy by floor plate and unit type. In Ho Chi Minh City commercial stock, upper floors and oddly shaped plates often lag while street-facing bays stay full. A portfolio average can mask a single floor that has been empty for four quarters.

Shadow vacancy deserves its own column. Subleased space, tenants on notice, and units held for renovation should appear beside confirmed empty stock. Without that column, your renewal calendar will surprise you.

When we prepare a Portfolio Occupancy Review, we ask for rent rolls, notice letters, and a short list of units management already distrusts. The resulting charts are less about decoration and more about deciding which floors need leasing attention this quarter.