Rental properties are starting to pick up.

Most vacant commercial spaces in the heart of Ho Chi Minh City have been leased after landlords proactively negotiated and lowered prices.

The rental market in Ho Chi Minh City is closing out 2024 with bright colors, signaling a promising new year. A bustling and vibrant atmosphere is evident throughout the city. Renovation, refurbishment, and freshening activities are booming after a long period of stagnation.

Attractive location that attracts customers.

Observing the central streets such as Hai Ba Trung, Dong Khoi, and Le Lai, we noticed a significant change. The long-standing "for rent" signs are gradually disappearing, replaced by new shops offering a variety of businesses, from fashion and cosmetics to food and entertainment.

Katinat, a coffee and milk tea brand, has just opened a new outlet in the heart of Ho Chi Minh City.

Mr. Vu Hoang, who is looking for a location to open a health therapy business in Thu Duc City, shared that he has been searching everywhere in recent days to find a suitable space.

"Suitable locations are expensive, costing 35-40 million VND/month, while affordable ones are hard to find. A few days ago, I found a house on Tran Nao Street (Thu Duc City) that met my requirements for only 25 million VND/month. But close to the scheduled meeting time, the real estate agent informed me that someone else had already put down a deposit," Mr. Hoang recounted.

Mr. Hoang's story partly reflects the reality of the current market. That is, the demand for rental space is increasing, especially in prime locations, leading to scarcity and fierce competition.

According to Mr. Tuan Anh, an experienced real estate broker in Phu Nhuan, Binh Thanh, and Thu Duc districts, the market is clearly booming. Most clients are looking for buildings with a ground floor and two to four upper floors, with rental prices below 50 million VND per month, to use as spas, company offices, or for renovation and rental as serviced apartments.

Ms. Thanh Tam, a real estate agent specializing in the central area of ​​Ho Chi Minh City, also confirmed that the rental situation in District 1 is currently showing many positive changes. Most vacant properties have been rented after landlords proactively negotiated and lowered prices to attract tenants. "Only a few properties with legal issues or related to some case remain vacant and cannot be rented out," Ms. Tam said.

Mr. Nguyen Van Thieu, an expert in this field, believes that market growth mainly comes from large brands. They are willing to pay high prices to acquire prime locations, serving their business expansion strategies and capturing market share.

"Big brands are dominating the race for prime locations," Mr. Thieu affirmed. In addition, the emergence of several new retail chains, especially in the food and fashion sectors, is also heating up the market, with them accepting rental prices of 80-100 million VND per month for desirable locations.

Financial institutions and banks are also seizing the opportunity to "acquire" prime locations. A prime example is Prudential, which recently leased a corner property on Tran Cao Van and Hai Ba Trung streets (District 1) after KSFinance (part of Sunshine Group) returned it and left it vacant for quite some time.

However, Mr. Thieu also questioned the sustainability of this land investment strategy. He noted that several chains are competing to expand in order to gain market share, but the actual effectiveness remains unclear.

Mr. Thieu predicted that from now until early 2025, rental prices will increase slightly, and prime locations with good prices will remain attractive to many brands. He cited several expanding chains such as King Food Mart and new fashion brands, which will continue to "hunt" for suitable locations in the coming period.

Lan went to shopping malls.

The market's dynamism isn't limited to the streets; it's also spreading to shopping malls. According to Savills Vietnam, the occupancy rate at modern retail projects in Q3 2024 reached 94%, an increase of 0.5 percentage points compared to the previous quarter.

In particular, key projects such as Hung Vuong Plaza, AEON Mall, and Van Hanh Mall consistently maintain 100% occupancy. "These shopping malls always attract a large number of customers thanks to their prime locations, diverse product categories, and professional management," analyzed Ms. Tran Pham Phuong Quyen, Senior Manager of Retail Leasing at Savills Ho Chi Minh City.

Ms. Quyen also added that many international brands are "eyeing" the Ho Chi Minh City market, but there are still some obstacles such as a scarcity of space in the city center and complex legal procedures. "However, with the advantage of a young population, increasingly high living standards, and strong consumer demand, Vietnam remains a market with great potential for international brands," Ms. Quyen stated.

Savills forecasts that by 2027, the Ho Chi Minh City market will have an additional 163,100 m2 of retail space from 12 new projects, with 55% concentrated in suburban areas. Rental prices in the central area are expected to remain stable in 2025, while suburban areas may face difficulties due to their heavy reliance on essential goods and services.

Ms. Pham Ngoc Thien Thanh, Head of Research and Consulting at CBRE in Ho Chi Minh City, said that the rental market in shopping malls has become vibrant again after three years of stagnation due to the pandemic.

Occupancy rates at the new centers are close to 100%, resulting in a market-wide vacancy rate of only 5%-6%. "The F&B and fashion/accessories sectors are leading the tenant market share in shopping malls," Ms. Thanh added.

It's beneficial for both sides.

Mr. Nguyen Hong Hai, Chairman and CEO of VNO Vietnam Investment and Development Joint Stock Company, also noted that the rental market in general is recovering strongly. Although rental prices have not increased, liquidity has improved, and landlords are more inclined to support tenants. "The market is developing in a way that benefits both landlords and tenants," Mr. Hai commented.

Source: https://nld.com.vn/mat-bang-cho-thue-bat-dau-khoi-sac-196241126194951163.htm