Surveys show that many street-front properties on central streets in District 1, Ho Chi Minh City, such as Ly Tu Trong, Mac Dinh Chi, Dong Khoi, Le Loi, Hai Ba Trung, Nguyen Hue, etc., remain vacant. Monthly rental prices range from tens of millions to hundreds of millions of VND, depending on the size and usable area of the property.
On Dong Khoi Street, rental prices are mostly above 100 million VND/m2 depending on the size, and landlords only rent for one year. This street has the 13th most expensive rental prices in the world , according to a survey by Cushman & Wakefield at the end of 2023. Rental prices here have also increased by 17% compared to the same period last year.
On Le Loi Street, there are about a dozen commercial spaces waiting for tenants, many of which have been vacant for months. Rental prices are all above 100 million VND per month, and in some cases even 2-3 times higher, depending on the location.
Vacant rental property on Nguyen Dinh Chieu Street, District 1 (Photo: Nam Anh).
Mr. Vo Hong Thang - Director of Consulting Services and Project Development at DKRA Group - said that about three months ago, his company conducted a survey and found that rental prices on major roads in Ho Chi Minh City decreased by 10-15%, but the occupancy rate also decreased by 20-25%. However, rental prices for spaces located in alleyways decreased less significantly, and the occupancy rate increased.
Instead of spending large sums on prime locations, they opted for more affordable locations. Therefore, in the short term, representatives from DKRA Group believe that rental spaces on main streets will be difficult to fill and will attract fewer tenants.
Ms. Mai Vo, Deputy Director in charge of Retail Services nationwide at CBRE Vietnam, noted that many prime retail spaces in central areas along Dong Khoi, Le Loi, and Nguyen Hue streets are vacant. The reasons include the impact of post-COVID demand and some spaces facing unresolved legal issues, making potential tenants hesitant.
Furthermore, tenants in central areas are mostly new, luxury brands looking to increase their presence and seeking 3-5 year leases, but some properties are only available for 1-year leases. This is too risky, and brands often refuse to rent.
According to Ms. Mai, properties in prime locations and central areas are highly valuable. Landlords understand this and prefer to leave them vacant rather than lower prices or rent them out without achieving expected returns. A representative from CBRE Vietnam expects the retail market to become more vibrant in 2025, as more new brands enter Vietnam and open new stores.
The difficult economic situation and landlords demanding very high prices is also the opinion of Ms. Trang Bui, General Director of Cushman & Wakefield, when speaking about the many vacant properties in Ho Chi Minh City recently.
Furthermore, Ms. Trang pointed out that on main streets like Ly Tu Trong and Mac Thi Buoi, the premises are only 4 meters wide. Brands renting these spaces can only operate on the ground floor, using the upper floors as warehouses. Therefore, the high cost of renting requires tenants to have stable financial resources and business operations.
Given the current economic situation, securing financial resources is not difficult for brands, but maintaining stable business is more challenging. "They have to consider that aspect, weighing costs and profits more carefully than focusing solely on brand promotion through physical space," Ms. Trang said.
According to this source, the current typical floor plan is 4m wide and 20m deep, with a staircase in the middle, resulting in a usable area of approximately 60m2. Many brands find this unsuitable... They desire a larger space and a more exceptional experience. Therefore, these spaces need to be restructured and renovated into larger areas and developed into multi-story buildings.
Source: https://dantri.com.vn/bat-dong-san/nha-cho-thue-tram-trieu-dongthang-o-tphcm-e-van-e-20240713073252037.htm
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