Return premises due to lack of customers
In the last days of 2024, on busy, prime streets in Ho Chi Minh City such as Ho Van Hue wedding dress street (Phu Nhuan district), Phan Xich Long food street (Phu Nhuan district), Pham Van Dong (Binh Thanh district) ... many premises were left vacant, some places had signs for rent for nearly a year. Without tenants for too long, these houses were degraded, the walls were peeling, the electric wires were tangled ...
Mr. Nguyen Van Loc (living in Phu Nhuan district) shared that he did not expect that this place used to be very bustling, wedding dress shops and wedding services all flocked here to find space to rent but it was very difficult to get, but now the shop owners are leaving in droves. "There are shops that put up signs for rent but could not find customers so now the owners put up signs to sell their houses" - Mr. Loc said.
About 5km away, the premises on To Hien Thanh Street, a street specializing in building materials, (District 11), are also in a state of being closed and locked. The empty houses on this street are covered with graffiti.
Ms. Luong Thi Thuy - manager at a furniture store on To Hien Thanh Street said that in Ho Chi Minh City, usually the second half of the year is the time when many construction projects and houses are built, others renovate their houses to welcome the new year, but this year, business is sluggish, and many premises have to be returned.
“My store used to have two locations, but because it couldn’t survive, we had to give up one location.Even though the other store has fewer customers, we still keep it because the area has a good location and rent,” said Ms. Thuy.
According to the stores, on average, each furniture store here is paying about 90-125 million VND/month for rental fees.
Slow business but land prices are still high
In Ho Chi Minh City, in 2024, many famous brands will return premises in prime locations. For example, Starbucks Reserve will return premises at 11-13 Han Thuyen around the end of August 2024. Currently, this premises is being offered for rent at 30,000 USD/month (about 757 million VND/month), equivalent to 9 billion VND/year, but it is still vacant because there are no tenants.
McDonald's closed its Ben Thanh branch (District 1) in September 2024; many famous restaurants and cafes for young people also announced that they would stop operating at the end of the year. At the same time, fierce competition from e-commerce platforms has caused traditional stores to face many difficulties, and business efficiency has declined.
Mr. Dinh Minh Tuan - Director of Batdongsan.com.vn in the Southern region said that the cash flow for renting low-rise real estate is gradually being affected by the strong development of e-commerce. E-commerce is developing and gradually taking up the shopping market share.
Vietnamese people spend an average of 1 billion USD on online shopping every month. The prominent product categories that attract a large number of online shoppers are electronics - beauty, fashion - home and living. Retail e-commerce sales in 2024, according to statistics on Shopee, Tiktok Shop, Tiki and Sendo, have continuously grown strongly over the years.
A report by real estate services company Cushman & Wakefield continues to put Dong Khoi Street (District 1, Ho Chi Minh City) in the group with the highest rental prices in Vietnam and ranked 14th globally.
According to this unit, the rental price of premises at Dong Khoi reached 330 USD/m2/month (equivalent to about 8 million VND/m2/month), an increase of 32% compared to before the COVID-19 pandemic, but a decrease of 6% compared to the same period last year (2023), mainly due to fluctuations in the local currency compared to the USD.
