Land prices are increasing day by day
On September 19, McDonald's Ben Thanh (2-2A Tran Hung Dao, District 1) officially closed after 10 years of operation. This branch has 3 floors, is open 24 hours, and was built with a total area of nearly 660 square meters.
Although the reason for the closure of McDonald's Ben Thanh was not clearly stated, many people believe that it may be due to the high cost of the premises, similar to Starbucks Reserve Han Thuyen (11-13 Han Thuyen, District 1) which has been closed since August 26. Currently, many real estate brokers are also offering to rent 2 apartments at 11-13 Han Thuyen with an area of 210m2 for 30,000 USD/month, equivalent to more than 750 million VND/month.
In fact, in recent years, many other big brands have also stopped renting townhouses in the center of Ho Chi Minh City in the context of difficult business, high rental costs, and the trend of consumers switching to online shopping.
According to Lao Dong, many vacant premises have appeared on busy streets in the center of Ho Chi Minh City such as Nguyen Hue, Le Loi, Mac Thi Buoi, etc. In general, these premises have rental prices ranging from hundreds of millions to billions of VND per month.
Speaking to Lao Dong, Mr. Duong Thanh Dao - Vice President of the Ho Chi Minh City Culinary Association - said that according to the F&B industry report for the first 6 months of 2024 by iPOS, 30,000 restaurants closed in the first half of the year, with less than 2% of Vietnamese people willing to spend more than 100,000 VND for a cup of coffee. These are telling numbers that truly reflect the picture of the F&B industry that is always fiercely competitive.
"Fierce competition in the F&B industry, competition from large and small chains, along with increased operating costs such as premises, personnel, and input material prices, etc., have put considerable pressure on small retail stores, forcing them to close down and become unable to maintain operations.
At the same time, the development of online business channels such as TikTok, Shopee... plus the rise of online food delivery services and new business models make it difficult for some traditional stores to attract and retain customers" - Mr. Duong Thanh Dao assessed.
Share space to reduce costs
Many shop owners near central areas of Ho Chi Minh City said that because business is increasingly difficult, while rental prices continue to increase, they cannot survive on "golden land".
Ms. Le Tuyet - owner of a fashion store in Binh Thanh district - shared that after the COVID-19 pandemic, people's shopping habits have changed a lot, they have switched from offline shopping to online shopping. At the same time, the rise and stimulation of e-commerce platforms has caused the retail market to gradually lose its position, especially the fashion, cosmetics and F&B segments are being heavily affected.
Running a small coffee shop right on a prime land on Nguyen Hue Street (District 1), Mr. Nguyen Truong Thinh said that his rental price is quite high, over 20 million VND per month even though it is only a few square meters. To save on rental costs, Mr. Thinh had to subdivide his rented space to another party during the hours when his shop is not in demand.
Statistics from Savills Asia Pacific also show that the rental price of high-end premises in the center of Ho Chi Minh City in the first half of 2024 reached 151 USD/m2 (3.7 million VND/m2), 15 USD higher than Seoul (South Korea) where the rental price has decreased by more than 7% over the same period, to only 135.4 USD/m2 (3.3 million VND/m2).
