Rental space begins to improve

Most of the vacant premises in the center of Ho Chi Minh City have been leased after the landlords proactively negotiated and lowered the price.

The rental market in Ho Chi Minh City is closing 2024 with bright colors, signaling a promising new year. The bustling, vibrant atmosphere is present on all the streets. Renovation, refurbishment, and renewal activities are taking place vigorously after a long period of silence.

Beautiful and attractive premises

Along central streets such as Hai Ba Trung, Dong Khoi, Le Lai..., we noticed a clear change. The signs for renting premises that have "persisted" for a long time have gradually disappeared, replaced by new stores with all kinds of businesses, from fashion, cosmetics, to cuisine and entertainment.

Coffee - milk tea brand Katinat has just opened a new point of sale in the center of Ho Chi Minh City.

Mr. Vu Hoang, a person who is looking for a location to do health therapy business in Thu Duc City, shared that in the past few days he had to search everywhere to find a suitable location.

"A suitable location has a high price, up to 35-40 million VND/month, but if you are late with a location that is within your budget, you will lose it. A few days ago, I found a house on Tran Nao Street (Thu Duc City) that met my requirements and cost only 25 million VND/month. But when it was close to the appointment time with the homeowner, the broker informed me that someone else had already paid a deposit" - Mr. Hoang said.

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

Mr. Tuan Anh, a person with many years of experience in real estate brokerage in the areas of Phu Nhuan, Binh Thanh, Thu Duc..., said that this market is clearly improving, most customers are looking for buildings with a structure of 1 ground floor, 2 to 4 floors with a rental price of less than 50 million VND/month to run a spa, use as a company office or invest in renovation to rent out as serviced apartments.

Ms. Thanh Tam, a real estate broker 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 of the vacant premises have been rented after the landlords have proactively negotiated and lowered the price to attract tenants. "There are only a few houses with "legal problems" or related to a certain case that are still vacant and cannot be rented," Ms. Tam said.

Mr. Nguyen Van Thieu, an expert in this field, commented that the growth of the market mainly comes from big brands. They are willing to pay high prices to own prime locations, serving the strategy of expanding business and capturing market share.

"Big brands are dominating the race for beautiful locations," Mr. Thieu affirmed. In addition, the appearance of a number of new retail chains, especially in the food and fashion sectors, has also contributed to heating up the market, with them accepting rental prices of VND80-100 million/month for beautiful locations.

Financial institutions and banks also do not miss the opportunity to "take over" prime locations. Typically, Prudential recently leased the premises on 2 fronts of Tran Cao Van - Hai Ba Trung (District 1) after KSFinance (part of Sunshine Group) returned it and left it vacant for quite a while.

However, Mr. Thieu also raised questions about the sustainability of this investment strategy. Because, some chains are racing to expand to gain market share without knowing the real effectiveness.

Mr. Thieu predicts that from now until early 2025, rental prices will increase slightly and beautiful premises with good prices will still be "delicious bait" to attract many brands. He cited some expanding chains such as King Food Mart, new fashion brands... will continue to "hunt" for premises in the coming time.

Lan to the shopping mall

Not only stopping at the streets, the heat of the market also spreads to shopping centers. According to Savills Vietnam, the occupancy rate at modern retail projects in the third quarter of 2024 reached 94%, up 0.5 percentage points compared to the previous quarter.

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

Ms. Quyen also added that many international brands are "eyeing" the Ho Chi Minh City market, but there are still some barriers such as the scarcity of premises in the central area and complicated legal procedures. "However, with the advantage of a young population, increasing living standards and large shopping needs, Vietnam is still a potential market for international brands," Ms. Quyen commented.

Savills forecasts that by 2027, the Ho Chi Minh City market will have more than 163,100 square meters of retail space from 12 new projects, of which 55% will be concentrated in the non-central area. Rental prices in the central area are expected to stabilize in 2025, while the suburban area may face difficulties due to its heavy dependence on essential industries.

Ms. Pham Ngoc Thien Thanh, Head of Research and Consulting at CBRE in Ho Chi Minh City, said that the rental space in commercial centers has become active again after 3 years of stagnation due to the pandemic.

The occupancy rate at new malls is nearly 100%, leading to a vacancy rate of 5%-6% across the entire market. "The F&B and fashion - accessories industries are leading the market share of tenants at shopping malls," Ms. Thanh added.

Win-win

Mr. Nguyen Hong Hai, Chairman of the Board of Directors and General Director of VNO Vietnam Investment and Development Joint Stock Company, also commented that the general rental market is recovering strongly. Although rental prices have not increased, liquidity has increased, and landlords tend to support tenants more. "The market is moving in a direction that is beneficial for both landlords and tenants," Mr. Hai commented.

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