Many commercial spaces for rent around Nguyen Hue Street in HCM City cannot find tenants. — Photo nld.com.vn

While the rental market in places close to downtown such as Phu Nhuan, Tan Binh, Binh Thanh, Binh Tan and Tan Phu districts is gradually recovering after two years of being affected by the COVID-19 pandemic, places in other districts and District 3 are not.

In the downtown area, the average rent for retail space is US$115 per square metre per month, while elsewhere it is only $24.

Signs offering places for rent are widespread after cafes, milk tea shops, restaurants, and fashion stores closed down.

However, landlords are not willing to reduce rents or at best offer a 10-15 per cent discount for a couple of months.

Rents were down by 50 per cent during the COVID restrictions last year, but now are only 15 per cent lower than in pre-pandemic times.

The reason is that most landlords are confident that the retail and international tourism markets will recover and do not mind keeping their premises empty while waiting for rents to recover.

Demand in prime locations is low because prospective lessees are waiting for strong signs of revival in the economy.

Many have chosen to relocate to other districts or to alleys where rents are lower.

However, some landlords are willing to cut rents by 30-40 per cent but still cannot find tenants.

Nguyen Ton, who owns three shops in Districts 1 and 3, said he used to earn more than VND180 million ($7600) a month, but recently cut rents by half and still has difficulty leasing them out.

“Two tenants have left and I expect the remaining tenant to also leave soon.

“I am telling them that if they sign a new contract they will get a 30-40 per cent discount for a year, but they are hesitant because consumers are tightening spending as the sharp increase in petroleum prices has sent the prices of many goods spiralling upwards while people's incomes have been greatly affected by the restrictions last year."

Tran Thi Lan Anh, who runs a fashion shop on Nguyen Dinh Chieu Street in District 3, said the restrictions may have been lifted, but consumers have reduced spending on "unnecessary things" including new clothes.

Source: Vietnam News

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