A vacant storefront on Kim Ma Street in central Hanoi. Photo credit: VnExpress/Anh Tu
In central Hanoi and Ho Chi Minh City, many storefronts are sitting empty as landlords demand high rents and e-commerce makes inroads into brick-and-mortar businesses.
In recent months, many shops in Hanoi's downtown areas of Hoan Kiem and Dong Da districts have been closed due to a lack of tenants, with some having been closed since the end of last year.
On Kim Ma Road, home to many fashion stores and restaurants, around 30 shophouses have their shutters down, some with “for rent” signs hanging up.
The commercial property on the west side of West Lake has fewer than 10 tenants.
Shophouses in Nam Tu Liem, Ha Dong and Long Bien districts also lie empty after people paid up to VND20 billion ($785,000) to buy them three or four years ago.
Real estate broker Minh Thu said he had never seen so many shophouses sold in Hanoi since 2017.
“Properties in prime Hanoi locations with monthly rents of VND15 million to VND20 million were once full to capacity, but now many of them are vacant, even though landlords are offering incentives such as reduced deposits.”
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Many shophouses in Ho Chi Minh City have “For Rent” signs hanging up. Photo courtesy of VnExpress/Tran Mai |
Analysts at property consultancy Savills said rising rents and growing competition from e-commerce were making tenants less willing to pay for pricey shophouses.
According to Savills, rents for some shophouses in Hoan Kiem district have risen by 20% since pre-COVID-19 and are likely to continue to rise.
Instead of paying rent of VND10-15 million, small and medium-sized business owners prefer to spend the money on online advertising, he added.
In Ho Chi Minh City's District 1, many stores are without tenants, and many are still looking for tenants even after the pandemic ends.
The building that once housed a Japanese restaurant is now vacant, but the landlord is still demanding VND300 million per month in rent.
In District 7, many of the former restaurant and office spaces now have vacant storefront signs.
But landlords have barely reduced rents. For example, the asking price for a 100-square-metre shophouse on Nguyen Van Linh Street is VND50 million per month.
