Ho Chi Minh City: The rent of premises in the suburbs has decreased

DNHN - According to CBRE Vietnam, in the first quarter of 2022, retail space rents in the suburbs of Ho Chi Minh City decreased by 10-20% compared to the previous year. The average rent for the ground floor and first floor of commercial centres in non-CBD districts is $35.5 per m2/month.

Meanwhile, the ground floor rent of commercial towers in the centre of Saigon is up to 145.1 USD per m2 per month, 4 times higher than the rent in the suburban districts. 

The vacant retail space in the central area is fluctuating by 3.5%, equivalent to 3,800 m2 of vacant space, without tenants. Meanwhile, the vacant area of the suburban area is up to 13.7%, equivalent to 131,300 m2, while the vacant area is approximately 4 times higher than that of the central area. 

The market recorded a significant decrease in the number of rental requests compared to before the epidemic and a sharp decrease in the foodservice (F&B), fashion and accessories industries.

According to CBRE, there is a clear distinction between the central region and the peri-urban district in Ho Chi Minh City in the first quarter of 2022, with a total supply of more than 1 million m2 of floors for lease. While tenants have begun to return to several commercial hubs in District 1, the amount of recovery is inconsistent in comparison to the suburbs. 

Pham Ngoc Thien Thanh, deputy director of CBRE Vietnam's Research and Consulting Department, stated that macroeconomic challenges are lowering customers' purchasing power in the short term, resulting in the closure of trade centres in the region. The suburbs of Ho Chi Minh City are still undeveloped. This results in a fall in the asking price for retail space in this neighbourhood 

The steady return of shoppers to busy shopping areas throughout the holidays and weekends demonstrates that consumers have adjusted to the new normal. Ms Thanh acknowledged, however, that retail space rental demand is projected to remain unequal across commercial industrial sectors. 

According to CBRE data, retail space supply in Ho Chi Minh City is estimated to reach around 235,000 m2 between 2022 and 2024, but the building of projects in the central region has been delayed. Leasing activity at new commercial centres is still relatively slow, owing to merchants being considerably more circumspect than in the past when it comes to expanding rental space. However, as a result of the epidemic's impact, suburban rents have been unable to keep pace with the economic recovery, resulting in price increases. 

 Quang Đao