HCMC landlords should halve rent for F&B businesses: experts

By Trung Tin   September 28, 2021 | 10:49 pm GMT+7
HCMC landlords should halve rent for F&B businesses: experts
A noodle shop on No Trang Long Street in HCMC’s Binh Thanh District reopens amid Covid-19 restrictions, Sept. 9, 2021. Photo by VnExpress/Quynh Tran
HCMC lessors should halve rents for F&B tenants over three to six months towards helping the latter cut costs and recover amidst lower demand, experts say.

Many F&B establishments have begun reopening operations since mid-September, but weak purchasing power and higher cost of goods and transportation make survival difficult in current conditions. Experts are recommending that lessors cutting rentals to a minimum to avoid losses.

Trang Minh Ha, chairman of enterprise consulting service provider North Stars Asia, told VnExpress that consumers were spending more carefully now because of the sharp drop in income amid the fourth Covid-19 wave.

"The cost of renting space for the food industry should remain at 10-15 percent of revenue in the next two quarters, half the pre-pandemic level so as to survive the challenging months," Ha said.

He said that rentals accounted for 20-30 percent of revenue on average, going up to 35 percent for prime locations in pre-pandemic times. However, in the current context, the purchasing power is only 25-30 percent compared to pre-pandemic times, so rental needs to be cut to 10-15 percent of revenue in the next two quarters.

Tran Pham Phuong Quyen, retail leasing manager with real estate firm Savills Vietnam, said F&B businesses should be cautious about opening new outlets. They should reduce space and maintain rentals at 10-16 percent of revenue to ensure efficiency and save money.

 
 
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