Short-term space rentals hit a sweet spot in Saigon

By Vu Le   October 28, 2018 | 10:52 pm PT
Short-term space rentals hit a sweet spot in Saigon
Leasing of unused space by many shops, ‘street-facing’ properties, and offices boom in downtown of HCMC. Photo by Shutterstock/Takashi
Many landlords in HCMC are leasing unused ‘office’ space by the hour or other short periods for handsome returns.

A coffee shop in the centre of District 1 operates on the ground floor, and offers the first floor for conferencing and workshops.

This space is advertised as being able to host up to 20 people for work or meetings. Rents are VND1 million ($42.69) per session, which is about 3-4 hours.

To stimulate demand, the lessor also offers a more flexible rental policy. The same space, if rented long term, is just VND10 million a month ($426.85), which is much cheaper than renting per session for people or institutions who host such meetings regularly.

A company rents out a ‘street-facing’ building in Binh Thanh District to a contractor who sublets the property. The ground floor is offered to commercial tenants and the upper floors are let out by day, hour, or week for a variety of office services.

Most tenants are small or medium-sized companies in real estate, consumer goods and e-commerce sectors. They lease space for short terms to have conferences, meetings, training sessions and sales activities.

Nguyen Hong Hai, CEO of Pax Sky, an office leasing company in HCM City, said that the short-term retail leasing model in HCMC has emerged as a new trend this year.

Hai said the office market in HCMC has been the busiest in a decade. Capacity and prices are not only rising in the grade A and B market segments, but also in Grade C affordable housing towers, and for any unused retail space and flexible offices.

The underlying reason is a shortage in the market, which is enjoying high occupancy rates of 95 percent at the moment.

A strong entrepreneurial movement, high growth in foreign investments and the e-commerce boom are main factors behind the new trend, Hai said.

He said the short-term space rental model has a lot of room to grow further as it has hit a sweet spot in the market with a lot of demand.

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