Skyrocketing rents leave prime retail spaces in HCMC vacant

A 600-square-meter building, which used to be rented by a garment brand as a showroom at VND280 million (US$11,300) a month, has been vacant since early 2022.

Nam, the landlord, said this year a company wanted to lease it for five years but did not agree on the rent of VND400 million a month. "I do not think that my price is high. The property is located on a large road which helps attract business."

In District 1 a 300-square-meter building which used to be leased to a jewelry company has been unoccupied since 2023.

Vacant stores on Le Loi Road in District 1, Ho Chi Minh City in October 2024. Photo by VnExpress/Phuong Uyen

The rent has jumped from VND220 million last year to VND400 million now, according to Tran Quoc Kien, director of a brokerage company which is looking for tenants for the building.

Many buildings in other prime locations in Vietnam’s biggest city have also been unable to find takers since early 2022.

A building at an intersection in District 1 is listed now at $30,000 a month, up from $20,000 in 2022.

Another landlord is leasing his 600-square-meter building in the same district for $35,000 a month, the same price as in 2022 when the last tenant left.

For many other vacant buildings, their landlords have hiked the rent by around 10%.

The higher prices partly explain the low lease rate, according to analysts.

Data from property listing platform Batdongsan shows that in the first nine months of the year average rentals rose by 10-30% in Districts 1, 3 and 10 and Thu Duc City.

District 1 saw a rise of 15%, while in District 3 it soared 32%.

A report by another listing platform, Nha Tot, said on some streets in District 1 rentals have risen by 19-30% year-on-year to VND220-250 million per month.

Dinh Minh Tuan, Batdongsan’s director for the southern region, said landlords are asking for higher prices to ensure their properties are never devalued. For this, they would rather keep them locked for years than lowering prices, he said.

Giang Huynh, director of research at an advisory unit belonging to property consultancy Savills Vietnam, said landlords want to have an advantage when negotiating selling prices in the future and therefore are willing to accept zero income for a short period.

She said businesses these days do not bother to lease at the most expensive store locations, but look for affordable areas.

Tuan added that tenants are not willing to pay extremely high prices even in these prime locations because of changing consumer habits, especially with the rise of e-commerce.