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Rents quadruple in HCMC downtown street as metro construction site cleared

By Vu Le   September 4, 2022 | 07:02 pm PT
Rents quadruple in HCMC downtown street as metro construction site cleared
A bird's eye view of Le Loi street in HCMC after the metro construction site is cleared. Photo by VnExpress/Quynh Tran
Rentals for streetfront premises on Le Loi street (HCMC’s District 1) have risen by up to four times since the removal of the metro construction site in mid-August.

Barriers were cleared on an 800-meter section of the street, which had been blocked for eight years for the construction of Ben Thanh, one of three underground stations on metro Line No.1.

A 108-sq.m shophouse there is now offered at US$8,000, up from $2,000 earlier, and a tenant told VnExpress lessees need to sign long-term contracts.

A 360-sq.m shophouse, which was renovated recently, costs VND600 million ($25,570).

Rents of VND200 million, two to three times the figure a couple years ago, are commonplace on the street, Khanh, a property agent in District 1, said.

"In 2019 and 2020 shophouses were offered at $2,000-3,000 a month but there were no takers as the barriers disrupted traffic.

"Rents were raised to $8,000-10,000 after the construction site was removed and news that Le Loi might be converted into a walking-only street spread."

Vo Hoang Quan, director of property developer Center Land, said landlords with deep pockets would keep rents high even if it means keeping their premises locked. "But some others could lower rents to below $7,000 after negotiations".

Demand would increase thanks to the metro station and a possible pedestrian street, but vacancy rates would remain at around 70% through the final quarter of the year, he said.

Nguyen Huu Thien, CEO of property rental firm Sabay Home, said rents on Le Loi street would keep rising, but prospective lessees would remain cautious due to high costs and unclear prospects.

Le Loi has more parking space than Nguyen Hue Street for instance and is less cramped, and so it would be a sellers’ market, he opined.

 
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