Shopping malls flounder in wake of coronavirus outbreak
Shopping malls flounder in wake of coronavirus outbreak
An unexpected complication throwing off the forecasts of real estate consultants, shopping malls have been dragged down by the coronavirus epidemic.
Usually bustling shopping malls stand almost deserted since the coronavirus outbreak
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The coronavirus outbreak has had a marked negative effect on high-performing shopping malls like Vincom Center, Lotte Mart (Hanoi capital), Giga Mall, Saigon Center, or Pearl Plaza (Ho Chi Minh City).
According to VIR’s observations, Vincom Center Ba Trieu that usually bustles during the weekends is now blanketed in silence. Specifically, food and coffee chains like King BBQ or Highland Coffee only manage to draw in a few customers. GV cinemas have also been floundering since the epidemic exploded.
In addition to the recent quiet, Vincom Center Ba Trieu has not managed to rent out all store areas despite its favourable location in an area of high- and middle-income residents. The situation is not fully the fault of COVID-19 – it has lasted since the beginning of the second quarter last year – though has been exacerbated by it.
In Ho Chi Minh City, Giga Mall has reported a similar drop in performance in the past days. A representative of the Korean BBQ chain there said, “Our revenue is only a half of the same period last year. Customers come only at a trickle even during the weekends.”
In addition to the poor sales caused by the health crisis, lease at the shopping malls remain unchanged while overheads and utilities, as well as coronavirus-accrued expenses have been a burden. “The fall in revenue has affected the earnings of our staff,” said a representative.
Acccording to real estate consultant Collier's latest report, the leasing price at Giga Mall is $25 per square metre per month. The minimum space for a food court is 250sq.m. Thus, the store chain may have to pay about $6,250 for lease.
Such a high leasing priceseems untenable amidst the epidemic. "If the crisis lasts, we may leave the shopping mall to cut operation costs,” said the representative of King BBQ.
Echoing this view, Nguyen Kim Ly, manager of a fashion store in a big shopping mall in District 1, said that the revenue these days is well below the VND30-40 million ($1,300-1,740) a day it made in the previous year as shoppers are few and far between. However, the situation is not so dire thanks to improving online sales.
The CGV cinema at Pearl Plaza has also seen a significant drop in revenue these days. “Blockbusters were not enough to lure in customers, with visitor count a solid one-third down against the time before the epidemic,” said a CGV’s staff.
Regarding the effects of the coronavirus on retailers and also shopping malls, Stephen Wyatt, country head of JLL Vietnam, told VIR that the effect of this outbreak is still limited. “We expect the impact to be short-term, and most investors and operators are adopting a wait-to-see attitude and delaying making major decisions."
