Rents plummet amid coronavirus epidemic

Mar 9th at 13:46
09-03-2020 13:46:21+07:00

Rents plummet amid coronavirus epidemic

With businesses reporting dwindling revenues due to the coronavirus epidemic, landlords are cutting their rents by up to 40 percent.

Rents plummet amid coronavirus epidemic
A man sits in front of a closed premise on Phan Xich Long Street, Phu Nhuan District, Ho Chi Minh City, on March 5, 2020. Photo by VnExpress/Quynh Tran.

Hung Thinh Corporation in Ho Chi Minh City recently announced a 20-40 percent reduction in rents at its two malls in HCMC and one in the southern port town of Vung Tau.

Its chairman, Nguyen Dinh Trung, said the reduction would be available in March and April to support restaurants, supermarkets and convenience stores which have seen revenues fall by 40 percent following the outbreak.

Da Nang real estate company Dai Thang Holdings has reduced rents by 20 percent at its buildings in the central city.

All customers who signed rental contracts during the outbreak are entitled to the lower rates until the disease is contained.

CEO Doan Thien Viet said the company seeks to share the burden with businesses. Tenants are also making bargains on their rents amid dampening business performances.

Hoa, an estate broker in HCMC, said some food and beverage chains have asked landlords for discounts of up to 40 percent saying their revenues have fallen at the same rate, and plan to find new and cheaper locations if their request is denied.

Small and medium-sized companies, which usually rent offices at $15-25 per square meter per month are demanding cuts in rentals of up to 25 percent.

Hoa said: "Bargaining is necessary amid the epidemic. As long as landlords and tenants can meet each other half way, contracts will be signed."

He said rents have fallen by 8 percent since early January in Binh Thanh District and by 15 percent in District 2.

With the coronavirus outbreak causing some small businesses to shut shop, many landlords are trying to retain tenants by cutting rents. Brokers said many small HCMC businesses, especially restaurants and cafes which got few customers in the past month, have vacated their premises to cut their losses.

Ngo Duc Ke Street in HCMC’s District 1, which has a large number of milk tea shops, has seen them close down one by one since the end of February.

Many fashion shops on Nguyen Trai Street in the same District and restaurants on Phan Xich Long Street in Phu Nhuan District have also closed.

Huynh Phuoc Nghia, a lecturer of business and marketing at the HCMC University of Economics, said lower rents are inevitable after over a month of the disease, and further drops could be expected until the epidemic is contained.

Rents account for 25-35 percent of costs for food and beverages establishments, and so these businesses are seeking discounts to survive, he explained.

Vnexpress





RELATED STOCK CODE (1)

NEWS SAME CATEGORY

A catalyst to push up Dong Nai real estate market

Continual updates on the progress of space clearance, compensation, and resettlement serving the construction of Long Thanh International Airport have turned the...

Vincom Retail reserves $13 million support for tenants hit by COVID-19

Vincom Retail JSC, the retail arm of Vingroup, on March 5 announced reserving VND300 billion ($13 million) to support tenants in its 79 retail centres nationwide...

$5.5 million mega eco-urban area in Bac Ninh submitted to the PM

The mega eco-urban area is located in Tien Du district and Tu Son town, Bac Ninh province with a total area of ​​nearly 1,700 hectares with seven phases.

Vincom supports partners during COVID-19 epidemic

Vincom Retail Joint Stock Corporation announced that it spent VND300 billion (nearly US$13 million) to support its partners in terms of rent at 79 department stores.

Association calls for rate cuts, improved legal framework for new property products

The Viet Nam Real Estate Association has proposed the Government develop measures with a focus on credit and tax support, together with improving the legal...

Townhouses with easy Saigon access more alluring to investors

Urban townhouses in Saigon vicinity are becoming an appealing investment option with new supply limited and most projects well connected to the city center.

Real estate transactions in Hanoi plunge in Jan-Feb on coronavirus fears

Hanoi, the city of a nine-million population, needs approximate 600,000 apartments per year.

$300 million Ben Thanh underground trade centre runs into delay

The construction of Ben Thanh underground shopping centre has been delayed due to a lack of investors.

Sixth PropertyGuru Vietnam Property Awards opens call for nominations

The sixth edition of the PropertyGuru Vietnam Property Awards, presented by global brand Kohler, is underway with a new timeline. The awards ceremony will also move...

How EVFTA, coronavirus affect Vietnam industrial property?

The coronavirus outbreak will certainly have an effect on the global economy in the coming months. Vietnam, with its proximity and close trade and supply...

Real estate stocks

Construction stocks


MOST READ


Back To Top