Vietnamese businesses, landlords lean on each other to survive epidemic

Many shopping malls and landlords have accepted to lower retail premises rent or exempt rent to help tenants overcome difficulties at this time.

Returning from a meeting with the owner of the house he is renting to run a massage facility on in HCM City, Toan said he had reached a consensus with the landlord. He won’t have to pay rent for one month while his facility temporarily closes.

Vietnamese businesses, landlords lean on each other to survive epidemic

Petty merchants at An Dong Plaza shopping mall sighed with relief when the plaza’s management board said there would be 30 percent rent reduction for March, April and May.



Toan said his business has been hit hard by the epidemic. The revenue has dropped dramatically, but he still has to pay workers and other expenses to maintain the shop. The rent is $2,000 a month.

Toan and his wife had intended to give the retail premises back, if the landlord refused to lower the rents.

“It is still unclear when the epidemic can be contained. It is highly possible that the massage facility will have to close until the end of April,” he said. 

Many shopping malls and landlords have accepted to lower retail premises rent or exempt rent to help tenants overcome difficulties at this time.
 

Late last week, more than 100 petty merchants at An Dong Plaza shopping mall in district 5 sighed with relief when the plaza’s management board said there would be 30 percent rent reduction for March, April and May.


Prior to that, merchants at the shopping mall signed a petition to the management board, asking the building’s owner to lower the rents.

The spread of coronavirus, plus the development of shopping apps, have led to the sharp fall in the number of people going to the shopping mall. Some merchants reported dramatic decreases of 80-90 percent in revenue in recent months.

In general, the premises rent, taxes and other expenses cost them VND40 million a month.

A survey by Savills released last week found that as of early March, the rent of street front houses has dropped sharply because of sluggish business.

Many landlords have slashed rents to support tenants. They exempted rent for one month, or lowered the rent by 30-50 percent.

As for street front houses in advantageous areas such as Phan Xich Long street (Phu Nhuan district), Ho Tung Mau and Ngo Duc Ke (district 1), landlords accepted a small rent decrease of 10-20 percent compared with late 2019.

Diamond Plaza has lowered the premises rent since February. Big C and Go!, belonging to Central Retail, have cut rent by 10-15 percent for February and March.

In March, Vincom Retail announced z budget of VND300 billion reserved to support partners who rent retail premises affected by the current crisis.

Aeon, the retailer from Japan, has also accepted to lower the rent for some contracts.

Linh Ha 

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