VietNamNet Bridge – The segment of retail space for lease has seen demand slumping sharply in the second quarter, the first decline for a long time, as many retailers are leaving commercial centers.


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Girval Cafe moved out of the corner of Dong Khoi and Le Loi streets in Vincom Center A last month.

Among real estate services, retail space for lease is considered as having high potential thanks to demands of local and international retailers.

However, a recent survey of CBRE Vietnam shows that the leased area was down 9,000 square meters in the second quarter as new tenants were not enough to make up for those leaving shopping venues over poor business operations. The available space increased sharply in the second quarter although the market saw no new supplies.

According to the company, some renowned retailers in the cuisine and fashion sectors have left their premises in large commercial centers in the center of HCMC. For instance, Givral, a café and bakery brand, left the convenient location of the corner of Dong Khoi and Le Loi streets in Vincom Center A in District 1 late last month.

Marc Townsend, managing director of CBRE Vietnam, said that high rents and the modest number of shoppers are big challenges to the retail industry.

HCMC has around 400,000 square meters of retail space for lease with rents averaging out at VND2.2 million per square meter for commercial centers in the center and around VND670,000 per square meter for those outside the central area.

While commercial centers in the central area only welcome famous brands with strong financial capability, commercial centers elsewhere are slashing rents to lure customers, CBRE said.

Large retail projects are facing challenges in keeping customers. Project owners have cut rents and applied many incentives for customers such as free rent for the first few months or revenue sharing.

However, on the positive side some retailers still have plans to expand their network, including Aeon with 20 stores, Lotte Group with over 60 retail points and CoopXtraplus.

Source: SGT