Retail space rents on downward rent
Owners of buildings offering retail space in downtown HCM City are expected to cut their rents to maintain old clients as well as attract new ones.
According to the real estate consultant CB Richard Ellis Vietnam (CBRE), an increasing inflation rate and a slowdown in retail business and service sectors are the two main reasons driving retail space rentals down. In the first half of 2011, the total retail sales of goods and services after inflation was deducted rose by only 5.7% over the same period last year, a modest growth rate compared to last year’s growth rate of 16.4%. “Lower purchasing power and high rents of premises both burden retailers”, said Marc Townsend, director of vorable rents.
The rent downtrend is becoming clearer given strong supply in the time ahead.
Eden A will be put into operation in 2012’s second quarter which can provide 30,000 square meters of floor space. At present, Bitexco Financial Tower is offering 8,000 meters for lease with prices ranging between US$78-124 per square meter.
Outside the downtown area, retail supply will also be abundant when the Crescent Mall in Phu My Hung Urban Area, with a total area of 45,000 square meters, comes into operation by the year-end.
There is 352,800 square meters of retail space in HCM City. The average rent is US$125 per square meter in central business district (CBD) and US$33 per square meter in non-CBD areas.
