Space rental increases along upgraded streets in HCMC

Premise prices have highly increased along many streets in Ho Chi Minh City after they were upgraded and become more spacious.

Rental has increased 20 percent in Nguyen Hue Street after the walking zone opened for service (Photo: SGGP)

After Nguyen Hue walking street officially came into operation in District 1, space rental has increased 15-20 percent over before.

Tenant Nguyen Van Thai at a 4m wide and 32m long shop in Nguyen Hue’s front said that the property owner demanded a 20 percent increase in rental, taking it to US$12,000 now.

A manager of B.O office building in the street said that rental has been hiked 20 percent over before. A 67 square meter office overlooking the street’s front from the sixth story is let out at US$2,000 a month. An 18 square meter apartment overlooking other sides is rented out at US$600 a month.

A managing staff at Sun Wah Group Do Minh Luan said that the rental was US$33-35 per square meter a month, which is expected to run up by 20 percent next year.

Lessees along Tan Hoa-Lo Gom Street have experienced a rental increase of 10-15 percent in Tan Phu District.

Renter Le Thi Nghia said that landladies had raised the rental of her 32 square meter room from VND2.2 million to VND2.8 million a month, pleading that the street had been upgraded facilitating travelling.

A 4m wide and 15m long space in the Tan Hoa-Lo Gom street has the price of VND13.5 million month, VND4 million up from two months ago.

Unsalable business

Despite the rental increase, trade in these streets has become gloomy.

An electronic shop owner in Nguyen Hue said that when the walking street was under construction, he had to paid VND20 million monthly for a 16 square meter space and fell in unsold conditions for several months due to road works. Some shops nearly closed down without entrance ways.

However right after the street was built and opened, the space price was increased by VND10 million while purchasing power had yet to recover at that time.

Camera shop owner Le Hung said previously he received an average of 300 visitors a day. The number has fallen to only 50 recently. Many customers told they were afraid of parking and walking to shops in the street amid hot weather.

A jewelry shop owner named Hanh said that her business was in difficulties because of rental increase and purchasing power drop.

Luong Thanh Hung, head of Hung Phat Real Estate Exchange in Tan Binh District, said that was a natural rule to see lessees raise their rentals when roads were broadened.

Besides, the increase in the number of space seeker for shop opening has contributed to the up price in Nguyen Hue Street. However 20 percent increase was too high, he said. 

Tenants would have no way other than accepting it because of the unique position of the square, he added.

By staff writers – Translated by Hai Mien

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