Many realtors have slashed retail premises rent by 20-40 percent to help tenants survive Covid-19, which is damaging the economy.
The Da Nang-based Dai Thang Holdings has announced 20-40 percent decreases in rent of the offices the company is managing.
Doan Thien Viet, CEO of Dai Thang, said the company cut the office rent to share difficulties with clients. Both clients signed contracts prior to March 1.
Hung Thinh Group has also announced the reduction of retail premises rent until April to two shopping centers in HCM City – Moonlight Plaza in Thu Duc district and Saigon Mia in Binh Chanh, and one in Vung Tau City – Vung Tau Melody.
Hung Thinh’s president Nguyen Dinh Trung said the company lowered rent to help partners stabilize their business. Because of the epidemic, the number of visitors to shopping centers, supermarkets, restaurants and convenience stores has decreased dramatically.
|Many realtors have slashed retail premises rent by 20-40 percent to help tenants survive Covid-19, which is damaging the economy.|
Tenants have also asked landlords to slash rents.
Hoa, who has been working as a broker for half a decade in districts 1, 2 and Binh Thanh, said some large food and beverage chains have asked landlords to slash rent by 40 percent, equal to their 40 percent revenue reduction.
“The chains said if the landlords don’t lower the rents, they will leave,” Hoa said.
Some small and medium businesses which are leasing offices at $25 per square meter per month and street-front houses have also asked to lower the rents by 20-25 percent as their business has become stagnant.
“New rent levels have been set up in the Covid-19 period. It’ll be okay if landlords lower the rents by 50 percent of the proposed levels,” he commented.
The owners of street-front houses have already begun slashing rents. According to Hoa, the rent of the houses in Binh Thanh district has decreased by 7-8 percent, while the rents in district 2 have decreased most sharply by 15 percent.
The negotiations appear to last longer for premises in central district 1 because of their advantageous positions. Some landlords have promised to raise the rent only once every two years and lower the fees of some kinds of services.
The rent decreases are more common in the localities neighboring HCM City because of their less advantageous positions.
Huynh Phuoc Nghia from the HCM City Economics University commented that rent reductions were inevitable, saying that the domino effect may continue for many more months until the epidemic ends.