Ngã Sáu Phù Đổng – The Most Expensive Rental Space in Vietnam
Since Starbucks entered the Vietnamese market 11 years ago and opened its first store at the intersection of Nguyễn Thị Nghĩa – Phạm Hồng Thái streets facing the Ngã Sáu Phù Đổng roundabout, this area has become “hot” among F&B enthusiasts.
Located at the intersection of 6 streets in District 1, the address 325 Lý Tự Trọng at Ngã Sáu Phù Đổng is not only one of the most expensive rental spaces in Ho Chi Minh City but also in Vietnam. Over the past decade, this location has witnessed the arrival and departure of many renowned F&B chains such as Phúc Long, Soya Garden, PhinDeli, and more.
The first notable name to mention is “big player” Phúc Long with its tea and coffee shop that used to be very crowded at this location. Before the Covid-19 pandemic, Phuc Long attracted customers at any time of the day, with some peak days even requiring a long wait.
In July 2019, Phúc Long announced the return of the rental space and Soya Garden, the organic soy milk startup, quickly took its place. This startup had successfully raised funds on the Vietnamese version of Shark Tank (Thương vụ bạc tỷ) and received support from Mr. Nguyễn Ngọc Thủy’s E-Group with an investment of about VND 100 billion.
However, due to inefficient business and the impact of Covid-19, Soya Garden returned to Hanoi in the middle of 2021, including giving back the rental space at Ngã Sáu Phù Đổng and other locations in Ho Chi Minh City.
In November 2021, the next new tenant at the Ngã Sáu Phù Đổng roundabout was revealed, and that is the coffee brand Phin Deli. However, just after one year of its opening, Phin Deli also withdrew.
Phin Deli is the successor to Phúc Long and Soya Garden at Ngã Sáu Phù Đổng. Photo: Hồng Phúc (Dân Việt).
After Phin Deli left, MIA – a brand specializing in glasses and handbags – took over this prime location, ending the “turnover” of F&B stores at this spot. Interestingly, after each brand left, the price of the rental space not only didn’t decrease but continued to rise.
When MIA opened its store at Ngã Sáu Phù Đổng, a marketing expert named Đức shared on Tiktok: “Phúc Long rented this space for 5 years at a price of $14,000/month, then the landlord raised the price to $25,000. So Phúc Long gave up. Both Soya Garden and PhinDeli were rented at a price of $25,000. After PhinDeli left, the rental price of this space increased slightly to $26,000 (about VND 700 million) and belongs to MIA.“
With a rental price of up to VND 700 million/month, this location at Ngã Sáu Phù Đổng deserves to be among the most expensive rental spaces in Vietnam.
Burning Money to Build a Brand?
For all the brands like Soya Garden, Phúc Long, PhinDeli,… or even MIA at present, renting a space at the “golden land” Ngã Sáu Phù Đổng is not just for the purpose of pure business but also a way to promote their brand.
Mr. Lâm Bội Minh – the “father” of Phúc Long – once shared that when he rented the Ngã Sáu Phù Đổng location, there was no parking space, and the rental price was high, but at that time, he started the F&B business and chose that spot for advertising. Later, they achieved their goal.
The front of the MIA store at Ngã Sáu Phù Đổng (District 1 – Ho Chi Minh City) in January 2024. Photo: Trọng Nghĩa
Last year, Mr. Trần Anh Tuấn – Founder/CEO of MIA – shared with us that before PhinDeli closed, real estate brokers had approached him because they identified MIA as a potential customer, since they often rented beautiful spaces at intersections and corners to open stores. As fate would have it, MIA negotiated successfully and secured its name at this famous location.
With the high rental price, capitalizing also presents a significant challenge for MIA. Mr. Tuấn shared that the MIA team had made it clear that if they considered the costs such as staff salaries and the rent, how much monthly revenue the store would need to break even and make a profit.
However, the special rental price of MIA, if calculated per square meter, is very high, but in terms of overall area, it is not the highest at Ngã Sáu Phù Đổng. Mr. Tuấn analyzed: “Across from the other corner is Con Cưng Super Center, with rental prices several times higher than ours. Additionally, the rental price below VND 100 million throughout the MIA chain is not rare, but this rental price is equivalent to several normal spaces of ours.”
Doing the math, when dividing the cost of building a brand for the MIA store system, it turns out that each store bears not too much burden.
MIA store at Ngã Sáu Phù Đổng (325 Lý Tự Trọng Street, Ward Bến Thành, District 1, Ho Chi Minh City. Photo: Trọng Nghĩa
At present, MIA still holds this vital position, and this is also a cross-selling point for the 2024 Lunar New Year.
Last year, Mr. Tuấn also shared that MIA plans to stay long-term at this location and not “run away” soon. They will not rent for 1 year but at least 3 years, as long as the landlord doesn’t make things difficult, such as raising the rent by 20% to 30%, for example.
Since its opening on November 19, 2022, MIA has been at this location for more than a year.
According to Trọng Nghĩa
