“No Tenants Due to Exorbitant Rents?”
Are high rents keeping tenants away?
VietNamNet’s reporters observed that numerous vacant properties along bustling streets in Da Nang’s center, such as Nguyen Van Linh, Le Duan, September 2, Dien Bien Phu, Nguyen Huu Tho, and Hoang Hoa Tham, are up for lease. Despite the long-standing signage, many of these locations remain locked and unoccupied.
A fashion boutique on Nguyen Van Linh Street has closed its doors and vacated the premises. The landlord has been advertising the property for rent at a rate of 8,500 USD per month for several months without success.
|
Nguyen Van Linh Street in Hai Chau District is a prime location, stretching from Da Nang International Airport to the foot of the Dragon Bridge. Rental properties in this area are among the most expensive in Da Nang. Currently, storefronts measuring 5 meters in width are leasing for approximately VND 40-90 million per month.
Larger spaces measuring 9-20m are available for VND 100-350 million, equivalent to billions of dong annually. Amid a wave of businesses vacating their premises, this area is also experiencing vacancies as fashion, beauty, and language center brands exit.
Dubbed “golden land,” vacant properties on Nguyen Van Linh Street are hard to come by. However, at this time, there are multiple empty spaces awaiting tenants.
|
Similarly, on Le Duan Street, Da Nang’s top fashion hub, numerous stores are closed, with three out of four adjacent buildings displaying “For Rent” signs. Operating stores are offering drastic discounts, yet customers are scarce.
Rents here are substantial, ranging from VND 30-300 million per month depending on location and size. For instance, a 60m, 3-story property rents for VND 30 million per month, while a 2-story, 171m2 space goes for VND 120 million, and a 4-story, 250m2 building rents for VND 200 million…
The situation of vacant properties extends to September 2, where over ten empty spaces are available for lease, with rents ranging from VND 100-220 million per month.
Three houses on Le Duan Street are closed, with “For Rent” signs displayed. These houses have been seeking tenants for almost a year.
|
For several months, Ms. Trang, the owner of a 2-story, 100m2-plus property on Nguyen Van Linh Street, has been unable to find a new tenant. Previously, the property was leased to a fashion business for VND 45 million per month. Ms. Trang continues to advertise at the same rate but is willing to reduce the rent to VND 35 million if a tenant expresses serious interest. “This rent is already rock bottom; I can’t lower it any further,” she asserts.
Mr. Minh leases a property on Hoang Hoa Tham Street (Thanh Khe District, Da Nang) for VND 25 million per month. Previously, the tenant operated a cosmetics business but has since relocated. Despite advertising and engaging brokers, Mr. Minh has been unable to find a new tenant.
While someone offered VND 22 million per month, Mr. Minh’s parents did not agree. Acknowledging the challenging economic climate, the family has slightly reduced the rent but only minimally. Instead, they offer support with the deposit and payment terms. Specifically, they have adjusted the requirements from a 3-month deposit and 1-year advance payment with a long-term lease to a 1-month deposit, 6-month payment, and a minimum 2-year contract.
 Despite offering various promotions, fashion streets remain deserted and devoid of customers. Many store owners are forced to close and seek more affordable locations due to high rents relative to their profits.
|
Costs Remain Unchanged, and Properties Remain Vacant for Years
Mr. Quang Thanh, a broker specializing in rental properties, notes that despite being vacant for several months or even years, many landlords are unwilling to lower their prices or negotiate. Overall, rents remain high.
On Nguyen Van Linh Street, Mr. Thanh is seeking tenants for over ten commercial properties. For instance, a 13.5-meter-wide, 315m2, 5-story building is offered at VND 240 million per month, with a required 5-10 year lease, semi-annual payments, and a 3-month deposit. This property has been on the market for almost half a year without finding a tenant. The owner is open to negotiation but only willing to reduce the rent by approximately VND 5-10 million per month.
Not far away, another 2-story property of a similar size is available for VND 210 million per month, with a 5-year contract. Despite being vacant for nearly three months, the rent remains unchanged.
Also on this street, a 450m2 space near the Dragon Bridge is listed at precisely VND 250 million per month, with a long-term contract and negotiations limited to the deposit and payment terms. This property was previously leased by a coffee chain and vacated after several years of operation. According to the broker, it has been two months since the chain moved out, and no new tenant has been found.
Similarly, a 2-story, 190m2-plus building on Le Duan Street has been advertised for rent since the end of 2023, yet the asking price of VND 140 million per month remains unchanged.
A storefront on Ly Thai To-Hoang Hoa Tham Street is closed and vacant after The Gioi Di Dong vacated the premises. The landlord is asking for VND 100 million per month with no room for negotiation.
|
Explaining the situation of prime locations remaining vacant, Mr. Thanh attributes it to landlords setting excessively high rents and refusing to negotiate or lower their prices. In addition to the rent, there are other stipulations, such as a 10% price increase after 1-2 years, long-term contracts of 5-10 years, and requirements regarding deposits and payments.
In desirable areas, landlords tend to be financially secure and uncompromising. They would rather keep the property vacant than lower the rent.
“Landlords want high rents, but tenants need to cut costs in these challenging business times. When negotiations between the two parties fail, properties remain vacant for extended periods,” he says.
Diệu Thuỳ
The Endless Tug-of-War Between Tenants and Landlords in Ho Chi Minh City’s Prime Real Estate
“The tenant was asked to leave as someone else was willing to pay more.” This blunt statement sums up the current reality of the rental market in Ho Chi Minh City’s central area.
Office Rental Rates: A Continued Long-term Rise?
Office rental prices are expected to continue to rise in the short to medium term. This is why you need a long-term workspace strategy, whether it’s signing a new lease, relocating, expanding your office, or even investing in your own building.
