The Most Expensive Retail Rent in the World: Unveiling Hoan Kiem Lake’s Secrets

The recent decision by the Hanoi People’s Committee to demolish the “Shark Jaw” building – a prime location next to Hoan Kiem Lake – has sparked interest from many. The “Shark Jaw” building was a unique structure that attracted attention for its unusual design.

Contrary to popular belief, “Shark Jaw” is not the most expensive location for business rentals near Hoan Kiem Lake. According to a report published last year by Cushman & Wakefield (C&W), a leading global commercial real estate services firm, Trang Tien Street, on the other side of Hoan Kiem Lake, ranked 18th in the list of 51 streets with the highest retail rents in the world within the Asia-Pacific region.

Trang Tien Street boasts rental rates starting from 300 USD/m2/month, equivalent to 7.65 million VND/m2/month, a 50% increase compared to pre-pandemic levels and unchanged from the same period last year. These rates are significantly higher than those of well-known streets in other major cities such as Guangzhou, Chengdu, and Chongqing in China, Bangkok in Thailand, and Kuala Lumpur in Malaysia.

One of the most prominent landmarks on Trang Tien Street is Trang Tien Plaza, Hanoi’s first luxury shopping mall. With rental rates starting at 328 USD/m2/month, or 8.3 million VND/m2/month, only luxury brands such as Dolce & Gabbana, Burberry, Gucci, Rolex, and Hublot can afford to lease space here.

According to a local Hanoi real estate broker, a 260m2 property with a 15-meter-wide storefront offering a direct view of Hoan Kiem Lake on Le Thai To Street is currently available for rent at 450 million VND per month. Similarly, a two-story property with an area of 166m2, located near the “Shark Jaw” building and facing the Thuy Ta ice cream parlor on the same street, is also being offered for rent at the same price.

On Dinh Tien Hoang Street, which runs along Hoan Kiem Lake, a 72m2 commercial space with a 5.5-meter-wide storefront is available for rent at 250 million VND per month. For a similar storefront width of 5.5 meters on Hang Khay Street, facing Hoan Kiem Lake, the average rental price ranges from 200 to 230 million VND per month.

In addition to the streets with direct frontage on Hoan Kiem Lake, other streets leading to the lake, such as Cau Go, Hang Dao, and Hang Bong, also offer rental opportunities. Properties on these streets are available for rent at prices ranging from 150 to 210 million VND per month, depending on their size and location.

A representative from C&W confirmed that the luxury retail market in Vietnam is experiencing robust growth and attracting the attention of international brands. As a result, rental prices have increased to meet market demand, especially in prime locations like Trang Tien Street, Trang Tien Plaza, and the now-demolished “Shark Jaw” building in Hanoi, as well as Dong Khoi Street in Ho Chi Minh City.

According to C&W, the retail market witnessed strong growth from 2013 to 2019, with 195,000 m2 of new retail space entering the market annually. However, in the last five years, there has been a slowdown in the supply of rental space in this segment, particularly in central areas that used to be the main drivers of rental price increases.

This is evident from the increasing number of rental listings around Hoan Kiem Lake. On streets like Trang Tien, Le Thai To, and Dinh Tien Hoang, prime locations that were once leased by foreign luxury brands are now frequently being put up for rent or sublet.

Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association and President of the Vietnam Real Estate Brokers Association, shared his perspective on the matter. Given the challenging business environment, many companies would be cautious about committing to high rental costs.

Mr. Nguyen Quoc Anh, Deputy Director of PropertyGuru Vietnam, offered a similar viewpoint. He attributed the shift to the growth of e-commerce, which has made shopping more flexible and diverse. As a result, the need for expensive display spaces is diminishing, and brands are opting to downsize their physical stores to cut costs.

Meanwhile, a Savills Hanoi expert expressed that brands are becoming more selective when choosing rental spaces. Beyond just the central location, they also consider other factors such as road closures and parking availability, especially with Hanoi’s ongoing pilot program to restrict vehicles larger than 16 seats from entering the Old Quarter and Hoan Kiem Lake area.