Once bustling with upscale restaurants and luxury brands, the shophouse rows now sporadically display long-term lease signs.
As observed, numerous prime locations along Nguyen Luong Bang, the lifeline of the Phu My Hung urban area, have been vacant for extended periods.
Other roads once dubbed the “million-dollar commercial axis,” such as Ton That Tien, Nguyen Van Linh, and Bui Bang Doan, exhibit a similar trend, with numerous shophouses closed and deserted. Some locations are covered in dust and show signs of deterioration due to prolonged vacancy.
Currently, rental prices in Phu My Hung vary by area, ranging from 50 to 200 million VND per month, with some places charging in USD, reaching 10,000 to 60,000 USD per month.
Amid the negative fluctuations in business post-pandemic, entrepreneurs have been unable to withstand the pressure of high costs and expensive rentals, ultimately opting to close down and vacate the premises. Despite landlords reducing rents by 10-20% compared to the peak period, tenants remain cautious and sometimes refuse to negotiate.
The primary reason is attributed to changes in consumer behavior post-COVID. People now prioritize online shopping, and small-scale food and beverage (F&B) businesses with lower operating costs are thriving. In contrast, rental costs in Phu My Hung are still considered high relative to achievable revenue.
The owner of a tea shop chain that previously operated in the area shared, “Rent accounted for nearly 50% of our total costs, but the customer flow was insufficient to cover expenses. We had to close down after six months.”
It’s not just individual businesses; even prominent brands are gradually withdrawing or downsizing their operations. Maintaining a presence in this upscale residential area is no longer as straightforward as it once was, as consumers become more calculated in their spending.
Phu My Hung’s subdued atmosphere sees long-term lease signs on vacant properties.
Experts suggest that to reinvigorate the rental market in Phu My Hung, landlords need to demonstrate flexibility by offering more substantial rent reductions, subdividing spaces, or converting them into offices or co-working spaces to align with evolving demands.
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