The Golden Land on Han Thuyen Street Remains Vacant a Month After Starbucks Reserve’s Departure, Owner Offers to Sell at a Hefty Price of $134,500/sq. m.

The landlord of 11-13 Han Thuyen, District 1, Ho Chi Minh City is reportedly looking to re-lease the property, just one month after the previous tenant, Starbucks Vietnam, vacated the premises on August 26, 2024.

The landlord is advertising a rental price of 30,000 USD/month (approximately 757 million VND/month), equivalent to 9 billion VND/year (an increase of over 600 million VND/year compared to the previous rental price).

According to real estate brokers, the new tenant can take possession of the property from September and will be given one month of free rent to prepare and renovate the new store. For a 5-year lease, the tenant must pay a deposit equivalent to 3 months’ rent, and for a 10-year lease, a 6-month deposit is required.

Interestingly, the landlord is also offering to sell the property outright for 630 billion VND, equivalent to 3 billion VND/sq.m.

“If you are willing to negotiate, you can meet the landlord. The landlord is an individual Vietnamese citizen residing in Vietnam,” a broker shared.

Notably, rental prices in District 1 have been on a sharp upward trend. Specifically, in this area, according to the batdongsan.com.vn real estate website, rental prices have increased by more than 15% over the past year.

It is worth mentioning that Starbucks Reserve, which opened in 2017, was the first and only Reserve store in Ho Chi Minh City at the time, and one of two Reserve stores in Vietnam (the other being in Hanoi’s Nha Tho Street). This unique Starbucks concept specializes in serving rare and exclusive coffee blends from around the world.

Over its 7 years of operation, Starbucks Reserve Han Thuyen has become a favorite destination for many due to its unique beverage offerings, brewing techniques, central location, and aesthetically pleasing ambiance. Thus, the news of its closure sparked sentiments of dismay among regular patrons and netizens alike.

The reason behind Starbucks Reserve’s decision to vacate this thriving location is reportedly due to unsuccessful negotiations to extend their lease.

Despite its prime location, 11-13 Han Thuyen remains vacant as the asking price is considerably high. After a month of unsuccessful leasing, some brokerage firms have indicated that the rental price is negotiable.

It is important to note that a desirable location is a critical factor in the success of an F&B establishment, and many investors are willing to pay a premium for prime real estate. However, pricing is equally crucial.

“Finding the right location for your F&B business is of utmost importance. You can’t expect customers to come to a location of your choice; instead, you should bring your concept to where the customers already are,” emphasized Mr. Hoang Tung, Founder of FoodEdu Academy and F&B expert.

According to Mr. Tung, there are six key factors that contribute to the success of an F&B outlet:

Firstly, the potential customer base and foot traffic in the area.

Secondly, legal considerations, including whether the premises are subject to any disputes and the authority of the lessor.

Thirdly, the size of the premises, as certain F&B concepts require a minimum amount of space.

Fourthly, the frontage or storefront, which should be large enough to provide good visibility from different angles.

Fifthly, the density of similar F&B outlets in the vicinity, as too much competition can dilute the potential customer base.

And lastly, the rental price. A prime location is desirable, but the rent must also be reasonable; otherwise, it’s not worth it,” Mr. Tung asserted.

In reality, high prices and rent increases have made negotiations difficult for many tenants, leading to a recent trend of vacating premises. Most recently, McDonald’s Vietnam, a well-known fast-food chain, announced the closure of its Ben Thanh branch on September 19. This outlet was one of the first and longest-running McDonald’s restaurants in the country.

McDonald’s Ben Thanh was located at 2-2A Tran Hung Dao, Pham Ngu Lao Ward, District 1, Ho Chi Minh City. The reason for the closure was attributed to consumers tightening their spending, but it may also be partly due to the 15-20% increase in rental prices compared to previous years. A real estate broker specializing in the Pham Ngu Lao area estimated the rent for the McDonald’s premises to be around 14,000 – 15,000 USD/year (approximately 350 million VND), with leases signed on an annual basis.