HCMC's Retail Rentals: A Global Perspective

According to the 'Main Streets Across the World 2024' report by property consultancy Cushman & Wakefield, Dong Khoi rents in Ho Chi Minh City (HCMC) have fallen 6% to $368 per square feet per year ($330 per square meter per month), pushing the city down a place from 2023. Despite this decline, HCMC's retail rentals remain higher than in cities like Barcelona, Dublin, Amsterdam, and Kuala Lumpur.

Global Leaders in Retail Rentals

Italy's Milan tops the list with a lease rate of $2,047, replacing last year's leader, New York in the U.S. London climbed up one place to third. In Asia-Pacific, Hanoi's Trang Tien Street ranks 18th with a rent of $300, leading Guangzhou, New Delhi, and Bangkok.

Local Economic Challenges and Retail Trends

Despite high retail rents in prime locations in HCMC and Hanoi, some landlords have reduced them to retain tenants amid persisting economic challenges. However, some prime retail properties have lost tenants in recent months. Starbucks recently vacated its prime location at 13 Han Thuyen Street in HCMC's District 1, where rents cost up to $30,000 per month. Restaurant YEN Sushi has also shut down its Dong Khoi outlet.

Nguyen Quoc Anh, deputy CEO of property listing platform Batdongsan, noted that the demand for street-front retail space is declining as e-commerce grows. Luxury brands are becoming increasingly selective in leasing retail space, with fashion brands in particular retreating from premium spots.

Tran Pham Phuong Quyen, senior manager of retail leasing services at Savills HCMC, highlighted that brands look for prime locations on bustling central streets, large areas, and wide frontages. They also want to be surrounded by other luxury brands, which is why many cluster along a few main streets in District 1.