The Shift to Online Shopping Impacts Hanoi's Shophouses

Thu Phuong, a fashion retailer in Hanoi, recently vacated her 70-square-meter store in Cau Giay District, marking the closure of her third outlet this year. The decline in sales has made it impossible for her to continue paying rent, pushing her to seek a new location focused on online sales.

Downtown Streets Turn Quiet

Once bustling with fashion stores and restaurants, Hanoi's downtown streets now face an unusual quietness. Over 40 stores on Kim Ma Street, known for its vibrant retail scene, have closed their doors. Nearby Nguyen Thai Hoc Street tells a similar story, with a noticeable increase in vacant shophouses.

Landlords Struggle to Find Tenants

Duc Huy, a property broker, notes a 15-20% rise in available shophouses compared to last year. A five-floor house on Kim Ma Street has remained vacant since August, despite a 10% rent reduction. Landlords, who once could demand high rents, now find it challenging to attract tenants.

Changing Consumer Preferences

Nguyen Chi Thanh, vice chairman of the Vietnam Association of Realtors, highlights the shift in consumer behavior towards malls and online shopping. Businesses are now investing more in online marketing rather than prime physical locations. Analysts also point out the inconvenience of limited parking spaces in shophouses compared to malls.

Declining Profitability of Shophouse Rentals

Dinh Minh Tuan, business director at Batdongsan, mentions the declining profitability of shophouse rentals, with landlords expecting an average profit margin of around 3% a year. A survey by VnExpress indicates shophouses are the least attractive investment this year, a trend unlikely to change even with economic recovery.