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In HCM City, below-ground shops and cafes catch on
More and more cafés, restaurants, and boutiques are opening below street level in the southern metropolis – testimony to the high demand for downtown retail space, according to the market newspaper, Saigon Tiep Thi.
The upscale commercial real estate agency CBRE Vietnam says that in HCMC, retail space in prime downtown locations is nearly fully occupied and demand remains high though rents have been increasing day by day. Therefore, real estate developers naturally think of developing underground space into retail premises.
Squeezing more profit from a bit of land
At CT Plaza (Tan Binh District), beside nine floors above-ground, there are two basement floors with a total area of 1000 square metres. At first, no client wanted to lease the underground premises. Then a foreign food group set up a restaurant that has done very well. After that, other restaurants have jumped on the bandwagon.
Vincom Centre in District 1 has six underground levels. Several are reserved for a 58,000 square meter shopping mall, the first big underground retail centre in Vietnam. It includes restaurants, apparel shops, supermarkets and entertainment areas.
The investors of Zen Plaza (District 1) have decided to convert part of its underground parking lot to use as retail premises. Other investors propose to use the space below some of HCMC’s parks, for example Tao Dan and Le Van Tam Parks, for retail premises, parking lots or shopping malls.
Rentals high
The below-grade retail space is fetching good rents. CT Group says that its basement food court space rents for $20-21 per square metre per month and tenants include some big name brands. At upscale Vincom Centre, rents in the underground mall are from $35 to $230 per square meter per month.
Saigon Tiep Thi reporters who visited Vincom Centre found that the new complex’s underground mall was bustling with shoppers and patrons of restaurants. A café owner said that its underground location is a drawing card.
Vincom Center management says that though the mall has just been opened, it is 90 percent occupied. Clients are all big names, like Nike, Levi’s, Mango, La Senza, Charles & Keith and Highlands Coffee.
Below-grade space costs more to build
The construction of the buildings with underground space is always chancy, says one developer. Investors must spend a lot on geological surveys, and the risk of accidents during construction is appreciably greater.
Phan Phung Sanh, Deputy Chairman of the HCM City Construction Association, says the total expense of build and operating underground floors is four to five times higher than for floors above-ground.
However, real estate developers are undeterred. According to the HCM City Construction Department, many projects with basement floors have been proposed, because investors in the ‘golden land areas’ aim to increase rentable space. The director of a real estate company offers another reason: Though the number of floors on the earth’s surface is limited by government agencies and taxed proportionately, no tax is assessed on the underground area.
vietnamnet, SGTT
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