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No vacancies at HCM City shopping malls
A lot of shopping malls have been inaugurated in HCM City, but it is not easy to find a retail space. Even when someone can find a location, it will not be easy to do business there.
Hien now trades fabric and embroidered hand-made clothes at Ben Thanh Market in HCM City. He wants a shopping mall pavilion to expand his business, but he cannot find a suitable space, even after searching for the last two months. District 1 malls are all fully occupied and he does not want to set up shop at shopping malls in Districts 5 or 7, because he fears low sales rates.
Luxury malls: You’re not always welcome
The first questions the District 1 malls asked Hien included which products he planned to sell, how expensive they are and if they are famous brands. Only when clients meet shopping mall requirements are they told about the rent.
According to Zen Plaza in District 1 in HCM City, malls set very strict requirements because they need to ensure their luxury image and the business capability of clients. Retail premises now rent for $50-60 per square metre/month, so it would be unprofitable to sell products worth 30-40,000 dong.
As a result, luxury shopping malls only sell famous brands like Lancôme, Valentino, Levi’s, or Adidas. Hien’s products cannot find a space beside them.
According to Tham Tuck Choy, General Director of Parkson Vietnam, due to high demand to expand business, it is very difficult to lease street-front shops and there are no parking lots. Therefore, retailers tend to set up shops in malls.
Exorbitant rents
District 1 malls rent spaces for around $55-100 square metre/month. If counting the service fee of $5-15 per square metre, retailers will have to pay $70-180 per month. At Zen Plaza, rent is hovering around $55-60 per square metre, while the service fee is $6 per square metre. Parkson has higher rents at $60-100 per month and Vincom spaces are $60-120. Advantageous spaces rent at $200.
Nguyen Minh Tuan, Director of DAN Group, which specializes in trading high-grade jewelry and now has a pavilion at Vincom, remarked that one should not expect to profit immediately. With the high rent, retailers will only profit after a long time.
Even when a good retail premises is located, this still does not mean that business will go smoothly. Located on a very beautiful position at 39 Le Duan Road in District 1 in HCM City, Kumho Asiana Plaza still cannot bring profits to its retailers who sell luxury products with well-known brands like Levi’s, Playboy, CaoDong Design and D.A.N jewelry.
After six months of operation, the only receives a few visitors daily. At first, the shopping mall had 30 retailers, but now it has only several.
L, the Director of a cosmetics pavilion, admitted that the mall has been quiet since Tet and that he cannot sell any products on some days.
As business has been bad, many retailers want to leave because sales cannot offset the rent. They have been told that they can terminate their lease, but they will not get back their deposits.
vietnamnet, Tuoi tre
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