HCM City's central real estate becomes upmarket

Retail space in the central areas of HCM City has become the target of many famous fashion brands, restaurants, cafes, banks and schools.

Many of these organis-ations are prepared to pay high premiums to rent space on main streets such as Dong Khoi and Le Loi but many of them are struggling to find suitable space due to a lack of availability.

Tran Huyen Chieu Tran, Director of Gau Bong Company, said her company had failed to find any space in the city centre after searching for three months.

Last year, her company paid US$3,000 per month to hire a property on Nguyen Hue Street but it was demolished for development so they were forced to look for another premises, she added.

Tran said that doing business in a good location would bring higher profits but it was difficult to find a good location because they were all full.

Another shopowner on Dong Khoi Street paid $4,000 per month to rent a 50sq.m space last year. This year, that figure increased by $500 per month for a similar space on the same street.

These two examples are clear indicators that demand for retail space in the centre of HCM City is on increase and likely to continue to rise, despite escalating prices.

In central streets such as Dong Khoi, Le Loi and other areas surrounding the HCM City Theatre, property is currently $150-200 per square metre.

And the situation is the same on neighbouring streets such as Mac Thi Buoi, Nguyen Thiep and Ngo Duc Ke. Sort after corner properties on these streets can even be 20-50 per cent more expensive but despite the price, they are always occupied.

According to reports by market research companies, the occupation rate of retail space in the second quarter of this year increased by 2 per cent over the first quarter, reaching 98 per cent.

However, in the near future, HCM City's retail property market likely to cool as supply begins to catch up with demand.

"It is estimated that by 2013, HCM City will have 1.3 million square metres of retail space," CB Richard Ellis said.

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