2020 a year of challenges for commercial real estate

Troy Griffiths, deputy managing director of Savills Vietnam, said the pandemic has had a direct impact on the shophouse market, with difficulties starting to arise in February when the first Covid-19 cases were confirmed, and social distancing measures imposed in April and July dealing a further blow to businesses.Savills data shows that in the Phu My Hung urban area in District 7, Ho Chi Minh City, vacancy of commercial space has climbed to 40 percent compared to 5 percent before the pandemic.Around 11,000 South Koreans live here, but the closed borders mean many have been unable to return to Vietnam and businesses here have seen revenues plummet.In downtown District 1, many landlords reduced rents by 25-40 percent, even in prime areas, but yet realtors said the number of vacancy listings increased through 2020 since business were uncertain.In Hanoi, the third quarter saw downtown shophouse rents falling by 20-25 percent from before the pandemic as many coffee shops, restaurants and fashion stores struggled with plummeting sales.Nguyen Hong Van, director for the Hanoi market at real estate consultancy Jones Lang LaSalle (JLL), said businesses in most sectors have refrained from expanding.Vietnam’s retail and services revenues grew at 2.6 percent in 2020 compared… Read full this story

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