In the heart of Ho Chi Minh City (HCMC), many rental spaces remain unoccupied. Landlords are still waiting for tenants, while brands are becoming increasingly selective, leaving prime street front real estate forgotten and gathering dust as they await occupants.

Many Prime Street Front Spaces Left Vacant 

According to TBTCVN reporters, along major streets such as Phan Dinh Phung, Hai Ba Trung, Le Loi, Nam Ky Khoi Nghia, and Ly Tu Trong, it is easy to spot numerous vacant rental spaces with "For Lease" signs displayed.

Some real estate agents have noted that despite rental prices decreasing, they remain high relative to the actual profits of businesses, prolonging the stagnation in the market. Additionally, finding a suitable space is challenging, as most landlords prioritize leasing to large brands such as banks, language centres, gyms, or offices. Moreover, previous tenants also struggle to renew their contracts, as rental prices continue to exceed the profitability of their current business models. 

In the past, business owners often chose to rent spaces in central locations and on major streets to both sell products and promote their brand presence. However, given the current situation, maintaining a prime location with high rental costs has become a financial burden. Many businesses have opted to move to suburban areas, smaller alleys, or deep side streets to reduce expenses. Others have even transitioned entirely to online business to ease financial pressures.

Tran Pham Phuong Quyen, Senior Manager of Retail Leasing at Savills Vietnam, shared that although retail spaces in central areas of HCMC may appear vibrant only a few prime locations—often referred to as “golden corners”—are truly suitable for opening stores or promoting brands. Large retailers conduct thorough research on the area and local consumer habits, making them highly selective when choosing a location to ensure business efficiency. 

This situation has led to an ironic paradox: “Brands are tirelessly searching for the perfect location but can’t find one, while landlords struggle to lease out their vacant spaces,” Quyen remarked. 

Retail Property Occupancy in Ho Chi Minh City Remains High 

With rising consumer demand and the growing affluent class, Ho Chi Minh City continues to attract international brands, particularly in the luxury sector. 

According to Savills data, by 2024, the city will have a total of 36 luxury stores, reflecting a 24% year-on-year increase, with the entry of brands such as Vertu, Tudor, and Franck Muller. Additionally, data from Statista projects that Vietnam’s luxury goods market could reach $218 million by 2029, with an average annual growth rate of approximately 13% over the next six years. 

Tran Pham Phuong Quyen also noted that central shopping malls have consistently maintained a 100% occupancy rate for many years, highlighting the ongoing demand for prime retail spaces. 

Some retail podiums have faced difficulties due to rising rental costs, which have exceeded the affordability of many brands, leading to vacant spaces—such as those in the Bitexco building. However, vacant spaces do not necessarily indicate a lack of demand. Many of these unoccupied areas are currently undergoing renovation by landlords to enhance their appeal and attract new brands to the market. 

“Rental prices in central streets have increased by an average of 10% compared to last year. Most leasing transactions are driven by brands expanding their store space and enhancing the shopping experience, as well as new international brands entering Vietnam and launching their first stores. This keeps the demand for prime retail locations consistently high, especially on Dong Khoi and Nguyen Hue streets,” Quyen shared. 

She also noted that from now until the end of the year, new retail space supply is expected to enter the market in prime locations. Rental prices may remain high, prompting brands to be more cautious when considering areas where actual purchasing power and foot traffic are unclear. If landlords fail to adopt flexible leasing strategies, occupancy rates in this segment may decline, potentially leading to an overall downward trend in rental prices. 

As of Q4/2024, the total supply of retail space has increased by 1% quarter-on-quarter (QoQ) and 6% year-on-year (YoY), reaching 1.6 million square meters. The new supply is primarily concentrated in non-central areas, benefiting from larger land availability and urban development. 

By 2027, 12 new real estate projects are expected to enter the market, adding a total of 165,429 square meters of retail space, reflecting an annual growth rate of 3% from 2025 to 2027. In 2025, two major projects—Marina Central Tower and Lancaster Legacy—will be launched in central locations. 

For more insights on the real estate market, visit Savills.