Dong Khoi Street, Ho Chi Minh City: One of the Streets with the Highest Rent in the World

Dong Khoi Street, located in District 1, Ho Chi Minh City, is one of the most bustling and expensive streets in Vietnam. According to a report by Cushman & Wakefield, the rent on Dong Khoi Street is currently 330 USD/m2/month (approximately 8 million VND/m2/month), ranking 14th globally in terms of highest rent. This achievement highlights Dong Khoi Street's important position on the international business map.

High Rent and Investment Potential from Luxury Brands

Due to the high rent, Dong Khoi Street has attracted not only local businesses but also many luxury brands and international hotel chains. Famous brands like Chanel, Gucci, Louis Vuitton, and Rolex have chosen Dong Khoi Street as their base in the Vietnamese market. This not only helps with brand positioning but also attracts high-end consumers. The street's appeal is also attributed to its prime location, as it is close to many important landmarks such as luxury hotels and famous tourist attractions, creating an ideal business environment.

In addition, the rise in rent is also due to market demand. Many international brands have set up shops here to enhance their brand image and effectively reach high-end customers. Given the street’s prime location in the heart of the city, it has become a highly sought-after area for businesses.

Post-Pandemic Rent Increase and Exchange Rate Fluctuations

According to the report, the rent on Dong Khoi Street has increased by 32% compared to the pre-pandemic period, but has decreased by 6% compared to the same period last year. This change is mainly due to fluctuations in the exchange rate between the Vietnamese dong and the USD. Nevertheless, the rent on Dong Khoi Street remains high globally, reflecting the area's strong commercial potential and the confidence businesses have in the market.

Surveys from real estate rental websites show that the rent on Dong Khoi Street typically ranges from several hundred million VND per month, depending on the location and size of the space. For example, a corner shop with two street fronts and an area of 236m2 can be rented for 550 million VND/month. Another corner shop with an area of 250m2 can be rented for 400 million VND/month. Generally, the rent for spaces in this area ranges from 300 million VND to 600 million VND per month, depending on the location.

Retail Market Development and Supply Shortage

In recent years, the commercial real estate market in the central area of Ho Chi Minh City, especially on Dong Khoi Street, has experienced a supply shortage. Since the pandemic, many businesses have paused their expansion plans, and real estate investors have temporarily held back some development projects. However, since 2023, the commercial real estate market has gradually recovered, driving up rent prices.

According to statistics from CBRE, since 1996, the Vietnamese retail market has seen an average of 97,000m2 of retail space added each year. However, over the past five years, the supply of retail space has slowed down, especially in core city areas, which has further driven up rent prices. Currently, the demand for high-quality commercial properties remains strong, which keeps rent for prime locations like Dong Khoi Street high.

Strong Growth in F&B and Fashion Brands

According to data from CBRE, in the past three years, the food and beverage (F&B) sector has accounted for 35% of retail lease transactions. This shows the rapid growth of the F&B sector in Vietnam. International brands such as Starbucks and McDonald's have expanded their business here, choosing central areas like Dong Khoi Street for their locations, attracting a stable customer base.

At the same time, the fashion and accessories industry has also shown strong growth, accounting for 33% of lease transactions. International fashion brands like Zara, H&M, and Uniqlo have already set up flagship stores on Dong Khoi Street, taking advantage of its prime location. In addition, the lifestyle industry is growing rapidly, with brands increasingly gaining popularity, and their store sizes are expanding, some even reaching up to 1,000m2.

Future Outlook: Real Estate Investment and Business Opportunities

Looking to the future, Ho Chi Minh City's commercial real estate market, particularly in areas like Dong Khoi Street, still holds great potential. As the economy recovers from the pandemic and consumer demand rises, more international brands are expected to further expand their presence in Vietnam. For real estate investors, Dong Khoi Street remains a high-return commercial property investment option, as well as a prime location for luxury brands to establish their presence.

As domestic and international consumers continue to increase their demand for luxury goods, fashion, and high-end lifestyle products, these brands will continue to expand in prime areas like Dong Khoi Street. The growing demand in these sectors will further push up rent prices and attract more foreign investment.

In summary, Dong Khoi Street is not only the commercial heart of Ho Chi Minh City but has also become an important part of the global high-end market. The rent prices reflect the area's strong economic vitality and future investment potential. As the economy continues to develop, Dong Khoi Street will remain one of the focal points in Vietnam’s commercial real estate market.