Rental Market in Ho Chi Minh City: A Recovery After a Long Slump

The rental market in Ho Chi Minh City is closing 2024 with strong signs of recovery, following a period of stagnation due to the pandemic and economic difficulties. Although finding suitable rental spaces remains a challenge, the demand for prime locations has significantly increased, signaling a positive outlook for the market.

New Shops Making a Comeback

Along major streets in the city center, such as Hai Ba Trung, Dong Khoi, and Le Lai, there is a noticeable change. The rental signs that had dominated these streets for a long time are gradually disappearing, replaced by new shops covering a wide range of businesses, from fashion and beauty to food and entertainment. This indicates the rapid recovery of commercial activities in Ho Chi Minh City.

Notably, major brands like Katinat, a coffee and milk tea chain, have quickly opened new stores in the city center, further driving the demand for rental space.

Intense Competition in the Market

According to Vu Hoang, a person currently looking for rental space in Thu Duc, demand is high, especially for properties in prime locations. These spaces usually come with a high rental price, around 35-40 million VND per month, and if one is not quick enough, the opportunity can be lost. Vu Hoang's experience reflects the intense competition in the market today.

Tuấn Anh, an experienced real estate agent in areas like Phu Nhuan, Binh Thanh, and Thu Duc, also mentions that most clients are looking for buildings with one ground floor and two to four upper floors, with rents under 50 million VND per month, to operate spas, office spaces, or to invest in renovation and rent out as serviced apartments.

Active Participation of Large Brands

Nguyen Van Thieu, an industry expert, points out that the recovery of the market is mainly driven by the active participation of large brands. These brands are willing to pay high rents to secure prime rental spaces for their expansion strategies and market share acquisition. Retail chains in industries like food and beverage and fashion are aggressively seeking rental spaces in city center locations, willing to pay 80-100 million VND per month.

However, Thieu also raises the question of the sustainability of these expansion strategies, as some chains are expanding rapidly without a clear understanding of the long-term effectiveness.

Retail Space Demand Expands to Shopping Centers

The recovery of the rental market is not limited to the streets of the city center but is also spreading to shopping malls. According to Savills Vietnam, the occupancy rate of modern retail projects reached 94% in Q3 2024, an increase of 0.5 percentage points compared to the previous quarter. Notably, key shopping centers like Hùng Vương Plaza, AEON Mall, and Vạn Hạnh Mall have maintained a 100% occupancy rate. This indicates strong demand for retail spaces in these commercial hubs.

Trần Phạm Phương Quyên, Senior Manager at Savills Ho Chi Minh City, also noted that many international brands are eyeing the Ho Chi Minh City market, though there are still barriers such as the scarcity of space in the city center and complex legal procedures. However, with a young population, rising living standards, and high consumer demand, Vietnam remains a highly promising market for international brands.

Growth Prospects for the Future

It is forecasted that by 2027, Ho Chi Minh City will add over 163,100 square meters of retail space from 12 new projects, with 55% of this space located in the outskirts. Rental prices in the city center are expected to remain stable in 2025, while the outskirts may face challenges due to the heavy reliance on essential goods sectors.

With the current positive signals, the rental market in Ho Chi Minh City is expected to continue growing in 2025 and beyond.