The banners, inviting clients to rent offices, have been hung at high rise buildings, both new and old, on Nguyen Dinh Chieu and Cong Hoa streets in HCM City for the last several months. When the city lights up, many new office buildings get quiet and dark. On real estate trading floors’ websites, a lot of ad pieces for leasing offices have appeared for the last many weeks.
T’s pho (noodle soup) shop is located on the bottom floor of a high rise office building that faces Nguyen Dinh Chieu Street in HCM City. No one could imagine before that the owner of a pho soup, a popular food of Vietnamese, can afford the retail premises on such an advantageous position.
T said that he once worked as a security guard for the building for one year. As he heard that the building’s owner found it very difficult to seek clients who rent the offices of the building, he plucked up courage to ask for the leasing of the area on the bottom floor for his pho shop.
T hopes that the shop would bring him and his family good income, because the shop is located on a good position which can attract visitors.
T is really very lucky when finding out a good retail premise to rent. However, the owner of the building is not so lucky, because he finished the construction of the building, capitalized at tens of billions of dong at the time, when the office leasing market has been gloomy.
The investor said that he initially targeted high grade clients, who could be bank branches or securities companies. However, in the economic difficulties, banks and the companies do not intend to expand their networks, and the offices have been left idle.
He has revealed that though he has two times offered discounts, the offices have not been fully occupied.
Meanwhile, the owner of a high rise building on Cong Hoa Street in Tan Binh district complained that he has lost one client. “Though I offered the rental decreases for six months or one year, the company still decided to leave,” he said.
He said that the company is a small company which has to save money by laying off workers and cutting down expenses.
Rental reductions and preferences cannot retain clients
While the owners of newly established office buildings feel anxious because they cannot find tenants, the owners of operational buildings have been on tenterhooks because a lot of clients have decided not to extend leasing contracts.
The owner of a B-grade office building located near HCM City’s center said that in mid 2010, when the building was put in operation, the building occupancy rate reached 70 percent. However, after the 2011 Tet, the number of clients dropped by 15 percent and has decreased by another 10 percent recently.
Meanwhile, the existing clients have asked for renegotiating for the leasing fee, because there are a lot of attractive offers to them.
Vy, an administration officer of a foreign company, said that it is very easy to find offices to rent these days. “Some real estate developers even accept to exempt the rentals for a certain period in order to attract new clients,” she said.
The foreign company once rent an office in district 3 at 34 dollars per square meter per month. However, the boss of the company has decided to leave for another A-grade office building in the central area with the rental of 30 dollars per square meter only and other preferences.
Source: SGTT
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