Numerous businesses have been compelled to vacate retail premises in Hanoi due to reduced consumer spending and high rental costs.

A commercial center situated on Truong Chinh Street in Thanh Xuan District is the latest example, where extensive commercial spaces spanning tens of thousands of square meters have remained unoccupied.

As per Tien, a 61-year-old commercial space owner there, despite reducing the monthly rent for a 200-square-meter area from VND150 million (US$6,335) per month last year to VND100 million ($4,220) for over two months now, he has been unable to find a tenant.

“As a result of economic challenges, many tenants have relocated from central areas to the suburbs in order to minimize costs,” Tien said. 

“Several companies have downsized their workforce and scaled back their operations.

“Previously, our commercial center was home to numerous banks and dozens of real estate businesses, but now only four bank branches remain.”

A similar predicament can be observed in another commercial center located on Tay Son Street in Dong Da District. 

Vast commercial areas covering tens of thousands of square meters are now deserted, dimly lit, and securely locked.

According to shop owners who still operate within this center, a few months ago, there was a consistent wave of tenants vacating their premises due to declining business.

“The tenants in this center represent various industries, but since the beginning of this year, business has suffered a downturn while the rental rates remain high,” said Lien Huong, the 41-year-old owner of a Japanese restaurant. 

“Consequently, the majority of them are unable to sustain their operations and are forced to return their premises to the landlords.”

Many commercial centers situated in Cau Giay District are also experiencing a scarcity of tenants.

The proprietor of a beauty spa called G.S. located on Cau Giay Street in Cau Giay District voiced their concerns, stating, “The rent is excessively high, considering it is less than 60 square meters, yet priced at VND30 million [$1,267] per month, excluding additional costs for electricity, water, building services, and taxes.

“As the number of customers has dwindled, I am making arrangements to vacate the premises and move to Le Quang Dao Street in Nam Tu Liem District.”

Adjacent to the G.S. beauty spa, the M.L. furniture showroom has also ceased operations. 

The owner of the showroom stated that the high rental compelled them to relocate their operation to Phung Khoang Street in Nam Tu Liem District, alleviating the burden of the costly lease.

Nguyen Quoc Khanh, vice-president of the Vietnam Association of Realtors, agreed that the primary cause behind the vacancy of numerous retail spaces in Hanoi is the lack of tenants resulting from low consumer demand.

“Currently, numerous businesses are forced to prioritize their survival, leading them to downsize their operations and relocate from central districts in order to reduce leasing expenses,” Khanh said.

According to Khanh, the present circumstances are exceptionally challenging, thus both retail space investors and businesses and individuals involved in property dealings should offer substantial discounts to accommodate tenants.

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