The bad luck for the Asian office market is that the COVID-19 epidemic struck amid market weakness and rental prices going down.
Current situation of real estate for rent
The bad luck for the Asian office market is that the COVID-19 epidemic struck amid market weakness and rental prices going down.
Experts say that the COVID-19 epidemic is having a great impact on real estate leasing activities from apartments, offices, commercial centers to restaurants, business shops …
At the end of 2019, JLL Company determined that the price of apartments in Ho Chi Minh City was the highest in the decade.
Specifically, rents increased 7.4% year-on-year and up 1.1% quarter-on-quarter, reaching a record high of 29.1 USD / m2.
The reason is indicated by the strong demand for the office market in Ho Chi Minh City, while the new supply is limited, so landlords often recommend high asking rents.
However, at this time, in addition to the stable rental area from before, newly launched projects are facing difficulties due to a significant decrease in demand.
Talking about the impact of the disease on the rental real estate market, Mr. Peter Hoang – Founder at Rentapartment Agency – said the upcoming rent may change based on market conditions.
The bad luck for the Asian office market is that the COVID-19 epidemic struck amid market weakness and rental prices going down. Sharing difficulties with tenants affected by the disease, many “landowners” in Hong Kong (China) have aggressively cut 30-50% of commercial rent.
Although not as hard as some office rental markets in Asia, the “whirlwind” of COVID-19 also caused members of the rental apartment market in Vietnam to review themselves and plan. improvised, this expert recommends.
Mr. Peter Hoang – Founder at Rentapartment Agency commented that the COVID-19 epidemic is still unpredictable, so it is still early to draw conclusions about the short-term and medium-term impact of the disease on the office rental market.
What businesses that provide rental services have to do at this point ?
However, according to him, businesses need to consider plans to require employees to work at home or other spaces. The current situation may affect the dynamics of some industries, leading to the delay in office conversion and expansion plans.
Not only the segment of apartments for rent in district 4 in some places like Ho Chi Minh City has high rents, but so is the trading floor. Therefore, developers leasing commercial space should also consider short-term support methods for tenants.
In Ho Chi Minh City, experts have warned that the local house price growth rate has increased much faster than the economic growth. This makes business premises pushed up, increasing costs for tenants. The endurance of businessmen becomes more and more fragile and easily “shocked” by the impact of the economy.
Facing with the situation that many tenants are having difficulties because of sluggish business in the middle of the epidemic season, some investors have moved to reduce the price of support ground. According to the statistics of a retail space leasing unit in Ho Chi Minh City, the number of visitors to shopping centers and supermarkets in the COVID-19 outbreak has decreased by 40-50% compared to the time when epidemic outbreaks occurred. outbreak.
Along with that, the number of customers in the food and drink shops decreased by 20-30% on weekdays; even 50% off on weekends. This makes sales at shopping centers decrease by 40%.
In the context of sluggish business, the burden of increasing rental costs has become a major challenge, affecting the financial situation as well as the existence of many tenants. At this time, the support of the investor is particularly important.
