A deserted corner of Grand Plaza on Ha Noi's Tran Duy Hung Street. Commercial centres were not attractive due to high rents, resulting in high vacancy rates. — VNA/VNS File Photo

Nguyen Hong Hoa in Ba Dinh District said she had rented a booth at the Grand Plaza, a trading centre in Tran Duy Hung, Ha Noi, for US$2,000 a month in 2011 to sell clothes.

However, after only four months of doing business, she had lost more than VND100 million ($4,700) because of too few customers and had to stop trading and cut her losses.

She wasn't the only one. Grand Plaza managers IDJ Asset Management JSC increased service charges to VND1 million per square metre six months ago to keep the centre afloat and then closed it down for "restructuring".

An IDJ Asset representative said no date had been set to re-open the centre.

Meanwhile, the Hang Da Trading Centre closed "to restructure" after only two years of operation. Many shops have closed or ceded their businesses to others leaving many vacancies. A few shops on the first floor still operate while the upgrade continues.

Tran Thanh Huong, a shopkeeper in the Hang Da Trading Centre, had to close because sales were sluggish while she had to pay VND20 million per month for rent and service and marketing charges plus tax.

Other trading centres, such as Mipec Tower, in Dong Da District, and Parkson, at Keangnam Landmark in Tu Liem District, have fared little better.

Property consultants CB Richard Ellis Viet Nam Company (CBRE) said the reopening of Trang Tien Plaza, which provide 14,000 square metres m in modern retail space, had pushed up the average rental in central business district (CBD) shopping centres by 3 per cent over the last quarter.

However, this was countered by the "restructuring" of other retail centres, including Mipec, which had weighed on the average rent in the CBD. Meanwhile, non-CBD retail rents had declined 2 per cent quarter-on-quarter and 11 per cent year-on-year.

Rents in other retail formats, including department stores and retail lobbies, stabilised quarter-on-quarter. Average vacancies went up by approximately 6 percentage points over the same period last year.

Still, vacancies increased in both CBD and non-CBD projects, especially in the CBD due to Hang Da Galleria's soft performance and a large number of tenants' relocating. More stores closed in shopping centres (172) than opened (121) in the first quarter this year.

The failure of such high-end projects as Grand Plaza and Hang Da Galleria was due to stagnant sales and the increase in prices of goods, including tax and intermediary fees that equalled 50 per cent of original prices.

Another 422,200 square metres of retail space was expected to enter the market from now till the end of 2013, putting more pressure on large retail centres. — VNS