Retailers desert empty shopping centres

Monday, Jul 15, 2013 09:03

A deserted corner of a shopping centre in Ha Noi. Shopkeepers are leaving shopping malls across the country because rents are too high and there are not enough customers to generate sufficient revenue. — VNA/VNS File Photo
HCM CITY (Biz Hub)— Shopkeepers are turning away from shopping malls across the country because their rents are too high and there are not enough customers to generate sufficient revenues.

A Tuoi Tre (Youth) newspaper report says that at the Lotte building in HCM City's District 11, nearly ten kiosks are unoccupied. In children's toys section, a 30 sq.m area is empty.

At least two restaurants have shut down because the owners were unable to pay the rent, a security guard told the newspaper.

Ngoc Thu, a saleswoman at a shop selling electrical goods in the building, said there are two types of lease agreements at Lotte, both of which are expensive. Tenants have to pay a minimum of VND20 million as rent per month for a small shop or pay 20 per cent of their sales.

At the popular shopping centre Saigon Square on Nam Ky Khoi Nghia Street in District 1, many tenants are looking to sublease their shops.

Trang, the owner of a shop selling fashion garments at the shopping centre, said: "Most visitors coming to the centre these days seem interested in window shopping. The decline in sales over the past two years has made us miserable."

Lac, another shop owner at the Saigon Square Centre, said she was seeking to sell or sublease her shop because business was stagnant and she was not making enough money to pay her rent.

Similarly, many shops on the second floor of the Pico Plaza Building on Cong Hoa Street in Tan Binh District are unoccupied. Huong Thuy, the owner of a fashion shop, said very few customers visited the plaza during weekdays, and the weekend inflow was not high enough to make a difference.

"Our sales turnover is less than VND1 million per day and we have to pay rents of tens of millions of dong per month, plus other costs," said Thuy.

Lower rents don't help

The manager of a shopping centre in Tan Binh District said rents have been lowered three times in the past one year because many tenants have returned their shops to the owners.

He said the tenants were looking for space outside the centre to cut costs.

He also said that three shopping malls, TS Plaza in District 7, CMC Plaza and UPO in Tan Binh District have been converted into restaurants.

According to a report from real estate services provider CBRE, many retailers have left the market in the second quarter, leaving many shops vacant at business centres and shopping malls in the inner and surburban districts of HCM City.

It said retailers leaving the inner districts of HCM City include Home One (returning 1,200sq.m); Gloria Jean's (100 sq.m); Nike (150sq.m); and Banana Leaf (100 sq.m).

The company said high rents and low number of visitors were major problems facing the retail sector.

Tuoi Tre also cited a report from another real estate services provider, Savill, which said that total retail turnover in the first six months of 2013 rose by just 8.1 per cent compared with the same period last year, lower than the growth rate of 8.9 per cent in the first half of 2012 and 8.8 per cent of the first six months of 2011. —VNS

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