A man passes by a property which is displayed for rent on Nguyen Dinh Chieu Street in HCM City's District 1.
Surge in vacant properties
The number of vacant street-front properties in downtown HCM City is unprecedented.
According to a survey conducted by Tien Phong Newspaper, numerous properties along Le Van Sy Street are now displayed for rent. Similarly, Nguyen Trai Street, once a bustling hub for fashion retailers, has dozens of unoccupied spaces. Even prime locations in District 1, such as Le Loi, Dong Khoi, and Nguyen Hue, which were once considered the city's top shopping destinations, are now struggling to attract tenants.
Data from Batdongsan.com reveals that in February 2025, rental prices in central HCM City continued to decline compared to the same period last year, with District 1 down from VND150 million to VND130 million per month, District 3 from VND140 million to VND130 million per month, and the Go Vap District from VND60 million to VND50 million per month.
Interest in renting street-front properties has also dropped sharply, with search volume in January 2025 decreasing by nearly 50 percent year-over-year, particularly in District 1. Since March 2024, rental demand across various districts in the city has continued to decline.
Recent data from Nha Tot paints a similar picture. Rental prices dropped continuously from October 2024 to January 2025, with reductions of 20-32 percent in the first month of the year alone.
Binh Thanh District saw the steepest decline, with rents dropping 32 percent from VND39.5 million/month in October 2024 to VND26.8 million/month in January 2025. Binh Tan and District 7 recorded rental decreases of 7-18 percent. District 1 rentals fell to VND61.9 million/month, down 18 percent from December 2024.
Calls for rental price adjustments
According to Dinh Minh Tuan, Director of Batdongsan.com Southern Region, the rental market could recover quickly if landlords agree to reduce rental prices by 10-15 percent. He believes demand remains strong but is hindered by high rental costs. Lowering prices to more reasonable levels could help increase occupancy rates.
Experts suggest adopting flexible leasing models, combining lower base rents with profit-sharing arrangements. This would reduce fixed costs for tenants while easing financial pressure. Additionally, lowering deposit requirements could attract more renters.
A representative from Nha Tot pointed out that the rental market has been hit hard by a wave of lease terminations throughout 2024. Both supply and demand for rental properties have cooled, with listings and rental inquiries dropping 10-30 percent by late 2024 and further declining 50-65 percent in January 2025.
According to Hoang Kim Hoai, Director of Phuc Dien Land, street-front rentals are losing appeal due to high rental costs, strict payment terms, and significant upfront deposits (typically 6-12 months' rent in advance). In contrast, shopping malls offer more flexible leasing options, including monthly payments and revenue-sharing models, making them more attractive to F&B and fashion businesses.
Moreover, the rise of e-commerce has significantly reduced demand for physical stores. Many businesses now prefer investing in digital marketing through Facebook, Instagram, TikTok, and Google Ads over renting costly store-fronts. As a result, many retailers that once operated in central areas are now shifting to suburban locations with lower rental costs.
