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Landlords offer rent relief to cushion blow of COVID-19 on shops, restaurants

Tenants across Vietnam are facing tough market conditions due to the heavy impact of the widely-spreading novel coronavirus disease (COVID-19), so some landlords are offering rent relief to help ease the pressure.

According to global real estate services firm JLL, office rental rates in Ho Chi Minh City hit a decade high at the end of 2019, growing 7.4 percent year on year to 29.1 USD per square metre as a result of surging demand and a shortage of new supply.

However, aside from properties already rented out, new properties are facing difficulties at present when demand plunged remarkably.

A retail property service provider in the city reported that the number of visitors to  local supermarkets and shopping malls have dropped by 40 - 50 percent after the outbreak was reported.

Restaurants have suffered a similar setback with guests declining 20 – 30 percent during weekdays and up to 50 percent at weekends.

Bui Nguyen Huyen Trang, Head of Market at JLL Vietnam said companies may consider letting their employees work from home or other spaces amid the epidemic, so it would affect the dynamic of some sectors, leading to postponements of office relocations or expansions.

Due to the unpredictable nature of the COVID-19 outbreak, it is still early to say anything about the short-term and middle-term impacts on the office space segment, she said.

But looking at the current situation, landlords cannot just stand by and watch. Pham Thai Binh, Director-General of Hung Thinh Retail – the investor of Moonlight Plaza, Saigon Mia (HCM City), and Vung Tau Melody (Ba Ria-Vung Tau) – said his company has offered rent cuts, ranging from 20 – 40 percent, to tenants depending on each case.

The move is designed to help them maintain their businesses at this difficult time, Binh said.