A number of luxury house spaces for rent in the new urban area of Trung Hoa-Nhan Chinh are being abandoned because of fleeing businesses and high rental fees despite economic downturn.
Houses leased out at
hundreds of millions of VND per month
According to a broker, a 300-square metre space there is leased out for several hundreds of millions of VND per month. However, most businesses have moved out after just a few months. The broker said, "The owners do not come here at all unless they're showing a space for rent."
Two years ago, the Trung Hoa-Nhan Chinh urban area was the real estate hub and attracted a lot of trading floors headquarters. Then several services, such as restaurants and cafes followed and were opened here to serve the office workers. However, most of the houses in this neighbourhood are being abandoned.
Hai, a businessman said in 2011 he spent VND500 million (USD24,000) to open a restaurant but only lost money. "I calculated everything very carefully but it still failed. The economy has gone south fast since that year," he said.
Another former business-owner in this area said she had to close her cafe because of dwindling customers. She said, "Two or three companies shut down in just over a month. My brother's trading floor next door was not in good shape either, so when I shut down this cafe, he also shut down his trading floor."
The rent in Trung Hoa-Nhan Chinh urban area was around USD6,000-10,000, even before the economic downturn, not many domestic companies could afford to stay here for long.
On the other hand, owners of these buildings remain relatively unaffected by the recession and often own numerous properties. An owner even said he is keeping his house empty because he still cannot find a tenant. He said, "As my previous contract stated, I leased out this place to a real estate company for three years but they moved out and still owe me rent. I fear that some nameless company will ruin the space somehow so I'd rather lock it up and let it be for now."
Meanwhile, another owner said his space had been ruined when a cafe owner tried to renovate the first floor. If somebody wants to move in and live here, he will have to spend a lot of money to fix the house. "I don't want to lease it out, I don't want to live in it." he said.