Hundreds of shophouses in the inner and outer areas of Danang city remain deserted though life has returned to normal across Vietnam post-pandemic.
Shophouse properties were once a real estate “phenomenon” in 2015, branded a “cash cow”, while catering to various purposes, from residence to business, or for lease.
However, the sector is witnessing sluggish sales and such properties remain empty across Danang, central Vietnam's business and tourism hub, despite months or years of lease advisements.
At the Kim Long City project in Lien Chieu district, dozens of shophouses at prime locations on Nguyen Sinh Sac and Hoang Thi Loan streets, close to the beach and accessible to the Lien Chieu district administrative center, are unoccupied.
Many shophouses have put up for lease signs for months without any results. At present, only a few units are occupied for real estate transaction offices, flower shops, cafes, among other activities.
Also in Lien Chieu district, on Street No.5, Hoa Khanh industrial park, dozens of shophouses are vacant. Construction of these properties was completed years ago, but they are closed with for lease signs outside.
Similarly, the Hala Jade project in Hai Chau district, near Lotte Mart, one of the biggest commercial centers in Danang, is not crowded regardless of its prime location. Many shophouses in this complex are closed and covered in an overgrowth of trees and grasses, hurting the urban scenery.
According to a survey, in 2019, monthly rents for each shophouse here were VND60 million ($2,570). However, the rate dropped to VND30-40 million, but without attracting any interest.
Le Thanh Thong, a real estate agent in Danang, said investors and landlords place high initial prices to recover their costly investment, but the demand for this model is low at present. Besides, there are other problems, such as proximity to service hubs in the city.
Thong added this sector in Danang may not recover anytime soon due to high leasing fees and their distant locations. In the short-term, the number of customers will be low, and it would take at least two years for the sector to recover.
The Covid-19 pandemic has severely hurt the leasing market, especially among high-end shophouses. The market has even witnessed cut-loss measures.