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Many areas in the central region of Saigon have to be closed and returned spaces due to the sluggish business of Covid-19

Closing a series of exchange floors

In past years, the time after the Lunar New Year was a busy time for real estateenterprises, with many sales on offer.But this year, the market is quiet, real estate companies have cancelledall plans to launch, introduce and promote projects due to fears overCOVID-19.

According to a survey of some consulting units, the real estate market in both the North and the South showed a slowdown due to the impact of the Covid-19 epidemic. According to the online research of Batdongsan.com.vn,the interestlevelnationwidein February 2020 decreased by 14% over the same period last year.In particular, Ho Chi Minh City recorded a demandin searchingreal estateto buy was down nearly 24%.This caused a series of real estate trading floors to closetemporarily.

Mr. Nguyen Van Dinh, Vice Chairman of Vietnam Real Estate Brokers Association, said that a series of real estate brokers are in a difficult situation compounded by the impact of the Covid-19 epidemic. Specifically, out of about 1,000 businesses operating in the brokerage sector, up to one third of real estate trading floors have to close because investors do not open products. Along with that, about 500 exchanges had to temporarily suspend operations. These are floors that still have stock to sell because there are still sales contracts signed with the investor. According to Mr. Dinh, this is the time when the market is the most tragic in recent decades. Usually in the first quarter of the year the number of products offered to the market will not be as high as the last quarter of the year. However, up to now there is no product to offer right after the Lunar New Year as per the current situation of some exchanges.

Typically, VT Real Broker Companyhad400 sales employeesin the golden period of the beginning of 2019, now ithas dismissed them all. According to company leaders, because there is no project onoffer, there is no job for a company, even it is a possibility of spreading the disease,the final solution is to let employees stay, when the disease is controlled, it will recruit employees and findsourcing again.

Similarly, G Real Company has decided to cut its staff from 100 sales staff to about 10 to operate, when the epidemicis controlledand the marketrecovers, it will recruitagain.OrCountry Holdings Company has closed, stopped all operations.All remaining money in the account has been divided betweenshareholders.

The Covid-19 epidemic is also breaking many plans of major real estate investors. Most of the big real estate enterprises in Ho Chi Minh City who plan to launch products this year are also in a state of "no action". Some large companies "hold their breath" by offering activities for the next phase of the old project or buying for selling. For example, Tran Anh Group, a large real estate group in Long An, which is the owner of a series of projects and manages 12 real estate trading floors, closed four floors because there were no customers or sales.

Space for rent is flat

According to experts, not only in the field of real estate brokerage and service are affected by Covid-19, the rental real estate marketis also seriously affected, especially the situation of rental space in the podium of high-rise buildings and many street houses for rent are returned by tenants.

A recent survey bySavills shows that the revenue of some restaurants in February has decreased by 50% compared to the previous months. Many tenants of restaurantshave to decide to stop the business and pay the groundafter considering the revenue and operating costs.Meanwhile, some tenants maintainbusiness to keep ground orsuspend operations or negotiate rental discounts.

The rentaltownhouses in thefamous food streets in Ho Chi Minh City such as Phan Xich Long (PhuNhuan district), Ho Tung Mau and Ngo Duc Ke (District 1) have difficulty findingtenants for renting full houses, while rental contracts last up to 10 years.

Similarly, in Hanoi,shop transfer signs, store rentalsin recent days are not uncommon in the central streets of the capital city.The streets in the old town such as: Hang Ngang, Hang Dao and Hang Duong were dubbed the "diamond land" of Hanoi with the rent ranging from 2 to 2.5 million dong per month. However, due to the negative impact of the Covid-19 epidemic, thebusiness was always flat, leading to the phenomenon of mass space return.

In order to attract tenants, experts from Savills recommend that landlords need to reduce rents from 10% to 20% compared to the end of 2019 or rent flexibility under tenant areadesired by customs, instead of the whole houses. For townhousesthat are being rented, many landlords also negotiate to help customers with rental price.For example, some landlords accept at least a month's free rent for restaurant tenants or a 30% to 50% reduction in short-term rent for the convenience store.

In addition, under the negative impact of the Covid-19 epidemic, Savills experts predict that modern retail projects would not increase rents, and investors would take action to support tenants to maintain business operations as well as ensure the occupancy rate of the project.A number of retail real estate developers also announcethat they will implement the preferential policy, supporting rent space for tenants with a reduction of about 20-40%, depending on the specific caseandflexible assistanceduration of supportaccording to the evolution of the disease.