Business

Experts caution against investing in shophouses

Investing in the booming shophouse segment in Ho Chi Minh City could end in losses, if market observers are to be believed.
Experts caution against investing in shophouses ảnh 1Investing in the booming shophouse segment in Ho Chi Minh City could end in losses.
(Photo: vnexpress.net)

HCM City (VNA) - Investing in thebooming shophouse segment in Ho Chi Minh City could end in losses, if marketobservers are to be believed.

Since 2014 shophouses built in condo projectshave been in huge demand thanks to the high returns they fetched when resold orleased. Even managing to buy one became difficult, such was the demand.

In a report, property consultant CBRE said theprices of shophouses rose by 261 percent in the secondary market last yearwhile villa prices only rose by 35-37 percent.

They cost 2,700-4,000 USD per square metre andfetch rents of 10-30 USD, meaning returns are much better than on bankdeposits, researchers said.
Yet insiders warn it buyers should be very careful when investing in one.

According to a broker in district 7 theleasing market now is not as good as it was in past years.

Only shophouses in old condo projects with highoccupancy rates are in high demand and those in new projects are difficult tolease, she said.

Experts say it is difficult to lease shophousessince 80 percent of their customers are residents of the condo and they are notconvenient for outsiders because of parking and other issues. 

The broker said that in fact in some places inDistrict 7, owners had been unable to rent out their shophouses for more thanone year.
Yet their prices were still rising.

According to another property consultant, JonesLang LaSalle Incorporated (JLL),  demand for shophouses which are built innew urban area projects is much higher than the one in condo projects.

Shophouses in condos are still attractive toinvestors since they fetch 1.3-1.5 times the returns condos do.–VNA
VNA
#booming shophouse segment #condo projects #property consultant CBRE #leasing market #demand for shophouses #urban area projects #Jones Lang LaSalle Incorporated #prices of shophouses #secondary market #Vietnam News Agency #Vietnamplus
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