Retail tenants seek rental relief

16/04/2020 16:51

Retail outlets with plummeting revenues and shopping mall owners are among the many affected by COVID-19, and while many of the latter have begun offering support to the former to help soften the blow, there are many still struggling.

Hanoi (VNA) - Retail outlets with plummeting revenues and shopping mall owners are among the many affected by COVID-19, and while many of the latter have begun offering support to the former to help soften the blow, there are many still struggling.

Most retailers in Hanoi have temporarily closed their doors because of social distancing measures which have now been extended for another week to help contain the spread of the SARS-CoV-2 that causes the disease.

Pham Van Tung, who owns a clothing store on Hue Street in downtown Hanoi, said his business has been hit badly by COVID-19. Revenue is sinking but he must still pay over 20 million VND in rent every month. If the situation does not improve soon, he said, he may have the lease terminated or sublet the premises, since he cannot handle the financial strain any longer.

Retailers in shopping centres such as Vincom Plazas, AEON, and Big C are in no better position. Prior to social distancing measures being imposed, supermarkets and shopping malls had already seen visitor numbers fall 40-50 percent, while guests at restaurants had tumbled 20-30 percent on weekdays and even 50 percent on weekends, with revenue down 40 percent.

Amid widespread closures, retail tenants are now pleading for relief from landlords.

A representative of luxury fashion retailer Giordano Vietnam said that last year it opened three outlets, but is currently only able to maintain one.

Than Duc Viet, Deputy General Director of the May 10 garment firm which has around 250 outlets around the country, said that not only small retailers but also major players like May 10 are struggling to cover their fixed costs, particularly rentals, which are typically among retailers’ biggest expenses.

To address the issue, Vincom Retail, which operates Vincom Plazas, has announced a relief package worth 300 billion VND (about 12,751,000 USD) to support affected commercial tenants nationwide. The relief will be in the form of rental reductions, and Vincom also plans to offer deals and discounts to coax back shoppers.

According to the Vietnam Association of Retailers, Hung Thinh Retail - the owner of Moonlight Plaza, Saigon Mia, and Vung Tau Melody - has slashed its rentals by 20 to 40 percent as a short-term measure./.