Shophouse supply in HCMC is still scarce, rental profit margin can reach 12%/year
That is the affirmation of Mr. David Jackson, General Director of Colliers Vietnam when sharing about this segment in the real estate market. This expert said that there are 2 biggest advantages that shophouse apartments bring to owners.
Rental income can reach 12%/year
Firstly, a variety of ways to help owners find income. According to Mr. David Jackson, Shophouse occupies the most favorable locations for business in buildings. This type of apartment is very suitable for renting as shops, foreign language centers or offices, businesses. Even in tough times like during the severe outbreaks of the Covid-19 pandemic, shophouse owners can still get revenue by converting functions, allowing businesses to operate online. sublease (such as an online learning service provider, a technology enterprise, etc.).
Rental income can reach 12%/year. In addition, owners of shophouses, depending on their needs, can consider living options or using them for business purposes, which is very flexible.
Second, strong and sustainable upside potential. Due to possessing so many elements of a real estate, the shophouse's high potential for price appreciation is understandable. This has also been proven by the market reality when the value of shophouse apartments can increase 15-30% per year.
From the perspective of investors, shophouse is creating great attraction compared to other types of real estate products. Especially, when the epidemic is under control, the demand for ownership and rental of premises increases, so podium shophouses in high-rise apartment buildings are increasingly sought after by their scarcity and high liquidity. In some projects, the rate of leasing as well as buying and selling of this type is 100%.
Supply continues to be scarce
It is estimated that in 2022, the number of new apartments in the Ho Chi Minh City market will be about 20,000 - 20,000 units.
According to expert Colliers Vietnam, although there are signs of recovery, the shortage of apartment supply continues. In which, the number of shophouse apartments usually only accounts for a very small percentage, usually no more than 5% of the total number of apartments in the project.
Due to many advantages and limited supply, the price of shophouse apartments has continuously increased in recent times, currently at an average of about 150 million VND/m2.
The report of the analytical units also pointed out,
The supply of shophouses in apartment podiums in Thu Duc area tends to increase over time since Tet until now. Compared to the beginning of the year (January 2022), the supply in March-April 2022 increased by more than 35% and by May 2022, there was an abundant amount of shophouses with an increase of one and a half times. However, compared to the previous time, this type is still in short supply.
According to this unit, the shophouses are mainly in the area of 70-200 m2, distributed mainly in projects such as Lavita Garden, Sunview Town, The Oasis, Vinhomes Grand Park, Lavita Charm, Opal Riverside, Urban Green , FIATO Premier, Shophouse The Global City …
Usually, shophouse rental ads in the price segment from 6.5 to 16 million VND/month are more interested by tenants in terms of both news views and contacts. Accordingly, the index showing the interest of tenants has increased steadily over the months, demonstrating the increasing demand of tenants in this area.
Ms. Dang Phuong Hang, CEO of CBRE Vietnam once said that the attractiveness of shophouse lies in the low proportion of products in the entire project basket; has a beautiful location, convenient for trade; good profitability due to the combination of many functions from self-employment to rental. Due to the slow growth of this segment, the shortage of new supply continues. Meanwhile, inventories decreased, so the asking price in this segment increased naturally.
A real estate enterprise in Ho Chi Minh City said,
Shophouse can be sold or leased long-term with the main purpose of doing business, so it always receives great attention from the market. Due to the influence of the licensing of new projects in Ho Chi Minh City in the context that the land fund is no longer abundant, the investors also focus on the types of products that follow the trend of diversified functions and high value, especially shophouse. If there are no positive changes from the improvement of the legal process, the growth of new supply of the market will continue to remain low.
