What makes shophouse the 'king of investment channels' in many localities?
(Baonghean.vn) - Known as the "golden goose", shophouse has never lost its appeal, even during the pandemic. Possessing dual superior value, both for living and meeting business capabilities, shophouse continues to be on the hunt list of investors at the end of the year.
Shophouse and the title "golden goose"
With the real estate market gradually heating up again after the frozen period of 2011-2013, the term shophouse appeared. Accordingly, shophouse is defined as a townhouse with smart design, can be used for both living and business, located in a modern, well-planned urban area.
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| Shophouse - a product type that is always "sold out" in projects. Photo: Square Field Project |
With its superior advantages, since its appearance, shophouse has created a "sold out" storm in many projects for a long time. Thanks to its continuous sales speed and leading absorption rate for many years, shophouse has been affectionately called "the goose that lays the golden eggs" by investors.
A report by the Vietnam Real Estate Association (VNREA) at the time of the market before 2020 showed that the shophouse segment recorded a rental profit of up to 8 - 12%/year plus better liquidity than other product lines. This is the reason why the group of investors with financial potential is always looking for it. Even during the pandemic, VNREA statistics recorded that low-rise houses including shophouses maintained the highest absorption rate at nearly 50%.
According to WeLand's market research department, in 2021, the demand for buying townhouses and shophouses has grown strongly, achieving high growth rates, especially in some provincial markets. Typically, in Nghe An, a real estate project in Hung Nguyen, south of Vinh city, although not yet launched, has recorded sudden interest from many Hanoi investors in this type of product.
Savills' survey in the third quarter of 2020 also noted that shophouses are a segment that maintains a stable price increase year-on-year and continues to be an asset that retains its value even during the pandemic.
According to a distribution agency, there is a project where customers compete for a place to buy. Although this is a high-value product line, the liquidity is very good. In particular, in the secondary market, the number of buying and selling transactions of shophouses is even more active. Many transactions are transferred in the short term with a large "closing" difference. The heat of this product line makes the search of veteran investors for this product line show no signs of cooling down.
Decoding the heat of shophouse
The inherent superiority of shophouse is the factor that creates the attraction of this product line. Right from the time of its inception, shophouse is a product line that hits and matches the psychology of sophisticated businessmen who are looking for a superior investment channel.
Compared to townhouses located in previous residential areas and streets, shophouses are considered the perfect upgraded version, not only maintaining the advantage of renting or doing business in the premises but also ensuring a steady cash flow thanks to its prime location in the urban area.
Investors commented that the methodical planning of the urban area has brought about a series of indicators that create the attractiveness of shophouses: a stable source of customers from the population in the urban area, and convenient space that also attracts customers from neighboring areas to visit and shop for services at the shophouse.
Ms. Nguyen Hoai An - Director of Research and Consulting Department, CBRE Vietnam, commented that the ability to rent for business with profit factor is an important factor that makes investors decide to spend money. According to Ms. An, most projects are located in existing residential areas, with high population scale in and around the project. This location advantage helps shophouses always have a great advantage in approaching customers, while increasing the value of real estate.
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| Shophouses in new real estate markets are becoming a trend chosen by many investors. Photo: Perspective of Nidco Thinh Loi - Vinh Park River Urban Area Project. |
In addition, the modern smart design and large area are enough to make each shophouse more versatile by creating a separate business space on the first floor and being able to customize the space above, completely meeting the private living needs of the homeowner.
According to Mr. Pham Van Nam, a professional investor, investing in shophouses has never been a reverse investment, especially at a time when supply is becoming increasingly scarce. In particular, shophouses located on existing main roads, in existing business areas, and in well-developed urban projects are always sought after by investors.
At this time, shophouses in major markets such as Hanoi and Ho Chi Minh City have high prices, up to hundreds of millions of VND per square meter. Therefore, investors tend to choose shophouses in developing localities with reasonable investment rates and high room for price increases thanks to future infrastructure and economic development. In particular, Vinh city is one of the most vibrant markets - Mr. Nam added.
“Vinh City has a reasonable price and high potential for price increase. In particular, there are projects that are at the forefront of the expansion plan of Vinh City to the South, which are very potential and have become 'hot items' in the market recently,” this investor also commented.