The Bhutanese Leading the way.
Post-COVID-19 pandemic, commercial spaces and businesses are experiencing a decline in business. They blame the migration of young people, adding to the owner’s stress because loans must be repaid on schedule. Tenants and the former shop owner explain what their preferences are and what’s making them picky.
Singye Dorji, an official from the Singye Group and Singye Rental Properties, shed light on the situation, emphasizing the challenges faced by its newly constructed building opposite Chang Lam.
Despite the completion of the building a month ago and advertising its commercial spaces for rent, Singye Group has received minimal interest.
He said, “The market has drastically gone down for most rental spaces over the past few years, and we had only three people calling us and looking for a space to rent over the past month. If this continues, it is obvious that everybody is going to run at a loss as we have to pay monthly EMI.”
The concern extends beyond the core town, as a houseowner in the outskirts of Babesa expressed worry about the lack of demand for commercial spaces. While his residential spaces in the same buildings have been occupied.
He said, “The trend of people migrating abroad and the surge in upcoming buildings across the city has raised uncertainties about who will occupy these spaces in the future.”
Property owners find themselves in a difficulty, questioning whether high rents or inadequate advertising efforts are deterring potential tenants. The anxiety is heightened by the need to cover monthly mortgage payments, which could lead to financial losses if the current trend persists.
In the midst of this commercial real estate dilemma, businesses are also feeling the pinch. Pem Dorji, owner of a family clothing store along Norzin Lam, observed a significant decrease in customers, especially post-COVID-19.
He said, “There are not a lot of customers. Our usual customers were youths, but we have seen a sixty percent decrease in the number of customers we usually get. Luckly, our building owner have been understanding and kept the rent the same throughout the years.”
While some proprietors have been understanding and maintained rent levels, others have resorted to sudden increases, putting additional strain on struggling businesses.
Divya, a shop owner in the core town, said, “There was a sudden rent increase from Nu 8,500 to Nu 12,000 this year. With a 50 percent decrease in business, and now I am reconsidering any plans for business expansion given the challenging circumstances.”
The impact is not uniform across all businesses. Kinjal, another shop owner, noted that businesses located near busy intersections or close to major offices and institutes are managing better. Convenience and accessibility seem to be key factors for attracting customers, particularly office goers with time constraints.
Business owners report that despite an increase in people’s salaries with pay hikes, there has not been a corresponding boost in purchases. The consensus is that a higher number of people is crucial for increased sales, emphasizing the interconnectedness of the commercial real estate and business sectors.
Amidst these challenges, tenants and those seeking rental spaces emphasize the importance of various factors when looking for a home or a commercial space. Location, number of rooms, conditions, and rent are critical considerations.
Kinley Sonam said, “I have been looking for a home for two months, but there has been no luck. It’s not like there are no empty apartments. Yes, there are, but they are not up to my expectations. While some have the price point that I am willing to pay and an ideal location, the conditions of the houses are bad, and vice versa. This has left me stranded in my old apartment.”
Former grocery owner Tandin said, “I left my shop because it wasn’t feasible because the grocery shop is located in a residential complex and most of them shopped from the main town and few came by. With the amount of losses I took, I had to leave.”
“That’s when I learned long-term planning for the business was important,” he added.
Like many, he has no business plans for now.
