Vietnam urban trade centers see higher occupancy, rentals with foreign brands’ entry
With the entry of foreign brands, shopping centers in Hanoi and Ho Chi Minh City witnessed a steady increase in rentals and occupancy rates in the year’s first quarter.
Leasing activities were dominated by foreign brands’ expansion across diverse sectors, ranging from fashion and dining establishments to supermarkets, primarily concentrated in Vietnam’s top two metropolises.
Two luxury fashion labels, Rene Caovilla and The Hour Glass Opera, opened respectively at Union Square in HCMC and 63 Ly Thai To in Hanoi.
HCMC also welcomed new mid to high-end international brands like Fendi, Cartier and Loewe.
According to a Q1 report by property advisory firm CBRE, retail property rentals in Hanoi and HCMC have maintained an upward trend due to limited new supply since 2020.
In Hanoi, the asking rent for the ground floor in the central business district (CBD) area was $163.2/square meter/month, representing a 13.4% increase year-on-year. The vacancy rate in the central area decreased to 1.7%, down 3.1 percentage points (ppts) year-on-year.
Meanwhile in HCMC, the average rents quoted at prime locations reached $240/sqm/month, up 1.8% year-on-year. The vacancy rate in the central area stood at 4.7%, down 1.1 ppts from Q1/2023. There was almost no vacant space in the CBD area of both cities, the report said.
In non-CBD areas, both Hanoi and HCMC have experienced good rental growth this year. The asking rent for non-CBD areas in Hanoi reached $30.6/sqm/month, up 13.9% year-on-year.
The first quarter saw Hanoi welcome a new project, The Linc complex, in the Park City Hanoi urban area, with a rental area of 10,581 sqm.
Meanwhile, in HCMC, the non-CBD area rentals soared 23.7% year-on-year to $53.3/sqm/month, due to restructuring by some shopping centers.
The average occupancy rates for the market as a whole in Hanoi and HCMC stood at 89% and 90%, respectively, a slight increase compared to the previous year.
A Savills Vietnam report says retail occupancy remained sound, flat quarter-on-quarter and up 1 ppt year-on-year to 92%. Vincom Plaza 3/2 closed more than 28,000 sqm of net leasable area for renovation, driving the increase.
Small modern retail supply with strong local consumption and increasing middle class will support market growth, the report cited Savills analysts as saying.
They noted that although certain small retailers have closed shop, there was a trend of brand expansion (Muji, H&M, Uniqlo, Poseidon) and new mid to high-end international brands (Fendi, Cartier, Loewe) entering the market.
Giang Huynh, head of research & S22M, Savills HCMC, commented that modern retail space was likely develop further, thanks to demographic factors and rising disposable income.
Vietnam’s retail sales of goods and services reached VND270 trillion ($10.63 billion) in Q1/2024, up 12% year-on-year, according to government data.
Despite economic challenges, CBD commercial centers have shown resilience, maintaining relatively stable occupancy rates, said Thanh Pham, associate director of CBRE Vietnam.
“Any vacant spaces are being filled promptly by replacement tenants. This trend indicates a growing inclination towards attracting larger tenants to these centers, aiming to offer shoppers diverse experiences and comprehensive additional services,” Thanh said.
CBRE anticipates total average new supply in Hanoi and HCMC at around 65,000 sqm per year in the coming years, 57% lower than the average of the past ten years.
New supply and completion of several large-scale projects will contribute to less severe scarcity compared to previous years. As such, CBRE predicts that rentals will continue to increase, but at a slower pace – by 2-3% in non-CBD areas and 5-8% in CBD areas.
- Read More
Vietnam high-speed railway should run beyond Hanoi, HCMC on either side: lawmakers
Vietnam’s mega North-South high-speed railway project should be redesigned and extended beyond Hanoi and Ho Chi Minh City as currently planned, several lawmakers have suggested.
Infrastructure - Thu, November 21, 2024 | 6:11 pm GMT+7
Vietnam-Malaysia relationship upgraded to comprehensive strategic partnership
Vietnam and Malaysia have upgraded their relationship to a comprehensive strategic partnership, the highest level in the former’s diplomatic hierarchy.
Politics - Thu, November 21, 2024 | 5:21 pm GMT+7
Petrovietnam units sign LNG supply deal for trial run of Vietnam’s first LNG power plants
PV Power and PV Gas, two units of state-owned Petrovietnam, have signed an LNG supply deal for trial operation of Nhon Trach 3 and Nhon Trach 4, Vietnam’s first LNG-to-power plants.
Energy - Thu, November 21, 2024 | 4:40 pm GMT+7
Sufficient first phase funds ensured for Vietnam’s new mega airport: transport minister
Minister of Transport Nguyen Van Thang affirmed Wednesday that funding would be secured for building the Long Thanh International Airport, set to become Vietnam’s biggest.
Infrastructure - Thu, November 21, 2024 | 3:53 pm GMT+7
VAFIE to organize workshop on amendments to horse racing, football betting rules
The Vietnam’s Association of Foreign Invested Enterprises (VAFIE) and The Investor will organize a workshop on suggestions to amend the government’s Decree 06 on horse racing, greyhound racing and international football betting services.
Economy - Thu, November 21, 2024 | 2:38 pm GMT+7
Vietnam Politburo okays international, regional financial centers in HCMC, Danang
Vietnam’s highest decision-making body, the Politburo, has greenlighted the establishment of an international financial center in Ho Chi Minh City and a regional financial center in the central city of Danang.
Economy - Thu, November 21, 2024 | 1:50 pm GMT+7
Singapore's Platinum Victory seeks to gain veto at Vietnam’s REE
Singaporean fund Platinum Victory Pte. Ltd. has registered to buy more shares of Ho Chi Minh City-based utility firm Refrigeration Electrical Engineering Corporation (REE) to achieve the vetoing power in the latter.
Finance - Thu, November 21, 2024 | 11:29 am GMT+7
Posco keen on investing in Vietnam's $2.2 bln LNG power project
South Korea’s steelmaker Posco is eyeing to invest in the $2.2 billion Quynh Lap LNG-fired power plant project in Vietnam’s central province of Nghe An.
Energy - Thu, November 21, 2024 | 10:42 am GMT+7
Vietnam firm Hoa Lam to build $212 mln Aeon Mall in Mekong Delta
The Mekong Delta city of Can Tho has accepted a subsidiary of private multi-sector Hoa Lam Group as the investor of the Aeon Mall Can Tho commerce and service center.
Industries - Thu, November 21, 2024 | 10:31 am GMT+7
Vietnam startup expert closes Monkey in Black coffee shop
Tung BT (Tran Thanh Tung), a popular startup expert and social media influencer, is closing his final coffee shop in Ho Chi Minh City, ending a 10-year journey of the "Monkey in Black" brand.
Companies - Thu, November 21, 2024 | 8:16 am GMT+7
Vietnam-Singapore ties set for elevation to comprehensive strategic partnership
Vietnam and Singapore will elevate bilateral ties to a comprehensive strategic partnership and Singaporean Prime Minister Lawrence Wong will visit Vietnam next year.
Politics - Wed, November 20, 2024 | 8:16 pm GMT+7
Vietnam’s Vingroup establishes robotics firms, with co-founder’s 2 sons as major shareholders
Vingroup, Vietnam’s largest private conglomerate by ecosystem, has set up a robotics unit as it moves to ramp up its industrial-high technology ecosystem.
Companies - Wed, November 20, 2024 | 6:17 pm GMT+7
E-commerce, digital platforms likely to pay taxes on behalf of their sellers in Vietnam
E-commerce and digital platforms will have to declare and pay taxes on behalf of their sellers starting January 1, 2025, according to a draft amendment to the Law on Tax Administration.
Finance - Wed, November 20, 2024 | 5:37 pm GMT+7
Flexibility, adaptability key to effective leadership: PepsiCo Vietnam exec
In a rapidly changing world, leaders need to develop the skill of being “as flexible as seaweed,” says Nguyen Viet Ha, general director of PepsiCo Foods Vietnam.
Companies - Wed, November 20, 2024 | 3:52 pm GMT+7
Central Vietnam province okays $88 mln automobile part project
Binh Thuan province's industrial zone authority on Tuesday granted an investment registration certificate to a $88 million project invested by Taiwan’s NeoSCM Limited.
Industries - Wed, November 20, 2024 | 3:44 pm GMT+7
Thai packaging firm Thantawan Industry makes inroad into Vietnam
Thantawan Industry Public Company Limited, a leading Thai manufacturer of premium plastic packaging, has inked a deal for a 30-year factory lease, marking its inaugural investment in Vietnam.
Industries - Wed, November 20, 2024 | 3:34 pm GMT+7