Vietnam's retail space market rebounds after massive crackdowns on counterfeit goods

The presence of numerous international brands in Ho Chi Minh City and Hanoi signals that Vietnam's retail market remains attractive, and following a wave of authorities' crackdowns on counterfeit goods, consumers are expected to benefit from a more sustainable market.

International brands strengthen presence in Vietnam

According to the latest data from Cushman & Wakefield (C&W) Vietnam, no new retail real estate projects were added to HCMC’s market in Q2/2025. The total accumulated supply remained at 1.2 million square meters, up 6.26% year-on-year.

In Q2, the average asking rent for retail space in the southern hub reached $53.36 per sqm per month, a slight decrease of 0.21% compared to the previous quarter and down 3.32% year-over-year.

Retail occupancy in the city reached 93.6%, slightly up from the previous quarter and climbing 4.16% year-on-year, reflecting stable quarterly demand and a growing annual trend.

"This growth is driven not only by the entry of international brands such as Japan’s Miki House at Takashimaya and Oh!Some at Vincom Dong Khoi, but also by local brands like the Poseidon buffet chain expanding into non-central districts," said Trang Bui, country head of C&W Vietnam.

Retail leasing demand remains high, with many brands on waiting lists for prime retail space. This is further supported by rising international tourist arrivals, boosting demand for major retail brands.

Meanwhile, a survey by Savills Vietnam showed that in the first half of 2025, HCMC’s modern retail space market remained relatively small, with net leasable area totaling about 1.6 million sqm.

New supply was limited, with just 5,000 sqm added from existing projects. Market performance remained stable with a high occupancy rate of 93% and average ground floor rents at about VND1.5 million ($57.4) per sqm per month.

New leases mostly came from the entertainment, lifestyle, and home goods sectors. The entry of new brands like Oh!Some, HOKA, and Lee, along with the expansion of chains such as Muji, Zara, and H&M in successful malls, demonstrates increasing retailer confidence.

Premium retail properties in central areas continued to see low vacancy rates, while future supply remains limited, with only about 100,000 sqm of net leasable area expected over the next three years. With strong consumer demand and an expanding middle class, the market is projected to remain stable in the short term.

In Hanoi, the retail space market remained stable with an occupancy rate of 86% and average ground floor rents rising to VND1.3 million ($50) per sqm per month.

"Leasing activity is primarily driven by F&B and convenience store sectors, with new brands like Oh!Some and 7-Eleven entering the market and chains such as Muji, Starbucks, and Dzinh expanding," noted a Savills Vietnam representative.

High-end retail assets in central Hanoi maintained low vacancy rates, while new supply over the next three years will remain modest at just around 10,600 sqm of net leasable area. With solid consumption and a growing middle class, Hanoi's retail space market is forecast to continue its steady upward trajectory.

According to C&W, Hanoi’s retail market welcomed an additional 13,658 sqm in the first half of 2025 from the Aeon Mall Cau Giay project. Total retail supply in the capital city reached approximately 1.4 million sqm, up 1.3% year-over-year. Shopping centers remain the dominant retail format, accounting for 86% of the city’s total supply.

In Q2, the Hanoi market’s average occupancy was 85.4%, down slightly by 0.06 percentage points from the previous quarter and 1.27 percentage points from the same period last year.

This decline was mainly due to temporary renovations aimed at improving customer experience. New brand entries included Mr. DIY, Oh!Some, and convenience store chains GS25 and 7-Eleven.

High occupancy rates are sustained at well-managed, large-scale projects that offer diverse services and quality retail space. In contrast, older retail podiums and malls with lower competitiveness have shifted to attract office and service tenants.

"In Q2, average ground floor rents rose to $47.1 per sqm per month, up 0.8% from the previous quarter and 6.7% from a year earlier. The increase was largely due to scheduled rent adjustments at projects in fringe and western areas, where infrastructure improvements and new brand entries are driving demand," Trang Bui added.

From 2025 to 2027, the retail market is expected to gain approximately 324,000 sqm from 17 new projects, with the western area accounting for 37% of future supply.

Besides Hanoi’s expansion, developers are also targeting nearby provinces. Notable projects include Vincom Mega Mall Ocean Park 2 in Hung Yen province and Aeon Mall Ha Long in Quang Ninh province, indicating strong growth potential in suburban and satellite areas.

Market rebounds after crackdowns on counterfeit goods

Experts forecast a positive outlook for the retail markets in both HCMC and Hanoi, especially after recent crackdowns on counterfeit and imitation goods by authorities.

The presence of major international brands underlines the market’s appeal in a country with a population of 100 million. It also provides consumers with access to genuine, high-quality, and valuable products.

According to Savills Vietnam, the greatest current challenge for the entire industry is the uncertainty of global economic and geopolitical conditions - factors beyond the control of even the most proactive retailers and property investors.

Omnichannel retail strategies are thriving in Vietnam, especially in HCMC. Fashion, F&B, and home goods brands are increasingly integrating online and physical channels to enhance customer experience.

In the first half of 2025, these sectors accounted for 67% of all new lease transactions in major malls. Physical stores are no longer just points of sale but they now serve as brand experience centers, pick-up points, and content creation spaces.

Retail demand in Hanoi is gradually shifting away from traditional central areas. The West Lake area is emerging as a growth hotspot, thanks to the impressive performance of Lotte Mall and 172,000 sqm of new retail space projected to be completed before 2027.

At Starlake, major investors such as Toshin, CJ, Mapletree, and Thadico are planning integrated lifestyle malls, aiming to turn the area into a vibrant entertainment destination rivaling the Old Quarter.

On the eastern bank of the Red River, new retail hubs like Vincom Mega Mall Ocean Park and Vinhomes Global Gates are supported by major infrastructure projects like the Tu Lien Bridge and Ring Road 4, enhancing connectivity with suburban areas.

Developers are moving toward large-scale, fully integrated commercial centers that offer stable foot traffic and long-term growth potential for retailers.

C&W forecast that HCMC’s retail space market will add around 38,000 sqm of new supply in 2025 and nearly 80,000 sqm in the following three years. Despite land scarcity and rising development costs, future supply will mostly concentrate in the city center, driven by two major projects set for completion in 2025: Marina Central Tower and Lancaster Legacy.

These developments are expected to boost the retail market in central areas and meet rising demand from international brands and tourists. With the continued growth of international tourism, HCMC’s retail space sector is poised to benefit from a luxury shopping trend. Key brands and investors are increasingly focusing on prime retail spaces with high revenue potential.

Moreover, demand for space in high-traffic, professionally managed locations remains strong, helping to keep rental rates stable or even slightly increasing despite new supply pressures and shifts in consumer behavior toward online shopping.