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Hanoi & HCMC retail see no new supply in Q3

Released at: 18:24, 04/10/2017

Hanoi & HCMC retail see no new supply in Q3

Photo: Ngoc Lan

Retail market in both cities have no completed projects during third quarter, latest JLL report reveals.

by Ngoc Lan

No new shopping centers were completed in Hanoi’s retail market during the third quarter of this year, according to the latest report from JLL.

Total stock remained unchanged, at nearly 970,000 sq m in 24 projects. In terms of location, Thanh Xuan, Hai Ba Trung and Long Bien districts accounted for 70.9 per cent of the total.

More than 16,700 sq m of retail space was taken up in the third quarter. The overall occupancy rate continued to increase, from 80.3 per cent in the second quarter to 82 per cent in the third quarter, thanks to promotional programs in new shopping centers and lower rentals in older malls.


In terms of pricing, the overall gross rental was $28.7 per sq m per month as at the end of the third quarter, a marginal decline of 0.4 per cent quarter-on-quarter, as many promotions and attractive rentals were offered to attract tenants.

Trang Tien Plaza still achieves the highest rentals, due to its prime location.

Convenience stores continued to boom in Hanoi’s retail market, with an increasing presence by both international and local brands. The average size of these stores was approximately 40 to 50 sq m in the non-CBD sub-market.

Total supply in Hanoi’s retail market is likely to increase significantly in 2018, with 322,000 sq m to enter the market. Until the end of 2017, only 2,000 sq m of premium retail space is expected to be put into operation.

Some international brands will enter the market. In particular, Zara Vietnam will open its first Hanoi store later this year, and two huge projects - AEON Mall Ha Dong and Ciputra Mall Hanoi - expected to enter the market in 2019 and 2020.

The expected lower-than-average rents in new projects and the abundant supply are likely to result in downward pressure on market rentals in the future.

Similarly, in the third quarter of 2017, retail supply in Ho Chi Minh City was relatively constant, as there were also no new completions.

The occupancy rate was down slightly, by around 35 basis points quarter-on-quarter. Occupancy levels at CBD shopping centers were flat, at 87 per cent, while in non-CBD projects they reached 92.8 per cent, down just 0.4 per cent quarter-on-quarter.


Overall, the gross rental of city malls averaged around $47 per sq m per month, up 2.4 per cent compared to the previous quarter. In the CBD sub-market, rents in prime shopping centers grew notably thanks to the presence of experienced brands such as Zara, H&M, and Old Navy, helping to boost foot traffic.

Premium retail supply is expected to welcome more than 75,000 sq m, mostly from the non-CBD sub-market, over the remainder of the year. F&B, entertainment, and experience-oriented retailers will be the main drivers of leasing demand.

Rents will likely move upwards until the end of the year, especially in the CBD, with major advantages from healthy foot traffic driven by anchor tenants.

The occupancy rate in new suburban projects is projected to face challenges in achieving expected performance, due to the weight of new supply against demand.

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