11:53 (GMT +7) - Friday 28/07/2017

Property

Hanoi's retail market recovers in Q1

Released at: 15:54, 30/06/2017

Hanoi's retail market recovers in Q1

Photo: Ngoc Lan

Retail sees strong performance in first quarter after a quiet period.

by Ngoc Lan

Hanoi’s retail market recovered in the first half of this year, according to the latest report from CBRE.

Ms. Nguyen Hoai An, Director of Research and Consulting Services at CBRE Vietnam, told a recent press conference on Hanoi’s real estate market that in the second quarter there were two new retail projects in Thanh Xuan district providing approximately 33,400 sq m, increasing the city's total by 4.4 per cent quarter-on-quarter and 12 per cent year-on-year.

The average leasing price was $33.4 per sq m per month, up 1 per cent quarter-on-quarter.

New supply in the retail segment is expected to be between 40,000 and 86,000 sq m over the remainder of 2017 and leasing prices are expected to increase.

Strategic and suitable customers are important factors in the success of the retail segment, according to CBRE, but there are also many issues relating to location and occupancy.

In Ho Chi Minh City’s retail market, the second quarter of 2017 saw 37,389 sq m of new space, bringing the total to 853,425 sq m. All new projects in the quarter were located in the non-CBD area.

The city will have more retail outlets in the future, coming from apartment for sale projects to be handed over shortly.

Except for projects with good locations or good brands, occupancy will not be as good as in the first quarter of the year. Projects expected to struggle include CBD Home Premium, Vincom Plus Homyland, and Vincom Plus Saigonres, which have from 30-75 per cent of rental areas unoccupied.

The report also noted that a series of international fashion brands are showing interest in Vietnam. Some have confirmed the opening of stores in Hanoi, such as Zara and H&M.

Food and beverages (F&B) is still fiercely competitive, with a number of brands from the Asia-Pacific region arriving in the country. Convenience stores is also developing strongly, marked by the recent arrival of 7-Eleven.

“Investors are putting great faith in Vietnam’s growth in the time to come,” Ms. An said. “This is the driving force for the development of the real estate sector.”

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