06:50 (GMT +7) - Thursday 26/04/2018

Property

Hanoi retail rents up but occupancy down, HCMC both down

Released at: 16:29, 11/04/2018

Hanoi retail rents up but occupancy down, HCMC both down

Photo: Ngoc Lan

Savills Vietnam releases latest quarterly report on April 11.

by Ngoc Lan

Hanoi’s retail market increased in terms of rents but fell in occupancy, while both indicators were down in Ho Chi Minh City, according to a quarterly report released by the Savills Vietnam on April 11.

The report noted that total supply in Hanoi was approximately 1.3 million sq m; stable quarter-on-quarter and up 4.2 per cent year-on-year. Supply has grown at an average of 12.2 per cent each year over the last four years.

Average ground floor rents increased 0.4 per cent quarter-on-quarter while occupancy was down 1.2 ppts, primarily because of changes in the shopping center segment. The CBD registered softer performance while the East of the city saw improved performance.

Eighteen new projects are scheduled to launch to 2020, cumulatively providing 410,000 sq m. The majority of future supply is components of residential complexes in the West.

In Ho Chi Minh City, meanwhile, total supply was over 1.2 million sq m with 73,000 sq m added from the entry of three new supermarkets and two shopping centers. Three closures and three changed uses withdrew 39,200 sq m.

Average gross rents fell only slightly, by 1 per cent quarter-on-quarter, while average occupancy lost 1 ppts due to new supply in non-CBD areas with low rents and occupancy. New fashion brands and international food and beverage (F&B) entries replaced unappealing tenants.

Sales focused on F&B, clothing, and household appliances. Automated convenience and click-to-brick become popular. E-commerce continuously attracted investment, with Amazon’s entry announcement a highlight.

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