Real estate and investment firm CBRE says Vietnam’s economic stability offers strong potential for the retail market.

Vietnam is seeing more affordable supermarkets expanding to second- and third-tier districts with high population density and low to medium income.

In 2015, Vietnam will have to accede to its World Trade Organisation obligation to permit the opening of wholly foreign-owned restaurant businesses, which will generate demand for retail space from foreign food and beverage retailers entering the Vietnamese market. F&B and supermarkets are non-cyclical sectors, which provides necessities and is expected to remain active regardless of whether economic growth slows.

Foreign retailers and foreign developers are confident over the long-term growth of Vietnam, especially in its 90 million, predominantly young population.

CBRE says a warming of government policy, especially the Economics Needs Test, will make overseas retailers feel more welcome and instill confidence in investors to tap into an “under-served” retail market in Vietnam.

Vietnamese developers and retailers will retain the competitive edge on account of their understanding of the local market, the speed with which they can get their products to market and their access to the best real estate.

However, as the market develops and becomes more competitive, quality of design, tenant mix, marketing and management will play a much greater role, CBRE says.