Vietnam retail rents edge up in first quarter
Vietnam retail rents rose slightly during the first quarter, despite more retail space becoming available.
Commercial property adviser CBRE Vietnam says available space in Hanoi increased 7.3 per cent to 760,000 sqm, with rental rates up 0.1 per cent overall compared to the same period last year. CDB rental rates rose 0.3 per cent.
Tenancy reviews at some shopping malls outside the CBD led to an average vacancy rate of 10.6 per cent, up 5.4 per cent quarter-on-quarter.
Hanoi’s retail market saw action with investment activities from Japan and South Korea. Lotte acquired a 7.3ha site for a shopping mall while Aeon opened its second site in the capital.
There were two new retail projects in Ho Chi Minh City: the fully occupied Sense Market 23/9 in District 1, and CBD Home Premium in District 2. These added 17,500 sqm of net lettable space to the market.
First-quarter rental rates were flat in most areas and formats, except for department stores where they dropped by about five points. In other formats, rent increases wavered between 0.1 and 1.2 per cent.
The vacancy rate was 7.9 per cent, up 1.2 points from the previous quarter and a 2.6-point improvement over the same period last year.
Rather than large-scale developments, new projects this year are mainly retail podiums, says CBRE. Accordingly, the market will have a chance to use available areas before bigger projects come on line.
With limited new supply, the number of tenants joining the retail market is expected to be lower than last year. Meanwhile, big names such as 7-Eleven and H&M are highly expected, CBRE says.
Vietnam also has seen an influx of foreign convenience stores, such as Ilahui, Miniso and Mumuso.
Japan’s Miniso has opened 17 stores in its first 12 months, while Korea’s Mumuso has four stores in Ho Chi Minh City since entering Vietnam in December.
New overseas players include Minigood and Yoyoso, chains that offer foreign goods at affordable price points and attract young customers.