of 2019, a key benchmark, and in the first nine months of 2022 is up 29 per cent from the January-September period of 2021. The bottom line is also blossoming, with after-tax profit up 63 per cent year on year for the first nine months.  Portfolio occupancy is another metric heading in the right direction: 84 per cent now compared with 82.5 per cent in the second quarter and 83.7 per cent in the third quarter of 2021. Vincom operates four different mall concepts, although just over 50 per cent of total gross floor area (GFA) is bound up in the Plaza configuration, a 10-40,000 square-metre format designed to operate in high-density areas of the country’s CBDs. It also operates a smaller format called Vincom+ to address the needs of consumers in secondary locations (15 malls), and Vincom Center (7 malls), another CBD concept with a GFA of 40-60,000 square metres. The fourth concept is the Mega Mall, of which five are currently operating, ranging from 60-150,000 square metres of GFA.  With many retailers still only committed to the more high-profile locations with greater consumer spending power, it isn’t surprising that the Vincom+ format (72.4 per cent occupancy) and Vincom Plaza (79.5 per cent) are a drag on portfolio occupancy. The latter format consists of 56 malls, but all except 10 of them are outside the main cities of Hanoi and Ho Chi Minh City. This may be about to change, since retailers wanting to ride the recovery are now looking at more ambitious expansion plans, bringing Vincom’s more second-tier malls into play. Tourism is still the hole in Vincom’s donut Vietnam’s retail industry growth is still being driven predominantly by domestic demand. International tourism is recovering but too slowly to make a truly meaningful contribution to spending yet. In the first nine months of the year, Vietnam recorded only 1.8 million visitors, represent a small fraction (15 per cent) of international arrivals in the first 9 months of pre-Covid 2019.  Until Covid border closures scuppered it, the country had been welcoming a steadily increasing horde of international visitors and by 2019 the number had reached 18 million. Ho Chi Minh City, Ha Long (on the coast east of Hanoi), Hanoi and Da Nang were, in that order, the leading host cities for international visitors. Tourists spent an estimated US$6 billion on retail, food and beverage, so the absence of this spending is leaving a big hole in retailer revenues. Still, retail sales were up a stellar 15 per cent in October compared with the same month a year ago and so far inflation has been more subdued in Vietnam than elsewhere. But that has been creeping up and is still an area of concern. Consumer prices were up 4.3 per cent year-on-year in October. While acknowledging the progress of Vietnam’s economy in rebounding from the Covid doldrums, the World Bank is now sounding a note of caution, saying that the risks to recovery are growing, singling out stagnating growth in Vietnam’s trading partners, domestic labour shortages and doubts about asset quality in the banking sector, the latter an obvious threat to the country’s financial stability.  Solid leasing market No notable new supply of physical retail space came to the market in the third quarter in either of the two biggest cities, which, combined with the recovery in consumer sentiment and more aggressive retailer expansion plans (particular among food and beverage retailers), was supportive of a leg up for the leasing market. According to Vincom and CBRE, CBD rents in Hanoi increased to US$144 per square metre per month, up almost 40 per cent year on year. Non-CBD rents increased 14 per cent to $27 per square metre per month. In HCMC, CBD rents increased 52 per cent to $218 per square metre per month and non-CBD rents rose 16 per cent to $38 per square metre per month. Footfall in Vincom’s malls continues to recover and is now at nearly 80 per cent of pre-Covid levels, not bad at all if you keep in mind the aforementioned slow return of tourist spending. The company is going ahead with plans to open six new malls in 2023. Two of these will be mega malls: Grand Park in Ho Chi Minh City and Ocean Park 2 near Hanoi will add more than 110,000 square metres of GFA to Vincom’s portfolio. The other four openings will be Plaza formats, in eastern Ho Chi Minh City, the central coast, Ha Giang in the far north and Bac Giang just northeast of Hanoi. E-commerce: the x-factor E-commerce has experienced powerful growth in Vietnam in recent years and Vincom is keen to see its real estate platform remain relevant. But the data suggests no reason to worry: physical retail property still has a major ongoing and future role to play in the lives of Vietnam’s 100 million population. Store-based retailing still only accounts for an estimated 6 per cent of total retail sales and at projected rates of growth is unlikely to breach 10 per cent for at least the next few years. This may come as a surprise because of the obvious prevalence of e-commerce in the big cities, but it shouldn’t be forgotten that Vietnam is still predominantly rural and not middle class. In fact, almost two-thirds of the Vietnamese population still lives in the countryside. To the extent that e-commerce is a growth sector in the retail industry, Vincom and its peers have plenty of time to rejig their tenant mix and mall configurations, and introduce new services that will enable them to meet the challenges of e-commerce and even benefit from them. So far, so good. Now, we wait to find out if Vietnam in general, and Vincom in particular, can stay the course in 2023, even as the rest of the world economy increasingly sucks wind.