Saigon commercial rents up 5.8 percent

By Vu Le   October 23, 2019 | 09:11 am GMT+7
Saigon commercial rents up 5.8 percent
Customers shop at a supermarket in Hanoi. Photo by Reuters.

Average monthly rents for retail space in Saigon's central business district (CBD) reached $135.5 per square meter in Q3, up 5.8 percent year-on-year.

The rental increase in the CBD in Q3 was 3.7 percent over the previous quarter, while monthly rents outside the CBD reached $35.8 per square meter, down 3.7 percent quarterly, according to the latest report by real estate firm CBRE.

Vacancy rates increased in both sectors in Q3, up 0.6 percentage points in the CBD and 0.5 percentage points outside, mostly because shopping centers were undergoing renovation and tenant mix revision this quarter, the report said.

CBD and non-CBD vacancy rates were around 2.5 percent and 8 percent respectively.

The retail market continues to be considered attractive to international retailers and developers, thanks to the Vietnam’s growing young population, and most retailers tend to choose HCMC to open their first stores when entering the country, CBRE said.

Vietnam’s retail industry has seen several major deals from international investors in the third quarter. Japanese fashion company Stripe International acquired Vietnamese women’s footwear brand Vascara, two years after it acquired another local fashion brand, NEM.

Amazon has also set up a subsidiary in Vietnam, which aims to provide support for small and medium enterprises and individuals that do business on its e-commerce platform. South Korean retail group BGF is also planning to enter Vietnam in 2020 and open a convenience store chain named CU, CBRE quoted Insider Retail Asia as saying.

In terms of consumer trends, food and beverage, fashion and accessories, entertainment, convenience stores, and beauty and health segments are expected to strongly attract retailers in the near future. Several shopping centers are thus being restructured to target these changes in consumption trends.

As of Q3 2019, HCMC had a total of 57 retail projects with total net leasable area (NLA) of 1.04 million square meters. In the last quarter of 2019, one new shopping mall project will be opened with an NLA of around 16,000 square meters, focused on food and beverage, fashion, accessories and entertainment, the report said.

HCMC is expected to receive 237,000 square meters of new retail space in 2020 from eight new projects. In particular, District 9 in East HCMC could see the opening of a 48,000 square meter megamall project, the biggest retail project to date, it added.

 
 
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