Cushman & Wakefield Vietnam has released its latest report on Vietnam's retail market for the third quarter of 2018.

HCMC: Market performance improves marginally

Two new retail outlets were completed in the third quarter and one retail outlet converted its retail space into office space for lease while another closed. Retail stock was recorded at more than 1.26 million sq m, up 2.2 per cent quarter-on-quarter and 6.6 per cent year-on-year.

The overall occupancy rate grew 1 percentage point (ppt) quarter-on-quarter and 4 ppts year-on-year to 93 per cent. This is viewed as a moderate improvement. New entrants accounted for over 90 per cent of total absorption in the quarter.

New supply drives up rent

Market-wide average rent in the third quarter of 2018 climbed 5.6 per cent quarter-on-quarter and 7.4 per cent year-on-year, to approximately $54.5 sq m per month, due to high rentals quoted by new retail outlets.

“Tenancy mixes in shopping malls are still focused on F&B,” said Ms. Vo Thi Phuong Mai, Head of Retail at Cushman & Wakefield Vietnam. “For example, over 40 per cent of tenants in The Estella Place are F&B brands. Golden Gate, Red Sun and Mesa Group are anchor tenants. Vincom Retail continues to expand their reach across the country by acquiring Fivimart - a 23-supermarket chain in the north. They are ready for revising the tenancy mix at shopping malls as well as inefficient lines. Middle class and fast fashion brands continue to target the Vietnamese retail market. In 2019-2020, Decathlon and Uniqlo plans to open their first stores in Hanoi and Ho Chi Minh City.”

Submarket

Inventory

(sq m)

Vacancy rate

Planned & under construction (sq m)

Average asking rent

VND/sq m/mo

$/sq m/mo

HCMC TOTAL

1,264,000

7.0%

892,000

VND1,265,000

$54.48

Department Store

103,000

5.7%

─

VND1,668,000

$73.1

Shopping Center

706,000

7.0%

─

VND1,113,000

$48.8

Retail Podium

43,000

10.1%

─

VND733,000

$32.1

Bazaar

26,000

6.1%

─

VND3,941,000

$172.7

Supermarket

319,000

─

─

─

─

Wholesale

66,000

─

─

─

─

SIGNIFICANT PROJECTS PLANNED & UNDER CONSTRUCTION

PROPERTY

SUBMARKET

TENANT

SQ M

EXPECTED COMPLETION

Crescent Mall – Phase2

Non-CBD

N/A

18,000

2019

Aeon Mall Tan Phu expansion

Non-CBD

N/A

41,000

2019

Elitemall

Non-CBD

N/A

61,000

2020


Hanoi: Improved market performance

One new retail outlet came into operation in the third quarter, resulting in an increase in total retail stock of 0.7 per cent quarter-on-quarter and 8.1 per cent year-on-year, to reach a total of more than 1.07 million sq m.

Market performance continued to show improvements. Overall vacancy fell 1.7 ppts quarter-on-quarter and 2.5 ppts year-on-year. New entrants accounted for most of the total absorption in the quarter.

Rents increasing slightly

Average asking rent increased by a modest 2.4 per cent quarter-on-quarter and 0.8 per cent year-on-year, due mainly to higher rental rates quoted by projects with improved performance, as well as a higher exchange rate. Retail space in the CBD was priced at more than double the average rent in the secondary and three to four times of those in the west and suburban submarkets.

VIR