VietNamNet Bridge – A lot of high end shopping malls have closed down after the failed efforts to drag out their existence.

High expectations, big failure

When it opened again in September 2011 after it changed its look, Hang Da Galleria was believed to become an ideal place for merchants to gather in a market, and for people to relax and enjoy entertainment services.

However, this has not come true yet. Hang Da Galleria cannot attract merchants to lease retail premises. With the low occupancy rate, the shopping mall has been closed down for upgrading.

Analysts blame the failure of Hang Da Galleria on the existence of more than one owner. The primary investor decided to lease the retail premises for long time to secondary investors. However, not many merchants have shown their interests in the premises there.

Grand Plaza also had to close down in late 2012 for a similar reason. And the same thing has been occurring with many high end shopping malls. The merchants who have leased the premises there now think of transferring the premises to others to stop loss.

The representative of a real estate consultancy firm said that at first, the investors were advised to build up the old Hang Da Market (which is now Hang Da Galleria) into a tourism site which specializes in selling Vietnamese traditional items. However, the plan was refused.

Since Hang Da had more than one owner, it was very difficult to decide what way Hang Da should go.

Leanne Mitchell, a real estate expert, said that many projects failed just because the owners could not reach agreements in many issues.

She believes that shopping malls’ investors should not sell premises to too many secondary investors, because the existence of many involved parties would make it difficult to reach a common voice. It’d be better to keep a control over all the matters of the shopping malls.

It is the owners of the malls who make decisions about the placing of the brands at the shopping malls to ensure the highest possible harmonization. In case they have to sell the premises definitely or lease for long terms, they should set up clear provisions in the contracts in order to avoid the disputes.

More luxurious, expensive shopping malls expected

The current economic recession has forced many people to fasten their belt, thus making luxurious shopping malls deserted.

In fact, there is another reason that keeps people away from the shopping malls -- the taxes of different kinds, valued up to 50 percent of the products’ value.

Mipec Mall, which was Pico Mall in the past, is now experiencing a period of re-positioning after an unsuccessful business period. The shopping mall at Indochina Plaza has also been quiet with very few visitors and buyers.

Analysts say the consumers’ confidence index decreased sharply in 2012 and it is expected to decrease further in 2013, which would badly affect the retail market.

The big guys in the retail market like Parkson and Lotte all have revealed their plan to expand their networks. Parkson plans to open 3-4 new malls in Hanoi, while Lotte is making hectic preparations to put the 65-storey building capitalized at $400 million into operation.

Vingroup Group would open Vincom mega Mall Royal City and Vincom Mega Mall Times City soon, which would cover an area of 460,000 square meters. Aeon Mall Vietnam has received the investment license for its retail project with the investment capital of $200 million.

Duy Anh