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02Aug2024
Industry Reviews / Latest News & Report
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Market overview
In 2023 and early 2024, continuation of economic difficulties and reduced purchasing power have impacted many retail businesses. Street front rental properties and modern retail supply both experienced lower occupancy rate than pre-2019 levels, taking example of Hanoi and Ho Chi Minh City (HCM). However, many signs of recovery have been observed.
Situation of street front rental properties
For street front rental properties, as reported by Lao Dong newspaper on February 29, 2024, in Hanoi, numerous streets in central districts such as Ba Dinh, Thanh Xuan, and Dong Da are seeing closures and urgent lease signs. Mr. Nguyen Quoc Khanh, Vice President of the Vietnam Association of Realtors (VARS), notes that while there is demand, many potential tenants are in a waiting state, hoping for more affordable premises. The retail space market in Hanoi might start to recover in the second quarter of 2024, yet is only expected to reach about 80% of its pre-2019 levels.
However, contrary to the scene of mass leasing signs, several prime business locations in the Hoan Kiem district, such as Trang Tien, Tran Hung Dao, Ba Trieu, and Ly Thuong Kiet streets, continue to attract numerous brands. Specifically, areas in Hoan Kiem have recently welcomed and expanded stores of luxury to high-end brands, including Louis Vuitton, Dior, Berluti [1]
Situation of modern retail properties
For modern retail supply, in HCM during 2023, the occupancy rate remained relatively stable quarterly at 90% and saw a 1.9 percentage point increase compared to the previous year, thanks to good occupancy rates in newly launched projects[2]. The year 2023 witnessed notable progress in the retail sector in HCM, with various new projects and projects aimed at revitalizing existing shopping destinations[3]. The future modern retail supply in HCM is expected to continue to increase, with an average annual growth rate of more than 4% during the 2022-2027 period.
Modern retail supply in HCM（10 thousand m2）
Source：Cushman & Wakefield（2022）
Examples of modern retail projects in Ho Chi Minh in 2023
Source：Cushman & Wakefield（2023）
Opportunities and challenges
The trend of new brands entering Vietnam and expanding scale is still strong in 2023. Many chose shopping malls to set up their stores such as Uniqlo, H&M, Miniso.
