In early February, Central Pattana, a member of Central Group (one of Thailand’s leading conglomerates), officially established a legal entity in Vietnam as CPN Global Co., Ltd. This company mainly operates in the real estate sector and has a charter capital of 20 billion VND, with Central Pattana owning 100% of the shares. The representative in Vietnam for this legal entity is Mr. Chanavat Uahwatansakul.
This action is predicted to mark the start of the retail real estate expansion activities in Vietnam by the Thai “giant”. In an article published in Bangkok Post on March 9, 2023, Wallaya Chirathivat, CEO of Central Pattana, stated that the company will invest in mega projects over a period of 5 to 10 years, with each project covering an area of more than 350,000 square meters and an investment value of over 20 billion baht (approximately 14,000 billion VND), with a focus on Vietnam and Malaysia.
This information also attracted attention as last year, an international online newspaper reported rumors that Central Group could acquire shares in a major retail real estate company in Vietnam. However, subsequently, a subsidiary of Central Group, Central Retail, denied the rumors.
In fact, it is not difficult to understand why Central Pattana is venturing into the retail real estate sector when its “sibling” Central Retail has already developed a wide-ranging ecosystem in the retail industry. Moreover, the retail real estate sector in Vietnam is a large market where many “giants” are competing.
After the Covid-19 pandemic, especially in 2023, there has been a wave of major investments. Many big names have announced plans to enter the market, such as AEON, Saigon Co.op, Thaco, Central Retail, Lotte, and a new player from Kido Corporation.
Central Pattana is a subsidiary of Central Group – a Thai conglomerate managed by the wealthy Chirathivat family. The Chirathivat family is currently ranked 4th among the richest families in Thailand with an estimated wealth of over 12 billion USD.
Foreign “big players” are quickly taking their share
Lotte – the South Korean “giant” after announcing its withdrawal from China, is now making plans to expand its presence in Vietnam. Last September, the Group inaugurated Lotte Mall West Lake Hanoi located on Vo Chi Cong Street in Tay Ho District. According to the introduction, this is the most magnificent commercial complex ever built by Lotte in Vietnam with a total floor area of 354,000 square meters.
Photo: Last September, the Group inaugurated Lotte Mall West Lake Hanoi located on Võ Chà Công Street in Tây Hồ District.
In this area, another shopping center developer, Takashimaya, has also acquired a plot of land from the investor since 2019 and plans to develop it in the period from 2025 to 2027. In Ho Chi Minh City, Takashimaya is considered one of the most effective shopping centers with high occupancy rates and always crowded with customers.
Another Japanese player, AEON, cannot be overlooked. Recognizing Vietnam as a key market, in addition to large grocery stores, the Japanese “giant” has been diversifying its presence through different formats. For example, AEON recently opened a 5,000-square-meter supermarket at SORA Gardens SC in the new city of Binh Duong, following the debut of its compact supermarket model, AEON The Nine, in Hanoi last year.
So far, AEON has had six large-scale supermarkets nationwide, along with a series of small-scale supermarket chains, comprehensive grocery centers, compact supermarkets, and specialized stores. With regard to the six large supermarkets, the total floor area of AEON Mall has reached 406,000 square meters.
According to the financial statements for the fiscal year 2022 (from March 1, 2022 to February 28, 2023) of AEON, the company’s operating revenue in Vietnam reached nearly 13.3 billion yen (2,300 billion VND), an increase of nearly four times compared to the previous two years affected by the pandemic. Operating profit also increased from a loss of 83 million yen to more than 3 billion yen (over 510 billion VND).
Local investors are making a “comeback”
Conversely, domestic investors are not giving up either. Vincom Retail – known as the first unit to conquer “underground shopping centers in Vietnam” and is currently leading the local retail real estate market.
As of the end of 2023, Vincom Retail operates 83 shopping centers located in central locations in all 44 provinces and cities of Vietnam. In 2024, Vincom Retail plans to open 6 more shopping centers with a total retail floor area of about 160,000 square meters, maintaining its position as the leading retail real estate developer in Vietnam and the region.
In 2023, Vincom Retail’s gross revenue reached 9,791 billion VND, with a post-tax profit of 4,409 billion VND, an increase of 33% and 58.8% respectively compared to the same period, setting a record for the company’s annual performance.
In recent years, several other “big players” have entered the market. Truong Hai Auto Corporation (Thaco) is preparing to build its fourth Emart supermarket in West Lake . Specifically, Dai Quang Minh Company has been approved as the investor for the project of the Commercial, Service, and Shopping Center on the land plot B1-CC1-2 in a 2.4-hectare area in Tay Ho Tay urban area.
Thaco has just put Thiso Mall Truong Chinh – Phan Huy Ich into operation in Ho Chi Minh City with an area of over 10,500 square meters. Thus, Thaco is on the right track with its plans set at the beginning of the year, along with the statement “retail is not as difficult as people think”, and the goal of becoming the number one supermarket brand in Vietnam.
By 2026, the company aims to expand its system to 14 locations from North to South, become a leading commercial and service corporation, and make Thiso Retail – Emart Vietnam the number one supermarket brand in the country.
Following the success of Vạn Hạnh Mall, Mr. Tran Le Nguyen – representative of Kido Corporation (KDC) – recently introduced a similar shopping center at 126 Hong Bang, Ward 12, District 5, Ho Chi Minh City . The project is called Hung Vuong Plaza, with 7 floors from the 1st to the 7th floor and a total commercial floor area of 30,000 square meters. The total investment capital is 200 billion VND, with an estimated monthly revenue of 20 billion VND.
In fact, it is not without reason that just a few years after the operation of Vạn Hạnh Mall, Mr. Nguyen confidently decided to build a new shopping center at a location where foreign brands had failed, especially in the current context of declining purchasing power. With the same area as other brands such as Vincom… which is 50,000 square meters, Vạn Hạnh Mall has proven to be very effective, generating hundreds of billions of VND in revenue and making a profit.
In 2023, Vạn Hạnh Mall is expected to achieve revenue of 450 billion VND, with a net profit of 150 billion VND; corresponding to a profit margin of 33.3% on revenue. Hung Vuong Plaza is estimated to generate 250 billion VND in revenue in its first year of operation.
Buoyed by its success, after Hung Vuong Plaza, Mr. Nguyen revealed that there may be plans to develop a similar shopping center at the current Pandora Truong Chinh location (currently being leased by partners). According to this plan, the center will be built and serve various customer segments, particularly young people in the surrounding areas.
In addition to the planned Pandora project, Mr. Nguyen even said that there are many real estate companies that have approached him for leasing spaces because they have not been able to exploit them. In particular, the company is considering the District 8 area.
