According to the latest data from Savills’ Prime Benchmark report, retail rental prices in Ho Chi Minh City and Hanoi are maintaining their high levels due to limited supply.
Retail rental prices in Ho Chi Minh City and Hanoi increased by 4.7% and 4.6%, respectively, in the first half of this year.
The demand for premium retail space is on the rise as investors and retailers view Vietnam as a promising business destination.
The country’s economy and consumer market are being fueled by favorable demographic trends and urbanization across provinces and cities. The expanding middle-class consumer base is driving the need for more retail space.
Meanwhile, the recovery of international visitor arrivals—a 46% increase in the first eight months of 2024—has boosted business activities, especially in upscale shopping malls and centers in major cities, which are also tourist attractions.
According to Savills, Ho Chi Minh City currently offers approximately 1.49 million square meters of leasable retail space, with an occupancy rate of 92%. “Limited supply has created fierce competition for premium retail space, especially in central districts,” said Tran Pham Phuong Quyen, Senior Manager of Savills Retail Leasing.
In Hanoi, the lack of supply has also led to high occupancy rates and stable rental growth in premium projects, despite the market anticipating new project launches. Du Thi Thu Hang, Director of Advisory and Research at Savills Hanoi, foresees this trend continuing in the coming time.
Savills: Ho Chi Minh City and Hanoi are in a high growth phase, nearing the peak of the market.
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“The main challenge for retailers is balancing the high rental costs in central areas with limited options,” said Giang Huynh, Director of Research and Market S22M at Savills Ho Chi Minh City.
In Ho Chi Minh City, modern retail space is mainly concentrated in the central area, but there is now a dispersion to other districts. According to Savills, new retail projects in Districts 2, 7, and Go Vap will soon offer more choices for tenants.
According to Giang Huynh, the development of leasable space in non-central areas is accelerating, thereby providing more opportunities for retailers planning to expand with more reasonable costs.
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