Thailand
Vietnam: Hanoi retail market sees record occupancy rate
The Hanoitimes – The market posted net absorption of approximately 67,000 sq.m, a record figure over the past quarters
The occupancy rate in Hanoi’s retail market in the second quarter (Q2) this year grew to 92% from 90% recorded last quarter.
Accordingly, the market posted net absorption of approximately 67,000 sq.m, a record figure over the past quarters, mostly attributed to malls in non-CBD (Central Business District) areas, a recent JLL report has shown.
Two newly-opened Vincom shopping centers were almost fully occupied in its first few months of trade, with less than 5% space available.
During the quarter, new non-CBD completions opened to market after Vingroup – the country’s biggest private conglomerate opened two new malls in the west of Hanoi namely Vincom Center Tran Duy Hung in Cau Giay District with 45,000 square meter (sq.m) and Vincom Plaza Skylake with 13,000 sq.m in Nam Tu Liem District.
As a result, the opening of two new malls have helped to bring up the total retail stock to nearly 1,111,000 sq.m, posting an increase of 5.5% on quarter and 14.3% on year.
Accordingly, non-CBD area is taking up 62% total retail supply thanks to an increasing number of new openings. This trend is expected to continue due to limited developable site in the city center. This ratio remind us of the situation in the second quarter 2014 when supply in CBD area contributed up to 67%.
In terms of rent, the overall market rental is US$29.3 per sq.m per month, increasing 1.6% on quarter and 2.1% on year.
Higher-than-average rent in new completions developed in good catchment area had helped pushing the overall market rent upward, JLL explained.
The growth in rent was reported in both shopping centers and department stores while prime retail space remained relatively stable due to limited supply and fully occupied for a long time ago.
Rent in Hoan Kiem District remained unchanged, while that in the rest of the city climbed up in the quarter.
Meanwhile, new malls, especially in the outer districts where concentrate most future supply, will need to prioritize their effort in creating new retail concept and improving shopping experience to fill up leasable space as well as draw footfall to their malls, JLL recommended.
As the market is experiencing an upward trend, rent is expected to continue on the rise. In addition, an increase in purchasing power from positive economic prospect will help to strengthen the trend.