21:32 (GMT +7) - Friday 27/11/2020


New supply coming for HCMC's retail real estate

Released at: 15:33, 08/01/2019

New supply coming for HCMC's retail real estate

Photo: Estella Place

2019 expected to see large supply coming on stream.

by Linh San

2019 is expected to witness a sizeable amount of new supply coming on stream in retail real estate in Ho Chi Minh City, approximately 394,000 sq m gross floor area (GFA) from 12 projects located in non-CBD areas, according to JLL’s latest report. Ten of the 12 projects are retail podiums in mixed-use projects.

Tenants who require large spaces, such as clinics, education providers, and entertainment providers, etc., continue to fill up vacant space in upper floors of retail centers that usually attract less foot traffic compared to lower floors.

Foreign retailers are expected to expand their penetration in the CBD sub-market. Centers in non-CBD areas with continuously improving infrastructure, amenities, and new concepts are likely to perform better.

In 2018, the total Ho Chi Minh City retail stock increased to 1,026,706 sq m GFA. The market added a total of 138,648 sq m GFA of new supply from three large shopping centers: Van Hanh Mall, Vincom Center Landmark 81, and Estella Place, the latter of which was put into operation in December. Three department stores withdrew from the market during the year: Parkson Flemington, Parkson Cantavil, and RomeA.

Despite the entry of new supply and two more shopping malls undergoing restructuring, the overall occupancy rate increased 34 basis point quarter-on-quarter, revealing positive demand in the market. Estella Place recorded good occupancy rates, at about 85 per cent at opening time, thanks to a good project concept and the solid reputation of the developer.

F&B and entertainment tenants continued to show good performance and remained the most active group of tenants in the city.

The overall market rent was around $47.6 per sq m per month, up 0.9 per cent quarter-on-quarter and 2.8 per cent year-on-year. In both CBD and non-CBD areas, several shopping malls restructured their layout and reviewed rents upwards for new tenants, resulting in an increase in average rents in both sub-markets.

User comment (0)

Send comment