Real estate analysts believe there is still potential in the retail sector despite the closure of Parkson Landmark.
According to Savills’ Q4 2014 report, Hanoi’s total retail supply increased 3 per cent quarter-on-quarter (QoQ) and 9 per cent year-on-year (YoY). The capital also welcomed two new projects: the CTM Building in Cau Giay district and Ho Guom Plaza in Ha Dong district, both of which opened during the quarter.
Total take up was approximately 2,800 square meters, down 96 per cent QoQ due to negative take up in the secondary area. The report also showed that occupancy fell 3 per cent QoQ, of which department stores showed an improvement of 2 per cent QoQ while shopping centers and retail podiums fell by up to 3 per cent.
Unlike most other sectors, especially apartments for sale, there seems to be few positive signs in the retail sector. Moreover, the closure of Parkson Landmark earlier this month created a lot of debate over whether retail still has potential to develop.
Savills’ report, however, indicated that the retail sector has prospects for the future. In 2015 it’s predicted that approximately 397,000 square meters of retail space from 19 projects will enter the market. Of these, two projects have been completed but their opening day is still to be announced, while nine projects are currently being fitted out. In 2016 five new projects will provide 356,000 square meters for the retail real estate market.
Based on these figures, Ms. Do Thu Hang, Head of Research at Savills, continues to believe in the development of the retail sector. It is in the middle of a process of adjustment and should be able to avoid the difficulties experienced by Parkson Landmark. “Vietnam’s retail market has found a suitable direction, which is to develop supermarkets and entertainment complexes to meet demand,” she said.
- Retail market