4Q19: International brands continue to enter the market
New international retail brands were found to enter the market , while the existing ones continued to expand their presences in the quarter.
Vietnam, 14 January 2020 - Notably, Uniqlo - the Japanese global apparel retailer-opened their flagship store in Vietnam with 3,097 sqm over three floors in Parkson Dong Khoi in District 1 in 4Q19.On the other hand, the market witnessed the withdrawal of the VinPro brand, putting a strain on the occupancy rate of the Vincom chain.
While Department store closures continued in the market, existing malls saw an increase in vacancy rate as tenants relocate to the new malls nearby, which had better quality, facilities and many programs to attract buyers and visitors. Therefore, the overall vacancy rate rose in 4Q19.
Meanwhile, Crescent mall phase 2, spanning 16,000 sqm (GFA), opened in District 7 this quarter. The new phase specially focused on mid-to-high end brands and recorded a good occupancy rate of up to 90%.
The majority of malls in CBD saw rents increase marginally both y-o-y and q-o-q, supported by good location. Meanwhile, rents in non-CBD edged down slightly as the submarket was filled with old malls whose leasing activities were not so strong, as a result of competition from new malls with better quality and management service. The overall effect was a decline of 3.2% y-o-y in rents.
In 2020, some shopping malls in Non-CBD area will enter the market namely Satra Centre Mall, Socar Mall, Elite Mall and Central Premium Mall, contributing more than 280,000 sqm GFA. Besides, after renovation and brand restructuring, some existing malls are expected to improve on their occupancy rate.
As a new trend in the market, both retailers and mall developers are ireinventing themselves with focus on F&B and experiential retailers, providing better customer services and applying technology, consumer analytics to enhance their popularity and increase foot traffic.
Figure 9: Retail Total Stock
“000 sqm GLA
Figure 10: Retail Average Rents
USD/ sqm/ month
Aeon Mall opened a second shopping centre in Hanoi (the fifth in Vietnam) in Ha Dong District with 74.000 sqm in 4Q19. With its opening, Aeon Mall Ha Dong also introduced new brands to Hanoi such as Koi Thé and Digiking. The excitement toward new brands and the new project have helped Aeon Mall Ha Dong to attract an impressive number of customers in the first few weeks.
With the addition of Aeon Mall, the total supply of retail market in Hanoi reached approximately 1.2 millions sqm in 4Q19. Of which, shopping centres dominate the supply, while department stores and prime retail spaces did not record any significant growth.
The occupancy rate inched up 51 bps and reached almost 91% in 4Q19 despite the opening of Aeon Mall Ha Dong, as this new mall was only 5% vacant, indicating an effective leasing strategy. A few vacant spaces came from some Vincom shopping centres that were going through tenant mix exercise. For example, Vincom Pham Ngoc Thach was under renovation with a substantial amount of space remained closed. The shopping centre is expected to re-open the stores in 2/2020.
The average rent of the market stayed at the same level as 3Q19, at 29.3 USD/sqm/month, an increase of 1.6% y-o-y. Although located in an outer district and relatively remoted area, Aeon Mall Ha Dong was still able to set an asking price that was approximately on par with the general market, proving the appeal of the Aeon Mall chains to consumers and tenants.
In 2020, the market is forecasted to welcome new supply, mainly coming from two mega malls of Vingroup in Smart City and Ocean Park townships on the outskirt of the city. This is also a new trend in the market in which shopping centres are located in impressive areas outside the city centre. Those shopping centres usually provide a variety of entertainment and lifestyle activities such as gym, kid playgrounds, instead of purely for shopping. In addition, new brands are expected to enter Hanoi market in 2020, such as Uniqlo. This brand is expected to open its first store in Hanoi in Spring 2020, after the successful opening of its first store in HCMC in 12/2019.
Figure 19: Retail Total Stock
“000 sqm GLA
Figure 20: Retail Average Rents
USD/ sqm/ month
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