Article

Hanoi Retail Market 2Q21

Rents inched up in CBD area while remained stable in non-CBD area

July 02, 2021

No new completions entered the market

Hanoi retail market stayed quiet with no new completion coming on stream. The fourth outbreak, coupled with social distancing measures, led to the delayed opening of some shopping malls. Therefore, the total stock of the Hanoi retail market remained stable in 2Q21, with around 530,000 sqm NLA in Prime Malls, accounting for 62% of the total retail supply of the city.

Demand shows a slight recovery with the expansion of foreign brands

With the fourth outbreak of Covid-19 resurgence in May, most Prime Malls in Hanoi recorded an occupancy rate above 90%, and the overall vacancy rate stayed stable at 9.4% by the end of 2Q21. The pandemic has limited the extent of new transactions in this quarter to small and medium sizes, mostly in the CBD area. Therein, the occupancy rate of Prime Malls in CBD inched up to 88.4%, up by 0.4% q-o-q. In contrast, non-CBD recorded 90.9% occupied space, slightly down by 0.1% q-o-q due to some brands returning space.

In fact, new transactions in 2Q21 have proven that Hanoi retail market still catches the attention of foreign brands. One of the most notable and worth-mentioning brands is Jaguar Land Rover - a renowned premium automobile that has opened its first experience studio in Trang Tien Plaza, or the Korean fashion brand Hazzys that expanded by setting up a new store in Vincom Ba Trieu.

Subscribe

Looking for more insights? Never miss an update.

The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.

Subscribe

Rents inched up in CBD area while remained stable in non-CBD area

The average net rent of Prime Malls in Hanoi was 32.25/sqm/month in 2Q21, slightly inched up in the CBD area but holding flat in non-CBD. Owing to its resilient performance and attracting high-end foreign brands, the rental rate in City Centre climbed up to USD 62.8/sqm/month, equivalent to a growth of 1.1% q-o-q. Meanwhile, the figure for non-CBD stayed constant at USD 28.6/sqm/month due to the lingering impacts of the pandemic. Several landlords have applied for rental concessions to support tenants, normally in F&B and entertainment industries.

Outlook: The market remains stable

In 2H21, Hanoi retail market will welcome 76,165 sqm NLA with the most prominent project – Vincom Mega Mall Smart City in Nam Tu Liem district. The opening of these new malls, having been continuously delayed due to Covid-19, will mostly rely on pandemic containment in the next six months.

Meanwhile, the rental rate is estimated to hold flat till the year-end, with a projected bounce back from 2022 once the pandemic is expectedly well contained.

Note:

Prime rents refer to average net effective rent of Prime Mall across the city, excluding VAT and service charges. Please refer to terminology for definition of Prime Malls
City Centre refers to Hoan Kiem, a part of Ba Dinh and Hai Ba Trung District. City Fringe refers to the rest of the city.

Source: JLL Research