Market news


Hanoi receive new large retail supply commercial space for lease

2018 is expected to be an active year in the Hanoi retail market with a total of 157,000 Sq. m coming from eight under-development projects. This is the largest number of new projects ever planned for a single year and is only surpassed by 2013 in terms of scale. Most of these new projects are located in fast developing residential areas with good connecting infrastructure and which are expected to be attractive to both retailers and consumers. Hence, despite this new supply causing pressure on the vacancy rate, the average market rent is still expected to remain relatively stable or even to slightly improve.

(Hanoi commercial leasing and rental outlook)

Significant new supply expected in non-CBD areas

Meanwhile, the majority of current supply is located in different clusters in Non-CBD areas, in residential areas or other areas with good access to population centres. In the next few years, the Hanoi retail market is likely to follow the expansion trend of residential and infrastructure developments. The areas along Ring Road 3 and the two under-construction metro lines including the West, South West, and South will be hot-spots with nearly 375,000 Sq.m of retail space coming online over the next three years. Significant projects include Aeon Mall Ha Dong in addition to several shopping centers by Vincom and FLC. The North of the city is also quickly evolving with a new project announced earlier this year to be developed by Lotte Group, a Korean developer.

Particularly, an Emerging CBD will soon to be formed in the western area of Hanoi. The area covering Cau Giay, Tu Liem, and Thanh Xuan district is currently the largest retail cluster in Non-CBD, accounted for 41% of total supply. It will continue to remain its position in the next few years with 83,300 Sq. m future supply in the pipeline.

In terms of format, malls as a component of residential complexes will continue to thrive, thanks to a high level of supply in the condominium market. Eight out of twelve future projects up to 2020 are retail podiums. This format has certain advantages such as having resident potential customers and increased traffic due to the residential component, providing added services and amenities and improving the image for the whole project. However, suitable scale, design and parking spaces will be key factors for successful malls.

 

Song Chau Group (SCBI).

Tags:

Related news

Some developers HCMC's retail sector will be forced to lower rental expectations

Some developers HCMC's retail sector will be forced to lower rental expectations

Vietnam’s retail market has jumped to 6th place, higher than some developed markets in the region such as Singapore, Hong Kong, and Indonesia and showing high potential for further growth. Vietnam market achieved high scores in terms of market saturation with good scope for growth. Saturation in both Hanoi and Ho Chi Minh City is far behind the levels seen in some other SEA cities
Hanoi's office rental recovery with new supply and occupancy rate 2018-2020

Hanoi's office rental recovery with new supply and occupancy rate 2018-2020

Commercial leasing activities will continue to be active, with rental growth and occupancy levels expected to witness sustained improvements across all property types. Meanwhile, occupiers from the traditional sectors of manufacturing, financial and tech industries retained their position representing nearly 50% of total enquiries. Sustainable demand from traditional sectors combined with the rise of new sectors of Logistics, Education, and Co-Working are expected to be key drivers which will boost net absorption.
HCMC office for lease enjoys further with rental growth and demand for office space over the next three years

HCMC office for lease enjoys further with rental growth and demand for office space over the next three years

The office sector in Ho Chi Minh City first quarter 2018 on a positive note. Rents improved in both cities even on the back of new supply added to the market. The improvement in performance was observed across Grade A and Grade B buildings, because of stable predicted growth in the economy and the city’s ever improving infrastructure in the form of metro lines. Projected Rental growth in 2018–2020 is a result of continuing appetite for quality supply
Vietnam’s economic growth rate to "impulse real estate market 2018"

Vietnam’s economic growth rate to "impulse real estate market 2018"

"As the economy had a stellar performance in 2017, Vietnam’s real estate investment scene continues to attract more and more interest from foreign investors and developers across all sectors. Vietnam’s real estate market is entering 2018 with a positive sentiment, despite some skepticisms about oversupply in the upscale residential sector, especially on secondary and rental markets."
"Serviced Apartment Q4 2017" Quarterly Report - Ho Chi Minh City, Vietnam

"Serviced Apartment Q4 2017" Quarterly Report - Ho Chi Minh City, Vietnam

"Q1 2018, an estimated 1,280 units of "serviced apartment" supply will enter the market by the end of 2018. In spite of the fact that landlords have enjoyed favorable market conditions with high occupancy rates and steadily increasing rental rates, Ho Chi Minh City serviced apartment market has seen increased competition from new buy-to-let apartments."
"Real Estate Q4 2017" Quarterly Report - Ho Chi Minh City, Vietnam

"Real Estate Q4 2017" Quarterly Report - Ho Chi Minh City, Vietnam

In 2018, the East and South will continue to be hotspots of the market with more new launches condominium / apartment. Within the next three years, office and retail market will be more competitive as a large amount of supply from community retail podium will be launched. Rental growth will increase at a slower pace as existing supply will remedy their rents more strategically while vacancy rate will surge up momentarily before dropping down
"Office Leasing Q4 2017" Quarterly Report - Ho Chi Minh City, Vietnam

"Office Leasing Q4 2017" Quarterly Report - Ho Chi Minh City, Vietnam

2017 witnessed the "office market bustling with new supply and healthy absorption." 2018 onwards will witness the market coming up with better supply albeit at a slower pace than 2017. "Rental growth will increase at a slower pace as existing supply will remedy their rents more strategically while vacancy rate will surge up momentarily before dropping down just as quick as the market will continue its healthy absorption momentum with new supply"
Vietnam continues to be the "TOP of destination foreign investors in 2018"

Vietnam continues to be the "TOP of destination foreign investors in 2018"

"Vietnam continue attracting foreign investors in 2018 and next ten years". Apart from subjective factors, in terms of objective factors; domestic market with the size of significant "population compared with other countries, young and dynamic population, middle class is increasing, urbanization grows fast pace will be make force the demand not only for housing market, also retail market, office building, etc."
The tenant looking out form Ho Chi Minh City "overload centre"

The tenant looking out form Ho Chi Minh City "overload centre"

With the narrow land fund in Ho Chi Minh City present, daily traffic jam; "office rentals and other service are rising" will be make burden for business, that is the reason why the tenant looking out form Ho Chi Minh City centre. "Thu Thiem" county town will be one of new centers in the future.