The retail market started to record recovery signals as both occupancy rates and rental rates showed signs of growth again.
Savills report shows that many new international brands such as Columbia, %Arabica, Ain & Tulpe, 6ixty8ight and brands that have delayed their plans to enter the market in 2021 such as Bath & Body Works, Prima Donna and Sport Direct will open a store in Vietnam this year. In which, Ho Chi Minh City and Hanoi are favorite destinations.
According to Ms. Tran Pham Phuong Quyen, Manager of Retail Space Leasing of Savills Vietnam, since the beginning of the year, rental demand has increased again with impressive expansion plans of businesses.
At the same time, a series of new models such as central kitchens, satellite distribution stores around, or multi-brand integrated stores, even many new supermarket models such as Novamart, Fujimart… also contributed. Part of making the rental market exciting, the absorption rate of the premises gradually improved.
In fact, in the first 3 months of the year, the average occupancy rate in the whole city was recorded at a high level, up to 92%. The average asking price also increased by 3% QoQ and YoY, reaching 1.2 million VND/m2/month. Particularly for projects in the central area, this figure is close to 3 million VND/m2/month.
It is worth mentioning that the developers have increased the minimum rental period and applied an annual price increase policy of up to 10%.
However, Ms. Phuong Quyen believes that the increasing domestic consumption is strengthening the confidence of retailers so that they open new stores throughout the districts and regions, instead of previously only concentrated in District 1, District 3 crowded with tourists. This is the reason why the trend of increasing rents mainly comes from projects outside the city center.
According to her, despite the pandemic, physical stores are still a key sales channel, thanks to the advantages of the strength of brand recognition, product experience space and comprehensive customer care. Product launches and exchanges are held here.
“Refer to a few brands Savills is working on, the supermarket group is aiming to open 10 stores, the fast fashion industry is targeting 2 new stores, the accessory brands are targeting 8 new stores, the restaurant group is has a target of 4 new stores this year…”, Ms. Quyen added.
According to experts from JLL, the brands that made outstanding contributions to transactions in the first quarter of the year were Chuk Chuk, Con Cung and the Nova Market supermarket chain. In the remaining 9 months, the food industry, convenience stores and pharmacies are forecast to lead the market’s demand.
Along with that, shopping malls that have to postpone their inauguration due to the impact of the social distancing order are likely to open this year, providing the market with more than 100,000 m2 of new floors for lease. However, according to Savills, 74% of this new supply comes from off-center projects.
Savills’ research department forecasts future supply to 2025 will reach nearly 400,000 m2 from 24 projects. Thaco will develop two Emart projects in Go Vap and Thu Duc City, while Aeon plans to open more shopping centers in Hoc Mon.
@ Zing News
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Source: Vietnam Insider