Food and beverage (F&B) and fashion and lifestyle will continue to drive demand in Ho Chi Minh City’s retail property market, according to real estate consultancies.

In a report about the city property market, CBRE said: “In terms of consumer behaviour, F&B, fashion and accessories, entertainment, convenience stores and beauty and health continued to be among top attraction categories. At some shopping centres, renovation is under progress to target these changes in consumption trends.”

Jones Lang LaSalle (JLL) said: “International affordable/mid-end brands and local chain stores in F&B, beauty and healthcare, fast fashion, and entertainment have shown encouraging performance and are preferred by most landlords.

“In an effort to induce customer spending, many tenants have started to collaborate with popular fintech [financial technology] apps such as Momo, Grab Pay by Moca, Vnpay and so forth to provide attractive promotions.”

Speaking about the market, the companies reported a slump with no supply emerging in the third quarter.

A CBRE report said there was not a single new retail property opening during the quarter.

Parkson CT Plaza in Tan Binh district changed ownership, was renovated and has been renamed Menas Mall.

Also in the review quarter, Parkson Saigontourist remained under renovation and plans to reopen next year. Thus, only Parkson Hung Vuong Plaza remains in operation while the other Parkson projects are either closed or going through significant changes.

The city has a total of 57 retail projects with net leasable area of 1.043 million square metres.

In its report, JLL said: “In the third quarter the total retail stock remained unchanged with no new supply coming online. Vacancies have been relatively stable in both the central business district [CBD] and non-CBD sub-markets in recent quarters.

“It has become challenging for tenants requiring more than 1,000sqm to find a suitable place in existing malls. Almost all will have to wait for vacant space in new supply or at the centres currently undergoing renovation.”

Rentals stand at around $135.5 per square metre in the CBD and $35.8 elsewhere.

Average rentals in the CBD increased by 3.7 per cent quarter-on-quarter, while in other places they decreased by 0.9 per cent.

On an annual basis, non-CBD rentals increased by 0.2 per cent and CBD rentals by 5.8 per cent.

According to CBRE, occupancy rates did not see any change in the department store and retail podium formats.

In the shopping centre format, renovation and tenant mix revision in some projects had temporarily picked up the overall vacancy rates, but they are expected to improve in the coming quarters.

Potential ahead

Although the number of new international brands entering the market in the third quarter was limited, the retail market in both Ho Chi Minh City and Vietnam as a whole was still considered attractive by international retailers and developers, thanks to the growth in the country’s young population and changes in their shopping behaviour, the companies said.

In the third quarter, Japan’s Stripe International acquired Vascara two years after its acquisition of NEM brand.

Also, Amazon opened an office in Vietnam to support small and medium-sized enterprises and individuals participating in online commerce.

According to Inside Retail Asia, South Korean retailer BGF will enter Vietnam next year by opening a convenience store chain named CU.

In the last quarter of this year, Crescent Mall Phase II (Crescent Hub) will open with a total net leasable area of 16,000sqm.

CBRE said: “In 2020 we estimate that 237,000sqm of new net leasable area will come from eight projects across Ho Chi Minh City. Vincom Mega Mall Grand Park, with 48,000sqm of net leasable area, will be the biggest project to open in 2020. The project is the retail component of Vinhomes Grand Park, a 271ha township by Vingroup in District 9.”

VIET NAM NEWS/ASIA NEWS NETWORK