Ha Noi saw good performance in the retail property market in the first quarter of this year. – Photo internet
Ha Noi’s retail property market performed well in the first quarter of this year, however challenges remain from the development of e-commerce, experts said.
Total stock was about 1.4 million sq.m, including supply of 16,000 sq.m from one project in inner Ha Noi, according to Savill Viet Nam’s report on the capital’s property market in the first quarter.
Retail podiums in fast-growing residential areas have performed well with high occupancy rate, leading to a rising development trend of shop-house podiums, the report said.
“Global luxury brands have shown interest in Ha Noi, however, the market has yet to offer quality retail space matching tenants’ requirements,” said Hoang Dieu Trang, Senior Manager, Commercial Leasing of Savills Viet Nam.
According to the quarterly report on Ha Noi property market released on Thursday by JLL Viet Nam, in the first quarter of this year, the occupancy rate reached nearly 90 per cent, up by 1.6 percentage points quarter-on-quarter.
The demand for projects having good catchment area and eye-catching visibility remained strong. Good quality food and beverage and fashion operators drove most leasing enquiries in the first quarter, JLL said.
In addition, convenience stores continued to show expansion with more stores opened by retailers such as Circle K and Vinmart. As of the first quarter, total existing space reached 80,100 sq.m, mainly came from the non-central business districts (CBD) sub-market, it said. These areas included all districts except Ba Dinh, Hoan Kiem, Dong Da and Hai Ba Trung.
Overall market rent was at about US$28.8 per sq.m per month, up by 0.02 per cent quarter-on-quarter and 1.1 per cent year-on-year. In CBD areas, average rent was recorded at $84.9 per sq.m per month, up by 0.2 per cent from last quarter, while non-CBD area saw a moderate increase of 0.03 per at $27.7 per sq.m per month.
Ground floor rents in the largest retail supply areas, Dong Da, Ba Dinh and the west, remained stable at $30.4 per sq.m per month in the first quarter as the market gradually absorbed new openings in 2018. Vacancies in these areas decreased 9.3 per cent in the quarter, down 1.8 percentage points year-on-year and 3.3 from the previous quarter, according to the CBRE Viet Nam’s report on Ha Noi market released on Wednesday.
These areas were most likely to see rent adjustment and increased pressure on vacancies by the end of 2019 with four future projects (nearly 70 per cent of new supply) located in this area, said Nguyen Hoai An, Director, CBRE Ha Noi branch.
Amid the disruption of e-commerce, while food and beverage firms were gaining market share with growth in internet retailing, other retailers face challenges of keeping track of consumer habits, she said.
Consumer lifestyles were rapidly evolving, requiring retailers to invest in innovation to keep up with emerging trends, Trang from Savills said. Retailers were expanding their social media presence to engage shoppers and robust growth of e-commerce was expected to continue.
"Many projects have transformed into community hubs, lifestyle centres and entertainment complexes and entertainment providers have expanded to attract a wider demographic," she said.
Retail projects within residential complexes are expected to grow. Large-scale and professionally developed projects such as Lotte Mall and Aeon Mall Ha Dong are anticipated for their impacts on the surrounding areas, according to Savills. — VNS