How is Hanoi’s retail market sector, especially in the west?
The current market supply is about 700,000sqm with striking projects such as Keangnam Landmark Tower, Long Bien and Savico Vincom Centre Mall. There is also new supply from forthcoming retail podiums such as CornerStone and Song Hong Land.
A significant difference is recorded in the average rent especially in terms of location. Highest rent in downtown area can reach $200 per square metre per month, while average rent in outlying areas or suburbs is only around $25 per month. Occupancy rate is around 89 per cent.
The west is still a hot area and for retail in particular, with the appearance of Garden Mall, Keangnam Landmark Tower – and a major project under the well-established Parkson brand.
According to some professional consulting companies, there is more than a million square metres of retail space. Is the massive investment in shopping centres a reason for oversupply?
We can say supply is abundant now, but the market still lacks practical projects with relevant floor layout, convenient utility system and in accordance with customer requirements
Therefore, Cushman & Wakefield offers advice from the first phase of development, since investors just have land, without any strategy for layout and design where we consult as per customers’ demand to bring highest occupancy to future projects.
In reality, Cushman & Wakefield with a global network receives many enquiries about retail spaces, transaction office of global organisation or international brands, but when it comes to space short listing, there are few options for occupiers, which shows the limited capability of real estate supply.
In fact demand for retail space is quite significant, but the abundant supply of retail space in the west is not getting a lot of attention, what is your idea about this?
The market in the west is not exciting as this is a newly developing area of the city and the buying trend of Vietnamese people is still around downtown. Besides, leasing strategy and pricing strategy is not relevant to commercial centre tenants, especially the design features, and services not yet suitable which limits the chance to maximise business for tenants
The number of retailers in Vietnam is still limited and there should not be very significant changes in the short term.
What is important to attract tenants according to Cushman & Wakefield?
The most important factor is location, whether the retail space is suitable with tenant’s business development strategy and the local residents could be their customer’s target. Others prerequisites include good price, relevancy with tenant’s business, available floor outlets, flexible interior design, good escalator facility, good exhibition light as well as long-term promotional strategy of the investor.
What do you expect out of the retail leasing industry in Vietnam?
I believe Vietnam’s retail market is still in its initial stage of development. Global crisis may have some significant impact on the market, but in the long term there is still a lot of space for development.
In the next few years many retailers and large corporations will enter the market in Vietnam, most of whom Cushman & Wakefield are representing.
Bich Ngoc (vir.com.vn)