Property market heats up as demand builds

18:33 | 13/06/2005

More retailers are taking up space in shopping centres while vacancy rates at office and apartment buildings in both Hanoi and Ho Chi Minh City continue to fall, according to a market update from property consultant CB Richard Ellis released last week.

Vietnam’s shopping spree: retailers are flocking to Hanoi and HCMC as vacancy rates tumble

The update showed that the retail market in Ho Chi Minh City looks set to heat up following the arrival of fast food giant The Mirror Food Group from Thailand, which will offer the Italian Pizza and Swensen’s ice cream brands in stores throughout the city.
CB Richard Ellis revealed that the 30-year company is expected to open its first fast food outlet in District 1 in August. During its first year of operations, the company also plans to open two pizza restaurants and two Swensen’s ice cream stores in the second city.
The first Clarins Institute in Vietnam opened last month in a prime retail space on the ground floor of the Jardine House on District 1’s main shopping artery of Dong Khoi street, occupying a total floor area of 341 square metres.
In Hanoi, international brands such as Levi’s, United Colours of Benetton, A II Z, Giordano, Bossini, Misaki, Bonia and Braun Buffel, have all opened new stores in the Vincom City Towers.
CB Richard Ellis said the luxury brand retail market in Hanoi would also be given a boost with the Pacific Place development, which is currently under construction and will be offering attractive terms to international retailers.
Regarding the rental market, the property consultant’s update showed the average occupancy rate of serviced apartments in Hanoi peaked at 98 per cent of the total supply.
“The best projects are full or almost full as the number of expatriates has grown in recent years in line with the Vietnamese economy’s expansion and growth,” the report stated. “There has been particularly high demand for luxury apartments in the West Lake area.”
Rental rates range between $950 to $9,300 per unit per month for a one bedroom apartment to a five-bedroom penthouse, while an independent villa fetches $2,500 to $8,000.
“It is expected that Grade A serviced apartments will continue to have low occupancy levels, and rental rates will remain stable for the next few years,” the consultant claimed.
Ho Chi Minh City will see a sharp increase in the stock of serviced apartments in the next 12 months owing to a range of condominium projects about to be completed. An additional 500 units will be available for lease from projects like the Manor in District 1, Phuc Thinh in District 5, Hiep Phu in District 9 and Gia Phuc in Thu Duc District.
In the short-term, Saigon View serviced apartments, due for completion in three months in Binh Thanh District, will accommodate the rising demand from expatriates with lower budgets, looking for reasonably priced apartments with international-standard
services and management.
On the office front, Grade A and B office space occupancy rates in Hanoi remain high at 98 per cent and 94 per cent respectively, leaving little good quality space available to new arrivals in Vietnam.

Tran Son

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