Factors of diversified supply sources, competition from brands, and the participation of international brands are promoting the development of the retail market in Hanoi.
Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing Department, Savills Hanoi, shared about the current outstanding developments in the retail market, while emphasizing future trends and prospects.
Hoan Kiem area, with its position as the historical and cultural center of Hanoi, attracts a large number of civil servants, tourists and local residents. (Photo: PO)
How do you evaluate the Hanoi retail real estate market in 2023?
- Data in the market reports for the fourth quarter of 2023 just released by Savills Vietnam shows that since 2019, the supply of retail space has remained stable, with shopping centers increasing by 2% per year in supply, and retail podiums recording the highest increase with an average of 7% per year. In the fourth quarter of 2023, the total retail supply reached 1.78 million square meters, of which shopping centers accounted for 63% of the supply, equivalent to 1.1 million square meters.
Retail occupancy in Q4 2023 increased by 2% quarter-on-quarter to 88%. Of which, retail podiums recorded the highest occupancy increase of 4 percentage points, followed by shopping malls with an increase of 2 percentage points. Shopping malls had the largest additional leasable area and accounted for the highest proportion.
The emergence of diverse new brands, along with the expansion of international brands, not only provides more choices for consumers but also contributes to enhancing Hanoi's position on the regional retail map.
According to you, which retail model has been "popular" with retail tenants in the past year?
- In the Hanoi market, location plays an important role in the rental decisions of brands. With the differentiation of areas, each place brings its own unique characteristics to serve the diverse needs of brands.
For example, the Hoan Kiem area, as the historical and cultural center of Hanoi, attracts a large number of civil servants, tourists and locals. The area is often home to government agencies, embassies and headquarters of multinational companies, and has maintained its appeal, especially for luxury brands.
In addition to existing brands, other high-end and luxury brands in the world are still interested in this area and are looking for premises suitable for their brands and models.
However, in reality, shopping malls are a retail model that many tenants are interested in, especially with high-quality premises, full legal status and fire prevention and fighting standards.
It is important that these shopping malls are well organized, from advertising strategies to tenant zoning and operational management strategies, as these are important factors in operating and maintaining the shopping mall.
The key to the success of today’s shopping malls lies in the integration of scientific tenant segments, retail and entertainment brands, and food and beverage services. Today’s customers are not only looking for a place to shop, but also want a comprehensive experience with entertainment and culinary activities.
This area still maintains its appeal, especially for high-end brands. (Photo: MN)
According to you, what will be the trend of the retail market in the coming time?
- Retail market trends in the coming time will be shaped by factors such as increased spending on services, a move towards sustainable and environmentally friendly stores, along with a focus on providing unique experiences for customers.
In the future, the Vietnamese retail market will witness strong growth in the food and beverage (F&B) industry. Entertainment retailers such as cinemas and amusement parks will also attract a large number of customers.
The combination of online and offline shopping through omnichannel retail strategy is also becoming popular, bringing flexible and convenient shopping experiences to customers. Retailers are creating unique shopping spaces and new experiences, turning retail into a creative and attractive experience destination. This will certainly increase the competitiveness of the Vietnamese retail market in the coming time.
What is the outlook for the market in the coming time, both in terms of opportunities and difficulties and problems that need to be solved, madam?
- The outlook for Vietnam’s retail market in 2024 includes both opportunities and challenges. On the one hand, retail supply remains limited, and reputable developers are holding the majority of high-quality supply, especially in downtown areas. This requires retailers to build good relationships and be willing to pay higher rents to access prime locations.
On the other hand, the number of reputable developers offering high-quality projects in suburban areas has increased, providing retailers with more choice in terms of location and affordability. This has prompted the emergence of new stores in non-central locations, after success in previous locations, expanding to more non-central areas.
According to Savills Vietnam, retail supply is expected to increase by 247,601m2 between now and 2025. However, the challenge of limited supply in central city areas still exists, with only 0.4% of future supply located in the central area, requiring retailers to continue to seek creative and flexible solutions in choosing locations and business models.
Thank you!
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