Opportunities and challenges intertwine

Shopping malls continue to be popular

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.

Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing Department, Savills Hanoi (Photo: Provided by the character)

Commenting on the retail market situation in Hanoi in 2024, Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing Department, Savills Hanoi, said that last year, the Hanoi market witnessed exciting developments, when the supply of retail space was increased by the Lotte Mall West Lake Hanoi shopping center and the return to the market of The LOOP by Takashimaya.

With The LOOP by Takashimaya, the return comes with a facelift and a tenant expansion strategy that has diversified the customer experience. This not only increases the attractiveness of the shopping center, improves occupancy rates, but also attracts a large number of visitors and great interest from consumers.

Another focal point of the market is Lotte Mall West Lake Hanoi. This is the largest commercial center project in Hanoi, located in a complex including a commercial center, offices, serviced apartments and hotels, offering a unique experience with 233 stores, an indoor playground, and an aquarium. This event has recorded a group of 28 brands debuting in Vietnam for the first time.

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.

In the Hoan Kiem area, with its position as the historical and cultural center of Hanoi, it attracts a large number of civil servants, tourists and local residents. The area is often home to government agencies, embassies and headquarters of multinational companies, and still maintains its appeal, especially for high-end 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.

(Source: Internet)

However, the reality shows that 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 organized systematically, from advertising strategies to tenant zoning and operational management strategies, because these are important factors in the operation and maintenance of shopping malls.

The key to the success of today’s shopping malls lies in the integration of scientific tenant zones, shopping and entertainment brands, as well as food and beverage services. Customers today are not only looking for a place to shop, but also want a comprehensive experience with entertainment and culinary activities. This is clearly demonstrated in shopping malls such as Lotte Mall, which offers a variety of services from hypermarkets, cinemas, food courts to fashion stores on different floors.

Identify the challenge

Responding to the question of what the retail market will look like in the future, Ms. Hoang Nguyet Minh stated that the retail market will be shaped by factors such as increased spending on services, moving towards sustainable and environmentally friendly stores, and focusing 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.

(Photo/Source: Internet)

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.

However, Ms. Hoang Nguyet Minh commented that in 2024, the Vietnamese retail market will not only have opportunities but also face challenges.

“On the one hand, retail supply remains limited and reputable developers are holding the majority of high-quality supply, especially in central city 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, creating opportunities for retailers to have more choices in terms of location and affordability. This has promoted the appearance of new stores in non-central locations, such as Foot Locker, Karl Lagerfeld or Dyptique at Lotte Mall West Lake Hanoi. Or Muji & Uniqlo, after success in previous locations, have expanded to many non-central areas.

According to statistics from the publication “Developing the Retail Market in Vietnam – Retail Wise” by Savills Vietnam, retail supply is expected to increase by 247,601m2 from now until 2025. However, the challenge of limited supply in the city center 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,” Ms. Hoang Nguyet Minh stated.

NAM ANH

Source: https://www.nguoiduatin.vn/thi-truong-ban-le-ha-noi-nam-2024-co-hoi-va-thach-thuc-dan-xen-a647669.html