Retail space in Hanoi: Growth opportunities in supply and rental prices

GS25 convenience store (Hang Dau street, Hoan Kiem district) is part of a chain of stores that have just opened in Hanoi . Photo: Duong Hiep

Rental space growth is steady

Overview statistics in the first quarter of 2025 by CBRE Vietnam, a real estate service provider, show that the Hanoi retail market has stabilized. Supply increased when the Aeon Xuan Thuy Shopping Center, with 18,000m2 of effective floor area, officially came into operation. Total retail sales of goods and consumer service revenue at current prices in the first quarter of the year are estimated at VND1,708.3 trillion, up 9.9% over the same period last year, higher than the growth in the same period in the first quarter of 2024 of 8.2%.

Not stopping there, the Hanoi market is expected to welcome two new supplies in the second and third quarters of 2025, including Vincom Megamall Ocean City (60,000m2 of effective floor area) and Hanoi Centre (43,000m2 of effective floor area). This significant increase in supply could create greater competition, while also providing opportunities for retailers looking for premises that suit their scale and strategy.

In terms of leasing activities, the Hanoi market recorded 24,760m2 of net absorption in the first quarter, higher than the absorption of 3,537m2 in the fourth quarter of 2024. Recent transactions mainly came from the food and beverage (F&B) industry, lifestyle, including all products and services that help consumers express their personality, pursue their interests, and improve their quality of life such as furniture and home decoration, personal care products, cultural and artistic products, health products and services, pet products and services... and entertainment. This trend reflects a change in consumer habits, with an increasing preference for personalized experiences and services.

Although asking rents in the CBD remained unchanged compared to Q4-2024, the area still recorded a growth of 15.4% year-on-year, reaching USD 173/m2/month. Meanwhile, asking rents in the non-CBD area also recorded a growth of 5.4% year-on-year, reaching USD 37.1/m2/month. Vacancy rates in the CBD remained unchanged due to no new transactions recorded, remaining low at 1.7%. In contrast, vacancy rates in the non-CBD area decreased slightly from 10.7% in Q4-2024 to 9.8% in Q1-2025, indicating better absorption in this area.

Opportunity for growth again

CBRE provides noteworthy information about the continued expansion of Chinese brands in the Vietnamese market. Since 2023, some brands such as Oh! Some, KKV, Semir, Cotti Coffee have been present in the market and are planning to increase their store network in Hanoi and Ho Chi Minh City. In addition, the convenience store market in Hanoi has just seen the presence of a series of convenience store chains that have focused on development for many years in Ho Chi Minh City such as GS25. In addition, the fact that the 7-Eleven chain has confirmed its plan to "go North" and open its first store in Hanoi may boost demand for retail space for rent.

Ms. Hoang Nguyet Minh, Senior Director of Commercial Leasing, Savills Hanoi also said that in 2025, Hanoi will continue to have a number of large retail spaces, such as Keppel's Hanoi Centre project, with a very large supply of about 75,000m² of construction floor space. By 2026, there will be another project by Tismo with the purpose of developing a central project in Hanoi. These are all foreign investors who are tending to move from Ho Chi Minh City to Hanoi.

According to another real estate consultancy, Avison Young, the total retail area in Hanoi has exceeded 1 million square meters. In addition to large-scale projects, retail space also tends to expand at the base of apartment and office buildings. Regarding supply in the next 2 years, Avison Young forecasts that the Hanoi retail market will add nearly 29,500 square meters of new rental space, concentrated in Bac Tu Liem district. In the context of high rental prices in the center, more and more brands tend to move to retail space outside the center. This area not only has reasonable rental prices but is also large and diverse in scale, helping to optimize business space, better meeting the needs of tenants.

In addition to the positive developments, research units also recognized that the rental space in many shopping malls has been vacant for a long time. The reason is that these shopping malls are often small in scale, have suboptimal designs, and do not attract a large number of customers, so tenants often leave after a short time...

To improve the situation, Avison Young General Director David Jackson recommends that investors in shopping malls need to build a systematic tenant list, ensuring a balance between consumer shopping and entertainment groups... They also need to carefully study the demographics in each area to have an optimal leasing plan, meeting market demand. The management and operation unit needs to focus on management services, advertising programs, price support as well as entertainment activities to stimulate customers to come to the shopping mall.

According to Matthew Powell, Director of Savills Hanoi, retail real estate investors need to recognize that retail space needs to create a vibrant living environment. Therefore, the key solution should be to enhance the overall experience, making shopping destinations more attractive. In addition, large retailers need to adapt and take advantage of technology to enhance the retail experience both online and offline, thereby increasing sales for the tenants.

Source: https://hanoimoi.vn/mat-bang-ban-le-tai-ha-noi-co-hoi-tang-truong-ve-nguon-cung-va-gia-thue-698683.html