Continuously rated as one of the most dynamic economic sectors in Vietnam, maintaining double-digit annual growth rates for decades, the retail market has quickly recovered clearly right after the Covid-19 pandemic, maintaining a positive growth rate up to the present time.
According to the forecast of the Ministry of Industry and Trade, the size of Vietnam's retail industry will increase to 350 billion USD by 2025, contributing 59% of the total domestic budget.
Along with the development of the retail industry, Vietnam is also emerging as an attractive destination for high-end retail real estate investors with a rapid growth rate compared to other countries in the region.
Vietnam's retail space is still modest in terms of scale, quality and experience. (Photo: ST)
According to the Vietnam Association of Realtors (VARs), Vietnamese people's income and increasingly high-end shopping habits have attracted the attention of real estate investors in the retail sector, especially high-end segments.
As a result, the high-end retail real estate market in Vietnam is expected to continue to grow strongly in the long term, with annual rents continuing to grow at double-digit rates, despite short-term challenges.
"Along with the socio-economic development process, the habits of Vietnamese consumers, especially the young generation, have changed, increasingly moving towards high-end shopping experiences, not only stopping at buying goods but also looking for high-class services and living experiences. This change creates great demand for high-end retail real estate projects, contributing to promoting the development of this field," VARs commented.
In fact, many high-end brands from the fashion, cosmetics, home appliances, and high-end food industries have landed in Vietnam, especially in big cities like Hanoi and Ho Chi Minh City. The appearance of these brands not only meets the needs of Vietnamese consumers but also helps raise the standards of the retail market.
"Because the presence of international brands forces domestic retailers to improve their services and the quality of retail space. The investment and business environment, especially in the real estate sector, is increasingly improved with many policies to attract investment as well as credit support and tax incentives for retail real estate development projects, especially projects focusing on the high-end segment, also creating favorable conditions for domestic and foreign investors," said VARs.
In particular, the growth potential of the luxury retail real estate market is also driven by the rapid development of the tourism industry. Vietnam has become a popular destination for international and domestic tourists, especially those who want to shop and consume high-end products.
The shopping and tourism experience of tourists, especially foreign tourists from developed countries such as Japan, Korea, China, and European countries, who often have high shopping needs when coming to Vietnam, also creates opportunities for high-end retailers to expand the market. However, this market also faces some challenges in the short term.
According to VARs, despite its rapid growth, Vietnam’s retail space remains modest in terms of scale, quality and experience. The total retail space in Vietnam, especially high-end shopping malls, is still relatively modest compared to regional countries such as Thailand, Singapore, Malaysia, etc.
This requires Vietnam to continue investing in infrastructure, expanding the supply of high-quality premises, and improving the shopping experience for consumers to attract more international investors and compete with neighboring countries.
Total retail space in Vietnam, especially high-end shopping malls, is still relatively modest. (Photo: ST)
The slow growth in supply of high-end retail space while the demand from international brands and trademarks is constantly increasing has caused rental prices in central areas in Ho Chi Minh City and Hanoi to increase, creating great pressure on high-end retailers.
Global economic volatility, inflation, and rising raw material costs can impact the ability of luxury retail projects to expand. Specifically, rising inflation can reduce consumer purchasing power, affecting luxury retail sales.
"At the same time, the cost of building and operating high-end shopping malls will also increase, putting pressure on real estate developers. The instability of the international financial market also makes international investors more cautious in expanding their investment scale in the high-end segment," VARs said.
Source: https://www.congluan.vn/mat-bang-ban-le-viet-nam-van-con-khiem-ton-ca-ve-quy-mo-chat-luong-va-trai-nghiem-post313340.html
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