Many factors help the retail real estate market grow

Steady growth rate

In 2023, according to experts, retail real estate is one of the stable development segments, exploiting the maximum potential of this field and bringing relative profits to investors. Although it does not develop as strongly as many years ago, it is highly stable and sustainable.

According to JLL Vietnam, in the fourth quarter of 2023, retail commercial real estate in the non-central area of ​​Ho Chi Minh City recorded a positive trend with net absorption area reaching 35,868m2.

The main driver for this growth comes from the expansion of major tenants at new projects. Commercial leasing transactions come from the food and beverage and service industries such as Haidilao, H&M, Starbucks, etc.

In the central area of ​​Ho Chi Minh City, the area leased by investors decreased slightly in the fourth quarter. However, experts said that this was due to the transfer of underperforming brands at Vincom Center Dong Khoi and Diamond Plaza, in order to restructure and maintain their business operations.

Retail commercial space is expected to remain stable in 2023.

JLL's report shows that the supply of commercial real estate in Ho Chi Minh City has been greatly supplemented. For example, there has been a new supply addition due to the renovation of Hung Vuong Plaza (28,066m2) in District 5 and Thiso Mall Phan Huy Ich (18,000m2) in Go Vap District.

Meanwhile, total supply in the central area remains at 84,109 square meters, while the non-central area expands to 538,819 square meters by the end of 2023.

Occupancy rates at key shopping malls across the market in 2023 are relatively stable at 5.4%, lower than the 7.9% recorded in the same period last year. This represents a positive signal for the market as key shopping malls have returned to their pre-pandemic average occupancy levels.

According to research by the Vietnam Association of Realtors (VARS), the demand for retail commercial space continues to increase. The occupancy rate of business space in shopping malls and commercial blocks exceeds 90%.

The retail real estate market in 2023 is vibrant with new supply and development plans of leading retail groups to expand and open new stores with an area of ​​thousands of square meters, such as Uniqlo, Muji....

Maintain stability in 2024

Experts forecast that in 2024, key shopping malls are expected to maintain growth momentum thanks to stable tenant numbers and customer traffic, which is expected to continue to boost net rents.

In 2024, Vincom Mega Mall Grand Park, a project invested by Vincom, will begin operations, contributing to enhancing the position of the non-CBD area by providing more than 30,000 m2 of floor space. Categories such as food and beverage (F&B), fashion and lifestyle will continue to be the main drivers of new leasing demand.

Many clothing and food industries in shopping malls are expanding, which makes retail commercial space a focus.

Accordingly, the Vietnamese retail real estate market is still very attractive with a lot of room and potential for development. The market size will continue to increase with the increase in domestic consumption with half of the population in working age, rapid urbanization, high population density...

The huge demand for retail, especially from the rapidly growing middle class and super-rich, is an opportunity to enter the market, an ideal destination for international brands, from fast fashion to the luxury retail segment, which is still very limited compared to other countries in the region.

According to the General Statistics Office, total retail sales of goods and consumer services revenue in December 2023 is estimated at VND 565.8 trillion, up 2.6% over the previous month and up 9.3% over the same period last year.

Of which, retail sales of goods in 2023 are estimated at VND4,858.6 trillion, accounting for 78% of the total and up 8.6% over the previous year. Revenue from accommodation and catering services in 2023 is estimated at VND673.5 trillion, accounting for 10.8% of the total and up 14.7% over the previous year.

Accordingly, the retail and consumer services market still has many positive signals in the context of the economy still facing many difficulties.

According to a study by the Vietnam Association of Realtors, total retail sales of goods and consumer service revenue in 2023 will recover positively, estimated at VND 6,231.8 thousand, up 9.6% over the previous year.

Demand for retail space continues to increase. Occupancy rates for business space in shopping malls and commercial blocks exceed 90%.

Mr. Nguyen Hong Hai, Chairman of VNO Group, said that the retail market is currently experiencing a "wave" of returning premises due to many influencing factors... However, the occupancy rate of shopping malls is still high. The main reason is that many brands have new business strategies, and food and beverage services are still expanding, so they need more premises, especially inside large shopping malls. Therefore, commercial premises are not much affected.

According to Mr. Hai, the Vietnamese retail real estate market is still very attractive with a lot of room and potential for development. The market size will continue to increase with the increase in domestic consumption with half of the population in working age, rapid urbanization, high population density...

Many foreign brands are growing rapidly and the demand for retail space in shopping malls is huge.

Dat Xanh Services Institute of Economic - Financial - Real Estate Research said that in 2023, the operating capacity of retail space for lease will be stable, maintained at 90% for the Ho Chi Minh City market. Most landlords in central areas are still confident with stable high rental prices at 53 USD/m2/month in Ho Chi Minh City. Rental prices in non-central areas also increased slightly by 1% quarter-on-quarter to 1 million VND/m2/month.

Mr. Luu Quang Tien, Deputy Director of the Institute of Economic - Financial - Real Estate Research Dat Xanh Services, commented that currently, for the retail commercial real estate market, the notable trend is Shoppertainment, the combination of two factors "shopper" (shopping, shoppers) and entertainment (entertainment) has emerged as a new wave in the retail industry in big cities like Ho Chi Minh City.

It is this subtle blend of shopping and entertainment experiences that is capturing the attention of consumers.

In addition, the emergence of a series of large-scale Retail Centers with the "Park & ​​Buy" model where people can not only shop, but also experience entertainment and culinary services, is gradually becoming a popular trend. This makes the retail space in 2023 as well as 2024 very favorable, with stable development throughout.

According to experts, rental prices are expected to increase continuously along with the need for presence and expansion of international brands in the context of limited high-quality commercial space. Compared to other countries, shopping mall rental prices in Vietnam are still very competitive. This will make this segment noteworthy in 2024.

Source: https://www.nguoiduatin.vn/nhieu-yeu-to-giup-thi-truong-bat-dong-san-thuong-mai-ban-le-tangtruong-a644271.html