According to Chairman of the Vietnam Association of Realtors (VARS) Nguyen Van Dinh, the retail real estate market will become more and more vibrant, with new supply and development plans of international retailers.
VARS research data shows that the Vietnamese retail real estate market is constantly growing in both scale and quality. The occupancy rate of retail space in shopping malls in major cities exceeds 90%. The need for presence and expansion of international brands in the context of limited high-quality commercial space continues to push up rental prices.
Retail industry recovers quickly
Retail is one of the most dynamic economic sectors in Vietnam, maintaining a continuous and impressive growth rate for decades. At the same time, it is one of the sectors with the clearest recovery rate despite being strongly affected by the pandemic.
Right from the beginning of 2022, after a long period of social distancing due to the COVID-19 pandemic, the retail industry has quickly recovered with activities to seize opportunities and choose good locations for long-term strategies in the Vietnamese market of the world's retail giants when rental prices have just started to increase slightly. In the whole year of 2022, the total retail sales of goods and consumer service revenue is estimated at VND 5,679.9 trillion, an increase of 19.8% compared to 2021 and an increase of 15% compared to 2019 - the year before the COVID-19 pandemic.
In 2023, total retail sales of goods and consumer service revenue at current prices is estimated at VND 6,231.8 trillion, up 9.6% over 2022. In the first quarter of 2024, total retail sales of goods and consumer service revenue at current prices is estimated at VND 1,537.6 trillion, up 8.2% over the same period in 2023.
In the Hanoi market, ground floor rental prices in 2023 recorded an increase of about 10% compared to the previous quarter with stable occupancy rates; the market in Ho Chi Minh City also recorded growth with large tenants leading market demand.
Attracting many large enterprises to invest
As one of the fastest growing economies in Southeast Asia, Vietnam's retail real estate market is opening up a series of new opportunities for investors and businesses in the industry, especially supermarket chains, convenience stores, and fashion brands, from low-cost to luxury segments - which are still very limited compared to other countries in the region.
“The retail real estate market will become more and more vibrant, with new supply and development plans of international retailers,” said Mr. Nguyen Van Dinh, Chairman of VARS.
Central Retail (Thailand) said that it will expand its sales points from the current 40 provinces and cities to 55 provinces and cities nationwide. Similarly, Aeon Group (Japan) is also planning to deploy 16 more projects in Vietnam from now until 2025, including 3-4 projects in Hanoi. At the same time, it will launch new retail models to meet customer needs, creating momentum for future development.
FujiMart Vietnam System, a joint venture supermarket chain between BRG Group (Vietnam) and Sumitomo Corporation (Japan) also aims to reach a total of 50 supermarkets by 2028. The landing of fashion brands from high-end to affordable segments such as Uniqlo, Muji, Dior, Cartier in recent years has been more bustling than ever.
Analyzing the Vietnamese retail real estate market, Mr. Nguyen Van Dinh said that this market is still very attractive with a lot of room and potential for development. Accordingly, he pointed out 4 specific contents including:
Firstly, the rapid growth of urban population and income has created a huge demand for real estate, especially in the retail sector, as people are looking for more convenient living and shopping spaces. The growth of large cities such as Hanoi and Ho Chi Minh City not only brings opportunities for real estate developers but also a potential market for retail brands to expand their business and develop new real estate projects.
Second, Vietnam is witnessing the development of major cities such as Hanoi, Ho Chi Minh City, Da Nang and satellite areas as investment policies to improve transport infrastructure, including highway and urban railway projects, are facilitating more convenient travel and connectivity between urban areas. This development not only creates opportunities for new real estate projects but also opens up the potential for retail businesses to expand their store networks and businesses.
Third, playing an important role in the Vietnamese economy, with the goal of becoming a key economic sector, the development of the tourism industry is creating new opportunities for the retail real estate market. Developed tourist areas such as Phu Quoc, Nha Trang, Da Nang, ... are increasingly attracting the attention of investors and retail businesses with long-term development potential.
Fourth, Vietnamese consumers are becoming increasingly savvy and demanding in terms of shopping experiences. They not only seek quality products but also demand variety and convenience in their purchases. This creates opportunities for retail brands to develop new business models, including integrated shopping malls, dedicated entertainment and dining areas, and product experience stores.
It can be seen that the retail real estate market in Vietnam is not only a business opportunity but also an important part of the sustainable development of the economy. Understanding the trends and opportunities in the market will help businesses take advantage of the potential and achieve success in the future.
According to the Communist Party of Vietnam Electronic Newspaper
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