Retailing space leasing in HCM city gloomy

Retailing space leasing in HCM City is gloomy while the fulfilling ratio of Hanoi remains high. The contrary movement between two regions is seen more clearly as Hanoi’s retail space rental is escalating while HCM City’s is falling.

According to VnExpress.net, at Kumho building (Dist 1, HCM City), the vacancy ratio of trade centers is still high.

Meanwhile, some newly-operational buildings in Hanoi have relatively-high fulfilling ratio, such as Pico Mall (90%), Oriental Tower (100%).

Retail space rental in Hanoi trade centres ranges between $20 and $120 per square meter per month whereas retail stores are offered at $40-185/sqm/month, Knight Frank real estate consulting firm reported.

Noticeably, retail space for long-term renting is becoming a new investment channel. In particular, Hang Da, Cho Mo trade centres and Keangnam Landmark Tower projects are offered at $3,000-11,000/sqm/month with the leasing time of around 50 years.

Survey results of CBRE showed that average rental in center areas of Hanoi was $62 per sqm a month, up 7.7% against the previous quarter because Vincom Center Hanoi has adjusted leasing contracts with higher prices. The rental outside the city center is $39/sqm/month, increasing by 15.8%.

Colliers International Vietnam Co explained that the rental of outskirt areas in the capital city was on rise as Pico Mall (in Dong Da Dist) is offered at high rental. In addition, temporary closure of Trang Tien Plaza causes pressure on rental increases inner the city.

Retail space leasing in Hanoi remained satisfactory in the second quarter with current supply of 230,000 sqm including trade centres, retail mall and hypermarkets. Total retail space supply currently increases 10.33% compared with the first quarter. While Trang Tien Plaza is in improvement, some new trade centres such as Pico Mall and Oriental Tower have been operational. Moreover, 5,000 sqm of expanded Parkson Viet Tower also helps increase the retail space supply.

The market is expected to blossom till the year end with coming-up supply from Da Galleria (9,312 sqm of floor area), Landmark 72 (in Keangnam, 97,000 sqm), Savico MegaMall (63,400 sqm), and Vincom Center Long Bien (45,000 sqm).

Data of Hanoi Statistic Office indicates that the city’s total retail sales and service turnover in Jan-June grew 21.7% year on year, in which the retail sales surged 23.3%. Retail space in Hanoi is forecasted to develop because of land scarcity and high property prices in center areas.

Differing from Hanoi, realty consulting firms in HCM City said, the market of trade centers was on price decrease in second quarter. According to the Q2 survey of Colliers International Vietnam, the retail space rental in famous shopping malls like Dong Khoi, Le Loi, Le Thanh Ton averaged at $90/sqm/month.

In HCM City, the highest rental at retail malls is $112.5/sqm/month while that of trade centers is $102.5. Small-sized shopping malls have the offering rental of $52.5/sqm/month.

In April-June, the rental in trade centers stands at $33.13/sqm/month, representing a quarter-on-quarter fall of 5.4%. Ratio of vacant area to total retail space supply in the country surged from 8.4% in Q1 to 14.7% in Q2. A reduction in the average rental of outskirt areas fell more sharply from 11.5% to 16% whereas offering price in trade centers soared to $109.35/sqm/month, CBRE reported.

There will be extra 1.2 million sqm of new retail space coming up HCM City market from 2012, according to Savills Vietnam. – Vietbiz24

Tags: Vietnam retail market, Vietnam retail spaces