How did these two new projects impact Ho Chi Minh City’s retail market? | Real Estate Asia
, Vietnam

How did these two new projects impact Ho Chi Minh City’s retail market?

The significant net takeup at Thiso Mall drove vacancy rate down to 5.6%.

According to a JLL report, net absorption of Prime malls in Ho Chi Minh City surged, driven by two new malls: Diamond Plaza and Thiso Mall. 

The HCMC retail market was very active in 1Q23, with many large tenants from a variety of industries opening their stores, including sports outlet Decathlon, children’s playgrounds, Kiwooza Planet, Liliput and BB Wellness, as well as F&B establishments Golden Gate and %Arabica.

Here’s more from JLL:

The vacancy rate in City Centre declined to 1.4% thanks to the addition of the fully-occupied Diamond Plaza after successful refurbishment, while the large, vacant mall, Bitexco Financial Tower, was removed from the Prime mall basket. Concurrently, the vacancy rate in City Fringe also decreased from 7.9% to 5.6%, due to significant net take-up at Thiso Mall.

Prime mall basket changes as market develops

The completion of the Diamond Plaza renovation added 12,800 sqm of Prime mall supply to the City Centre. The focus on luxury and high-end offerings in this mall aims to cater to discerning shoppers. Furthermore, Bitexco Financial Tower was removed from the Prime mall basket owing to its subpar performance. The mall also announced its plans for renovation in the quarter.

No new supply was recorded in City Fringe. Among ten Prime malls in City Fringe, the newly-supplied Thiso Mall recorded the largest vacant space and is offering around 12,000 sqm NLA on the market, providing opportunities for prospective tenants seeking to establish a presence in Thu Thiem’s first mall.

Overall rents rise, primarily fuelled by strong leasing demand

The addition of Diamond Plaza into the Prime mall basket resulted in net effective rents increasing by 2.2% q-o-q, to USD 80.9 per sqm, per month, in City Centre. The submarket was driven by strong demand from global and domestic brands. In City Fringe, net effective rents increased by 0.5% q-o-q to USD 35.5 per sqm, per month, reflecting the steady expansion of the submarket.

In 1Q23, there were no transactions in City Centre or City Fringe. City Centre saw a 3.2% q-o-q increase in capital values due to the newly-added Diamond Plaza, while City Fringe saw a 2.0% q-o-q increase, driven by new developments. Market yields for City Centre and City Fringe were at 6.9% and 8.9%, respectively.

Outlook: Sustained healthy demand is expected

With the expected opening of Vincom Grand Park in District 9 by end-2023 to add 30,100 sqm to total supply, the retail market in HCMC continues to expand in the City Fringe area thanks to a large land bank and a growing customer base. Also, the trend of refurbishments is also progressing, as seen in Union Square in the CBD and Hung Vuong Plaza in the non-CBD area.

By end-2023, net absorption and net effective rent in both submarkets are expected to surge thanks to the continuation of healthy demand and high-quality new supply additions. F&B tenants are likely to continue to lead demand.

Note: Ho Chi Minh City Retail refers to Ho Chi Minh City's overall prime retail market.

 

Join Real Estate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

How Metland Indonesia deals with weaker residential purchasing power
The real estate firm continues to expand with residences that are attractive to consumers because of pricing, the ‘growing house’ concept, and sustainable features.

Event News

Event News

Real Estate Asia Awards 2023 Winner: Henderson Land Development Company Limited
Henderson Land Development Company Limited wins big at the Real Estate Asia Awards 2023 taking home 3 notable accolades, the Developer of the Year, Mixed-Use Development of the Year, and Residential Development of the Year awards for Hong Kong.
Real Estate Asia Awards 2023 Winner: Henderson Land Development Company Limited
Henderson Land Development Company Limited wins big at the Real Estate Asia Awards 2023 taking home 3 notable accolades, the Developer of the Year, Mixed-Use Development of the Year, and Residential Development of the Year awards for Hong Kong.