Market research data from JLL Company shows that in the third quarter of 2024, the retail space market in Ho Chi Minh City will have no new supply.
The overall retail supply in HCMC in the first 9 months of the year improved with the opening of Parc Mall (District 8) in Q3 and the resumption of Vincom Plaza 3/2 (District 10) in Q2 after completing renovation.
Vacancy rates of key shopping malls in the central and non-central areas both improved in Q3/2024.
According to JLL, the prime shopping mall market in Ho Chi Minh City recorded a net absorption of approximately 1,300m2 in Q3/2024, with 85% of demand contributed by tenants in non-CBD areas.
Vincom Mega Mall Grand Park (District 9) continued to lead the number of new transactions, notably McDonald’s, Beverly Hills Polo Club and Kohaku Sashimi & Yakiniku.In addition, Thiso Mall Sala (District 2) welcomed the entry of MUJI, a major retailer in the lifestyle sector, and is expected to open early next year.
In addition, the presence of new F&B chains such as Long Wang, Mikado Sushi, Spicy Box and Bac Kim Thang in the past 9 months in key commercial centers in Ho Chi Minh City also shows that demand is becoming more diversified.
In terms of rental prices, according to JLL, the retail market in the central area continues to benefit from limited new supply and scarce land fund.
In Q3/2024, the average asking rent on the ground floor of the central business district's key shopping malls increased slightly to USD 229.2/m2/month, up 0.6% quarter-on-quarter and 2.7% year-on-year.
The asking rent in the non-central area reached USD 58.3/m2/month, with a 0.7% increase quarter-on-quarter.
According to JLL, by the end of 2024, the central and non-central areas will maintain the current level of supply of key commercial centers due to no new supply.
In 2025, the central area is expected to receive a new high-quality supply of Marina Central developed by Masterise, with a leasable area of about 13,000m2.
Meanwhile, the picture is quite gloomy for the retail space of townhouses.It is easy to see the empty state of townhouses for rent in Ho Chi Minh City that has lasted since the COVID-19 pandemic until now.
Central streets such as Ly Tu Trong, Dong Khoi, Le Loi, Hai Ba Trung, Nguyen Hue...
have many vacant premises, even for a whole year without finding a tenant.Although business is sluggish, many customers are returning premises, but the rental price in these areas has not shown any signs of stopping increasing.
For example, on some streets such as Dong Khoi, the average rental price is over 100 million VND/month.Data from Batdongsan.com.vn shows that in the first 6 months of 2024, the rental price of townhouses in Ho Chi Minh City continued to increase compared to the same period last year.
Areas such as Districts 1, 3, 4 and 2 (now Thu Duc City) all increased by 25-40%, only District 7 decreased slightly by more than 4%.This is the main reason why many big brands accept to give up prime locations because they cannot bear the costs.
Recently, Starbucks Reserve left its store on Han Thuyen Street with a rent of up to 30,000 USD/month (equivalent to about 750 million VND/month).
The economy is difficult, people are tightening their spending, while business premises on the central street still keep high prices.This encourages many brands to accept to move to the outskirts of the city or into commercial centers.
According to industry experts, there is a shift from townhouses to shopping malls because these places have many advantages such as large and stable customer traffic, integrated shopping and entertainment space, rental prices, professional operations, low investment costs for stores, diverse rental areas, etc.
