According to new data published by Savills Vietnam in the first quarter of 2025, in Hanoi, total retail supply decreased by 3% quarter-on-quarter and 2% year-on-year because Vincom Center Nguyen Chi Thanh was no longer a commercial center.
The rental price of the ground floor increased by 2% quarterly and 6% annually, mainly thanks to the increase in the department store with 14% per year; shopping malls and retail businesses both recorded a 7% annual price increase.
Notably, in the central area, rental prices recorded a strong increase of 37% year-on-year, reaching 4.5 million VND/m2/month. The capacity increased by 2 percentage points quarter-on-quarter, reaching 86%. Notably, new lease contracts have shifted away from the previously dominating F&B industry to convenience and fashion and cosmetics stores.
In terms of prospects, the market is expected to expand with 115,606m2 of new retail supply from two shopping malls and six retail platforms. In the 2026 and 2027 periods, the supply will continue to increase by 257,670m2 of rental floor area from nine projects.
In the Ho Chi Minh City market, in the first quarter of 2025, retail supply increased by 1% quarter-on-quarter and 6% year-on-year to 1.6 million m2 after Center Mall Vo Van Kiet District 6 joined the market. Despite scarce land funds and high development costs, future supply in the central region accounts for 52% of the market share. By 2027, future supply will reach 150,270m2.
In the first quarter of 2025, the capacity will be stable quarter-on-quarter and increase by 2 percentage points year-on-year to 94%. The capacity of the shopping mall contributed 0.1 percentage points quarter-on-quarter, offsetting the retail market capacity decreasing by 1 percentage point quarter-on-quarter.
Ms. Hoang Nguyet Minh - Senior Director of Savills Hanoi Commercial Leasing Department - said that the annual capacity growth is driven by high demand from tenants in the F&B, entertainment and home appliance and interior industries along with good absorption in new projects.
The average rental price for the ground floor reached 1.4 million VND/m2/month, down 0.2% quarter-on-quarter but up 9% year-on-year due to low rental prices at Centre Mall Vo Van Kiet. Excluding this project, the average rental price increased by 0.4% quarterly.
Street retail is fiercely competited with modern retail - where goods and services are more diverse. In the past three years, new shopping mall projects such as Thiso Mall Sala, Parc Mall, Vincom Mega Mall Grand Park and Centre Mall Vo Van Kiet have been launched with a capacity of at least 70%, despite the increasingly high occupancy rate of street retail.
