RETAIL RENTS IN HO CHI MINH CITY AND HANOI SIMULTANEOUSLY DECREASED
18/09/2019 00:09|INDUSTRY NEWS
Retail space in Ho Chi Minh City has averaged 2% a year rent since 2012, while Hanoi slipped stronger, losing an average of 6.8%, according to Savills Vietnam.
This unit has just released the Vietnam Market Handbook 2016, in which, retail rents in the two largest cities in the country have shown signs of going down. Hanoi rents are on a downward trend in all three areas, with the largest decrease being in the high-end sector at -7.8% a year as many high-quality retail centers enter the market in the area. Non-CBD areas have lower rents. Meanwhile, HCM City still recorded some areas with a slight increase in retail rents.
Rents for retail space in the two largest cities in Vietnam are on the decline. Photo: Vu Le
In the second half of 2015, the rental price of Hanoi's high-end retail segment reached 124 USD per m2 and Ho Chi Minh City reached 118 USD. In the 2010-2015 period, Hanoi's rents decreased by 3.5% per year, while HCMC increased slightly by nearly one percent. The retail segment of Ho Chi Minh City and Hanoi is in the nascent stage of development. Both cities have an average rent rate of 10% compared to Hong Kong, one of the cities with the highest prices in the world, more than double the second ranked market of Singapore.
Statistics of this unit, the total supply of retail space of the eight largest cities in Vietnam reached 2.8 million m2, of which Ho Chi Minh City and Hanoi accounted for 75%. However, other cities in the region such as Bangkok, Singapore and Kuala Lumpur have much higher densities than Vietnam, respectively at 0.9, 0.7 and 0.7m2 per person.
Savills forecasts, with rising incomes, increased awareness about sanitation and safety, and demand for entertainment, along with a decline in the number of nuclear families, the spending of modern Vietnamese consumers focused on improving improve living standards and upgrade transportation.