New international brands and shopping centers to invade the market

Thứ Hai, 03/02/2020 - 07:00

New shopping malls are anticipated to enter the market, mainly on the city’s outskirt. Meanwhile, retailers and mall developers are reinventing themselves to provide a variety of entertainment and lifestyle activities.

International retailers continue to penetrate Ho Chi Minh City

New international retail brands were found to have successfully penetrated the local retail market, while the already present ones continued to expand their presences in the fourth quarter of 2019, according to real estate consultancy JLL. Notably, Uniqlo - the Japanese global apparel retailer opened their flagship store in Vietnam, covering more than 3,097 square meters over three floors in the commercial center Parkson Dong Khoi in District 1 in quarter four of 2019. On the other hand, the market also witnessed the withdrawal of the VinPro brand owned by the country’s largest firm, Vingroup, putting a strain on the occupancy rate of the Vincom chain.

(Source: JLL Research)

While Department store closures continued in the market, existing malls saw an increase in vacancy rate as tenants relocate to the new malls nearby, which had better quality, facilities and many programs to attract buyers and visitors. Therefore, the overall vacancy rate rose in the quarter. Meanwhile, the second phase of the Crescent Mall, spanning 16,000 square meters gross floor area (GFA), opened in District 7 in the quarter. The new phase specially focused on mid-to-high end brands and recorded a high occupancy rate of up to 90 percent.

The majority of malls in District 1 and the CBD saw rents increase marginally both year-on-year and quarter-on-quarter, supported by their good location. Meanwhile, rents in the rest of the city edged down slightly as the sub-market was filled with old malls whose leasing activities were not so strong, as a result of competition from new malls with better quality and management services. The overall effect was a yearly decline of 3.2 percent in rents

Satra Centre Mall Cu Chi.

In 2020, some shopping malls in the city’s non-central business district area will enter the market, such as Satra Centre Mall, Socar Mall, Elite Mall and Central Premium Mall, taking up more than 280,000 square meters of GFA. Besides, after renovation and brand restructuring, some existing malls are expected to improve on their occupancy rate. As a new trend in the market, both retailers and mall developers are reinventing themselves with focus on F&B and experiential retailers, providing better customer services and applying technology, consumer analytics to enhance their popularity and increase foot traffic.

A new shopping center enters the Hanoi’s market

Hanoi’s retail market in the fourth quarter of 2019 witnessed the opening of a new shopping center – Aeon Mall – which supplies 74,000 square meters in Ha Dong district, JLL has said in a recent report. With its opening, which is the fifth of its kind in Vietnam, Aeon Mall Ha Dong also introduced new brands to Hanoi such as Koi Thé and Digiking. The excitement toward new brands and the new project have helped Aeon Mall Ha Dong to attract an impressive number of customers since the opening in late November. With the addition of Aeon Mall, the total supply of retail market in Hanoi reached approximately 1.2 million square meters in the last quarter of 2019. Of the total, shopping centers dominate the supply, while department stores and prime retail spaces did not record any significant growth.

An Aeon Mall in Vietnam.

The occupancy rate posted an increase of 51 basic points and reached almost 91 percent in last year’s fourth quarter, despite the opening of Aeon Mall Ha Dong, as this new mall alone recorded small vacant which was about only 5 percent, indicating an effective leasing strategy. A few vacant spaces were recorded at some Vincom shopping centers that were going through tenant mix exercise. For example, Vincom Pham Ngoc Thach was under renovation with a substantial amount of space remained closed. The shopping center is expected to re-open the stores in February 2020

Rental, meanwhile, kept unchanged during the quarter. The average rent of the market stayed at the same level compared to that in the previous quarter, at US$29.3 per square meter per month, an increase of 1.6 percent on-year. Although located in an outer district and relatively remote area, Aeon Mall Ha Dong was still able to set an asking price that was approximately on par with the general market, proving the appeal of the Aeon Mall chains to consumers and tenants.

(Source: JLL Research)

In 2020, the world’s leading service firm forecast the market would welcome new supply, mainly coming from two mega malls of Vingroup in Smart City and Ocean Park townships on the outskirt of the city. This is also a new trend in the market in which shopping centers are located in impressive areas outside the city center. Those shopping centers usually provide a variety of entertainment and lifestyle activities such as gym, kid playgrounds, instead of purely for shopping. In addition, new brands are expected to enter Hanoi market in 2020, such as Uniqlo. This brand is expected to open its first store in Hanoi in Spring 2020, after the successful opening of its first store in HCMC in December 2019.

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