Colliers International Vietnam HN Market Insights Q22015 - Retail Sector (ENG)

1. SUPPLY
As of Q2 2015, there were no significant new retail projects entering the
market. The total retail supply was approximately 600,000sqm NLA from
30 projects. Shopping centre format continued to dominate the supply of
Hanoi’s modern retail development, accounting for approximately 85% of
total stock.
PERFORMANCE
In Q2 2015, the retail market started to pick up with a slight increase in
both occupancy and rent, driven by shopping centres in the non-CBD. The
average occupancy in the review quarter was 84%, up 0.5% q-o-q. And
the average asking rent stayed at US$37.2/sqm/mth, up 0.3 percent.
In terms of performance by location, Hoan Kiem District had the highest
rental rates due to its prestigious prime location as well as the high quality
graded shopping centres, remaining at US$82/sqm/mth. Whilst Long Bien,
Ha Dong and Tay Ho District had the lowest asking rents, ranging between
US$20 and US$30/sqm/mth.
DEMAND
Population demographics, the economic recovery and changes in
disposable income are expected to boost consumer confidence. Changes
in modern shopping centre development vs traditional store outlets
became more apparent since store owners have moved into big retail
complexes with the benefits of F&B services, parking and security.
OUTLOOK
In 2015, three shopping centre projects are expected to come online,
providing more than 176,000sqm NLA to the market. Big retail suppliers
are expected from Tu Liem, Tay Ho, Long Bien and Ha Dong District with
the total expected future stock of 60% of market share in the mid-term.
The benefits of the Trans-Pacific Partnership (TPP) and the EU Free Trade
Agreement (FTA) coming into effect in a year or two will set Vietnam as
an attractive hub for modern retail development towards global retailers
since commodity tariff tax are eased. However, future supply entering the
market will create pressure on the future performance of modern retail
complexes.
RETAIL SECTOR
Q2 2015 | MARKET INSIGHTS
HANOI
Figure 1: Supply by type
ECONOMY OVERVIEW
Vietnam has experienced a positive sign of the economic recovery in
1H 2015 when GDP grew 6.28% y-o-y, which is the highest level in the
last 10 years. The consumer confidence index also witnessed significant
improvement when reaching 143.1 points, up 10 ppts y-o-y compared to
the average target of last year.
Total disbursement rate in the foreign funded projects grew by 9.6%
y-o-y to US$6.3 billion. In which, real estate sector continued to attract
lucrative foreign direct investments with 13% of total new FDI, placed at
second after manufacturing.
In parallel with the new legal amendment of the Vietnam Housing Law
came into effect in July 1st 2015 allowing foreigners to legally own, sell and
transfer their properties will boost confidence in property investments.
Shopping
Centre
Department
Store
Retail
Podium
Total
Total Supply (Project) 19 2 9 30
Average Rent Rate
($US/sqm/month)
85 80 75
Occupancy (%) 89 83 81
Short-term Outlook
Table 1: Market Snapshot
Figure 2: Market performance
DAVID JACKSON
General Director
david.jackson@colliers.com
PLEASE CONTACT US FOR ANY INFORMATION
TRAN NGUYEN
Business Development Manager
tran.nguyen@colliers.com
www.colliers.com/vietnam
Colliers International is a global leader in commercial real estate services, with over 16,300 professionals operating out of more than 502 offices
in 67 countries. A subsidiary of First Service Corporation, Colliers International delivers a full range of services to real estate users, owner and
investors worldwide, including global corporate solutions, brokerage, property and asset ,management, hotel investment sales and consulting,
valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked
Colliers International as the second-most recognized commercial real estate firm in the world.
This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no
guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties
of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers
International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability
for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s).
©2015 Colliers International Research
0
50
100
150
200
Shopping Centre Retail Podium Department Store
US$/m²/month
Source: Colliers International Research
Non-CBD Average asking rents (US$/m²/month)
CBD Average asking rents (US$/m²/month)
Table 2: Significant future supply under construction
Project District Type Completion
Vincom Nguyen Chi Thanh Dong Da
Shopping
Centre
2015
Aeon Mall Long Bien Long Bien
Shopping
Centre
2015
Ho Guom Plaza Ha Dong
Shopping
Centre
2015
*All rents are gross rents per sqm, including service charge but excluding VAT
91%
3%
6%
Shopping Centre
Retail Podium
Department Store
Source: Colliers International Research