Retail space in Vietnam expected to boom in 2012: Savills

There were two projects being operational in Q1, namely MediaMart Long Bien and Fivimart La Thanh in Dong Da District to provide around 15,000 sqm of retail area. Total retail supply of Long Bien dist was increased by 22%, Dong Da Dist up 7% while the supply of other districts was unchanged.

Nguyen Anh Thu, Vice Director of Savills said that the increased retail area did not mean to be able to meet the demand of renters and investors in Vietnam.

Recently, some big brand names such as E-Mart, Lotte are demanding to expand market in Vietnam with long term investment orientation. However, as investing in new markets, these firms have high demand and requirements in terms of trade center area, technical requirement of floor. Total retail space of Hanoi currently is high but the number of qualified projects matched with demand of retailers is very limited.

The fact is that the modern retail mode accounts for 17% only in Vietnam. In addition, the strong consumer power and young population becomes the good base for retailers to expand business in the country. Therefore, property companies may develop modern trade centers in the future.

As forecasted, the western region of Hanoi became the attractive point of retailers. In next 3 years, around 1.6 million square meters from 90 projects (mainly in Ha Dong, Tu Liem and Thanh Xuan) will be supplied to the capital’s retail market that is being expanded to outskirt areas.

By 2014, Ha Dong Dist and Thanh Xuan Dist will have the biggest supply totaling 1.25 million sqm accounting for around 54% of new supply of Hanoi.