Vietnam’s retail market in general and Hanoi
in particular expect to see more entrance and further investment, especially from foreign retailers, according to a recent report by CBRE Vietnam
Both Japanese and Chinese retailers have expressed their growing interest in Vietnam. Thai retailers have recently made major moves through two notable tractions.
“This shows potential for further growth, despite increasing competition, for both retailers and developers,” said CBRE Vietnam.
The total supply of retail market in Hanoi stood at 758,216 sqm at end-2016, equivalent to an increase of 4.9% q-o-q and 6% y-o-y, thanks to the opening of two projects invested by Vingroup
Vacancy rate decreased 7.7 ppts q-o-q and 5 ppts y-o-y in the past quarter. One of the reasons for the improvement in occupancy was the high occupancy rate at opening of the new entrants. Besides, the departure of one department store which used to incur high vacancy also contributed to this change.
Average rents of Hanoi shopping centers fell 7.6% q-o-q due to a drop in non-CBD rental rates.
A lack of supply in the CBD means trend of new shopping centers opening in decentralized locations to continue next year. In 2017, new supply will provide at least another 106,000 sqm in non-CBD locations, increasing competition of this area.
The mid-end segment accounted for the majority of the condominium market in Hanoi last year, and the prospects of this segment remain upbeat thanks to rising demand and robust foreign investment.
The mid-end segment continued to perform well and dominated the apartment market in Hanoi last year in both terms of new launches and sales.
The majority of new launches in the 2016 was from mid-end segment with 56%, followed by high-end segment (30%) and affordable segment (11%). Last year marked the return of luxury segments with two projects launched in locations in the West Lake area.
According to the real estate service company, 9,128 units were launched in 34 projects across the city in the fourth quarter (Q4) last year. Throughout 2016, more than 30,000 new units were launched from 72 projects, decreasing by 13% year-on-year (y-o-y).
Q4 peaked both in terms of number of launched units and launched projects. The West continued to be the main supply hub with 37% of new launches located in this area, compared to 30% last year.
Market sentiment remained positive in 2016, with an increasing trend of sold units throughout the quarters. In Q4/2016, a total of more than 6,600 units were changed hands, leading to total number of 21,188 units sold in 2016.
The mid-end segment continued to perform well with more than 10,100 units sold during year, accounting for nearly half of total units sold.
In terms of pricing, average secondary prices slightly went down by 0.5% y-o-y. By segment, affordable segments experienced an increase of 1.9% y-o-y while other segments’ secondary prices slid from 0.7% y-o-y to 2.9% y-o-y.
“Supported by sound macroeconomic factors including positive GDP growth, a stable exchange rate and high inflow of FDI to Vietnam and especially to real estate from Korea, Japan and Singapore, the condominium market is expected to remain upbeat in the coming year,” said CBRE.