HCM City Sees Strong Demand for Retail Space: Savills

Tuan Minh

16:40 12/10/2016

BizLIVE - Retail rents in Ho Chi Minh City climbed in the quarter ending September despite a surge in supply, reflecting strong demand for retail space.

HCM City Sees Strong Demand for Retail Space: Savills

Demand for retail space increased in HCM City in Q3/2016. Photo: Internet

The average gross rent increased 4% quarter-on-quarter (q-o-q) in the third quarter (Q3) of this year, mostly from the good performances of the reopened Saigon Centre and the newly opened Aeon Mall Binh Tan shopping centers, despite a strong supply.
Retail stock reached 1.16 million square meters (sq.m), increasing 10% q-o-q and 22% year-on-year (y-o-y), Savills Vietnam has said in a report.
“The new CBD supply was quickly absorbed despite the high rent, reflecting strong demand for space in a fresh and prestigious retail project,” says the report.
Similarly, the overall performance of the office market continue to improve due to the lack of any new supply. Average occupancy grew one percentage point (ppt) q-o-q and five ppts y-o-y, reaching 98%, while average rent increased 1% q-o-q and 5% y-o-y.
New take-up was predominantly drawn from Grade B and C projects, accounting for 97% of all newly leased office space. Grade A was the best performer with rents increasing 4% q-o-q to $48/sq.m/month.
In the apartment market, 11 new projects and the next phase of one active project launched were launched, supplying more than 4,600 units, representing a significant q-o-q decrease of 47%. The apartment stock reached approximately 40,300 units across all grades.
Sales rose 7% q-o-q and 43% y-o-y to 7,500 units, with Grade C transactions increasing 15% q-o-q. Grade B sales, meanwhile, decreased 12% q-o-q in Q3/2016 after six consecutive quarters of increases.