Ha Noi Retail Recovering Well

Post-Covid Retail Recovery

Viet Nam’s is recovering well. According to General Statistics Office, total retail sales of consumer goods and services in the first seven months of 2022 reached VND 3,205.8 trillion, increasing by 16% year-on-year (YoY) and was the highest since 2018.

Ms Hoang Nguyet Minh, Senior Director, Commercial Leasing, Savills Ha Noi, noted that Ha Noi is a relatively young market. However, foreign and domestic customers have driven significant recovery since borders reopened in mid-March after two years of lockdowns, which severely limited commercial operations.

“Retail development, notable customer spending, rapid urbanisation and infrastructure improvements give Viet Nam a competitive edge. In the next two years, renowned mid to high-end fashion, cosmetics, and F&B brands will enter and expand in Ha Noi and Ho Chi Minh City. These brands are looking for shophouses in central districts or shopping centres run by reputable developers,” Ms Minh commented.

Street Frontage for Luxury Brands

In Ha Noi, luxury global brands are concentrated in Hoan Kiem District. In 2022, Christian Dior and Louis Vuitton opened stores on Ngo Quyen Street, and Berluti opened on Ly Thai To Street.

According to Minh, luxury brands often invest in quality flagship stores that focus on customer experiences with unique design and architecture. These brands have stringent requirements for their stores, which include floor loading and area specifications. They also want stores in central districts or on high streets with high footfall.

Retailers Like Shopping Centres

High-quality shopping centres are popular with retailers, both local and international. Reputable projects with experienced developers and operators like Vincom Retail (Viet Nam), Lotte (Korea), AEON MALL (Japan), and Central Group (Thailand) maintained high occupancy levels, even during the pandemic.

Savills H1/2022 market report, retail supply in Ha Noi reached 1.7 million m2 by June, increasing by 3% QoQ and 7% YoY after Vincom Mega Mall Smart City and two retail podiums entered.

In 2023, Lotte Mall will enter. This large complex is expected to attract domestic and international retailers and will be a leading retail destination in the city.

The returning spending power of local consumers after the pandemic is a significant driver for the shopping centre recovery. Although customers are shopping again and flexing their pent-up spending muscles, Savills Impacts 2022 report highlighted that the pandemic has changed retail and given consumers greater access to a variety of channels such as e-commerce. Therefore, shopping centres must deliver more than retail and be spaces for entertainment, social interaction, eating, and shopping. Experiential models are especially important in attracting younger customers.

“Shopping centre developers and brands must collaborate during the entire leasing process. Both parties must thoroughly research suitable business development strategies, maximise communication channels, and implement diverse creative marketing campaigns. This will support revenue for the tenant and long-term occupancy for the landlord,” Minh concluded.

CONCLUSION

Savills delivers a comprehensive range of commercial leasing services for both office tenants and property developers. Our experts are skilled in tenant and landlord representation and always secure favourable terms for their clients. With services from lease negotiations, operational strategies, or payment structure, our team can help you! Contact Minh to learn more.