HCM City retail property market expected to heat up

HCM City retail property market expected to heat up

The retail property market in HCM City is expected to see further growth this year, as new buildings are completed and more retailers, attracted by the increasing purchasing power of the population, enter the market.

A shopping mall in HCM City. The retail property market in HCM City is expected to see further growth this year. – Photo from gkg.com.vn

A report by JLL states that in 2025, there will be new high-quality retail spaces in the city centre, such as Marina Central (Masterise), providing around 13,000 sqm of rental space. Net effective rents are projected to increase by 2-3 per cent annually, although the recent expansion in the city fringe supply may impact this growth.

F&B, lifestyle, and children's amusement sectors are anticipated to be major drivers of demand in the market, it added. 

Another market researcher, Đất Xanh Services, reported positive growth figures for the market in 2024, providing a strong foundation for further development in 2025.

In 2024, the market saw 7 per cent growth, reaching 1.58 million square metres, with most off the growth occurring in the city centre. The occupancy rate increased by 3 per cent year-on-year to reach 93 per cent. Retail spaces were predominantly occupied by the supermarket, food and beverage, and fashion sectors.

Rent prices for retail spaces in commercial centres have experienced significant growth in central areas due to supply scarcity, coupled with high demand. Prices have been rising by 8 per cent annually, reaching an average of US$53.1 per square metre.

The trend of consumers looking for commercial centres with shoppertainment programmes has driven investors to enhance their construction and renovation plans with competitive leasing policies. 

Therefore, the market's development is attributed to the involvement of both foreign and domestic retailers in the market, as well as the increase in purchasing power.

According to Euromonitor, non-grocery sales in Việt Nam are expected to increase with a CAGR of 12.6 per cent from 2010 to 2027. Việt Nam’s consumer expenditure per household index is also expected to increase by 38 per cent from 2024 to 2028, ranking the highest in Southeast Asia. 

There are promising opportunities in the Vietnamese retail market, but success hinges on effectively engaging consumers. To stand out in the market, landlords need to upgrade and renovate their malls to reflect unique offerings.

Industry experts predict a positive transformation in the commercial real estate market in 2025, particularly in HCM City, with an improved supply. This segment is expected to undergo a transformative recovery for a new growth cycle.

According to Thanh Phạm, associate director of CBRE Vietnam: “Domestic and foreign brands are steadily expanding in major districts, leading to fierce competition for prime locations amid a shortage of quality properties." 

Mai Võ, head of Retail Services at CBRE Vietnam, adds: "Despite lower sales of luxury brands in various markets, Việt Nam continues to attract strong interest from a few niche brands that are targeting openings in 2025-2026. Despite the current subdued mood in retail sales in China and APAC in general, a significant number of Chinese brands are seeking opportunities to expand overseas, with Việt Nam being one of the potential markets for expanding their store networks. Thus, both landlords and tenants should carefully plan and secure locations at least 12 to 18 months in advance, given the long lead time required.”

In 2025, the commercial real estate market, especially in HCM City, is forecast to undergo significant positive changes, with an improved supply. It can be said that this segment will "transform" to recover for a new growth cycle. 

Bizhub