HCM City's rental charge of retail space to drop further | Vietnam ...

HCM City?s average rental of retail space and occupancy rate is forecast to see further decline for 2012, according to Colliers International.
HCM City: pressure on rental and occupancy rate

The total supply of retail space as of quarter 1 2012 is estimated at 646,000 square metre, up a 7 percent year-on-year, 87 percent of which is found in District 1 and District 7 thanks to convenient location and developed infrastructure.

Rental of retail space averaged at US$70.6 per square metre excluding service fees and value added tax in quarter 1, down 4pct year-on-year.

Average occupancy rate reached 90.3 percent, down 3.9 percent year-on-year. The highest percentage is found at general stores with 97 percent, followed by commercial centres and retail areas with 88 percent and 86 percent respectively.

The supply is projected at 1.27 million square metre with many large-scale projects such as Saigon One, Eden A, Pico Sai-gon Plaza, Kenton, Saigon M&C, Riviera Point.

Abundant potential supply accompanied by soaring inflation and monetary tightening would take a heavy toll on demand for retail space, probably pushing average occupancy rate and rental down further for 2012.

Buildings in the city centre like Caravelle, New World, Opera View, Rex Arcade and Sheraton Saigon have seen occupancy rate reaching 100 percent and average rental staying at US$110 per square metre.

HCM City is forecast to offer huge potential for retail development thanks to young population, rapid urbanisation and increasing income.

Hanoi: ample supply to come in three years? time

No new supply has been recorded in the first quarter of this year resulting in slight fluctuations in rental and occupancy rate. Yet, three coming years could see remarkable difficulties due to plentiful potential supply particularly in the west of the city.

The total supply of retail space remains at 433,700 square metre, of which 51.7 percent are shopping centres, 14.4 percent are general stores and 30.6 percent wholesale supermarkets.

New retail space projects have been found in the suburbs which are estimated to provide 72 percent of the total retail space supply.

Average rental is reported to fall 2.3pct over the previous quarter largely due to rental relaxing at shopping centres. The price in central areas has hardly seen any change due to nearly full occupancy. Shopping centres in the outer of the city such as The Garden,

Ha Thanh Plaza and Syrenxa have experienced an average rental decline of 3.34 percent.

Average occupancy rate at shopping centres reached 91.1 percent, down 1 percent over the last quarter due to the withdrawal of large tenants such as Pico Digital leaving Pico Mall, MTTC Deccor leaving The Garden, FAHASA book store leaving Ha Thanh Plaza.

The west area is expected to the shopping destination in three years to come and Thanh Xuan and Ha Dong District alone could provide 31.7 percent of the city?s total supply.

In all likelihood, many investors could face some delay in bringing out products onto the market due to capital difficulties and low occupancy rate, predicted Colliers International. ? Vietbiz24

Tags: Vietnam Property market, Vietnam real estate, vietnam real estate market

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