Hà Nội's prime retail sector among the fastest-growing in the region

Tràng Tiền Plaza in Hà Nội. Hà Nội attracts investors thanks to competitive rental costs for high-end retail spaces. — VNA/VNS Photo

HÀ NỘI — According to a socio-economic report recently published by the General Statistics Office, retail revenue for the first eight months of the year is estimated at nearly VNĐ3.3 quadrillion (US$130.3 billion), a 7.3 per cent increase year-on-year.

Prominent growth was seen in regions including Quảng Ninh, Hải Phòng, Cần Thơ, Đà Nẵng, HCM City and Hà Nội.

Trần Phạm Phương Quyên, Senior Leasing Manager at Savills Việt Nam, said that retail growth is being driven by demographic factors and widespread urbanisation, which in turn stimulate economic expansion.

A study by KPMG Việt Nam forecasts that from 2020 to 2030, Việt Nam will gain about 23.2 million new middle-class individuals, with a compound annual growth rate of 5.5 per cent. It places Việt Nam among the fastest-growing countries in Southeast Asia.

Also, as of October 2023, the urbanisation rate in Việt Nam has reached 42.6 per cent.

The Vietnamese government aims to raise this rate to at least 45 per cent by 2025 and over 50 per cent by 2030.

"The rise of the middle class, the positive recovery of the tourism industry and the continuous arrival of new brands have created a dynamic, modern retail landscape with immense potential," Phương Quyên explained.

She added that shopping malls are becoming increasingly popular as entertainment and leisure destinations.

According to the Prime Benchmark report released by Savills Asia-Pacific, Hà Nội was among the most active retail real estate markets in the first seven months of the year.

Emerging markets in Southeast Asia, including HCM City, Hà Nội and Jakarta (Indonesia) have seen significant improvements in rental prices for high-end retail space, with increases of 4.7, 4.6 and 3.8 per cent, respectively.

In Hà Nội, rents for prime spaces are $96.4 per square metre. By comparison, Kuala Lumpur's rate is $158.6 per square metre, Singapore's is $399.7 per square metre and Beijing's stands at $289.5 per square metre.

Đỗ Thị Thu Hằng, Senior Director of Advisory and Research at Savills Hà Nội, emphasised that prime retail rents in Hà Nội remain competitive relative to other regional markets.

"Briefly, rents in this segment in Hà Nội are expected to stabilise or increase due to limited new supply. It means that existing projects in prime locations will maintain high occupancy rates and could see rental price increases," Thu Hằng said.