Major retailers steadily expand their presence in City Fringe

• The market recorded 33,500 sqm of net absorption, driven by the City Fringe. Vincom Mega Mall Grand Park (District 9) recorded a strong absorption of 29,000 sqm, equivalent to an occupancy rate of 90% upon opening. Notable tenants are CGV and Uniqlo.
• In contrast, the City Centre experienced a slightly negative net absorption (around 1,200 sqm) as some underperforming tenants moved out or scaled back.

Vincom Mega Mall Grand Park officially opens, a highlight of the HCMC retail market in Q2 2024

• In Q2 2024, Vincom Mega Mall Grand Park (District 9) officially opened, adding around 32,000 sqm of NLA to the supply. As a result, the total supply in the City Fringe expanded to 570,500 sqm, while the City Centre’s remained unchanged at 84,100 sqm.
• The City Fringe recorded a vacancy rate improvement, declining from 5.0% in the previous quarter to 4.2% in Q2 2024. In contrast, the City Centre experienced a modest yet temporary increase in its vacancy rate by 1.4 ppts y-o-y to 3.0% in Q2 2024.

Rents stable across both City Centre and City Fringe

• In Q2 2024, the HCMC retail market reported stable rents across both the City Centre and City Fringe areas. The City Centre’s net effective rent inched up slightly to USD 83.4 per sqm, per month, a marginal 0.4% q-o-q increase.
• Despite the new supply, net effective rent in the City Fringe stood at USD 35.5 per sqm, per month, indicating consistent demand for retail space in the area and the market’s resilience amidst prevailing economic conditions.

Outlook: Stable supply and minor rent increases are expected until end-2024

• Looking ahead to end-2024, it is anticipated that both the City Centre and City Fringe submarkets will maintain their current supply levels as there are no new prime mall developments scheduled for completion until the end of this year.
• The retail leasing market will continue to recover with slight increases in rents over the next two quarters. By end-2024, City Centre and City Fringe are projected to achieve a net rent of USD 84.5 and USD 38.4 per sqm, per month, respectively.