Fashion and F&B sectors drive leasing demand

• HCMC’s prime retail market witnessed mixed performance across its submarkets. The City Centre recorded positive net absorption of approximately 300 sqm, driven by new leasing activity from fashion retailers including Pleat Kora and Victoria’s Secret.
• City Fringe recorded negative absorption of ~2,000 sqm due to lease expiries and tenant restructuring, rather than weakening demand. Notable new openings in the quarter included Popmart at Thiso Mall Thu Thiem and Hadilao at Parc Mall.

Market corrects as new supply pauses

• With no new prime retail space completed in Q2 2026, total supply remained steady at 96,500 sqm in the City Centre and 605,200 sqm in the City Fringe.
• City Centre vacancy decreased 0.3 pp q-o-q to 8.1% as new leases were recorded in the city’s favorable retail destinations like Vincom Dong Khoi and Saigon Centre. Meanwhile, City Fringe vacancy increased 0.4 pp q-o-q to 3.9%.

Modest rent growth amid focus on tenant retention

• Gross asking rents at ground floor rose modestly on a quarterly basis to USD 238.2 per sqm per month (+0.8%) in the City Centre and USD 66.8 per sqm per month (+0.7%) in the City Fringe, as landlords maintained competitive pricing strategies. The modest uptick underscored landlords’ focus on preserving occupancy and retaining tenants rather than pursuing aggressive rental growth.
• Flexible incentive structures continue to support tenant operations amid economic uncertainty.

Outlook: Experiential retail evolves through high-quality, interactive spaces

• In the near term, prime mall supply is expected to remain stable while vacancy rates decline. Despite cautious consumer spending in certain segments, the retail trajectory remains positive, driven by experiential, immersive environments tailored to local preferences.
• HCMC’s retail market will maintain growth, with average asking rents rising around 3-5% per annum in both submarkets. However, macroeconomic headwinds may affect consumer sentiment, requiring strategic adjustments by developers and retailers across each segment.