Arrival of new foreign retailers, especially in the City Fringe

• The Hanoi market recorded net absorption of -5,200 sqm in Q1 2025, with City Fringe accounting for -4,900 sqm. These figures mainly resulted from store closures in Vincom Nguyen Chi Thanh, which is slated for conversion to office space in the coming quarters.
• The retail landscape saw the arrival and expansion of new foreign tenants, notably Singaporean and Malaysian retailers such as OH!SOME and Mr.DIY, occupying sizable spaces of 500-1,000 sqm, especially in the City Fringe.

No prime mall completions in Q1 2025

• With no prime mall completions in Q1, City Centre and City Fringe supply stood at around 55,000 sqm and 616,300 sqm, respectively. The vacancy rate in City Centre increased slightly by 59 bps q-o-q to 4% due to the departure of some underperforming brands.
• Meanwhile, the City Fringe experienced a more significant rise in its vacancy rate, rising by 79 bps q-o-q to 8.4%. This increase was largely attributable to the aforementioned transition of Vincom Nguyen Chi Thanh.

The market shows resilience with stable rent increases

• Hanoi’s City Centre and City Fringe continued to record net effective rent upticks in Q1, reaching USD 67.3 per sqm, per month, and USD 34.9 per sqm, per month, respectively. On a yearly basis, the average rents grew by 3.2% in City Centre and 3.5% in City Fringe.
• City Fringe has benefitted from the decentralisation trend, yet competition from high-quality malls like Lotte Mall West Lake and upcoming projects in 2026-27, such as Takashimaya, Thiso Mall West Lake and CJ Shopping Centre, tempered rent hikes in this area.

Outlook: Rents are expected to continue their upward trend

• In 2025, the City Centre is expected to welcome Hanoi Centre, a 50,000 sqm shopping mall within the Tien Bo Plaza mixed-use project. Meanwhile, the City Fringe will witness the construction of Takashimaya in the West Lake area, contributing ~20,000 sqm by end-2026.
• Rents across submarkets are forecast to continue to increase in the next 12 months. However, as supply grows, landlords are expected to offer more enticing leasing deals to attract tenants and maintain occupancy in the competitive market.