Lifestyle and home-living brands expand, especially in the City Fringe

• City Centre and City Fringe witnessed positive net absorption in Q1, totalling 750 sqm. City Centre continued to attract foreign brands, with OH!SOME, a new Singaporean one-stop retailer, leasing around 1,000 sqm space in Vincom Dong Khoi.
• City Fringe saw lifestyle retail growth, evidenced by new stores by Uniqlo at Vincom Mega Mall Thao Dien and Muji at Aeon Tan Phu. Large-format furniture and home appliance retailers also expanded, exemplified by Nitori’s second store launch in the city.

Vacancy rates strengthen across City Centre and City Fringe

• The quarter saw no prime mall openings. The City Centre’s vacancy dropped 0.2 ppts q-o-q and 1.0 ppts y-o-y to 2.6%, mainly thanks to new leases from wellness brands occupying the standing three-quarter vacancies in Saigon Centre.
• City Fringe vacancy fell to 3.5% in Q1, down 0.1 ppts q-o-q and 1.5 ppts y-o-y. Besides F&B tenants, this notable improvement in vacancy was largely driven by the expansion of lifestyle and fashion retailers like Uniqlo and Muji over the year.

Rents saw a slight increase market-wide

• The City Centre retail market continued to thrive, benefiting from limited new supply. In Q1 2025, prime malls in this area witnessed their average net effective rents rise slightly to USD 84.8 per sqm, per month, up by 0.6% q-o-q and 2.1% y-o-y.
• The City Fringe saw net effective rent inch up by 0.4% on both a quarterly and yearly basis, to USD 35.6 per sqm, per month. This steadiness was largely due to the launch of Parc Mall in District 8 in Q3 2024, which offered competitive rates to attract tenants.

Outlook: Demand to remain strong across the market

• In 2025, Marina Central Tower, a prime retail space in City Centre’s Grand Marina project, is anticipated to be finished, adding around 13,000 sqm. Demand from the F&B, lifestyle and home living sectors are forecast to grow, driving market expansion and diversification.
• The market will continue its growth trajectory with the average net effective rent in both submarkets rising by 2-3% per year. However, the supply expansion in the City Fringe over the past year is likely to put pressure on rent growth in this area in the short-term.