New supply drives positive net absorption in Q1 2026

• The opening of Hanoi Centre drove demand in Q1 2026, with 31,000 sqm of net absorption recorded in the City Centre. This strong performance offset a temporary decline in the City Fringe, leading to a positive market-wide net absorption of around 26,700 sqm.
• Demand was anchored by F&B and fashion, with continued momentum from lifestyle and service concepts. Hanoi Centre exemplified this, successfully securing a strong mix of international brands, such as Zara, Urban Revivo, Victoria’s Secret, Kidzoona and Pop Mart.

Hanoi Centre officially opens, adding approximately 42,000 sqm of prime retail space

• Hanoi’s prime retail supply reached 678,000 sqm NLA in Q1 2026, following the addition of 42,000 sqm from the opening of Hanoi Centre. The new supply temporarily pushed the City Centre vacancy rate to 14.0%, up 10 ppts y-o-y.
• In City Fringe, the vacancy rate rose 0.9 ppts q-o-q, to 7.0%, though it remained 1.4 ppts lower on a yearly basis, supported by diverse demand and flexible landlord leasing strategies.

Rental growth stabilizes or shows marginal upticks amid heightened competition

• The average gross asking rent of ground floor in City Centre dropped to USD 132.5 per sqm per month, reflecting a 1.4% decrease q-o-q as the recently completed project offered a competitive rate to attract tenants.
• Despite economic uncertainties, the City Fringe showed resilience. Gross asking rent of ground floor stayed flat with a slight 0.3% increase q-o-q, settling at USD 54.9 per sqm per month.

Outlook: An upcoming surge of quality supply is anticipated to bolster the market through 2028

• Over the next nine months, supply will remain unchanged in both submarkets. In the longer term, City Fringe will see continued development of prime retail projects, including Westlake Square Hanoi, Thiso Mall West Westlake and Vinacomex Capital One, collectively delivering over 80,000 sqm in 2027-28.
• Sector such as F&B, lifestyle and entertainment – particularly business models targeting Gen Z and children, are expected to maintain sustainable growth. Meanwhile, increasing competitive pressure should drive tenant mix innovation and creative business model development.