F&B and lifestyle brands expand, especially in the City Fringe

• The market saw a net absorption of 1,300 sqm, with 85% of demand driven by tenants in the City Fringe. Vincom Mega Mall Grand Park continues to lead the number of new transactions, while Thiso Mall Sala welcomed MUJI, a major retailer to officially open in early 2025.
• The City Centre recorded 200 sqm net absorption, highlighted by Yakiniku Like’s debut at Vincom Dong Khoi. The past nine months saw the increasing presence of foreign F&B chains like Long Wang and Mikado Sushi in prime malls, representing the sector’s growing trend.

No new prime mall openings in Q3 2024

• No new prime mall completions in Q3 2024 maintained the City Centre and City Fringe stocks at 84,100 and 570,500 sqm, respectively. However, the retail landscape in HCMC was brightened by a new non-prime addition in the City Fringe, namely Parc Mall with 42,000 sqm.
• Positive net absorption drove down vacancy rates in Q3 2024. City Centre saw vacancy drop from 3.0% in Q2 2024 to 2.8% in Q3. City Fringe experienced a more significant quarterly decrease, with the vacancy rate falling 2.0 ppts to 4.0%.

Rents saw a modest uptick market-wide

• The City Centre retail market continues to grow, benefitting from limited new supply and a scarce landbank. In Q3 2024, prime malls in this area saw average net effective rents rise slightly to USD 83.7 per sqm, per month, up 0.4% q-o-q and 1.3% y-o-y.
• The City Fringe’s rent reached USD 35.8 per sqm, per month, up 0.7% q-o-q. On a y-o-y basis, there was a marginal decline of 0.6%, owing primarily to the introduction of new supply at end-2023, which initially offered attractive rents to entice tenants.

Outlook: New supply expected in City Center in 2025

• By end-2024, the City Centre and City Fringe are set to maintain their current supply. In 2025, the market will welcome new high-quality space in the City Centre with the completion of Marina Central (Masterise), offering around 13,000 sqm of rental space.
• The net effective rents are projected to rise by 2–3% per year, yet the recent expansion in City Fringe supply may exert some pressure on this growth. Players in the F&B, lifestyle and children amusement sectors are expected to remain major demand drivers in the market.