APPD Market Report Article

Ho Chi Minh City

February 28, 2023

Trang Le, Head of Research, Vietnam


USD 79.1


F&B and international retailers buoy market demand in 4Q22

  • Net absorption totalled about 11,000 sqm in 4Q22, primarily driven by the newly opened Thiso Mall. The quarter saw a significant increase in the number of F&B tenants. Manwah (662 sqm) opened a new store in AEON Mall, for example. Tan Phu L’Usine (363 sqm) has expanded to Saigon Centre, and Pizza 4P’s (553 sqm) and Paris Baguette (259 sqm) are undergoing construction in Thiso Mall.
  • Besides the expansion of F&B tenants, major anchor tenants continued to expand in the City Fringe, namely MUJI at Crescent Mall (1,329 sqm) and Vincom MM Thao Dien (2,019 sqm). Uniqlo (1,740 sqm) opened its 16th store in Vietnam at the newly-opened Thiso Mall. Meanwhile, approximately 1,000 sqm of Nguyen Kim Electronics in AEON Tan Phu moved out, indicating a slowdown in the electronics sector.

City Fringe vacancy temporarily increases due to new supply

  • The official opening of Thiso Mall adds 38,000 sqm to total retail stock in the City Fringe, with most of the space on the B1 floor being occupied by the supermarket, Emart, and other mostly F&B operators. Pizza 4P’s, L’Usine, Uniqlo and other well-known F&B brands are setting up their premises on the upper floors of Thiso Mall in the upcoming quarters.
  • The new addition, Thiso Mall, which had a 39% occupancy rate, contributed to the increase in the vacancy rate in City Fringe, pushing it up to 7.9% in the quarter. Completed in the midst of challenging market conditions (COVID-19 and global economic uncertainty) and with its location in Thu Thiem, a new area with limited traffic and catchment, the mall has found it challenging to fill the space.

Rents remain stable across existing malls in 4Q22

  • City Centre’s net effective rent remained stable at USD 79.1 per sqm per month. In 4Q22, rents in the City Fringe recorded USD 35.3 per sqm per month, a decrease of 2.3% q-o-q, mainly because of the opening of Thiso Mall with lower-than-average rents.
  • No Prime retail transactions were recorded in the investment market in 4Q22. The capital value rose by 10.4% y-o-y in City Centre and 7.9% in City Fringe, mostly from existing asset enhancement initiatives and limited new upcoming projects. By the end of 2023, market yields compressed to 7% in City Centre and 9% in City Fringe, respectively.

Outlook: Retail market stays resilient in 2023 despite headwinds

  • Vincom Grand Park is set to bring 30,100 sqm of prime retail space to City Fringe in 2023, further expanding Vincom’s presence in the HCMC retail market. Major mall developers will continue to renovate their properties to stay competitive and attractive in the market. The renovated malls in City Centre are expected to boost rents by 21.1% y-o-y by the end of 2023.
  • As F&B and international fast fashion tenants seek expansion opportunities across submarkets, landlords will likely continue to push rents higher. Accordingly, rents are expected to increase in both markets by the end of 2023. 

Note: Ho Chi Minh City Retail refers to Ho Chi Minh City's overall prime retail market.

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