Vacancy rates fall for retail space
HCM CITY (VNS)— Though the economy remains mired in difficulty, the property market's retail business segment is showing encouraging signs with vacancy rates falling in the third quarter, according to property services companies.
|A view of Nguyen Tat Thanh Street in HCM City. The property market's retail business segment is showing encouraging signs with vacancy rates falling in the third quarter despite the difficult economy. — VNA/VNS Photo Hoang The Nhiem
A report by CBRE Viet Nam says the total vacancy rate for both department stores and shopping centres has decreased from 15.5 per cent in the previous quarter to 12.4 per cent.
The monthly rental is around US$103 and $105 per square meter respectively for department stores and shopping centres in the downtown area, unchanged in case of the former and 3.4 per cent down for the latter.
Outside the downtown area, the rents are respectively $47.5 and $30, 2.5 per cent down in case of department stores and unchanged in case of shopping centres.
The third quarter saw notable activity within the technology sector. Telecom operator FPT opened 13 retail stores across 10 cities, including three in HCM City. HTC opened two concept stores in HCM City at the Crescent Mall, District 7, and Nguyen Hue Street, District 1, while Sony opened a new store on Dong Khoi Street, District 1.
Fashion and food and beverages also accounted for a large portion of demand. Ninomaxx and Nine West opened new stores, and global ice cream chain Baskin-Robbins continued its expansion with the opening of two stores in Diamond Plaza and the Crescent Mall.
Trung Nguyen Coffee expanded notably in the quarter, opening two stores on Dong Khoi Street. It also rolled out a new concept of "coffee corner" to sell ground coffee at Vinatex and Citimart.
It is well known that a number of major international F&B retailers are looking to enter or expand. The immediate consequence has been a concerted drive by local brands to expand and reinforce market share.
A prime example of an international F&B group expanding into Viet Nam is Johnny Rocket's, the fast food chain, which is scouting for a location for its first restaurant in HCM City, to be followed by others in Ha Noi and central Da Nang City.
Apartments at reasonable prices, with good quality, and built by well-known developers got a positive response from buyers.
Nam Long's Ehome 3 project in Binh Tan District saw strong turnout at the launch and swiftly sold over 50 per cent of available units.
Sunview 3 in Go Vap District also saw around 200 bookings.
In the last four years the affordable sector has seen less price fluctuation and tended to retain value better than other segments, according to CBRE Viet Nam.
Affordable units now cost an average $706 per square metre, down 0.3 per cent from last quarter and 3.1 per cent from a year ago. For the high-end ones, the fall has been 2.4 and 7.7 per cent respectively.
Almost 3,000 units have been completed in Q3, an increase of 19.9 per cent and 22.2 per respectively.
The market appears to have broken into three distinct brackets, the first tier comprising of well-funded developers who are able to finish their projects on schedule and maintain sales rates.
The second tier has developers who have slowed their projects and typically offer the biggest discounts to get them back on track again.
The third tier has projects delayed indefinitely, with their promoters suffering significant brand damage.
Unlike in the previous quarter, 87.7 per cent (or 2,620 units) of the new units in Q3/2012 were in the high-end segment. The remaining was from an affordable project in Binh Chanh District.
The majority of developers continued to try and hold prices at levels witnessed in recent quarters. But the third quarter has indeed seen isolated examples of developers offering significant discounts. This typically occurs at projects where pricing appears to be inappropriate or where the developer needs to stimulate sales and cash flow to move a development forward.
Hotels remain afloat
Savills Viet Nam said four 3-star and two 4-star hotels with more than 600 rooms entered the market in the third quarter, while one 3-star in District 5 closed. Thus the total number of 3 – to 5-star hotel rooms grew by 4 per cent quarter-on-quarter and 13 per cent y-o-y.
The average occupancy was 64 per cent, decreasing 2 per cent this quarter in spite of the average room rate (ARR) falling by 8 per cent to VND1.845 million/ room/ night.
All three grades had lower ARR than in the second quarter. The 4-star segment saw the sharpest decrease of 8 per cent followed by 5-star (4 per cent) and 3-star (1 per cent).
The overall revenue per available room, or RevPAR, decreased by 9 per cent this quarter, but increased by 1 per cent year-on-year. The sharp decrease was mainly due to 4-star rates falling by 20 per cent and 5-star rates by 7 per cent.
In the first nine months, tourist arrivals in Viet Nam increased by 10 per cent compared with the same period last year.
The number of business travellers was up 19 per cent against the same period last year, a good sign for the 4 – and 5-star segments.
In the next two quarters three 5-star projects with 873 rooms are expected to hit the market, negatively affecting the segment's occupancy rate.
A further 25 3 – to 5-star projects are in the works, and will add more than 5,400 rooms to the market.
Hotels are beginning to be built in new urban areas. One 4-star and 5-star hotel each with around 1,000 rooms will be built in District 7. — VNS