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HCM City retail, hospitality sectors see positive signs

Update: April, 07/2012 - 09:01

HCM CITY — The retail and hotel sectors of HCM City's property market saw some positive developments in the year's first quarter, according to real estate services company Savills Viet Nam.

Truong An Duong, head of the firm's research department in HCM City, said on average, rents had increased by 4 per cent from the previous quarter for the retail sector.

Average rent on the ground level was around US$79 per sq.m per month (including service charges, exluding VAT) for department stores, around $69 for shopping centres and $70 for retail podiums.

Average occupancy was up slightly, by 1 per cent, with rates at department stores, shopping centres and retail podiums standing at over 90, 86 and 74 per cent, respectively, at the end of the first quarter, Duong said.

"With the increase in living standard, more people now prefer to shop in modern retail centres than traditional markets, therefore demand for supermarkets, especially in the outer districts is expected to remain high in the future," he added.

There are seven department stores, eight retail podiums, 20 shopping centres, 60 supermarkets and three wholesale centres in the city.

Shopping centres still account for the highest market share (44 per cent) of the total retail stock, followed by supermarkets (31 per cent) and department stores (16 per cent).

Three hotels, none of them in the four- or five-star category, entered the market in the first quarter, increasing total supply by 1 per cent compared to the fourth quarter in 2011 and 8 per cent over the same period last year, to almost 11,000 rooms.

The total supply is expected to reach 1,280 rooms this year, a 12 per cent growth y-on-y.

Rents of four- and three-star rooms saw gradual increases from the second quarter of last year, but it was still lower than the first quarter in 2011. In five-star hotels, the rent went up from the second quarter of 2011 to the fourth quarter before levelling out at a higher level than 2011's first quarter.

But the five-star hotels had the lowest occupancy of 74 per cent. The rate was 77 for four-star and 80 per three-star hotels.

In the first quarter, HCM City received 920,000 foreign tourists, up 8 per cent y-o-y. The city targets 4 million visitors this year. — VNS

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