Extra retail space causes drop in rents
|A view of Trang Tien Plaza in Ha Noi. The increase in retail space has caused a drop in rental prices in the capital city. – VNA/VNS Photo Minh Duc
HA NOI (VNS)— The increase in retail space is closely linked with lower rents in the capital city, according to the latest reports of two leading real-estate firms, Savills and Cushman and Wakefield.
According to Savills, in Q4 of 2013, some 1 million square metres of retail space was assigned to 149 projects, a sharp increase of 15 per cent quarter-on-quarter and 37 per cent year-on-year, while the average rent dropped by 2 per cent.
Cushman and Wakefield also reported a decline in rents for Ha Noi retail outlets, citing the same reason of more retailing space entering the market.
According to the firm, the average rent for outlets on the ground floor of a shopping centre during the quarter was down to around VND844,000 (US$40) per square metre per month, as much as 9 per cent lower compared to Q3 2013.
Likewise, the average rent for a retail podium site declined by roughly 10 per cent to VND1,306,000 ($62) per square metre per month.
However, the company's chart also indicates that there is no downtrend in rents for outlets in the most expensive parts of the city. Rent on Trang Tien Street is still VND1.6-4.2 million ($71-186), while on Ba Trieu Street, rents are around VND1.05-1.6 million ($50-71) per square metre per month.
The highest rent for an outlet in a shopping mall is charged by Trang Tien Plaza, which costs VND4.6 million ($222) per square metre per month. Next is Parkson Viet Tower and Vincom City Tower, both of which cost VND2.02 million ($108) per square metre per month.
According to Cushman and Wakefield, luxury retailers continue to focus their attention on business streets with good footfall, in contrast to non-luxury brands, which favour shopping centres.
However, Trang Tien Plaza is an exception; it now houses a range of luxury brands, such as Chanel, Louis Vuitton, Dior and Cartier. Available space suitable for luxury brands remains stable, with steady demand, according to analysts. — VNS