|The average rent was almost VND1.4 million per square metre for shopping centres, over VND1.2 million for department stores and VND0.8 million for retail podiums. — Photo ndh
HCM CITY (VNS) — The 2015 outlook for retail property in HCM City is promising thanks to a rise in consumer demand and the large population, an industry executive told a market review seminar in the city yesterday.
Nguyen Khanh Toan, research manager of real estate services provider Savills Vietnam, said total retail turnover in the city last year was VND655 trillion (US$30 billion), up 12.5 per cent from 2013.
"If excluding the inflation factor, however, the growth stood at 8 per cent, a slight fall from 8.6 per cent the previous year," Toan said, adding that the overall national growth rate was 6.5 per cent.
Fewer tourists from China and Russia was a contribution to the smaller value as hotel occupancy rates dipped.
But HCM City has a large population of around nine million and many people prefer modern markets to traditional or wet ones and the trend is consolidating, he said.
In the fourth quarter the average occupancy rate was 92 per cent, increasing by one percentage point (ppt) q-o-q but 11 ppts y-o-y, the highest in the last five years.
Retail podium saw average occupancy of 84 per cent, up 3 ppts q-o-q, while for department stores it was 97 per cent and for shopping centres, 91 per cent, up 1 ppts q-o-q and 10 ppts y-o-y in both cases.
Rents were stable compared to q3 but were down y-o-y — 2 per cent for shopping centres, 3 per cent for department stores and 15 per cent for retail podiums. Promotions by new projects and five supermarkets and one shopping centre entering the market contributed to the falls.
The average rent was almost VND1.4 million per square metre for shopping centres, over VND1.2 million for department stores and VND0.8 million for retail podiums.
In 2015 and 2016, 362,000sq.m are expected to enter the market, two-thirds of them in District 7.
This year Viet Nam is set to open up its retail market due to its WTO agreement as wholly foreign-owned businesses are expected to enter.
Fewer international visitors in the fourth quarter meant lower occupancy for HCM City hotels — at 68 per cent for three- to five-star hotels, down 4 ppts y-o-y though it meant a q-o-q gain of 11 per cent .
Toan said direct international flights to places other than HCM City had also reduced the city's share.
Average rent was US$87 per room per night, down 2 per cent y-o-y, though 7 per cent up q-o-q.
Nine new hotels are expected to become operational by the end of 2017 with a total of 1,700 rooms. This year's first half will see two new five-star hotels in District 1 with 580 rooms enter the market. — VNS