Ho Chi Minh City retail rents to increase by 2-3% annually

Experiential retail is expected to drive the market.

According to a JLL report, Marina Central Tower, a prime retail space in City Centre’s Grand Marina project, is anticipated to complete this year, adding around 13,000 sqm. The experiential retail trend will continue, with emphasis on curated and interactive environments.

“The market will maintain its growth path with asking rent in both submarkets increasing 2-3% annually. However, supply expansion and ongoing macro risks will likely shape consumer sentiment and retailer strategies differently across the market,” the report said.

Here’s more from JLL:

In Q2, City Centre and Fringe areas recorded favorable net absorption of 1,417 sqm. Oh!Some, the lifestyle brand from Singapore, furthered its presence in several prime shopping destinations citywide, while Polarpopo from China entered the market for the first time.

Kid-focused experience venues saw significant growth in the City Fringe, highlighted by the opening of Ezoo’s innovative zoo-playground concept at Vincom Mega Mall Thao Dien and Light City’s cutting-edge interactive educational facility in GigaMall.

Vacancy rates strengthen across City Centre and City Fringe

No prime mall openings in the quarter. City Centre’s vacancy fell 47 bps q-o-q and 89 bps y-o-y to 2.2%, driven by new leases from premium F&B brands like Starbucks Reserve and TWG Tea.

City Fringe vacancy dropped to 3.4% in Q2, down 17 bps q-o-q and 86 bps y-o-y. Beyond F&B tenants, this improvement stemmed mainly from expanding lifestyle, home-living and entertainment retailers throughout the year.

Rents experienced a modest increase across the market

The City Centre’s retail market continued to flourish, supported by constrained new supply. In Q2, the area experienced a modest increase in average gross asking rent of ground floor to USD 244.6 per sqm per month, representing a 4.0% increase y-o-y.

City Fringe’ gross asking rent rose marginally to USD 65.2 per sqm per month, 0.7% y-o-y rise. Despite economic uncertainty, the market maintains momentum through strategic tenant repositioning by landlords and creative concept implementation by tenants.