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

The city will see around 13,000sqm of new stock by next year.

By end-2024, JLL said in a report that the Ho Chi Minh City Centre and City Fringe are set to maintain their current supply. In 2025, the market will welcome new high-quality space in the City Centre with the completion of Marina Central (Masterise), offering around 13,000 sqm of rental space.

The net effective rents are projected to rise by 2–3% per year, yet JLL said the recent expansion in City Fringe supply may exert some pressure on this growth. Players in the F&B, lifestyle and children amusement sectors are expected to remain major demand drivers in the market.

Here’s more from JLL:

The market saw a net absorption of 1,300 sqm, with 85% of demand driven by tenants in the City Fringe. Vincom Mega Mall Grand Park continues to lead the number of new transactions, while Thiso Mall Sala welcomed MUJI, a major retailer to officially open in early 2025.

The City Centre recorded 200 sqm net absorption, highlighted by Yakiniku Like’s debut at Vincom Dong Khoi. The past nine months saw the increasing presence of foreign F&B chains like Long Wang and Mikado Sushi in prime malls, representing the sector’s growing trend.

No new prime mall openings in Q3 2024

No new prime mall completions in Q3 2024 maintained the City Centre and City Fringe stocks at 84,100 and 570,500 sqm, respectively. However, the retail landscape in HCMC was brightened by a new non-prime addition in the City Fringe, namely Parc Mall with 42,000 sqm.

Positive net absorption drove down vacancy rates in Q3 2024. City Centre saw vacancy drop from 3.0% in Q2 2024 to 2.8% in Q3. City Fringe experienced a more significant quarterly decrease, with the vacancy rate falling 2.0 ppts to 4.0%.

Rents saw a modest uptick market-wide

The City Centre retail market continues to grow, benefitting from limited new supply and a scarce landbank. In Q3 2024, prime malls in this area saw average net effective rents rise slightly to USD 83.7 per sqm, per month, up 0.4% q-o-q and 1.3% y-o-y.

The City Fringe’s rent reached USD 35.8 per sqm, per month, up 0.7% q-o-q. On a y-o-y basis, there was a marginal decline of 0.6%, owing primarily to the introduction of new supply at end-2023, which initially offered attractive rents to entice tenants.