Shopping malls are mushrooming outside HCMC’s central business district, a new report by Jones Lang LaSalle Vietnam says.
The real estate service firm (JLL) said the most prominent example is Landmark 81 in Binh Thanh District, which opened in the third quarter with 46,000 square meters of retail space. The tallest building in Vietnam has retail outlets of many major international and domestic brands.
This year there will be more new entrants in the non-CBD area such as Estella Place (District 2), Cong Hoa Garden (Tan Binh District) and TTC Plaza (Binh Thanh District).
Retail space in the non-CBD area currently accounts for 80 percent of the total supply in the city and the ratio will remain to be on the rise in the coming time, JLL said.
The current rental rate in the city retail market is $46.2 per square meter per month, down 0.2 percent quarter-on-quarter and 0.7 percent year-on-year.
But in the non-CBD area, it is only at $37.
According to JLL, though supply of retail space is booming in the suburbs, international brands and major financial players continue to prefer the downtown area.
Therefore, with the increasing supply of retail space outside the CBD area, the competitive pressure of the locations in the non-CBD area will be more fierce in future.
It warned that with the rise of e-commerce, retailers would need to focus on creating new shopping experiences to survive.
The Vietnamese e-commerce market grew by 25 percent last year and is expected to maintain this rate for the next three years, according to the Vietnam E-Commerce Association.