Rents surge in downtown Hanoi as retail recovers

In a report CBRE Vietnam released Thursday, the property consultancy said rents increased by up to 39.5% year-on-year in the third quarter.

Space in the ground floor of buildings in the downtown area cost US$144 per square meter per month, up 9% from the previous quarter. Outside downtown, the rent was $27, up 6.9% from the previous quarter and 14% year-on-year.

High-end retail brands looking for space around the Hanoi Opera House and Metropole Hotel pushed up rents there, another consultancy, Savills, said noting that rates elsewhere in downtown Hoan Kiem District remained steady.

The third quarter saw the arrival of international luxury brands like Breitling, Marc Jacobs and Berluti, with most opening their first stores in Vietnam at prime locations on Ly Thai To and Trang Tien streets.

Existing brands such as Aeon MaxValu, Annam Gourmet, Mothercare, and Lyn opened new stores at major malls like Lotte Center Hanoi and Vincom.

According to CBRE, retail space in prime locations will continue to be highly sought after, leading to a further increase in rents.

However, inflationary pressure means consumers could spend less, especially on discretionary items, slowing down the retail market’s recovery, it said.

Nick Bradstreet, head of Savills’ Retail Asia-Pacific, said there is more room for luxury brands to expand and develop in Vietnam than in other Southeast Asian countries such as Singapore and Thailand.

However, supply of space for them, especially in downtown Hanoi, is limited, he added.