Hanoi to see 90,600sqm of new retail supply by year-end
Thanks to two new shopping malls.
With the official launches of Lotte Mall West Lake Hanoi and The LINC ParkCity at the end of 2023, a JLL report revealed that the Hanoi retail market is set to welcome an additional 90,600 sqm of NLA.
The arrival of these shopping malls not only expands shopping destinations for consumers but also represents a significant improvement in the development of Hanoi’s retail market, particularly in the City Fringe.
Here’s more from JLL:
Rents in the City Centre are expected to continue their steady growth compared to the previous year. Meanwhile, the City Fringe is expected to see rent growth at higher rates, driven by the strong influx of new high-quality supply to the West Westlake area, starting from 2024.
Net absorption remains stable in Hanoi
Net absorption in the City Centre posted only 70 sqm due to limited vacancy. Meanwhile, the City Fringe recorded high net absorption of 2,018 sqm, thanks to active leasing activities in well-established shopping malls such as The Loop Shopping Center, Vincom Mega Mall Royal City and AEON Mall Ha Dong.
F&B continued to lead new lease demand in the quarter, with examples including the Hutong (312 sqm) at The Loop Shopping Center and Hassan BBQ (300 sqm) at Vincom Mega Mall Royal City. The fashion and sports group also showed positive demand, demonstrated by the expansion of New Balance (200 sqm) at The Loop Shopping Center and Xtep (114 sqm) at The Garden Shopping Center.
Vacancy rate in both submarkets continues to decrease slightly
In 3Q23, the total supply of Prime malls in Hanoi remained unchanged q-o-q, at about 580,600 sqm. Trang Tien Plaza underwent minor renovations on the 2nd and 3rd floors to upgrade its facilities. Meanwhile, the retail market in the City Fringe eagerly welcomed the new supply from Lotte Mall West Lake Hanoi, which scheduled the official opening ceremony for early 4Q23.
City Centre’s vacancy rate continued to decrease slightly, reaching 5.2%, the same as pre-pandemic levels. The vacancy rate in the City Fringe area also experienced a minor decline, falling to 6.0% in 3Q23. This decrease was primarily driven by high leasing demand at Prime malls in both submarkets.
Net effective rents increased slightly, reflecting stable demand
Net effective rents in the City Centre remained at USD 65.1 per sqm, per month, marking a slight increase of 0.1% q-o-q. In contrast, net effective rents in the City Fringe rose modestly by 0.6% q-o-q to reach USD 32.6 per sqm, per month, reflecting vibrant demand in this area.
In 3Q23, Keppel Land invested USD 52 million to acquire a 65% stake in a joint venture for a commercial development project located in the heart of the city. The project will comprise a mix of retail, office and residential space and is expected to be completed in 2025, reflecting the firm’s confidence in the long-term growth potential of the Hanoi real estate market.
Note: Hanoi Retail refers to Hanoi's overall prime retail market.