These two projects will add nearly 60,000sqm to Ho Chi Minh City’s retail market

Both are seeing strong early leasing activities.

In a recent report, JLL revealed that the upcoming Vincom Megamall Grand Park in District 9 and the renovated Hung Vuong Plaza will add an extra 30,100 sqm and 28,066 sqm, respectively, to the Ho Chi Minh City retail area by the end of 2023. Both projects are currently reporting strong early leasing activities.

These substantial new projects are likely to stimulate an increase in net absorption in the City Fringe over the next six months. Conversely, the City Centre, with its minimal vacancy rates, is anticipated to maintain its stable performance amid this retail expansion trend.

Here’s more from JLL:

City Centre and City Fringe experienced significant demand despite limited new supply, with net absorption totalling 100 sqm and 8,000 sqm, respectively. The presence of anchor tenants, such as Uniqlo, led leasing activity at Aeon Celadon Tan Phu (1,680 sqm), Gigamall (1,721 sqm), and Thiso Mall’s Galaxy Cinema (2,440 sqm).

Furthermore, noticeable expansion was observed in the F&B and entertainment sectors. Retail operators, such as Aeon Supermarket, also actively pursued City Fringe retail locations, reinforcing its ambitious expansion plans for the year.

Option scarcity in City Centre boosts City Fringe tenant growth

In 2Q23, no new completions were recorded. Investors continued to enhance existing properties, as seen by the renovation of Hung Vuong Plaza following the lease termination of Parkson Vietnam. The mall, which is set to reopen by the end of the year, aspires to provide an enriched retail experience.

Following Icon68 Shopping Centre’s delisting, the City Centre’s three Prime malls—Vincom Center, Saigon Centre, and Diamond Plaza—recorded a low vacancy of about 725 sqm. In contrast, the City Fringe, housing ten Prime Malls, presented a sizable vacancy of nearly 20,000 sqm in 2Q23, offering considerable opportunities for tenant expansions.

Prime malls’ strong performance fuels surge in net effective rent

City Centre’s net effective rent rose to USD 82.6 per sqm, per month, up 2.0% q-o-q, due to low vacancy in Prime malls. Simultaneously, City Fringe’s rent saw a slight increase of 0.8% q-o-q to USD 36 per sqm, per month, mainly due to raising rents in high-performing Prime malls.

In the quarter, KIDO, owner of Van Hanh Mall, boosted its stake in Hung Vuong Plaza to 76.5% from 44%, after Parkson Vietnam’s bankruptcy application. This move signals KIDO’s faith in the Vietnamese retail market, underscored by Van Hanh Mall’s success.

Note: Ho Chi Minh City Retail refers to Ho Chi Minh City's overall prime retail market.