This article covers:
• Hanoi’s retail real estate market is thriving
• New developments and international brand expansions
• The impact of Chinese retailers
• Predicted long-term market trends
Rising Demand Meets New Supply
The retail real estate market in Hanoi is experiencing a significant resurgence, fueled by a mix of new developments and the expansion of international brands within the city. This thriving sector reflects a vibrant consumer market and a welcoming business environment for both local and international investors. With an estimated 31,000 new apartments introduced in 2023, mainly in suburban districts such as Dan Phuong, Long Bien, and Dong Anh, the city’s housing market is also booming, indicating a strong demand for both residential and commercial real estate.
Despite the abundance of retail space, a survey by Savills on 600 retail transactions in HCM City in 2024 revealed a notable shift towards high-quality supply, with Food & Beverage (F&B), fashion, and entertainment sectors leading the demand. This trend is reshaping the retail landscape, with brands moving from streetfront locations to mall spaces to take advantage of flexible payment and revenue-sharing models.
The Chinese Brand Invasion
The influx of Chinese retailers into Vietnam, particularly since 2023, is a notable trend impacting the local real estate landscape. Brands such as Oh! Some, KKV, Semir, and Cotti Coffee have made significant inroads into the market, planning to scale up their operations in both Hanoi and Ho Chi Minh City. This "Chinese brand invasion" signifies a broader trend of foreign retail brands seeking to capitalize on Vietnam’s growing consumer market, further stimulating the retail real estate sector.
Data from CBRE shows that the average rent in central areas of Hanoi and Ho Chi Minh City in 2024 increased significantly, by 16.2 per cent and 15.4 per cent respectively compared to the same period of the previous year. This rise in rental prices is a testament to the growing demand for retail space in prime locations, driven in part by the expansion of both local and international retail brands.
Future Market Projections
The current trends in Hanoi’s retail real estate market are expected to have long-term effects, with continued growth in both demand and supply. The market is witnessing a diversification in retail models and spaces, accommodating a broader range of consumer preferences and shopping behaviors. As brands shift from streetfront to mall spaces, the demand for high-quality, well-located retail space is likely to continue rising.
Moreover, the continued expansion of foreign brands, particularly Chinese retailers, into the Vietnamese market suggests a sustained interest in Vietnam as a key retail destination in Southeast Asia. This influx is not only boosting the retail real estate market but also contributing to the dynamism and diversity of Vietnam’s retail landscape. As such, Hanoi’s retail real estate sector is poised for continued growth and transformation, driven by evolving consumer preferences, new supply, and the strategic expansion of international brands.
In conclusion, Hanoi’s retail real estate market is on an upward trajectory, marked by a resurgence in demand, new developments, and a significant influx of international and particularly Chinese, retail brands. These factors are reshaping the city’s retail landscape, offering both challenges and opportunities for retailers, developers, and investors alike. With positive market projections and a dynamic consumer base, Hanoi’s retail sector is set to continue its growth, reinforcing its position as a vibrant hub for retail in Vietnam.
