Tran Thi Khanh Hien, head of Research, MB Securities
This sluggish retail sales growth was mainly attributed to compressing manufacturing activities and weak consumer confidence. However, the growth of retail sales accelerated to 10.1 per cent and 9.3 per cent on-year in the last two months of 2023, after a downward trend for the previous nine months, which might indicate a recovery for the retail and service sector into 2024.
Against the weak macro backdrop, Vietnam’s retail property market still witnessed a few bright spots. According to the latest report from CBRE, Vietnam’s retail market welcomed many new projects, with nearly 111,000 square metres in Hanoi and Ho Chi Minh City.
The most prominent of these was the Lotte Mall West Lake Hanoi, inaugurated in the second half of the year. With a rental area of up to 72,000sq.m, it is the largest shopping mall of the past four years. Additionally, rental prices in two metropolitans also experienced an uptrend thanks to the entry and active expansion of high-end and luxury brands.
The rental prices of central business districts (CBD) in Hanoi and Ho Chi Minh City jumped 6 per cent and 13 per cent on-year, respectively. Meanwhile, the non-CBD retail prices even bounced higher, 28 per cent and 12 per cent on-year respectively, due to the limited supply.
In the near future, Vietnam’s retail property market is still promising thanks to the recovering consumer confidence and the influx of international brands. I believe the favourable economic outlook will strengthen consumer confidence. Vietnam’s economic growth is estimated to expand stably 6-6.5 per cent per annum over the next three years, which will bolster household disposable income and facilitate the expansion of the middle-income population.
Particularly, shopping centres are on the rise as