Opportunities and challenges are intertwined.

Shopping malls continue to be attractive.

Data from Savills Vietnam's recently published Q4 2023 market reports shows that since 2019, the supply of retail space has remained stable, with shopping malls increasing by 2% annually and retail podiums recording the highest increase at an average of 7% annually. In Q4 2023, the total retail supply reached 1.78 million m2, of which shopping malls accounted for 63% of the supply, equivalent to 1.1 million m2.

Retail occupancy rates in Q4 2023 increased by 2% quarter-on-quarter, reaching 88%. Retail podiums recorded the highest occupancy increase, at 4 percentage points, followed by shopping malls with a 2 percentage point increase. Shopping malls had the largest additional leased space and accounted for the highest proportion of this increase.

The emergence of diverse new brands, along with the expansion of international brands, not only provides more choices for consumers but also contributes to enhancing Hanoi 's position on the regional retail map.

Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing Department, Savills Hanoi (Photo: Provided by the interviewee)

Commenting on the retail market situation in Hanoi in 2024, Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing Department, Savills Hanoi, said that the past year saw vibrant developments in the Hanoi market, with the increase in retail space supply with the addition of Lotte Mall West Lake Hanoi and the return of The LOOP by Takashimaya to the market.

With The LOOP by Takashimaya, the return, accompanied by a revamped appearance and a tenant expansion strategy, has diversified the customer experience. This not only increases the mall's attractiveness and improves occupancy rates but also attracts a large number of visitors and generates significant consumer interest.

Another highlight of the market is Lotte Mall West Lake Hanoi. This is Hanoi's largest shopping mall project, part of a complex encompassing a shopping mall, offices, serviced apartments, and a hotel, offering a unique experience with 233 stores, an indoor entertainment area, and an aquarium. This event marked the debut of 28 brands in Vietnam.

In the Hanoi market, location plays a crucial role in the leasing decisions of brands. With the diversification of areas, each location offers unique characteristics to serve the diverse needs of brands.

The Hoan Kiem district, with its status as the historical and cultural center of Hanoi, attracts a large number of civil servants, tourists, and local residents. The area is often home to government agencies, embassies, and headquarters of multinational corporations, and it maintains its appeal, especially to high-end brands. In addition to existing brands, other luxury and high-end brands from around the world are showing interest in this area and are seeking suitable locations that align with their brand and business model.

(Source: Internet)

However, in reality, shopping malls are becoming a retail model that attracts a large number of tenants, especially those with high-quality spaces, complete legal documentation, and compliance with fire safety standards. The important thing is that these shopping malls must be well-organized, from advertising strategies to tenant segmentation and operational management strategies, as these are crucial elements in the operation and maintenance of the mall.

The key to the success of modern shopping malls lies in the integration of well-planned tenant zones, retail and entertainment brands, and food and beverage services. Today's customers are not just looking for a place to shop, but also want a comprehensive experience with entertainment and dining options. This is clearly demonstrated in shopping malls like Lotte Mall, which offers a diverse range of services from hypermarkets and cinemas to food courts and fashion boutiques on different floors.

Identifying the challenges

In response to the question of what the future trends of the retail market will be, Ms. Hoang Nguyet Minh stated that the retail market will be shaped by factors such as increased spending on services, a focus on sustainable and environmentally friendly stores, and a concentration on providing unique customer experiences. In the future, the Vietnamese retail market will witness strong growth in the food and beverage (F&B) industry. Entertainment retailers such as cinemas and amusement parks will also attract a large number of customers.

(Photo/Source: Internet)

The combination of online and offline shopping through a multi-channel retail strategy is also becoming increasingly popular, offering customers a flexible and convenient shopping experience. Retailers are creating unique shopping spaces and new experiences, transforming retail into an innovative and attractive experiential destination. This will undoubtedly increase the competitiveness of the Vietnamese retail market in the coming years.

However, according to Ms. Hoang Nguyet Minh, in 2024, the Vietnamese retail market will not only have opportunities but also face challenges.

“On the one hand, retail supply remains limited, and reputable developers hold the majority of high-quality supply, particularly in downtown areas. This requires retailers to build strong relationships and be willing to pay higher rents to access prime locations.”

On the other hand, the number of reputable developers offering high-quality projects in suburban areas of the city has increased, creating opportunities for retailers to have more choices in terms of location and affordability. This has spurred the emergence of new stores in out-of-the-city locations, such as Foot Locker, Karl Lagerfeld, or Dyptique at Lotte Mall West Lake Hanoi. Similarly, Muji & Uniqlo, after their success in previous locations, have expanded to many suburban areas.

According to statistics from Savills Vietnam's publication "Retail Wise," the retail supply is expected to increase by 247,601 square meters from now until 2025. However, the challenge of limited supply in city centers persists, with only 0.4% of future supply located in the central area, requiring retailers to continue seeking innovative and flexible solutions in location selection and business models," Ms. Hoang Nguyet Minh stated.

NAM ANH

Source: https://www.nguoiduatin.vn/thi-truong-ban-le-ha-noi-nam-2024-co-hoi-va-thach-thuc-dan-xen-a647669.html