Increasing supplies of quality retail space in HCM City is failing to hit the spot.
The commercial hub has seen the opening of scores of high-profile shopping centres recently in time for the lead up to the traditional Tet holidays. These include District 7' s Saigon Paragon Shopping mall offering 7,500 square metres of retail space, District 11's Parkson Flemington with up to 26,000sqm and the Kumho Asia Plaza, bringing in some 7,000sqm.
The new space raises the city's total retail area to about 200,000sqm, according to Colliers International Vietnam.
This new retail supply excludes the newly launched Saigon Square 2 on Le Thanh Ton Street, which provides 350 shops in small spaces ranging from two to 4sqm.
In addition, nearly 150,000sqm will be brought onto the market in 2010, with the grand opening of District 11' s Saigon Place (20,000sqm) and the Everich (22,700sqm), District 7' s Crescent Mall Phase 1 (22,000sqm), District 2' s Saigon Pearl (30,000sqm) and District l' s Vincom Centre Shopping Mall (57,704sqm).
KP Singh, managing director of Colliers International Vietnam, said: "The price benchmark for leasing retail space in HCM City ranges from $60-$100 per square metre, per month. This is regarded as an attractive benchmark in the context of the global economic recession."
"Also, when Vietnam allows foreign-invested entities to trade on all imported and domestically produced goods in Vietnam, as committed in the country's World Trade Organisation (WTO) membership, the shortage of retail space will continue in big cities like HCM City," Singh added.
Under the WTO's commitments, starting from early 2009, Vietnam allowed foreign retailers to establish their wholly owned outlets in Vietnam, with restricting conditions applied to each second one.
The move has paved the way for many foreign retailers to come into the
country, including Korea's Lotte Mart, Japan's Best Denki, Thailand's Fresh Mart, France's Big C and Germany's Metro, with Britain's Debenhams the newest joining Vietnam's retail market. Debehams will occupy 800sqm of the Kumho shopping mall, raising its retail centres in the world to 202 within 17 countries.
The Saigon Square 2 opening saw a large number of small Korean retailers as well, said Singh, adding that this showed the beginnings of small foreign retailers joining the market.
Meanwhile, the city's government recently approved its retail development plan to 2015. One notable point in the plan is that the city will reduce the number of downtown markets and develop 95 new supermarkets and 140 new commercial centres. If the plan goes well, it will substantially increase retail space available in the city.
According to real estate consulting company Savills Vietnam, at the end of the first quarter of 2009, HCM City had 25 commercial centres, 57 retail supermarkets and three wholesale supermarkets, with a total area of 430,000sqm. The retail space, however, is still seen as small for a metropolis like HCM City.
Savills forecast that the demand for internationally standardised retail space, especially in the downtown area, would increase over the next three years.
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