Foreign firms keen to seek space for flagship stores in HCM City
VOV.VN - Despite the negative impact of COVID-19, several major retail groups have quietly brought in new international brands to Vietnam this year, with priority being given to large-scale stores situated in prime locations in the centre of Ho Chi Minh City.
Tran Pham Phuong Quyen, manager of Retail Leasing at Savills HCMC, revealed that although many international brands have been interested in the Vietnamese market since 2019, their expansion plans were delayed due to the COVID-19 pandemic.
However, these brands are in the process of restarting their strategies after international flights have resumed in the nation this year, Quyen said.
These new brands have often placed high requirements in terms of location, area, display capacity, and brand recognition for their flagship stores when entering the Vietnamese market.
In fact, several popular names such as Uniqlo, Muji, The Gioi Di Dong, and Con Cung have also made a presence within the domestic market by launching points of sales covering an area of thousands of square metres in Ho Chi Minh City.
Notably, multi-brand store models boasting an area of between 350 and 1,000 square metres are expected to expand moving forward thanks to diversification of goods and prices, she added.
The Savills expert, however, emphasised that the large-scale retail model will create burdens in terms of rental prices, investment costs, and capital to purchase goods.
She advised foreign businesses to carefully study the market and consumption potential before making decisions to launch flagship stores.
According to February’s report released by Savills Asia Pacific, both Vietnam and China are the two countries enjoying the fastest-recovering retail market in major cities.
This comes after CBRE Vietnam forecast that the retail market in the southern metropolis is expected to see robust growth by the end of this year, a factor that would duly push the rental price to recover moving into the second half of the year.
Real estate and investment management services firm Jones Lang Lasalle (JLL) also expressed its hope for the improvement of the Ho Chi Minh City market this year.
Due to new supply sources and the demand for recovery following the COVID-19 pandemic, rental rates are expected to increase by US$90.4 per square metre each month in the southern city’s centre, with this price being US$37 per square metre on the outskirts of the city later this year, according to JLL.
JLL anticipates that Hanoi’s rental space market will bounce back as it receives roughly 73,454 square metres of space from projects outside the city centre, along with expansion activities being carried out by big brands.
