* Hanoi condo supply soars to 25,000
A vast area of retail space is expected to be launched onto the HCMC market in the last quarter of this year, putting more pressure on the retail leasing segment amid the current low buying power.
Located at the corner of four main streets in District 1, Vincom Center A commercial center project is expected to open on October 10, offering the market around 38,000 square meters of retail space.
Customers have registered to hire 90% of this retail space after its investor marketed the project seven months ago.
Meanwhile, many retail centers far from the city center have reported poor business due to low buying power. According to Savills Vietnam, retail stores with total space of around 12,000 square meters outside the central area closed down in the third quarter.
Grade-A commercial centers at the city center have been leased at around US$105 per square meter and the remaining areas have offered rents of US$30 a square meter, dropping by 8% and 9.5% compared to the same period of last year respectively.
Knight Frank Vietnam Company said that some investors have applied flexible rent payment methods to support and attract more clients to their projects.
Although the retail market is facing many difficulties, industry insiders said that HCMC is still a potential market for retailers due to young population, rising incomes and the high pace of urbanization.
The city at the moment has around 700,000 square meters of retail area, mainly at the central business quarter. The retail space is expected to double in the coming years.
Knight Frank Vietnam said that the huge supply may cause more pressure on leasing demand in the future. Leasing power and rents are forecast to drop slightly between now and the end of this year.
* Hanoi City saw around 2,700 apartments offered in the third quarter, taking to 25,000 the total number of condo supply in the capital city, according to CB Richard Ellis Vietnam (CBRE Vietnam).
Speaking at the press briefing on Wednesday, Richard Leech, executive director of CBRE Vietnam, said that the condo market saw few signs of recovery in the third quarter while new supply kept rising.
Meanwhile, there was a clear tendency of handover of roughly-built flats to reduce prices for homebuyers. This was seen as a positive tendency, giving more options to buyers with limited budgets.
However, the enterprise said that housing demand remained low as people preferred to save money rather than buy homes given current economic concerns. Transaction mostly focused on low-priced and small condos.
The Saigon Times Daily