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Supply of retail premises to increase, prices to remain same
The total area for retail premises in HCM City by early 2009 had reached 210,323 sq m, with 17 trade centres.
More supply
Only one building, Saigon Paragon in district 7, has become operational so far this year. Opened in March, the trade centre with 21,229 sq m of floor space has attracted a series of big brand names like Givenchy, Jean Paul Gautier, Thierry Mugler, Giorgio Armani and Omega.
It is expected that two projects, the Plemington and the Everich in district 11 and Kumho Asiana in district 1, will be completed by the end of the year.
The retail market in HCM City this year expects to have 77,034 more sq m of retail premises. The supply is thought will be more profuse in 2010, when 209,780 sq m more will be added to the retail premises fund.
But 2011 is expected to be the year which witness a breakthrough in the retail premises supply, with 730,107 sq m to be put into operation.
2012 will see 331,464 more sq m of retail premises with a lot of projects expected to be completed, including Promennada the Canary in Binh Duong province (224,464 sq m in first and second phases), Bitexco building in district 1 of HCM City (5,000 sq m), Platinum Binh Chanh (140,000 sq m).
Leasing fees unchanged
According to CBRE Vietnam, a real estate market survey company, the average retail premise fee at trade centres was $85/sq m/month in Q1. The highest leasing fee reportedly was $250/sq m/month for advantageous positions on the first floors of buildings in the central area of the city.
The leasing fees of business premises at trade centres have been increasing sharply since the beginning of 2007. The average retail premise leasing fee in HCM City is now higher than those in Bangkok (Thailand), Manila (the Philippines) and Jakarta (Indonesia), but lower than those in Taipei and Beijing.
However, according to experts, leasing fees have decreased a little recently. The owners of trade centres have made compromises in negotiating with partners, offering attractive provisions in order to attract clients. They have reconsidered leasing fees, offered longer-term leases and exempted fees for installing advertisement billboards.
New trade centres and centres in suburban areas of the city have offered even more attractive terms for clients. CBRE has pointed out that the conditions prove to be changeable depending on the distance from trade centres to the central area, with five preferential conditions offered by central trade centres to 16 preferential conditions offered by trade centres in more distant areas.
However, the owners of the buildings have been trying to preserve the leasing fees, especially buildings in advantageous positions with high occupancy rates.
Trade centres have been trying to upgrade themselves to polish their images and lure more clients.
Saigon Centre, for example, has changed its interior decoration and re-designed the trade centre located on the first floor of the building. Diamond Plaza on May 18 announced a temporary closure in order to upgrade the trade centre.
VietNamNet, TBKTVN
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