|
Demand for upscale store sites keeps rising in Hanoi
Some experts say that lack of prime rental space is hindering the development of Hanoi retailing, though there is plenty of consumer demand.
Nguyen Binh Long, the owner of Italy Limone, a food shop, has leased the premises at Hanoi’s Vincom shopping centre for five years. He pays $3,300 each month for his 100 square meter premises. Long has been satisfied with the deal. The number of customers visiting his shop at Vincom is clearly higher than the number of customers who patronized him when the shop was located on Nha Chung street. Visitors go to Vincom not only to do shopping, but also to watch films, eat and drink.
“Our business is very good. We close the door late every day, when the shows at Mega Star Cinema finish,” Long said.
He went on to say that he is planning to expand his business, and he is eyeing Trang Tien Plaza or the Parkson shopping centre to carry out his plan.
Big shopping centres in Vietnam have been attracting more and more visitors. Vincom City Tower, for example, receives 6,000 visitors a day, Parkson 2,500, Trang Tien Plaza 4,000. The number of visitors may be double on weekend or holiday
According to the General Statistics Office (GSO), the retail turnover of goods and services in 2008 reached over $57 billion, and was nearly $20 billion just in the first three months of 2009. Per capita income in Hanoi averages $1900. Twenty to forty year-olds account for 40 percent of the population, and spend the highest part of their income on consumption
While the demand for upscale retail premises is very big, the supply remains modest. In 2008, only the Ha Thanh Plaza, Parkson and Syrena Shopping Centre projects became operational. Several more projects, including The Garden Lifestyle Mall, Vincom Park Place, Golden West Lake and Bac Ha Plaza are under construction.
Besides shopping centres, retailers have another choice: they can rent shops fronting on streets for traditional retailing.
However, the problem is that these street-front shops, if located in advantageous positions, always have a very high leasing fee, causing investors to hesitate.
According to the real estate consultancy firm Savills, there are nearly 300 retail shops on a one kilometer stretch of Hang Bong street, with a total area of 7,000 square meters. A 16 square meter retail shop leases at $100 per square meter per month. Meanwhile, the monthly leasing fee at shopping centres is between $30 and $60 per square meter.
Streetfront shops, both new and renovated, have clearly helped meet the shortage of retail premises and improved the appearance of Hanoi streets. However, thinks Richard Leech of the CBRE Vietnam real estate consultancy, shopping centre outlets will remain the main trend, while street-front shops and kiosks are just temporary solutions.
Le Khac Hiep, head of the company that owns the Vincom Trade Centre, said that Vietnam has all the conditions needed to develop the retail premises market, thanks to its high economic growth rate, increasing per capita income and growing demand for high class goods.
Hiep says the biggest problem now is the lack of good sites. “Customers do not want to lease retail sites located too far from the centre of the city. Further, many shopping centres haven’t figured out how to attract luxury retailers.”
A number of experts point out that the shopping center concept is not fully developed. It is still very difficult for international retailers to secure a permit to sell directly in Vietnam. Almost all the international brands reach the market via domestic distributors -- a not insignificant barrier.
VietNamNet, vneconomy
|
