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HCM City: Top end retail space grows
High retail rents in big cities have prompted investing in high quality trade centre development. However, investors have been warned that supply will one day exceed demand.
Newspaper Tien Phong believes that at least 150,000 square metres of retail premises will be available at trade centres in HCM City by June 2010. The figure is equal to 50 percent of the total premises launched in the last five years.
According to real estate consultancy firms, CB Richard Ellis and Savills, the demand for retail premises at trade centres in HCM City will be about 500,000-600,000 square metres.
Therefore, investors are continuing to pour money into trade centre projects, considering this a lucrative business. It follows HCM City authorities announcing auctions of ‘golden land’, including four areas near the city’s centre. Since then, dozens of investors have chased opportunities to for development.
Experts say that rent of retail premises in good locations in HCM City will stay high at $85- $100 per square metre per month.
A recent survey showed that the $85-100 per square metre rent in HCM City is higher than similar locations in Bangkok ($76 per square metre), Manila ($22.5) and Jakarta ($83).
However, despite current optimism, experts warn that oversupply may occur by 2015.
The concern is that supply will exceed demand in a country where only 20 percent of population has stable income and are capable of purchasing products in such places.
It’s believe that despite growth, in five years shopping at high grade trade centres still will not be the choice of the majority of Vietnamese people.
Meanwhile, there are currently 18 trade centres in HCM City with a total retail area of 233,000 square metres. Hanoi has 100,000 square metres of retail premises. All the trade centres are near fully occupied with the average occupancy rate of 96 percent.
Most trade centres are located in the central district 1 of HCM City (Diamond Plaza - 12,000 square metres), Tax (14,000 square metres) and Parkson (17,000), District 5 (An Dong, Thuan Kieu Plaza and Parkson Hung Vuong).
vietnamnet, tp
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