The Vincom Time City shopping centre. (Photo: VNA)
According to real estate services firm Savills Vietnam, concerns that e-commerce would entirely replace physical retail have not materialised. Instead, global consumers are returning to brick-and-mortar stores as spaces for shopping, experience and interaction.
Ho Chi Minh City is leading this recovery trend. In the first quarter of 2025, the southern metropolis’s total retail supply reached 1.6 million square metres, a year-on-year increase of 6 per cent, driven by new developments such as the Centre Mall Vo Van Kiet in District 6. Occupancy rates remained high at 94 per cent, indicating robust demand from both retailers and consumers. Despite a slight adjustment in average rental prices due to the addition of lower-priced projects, ground-floor rents still averaged VND 1.4 million (USD 53.67) per square metre per month, up 9 per cent annually.
In Hanoi, the same period saw ground-floor rents increase by 6 per cent year-on-year, with rents in central areas soaring by up to 37 per cent. Occupancy rates stood at 86 per cent, while new leasing activity revealed a shift away from F&B (food and beverage) tenants towards fashion, cosmetics, and convenience retail.
A new trend has also emerged. While capital flow previously led the charge in boosting the retail sector, it is now the retail brands themselves that are reshaping the market. Expansion by fashion, cosmetics, furniture and F&B brands is setting the pace for sector growth and driving renewed investor interest.
Tran Pham Phuong Quyen, senior manager of retail leasing at Savills Vietnam, noted that with many international brands eyeing Southeast Asia, Vietnam holds several advantages. It has a young, dynamic population with evolving shopping habits and a growing appetite for experiential retail, she said. Labour, construction, and logistics costs also remain relatively low compared to other countries in the region, allowing brands to optimise costs and unlock greater profit potential.
According to her, a major shift in investment mindset is also underway. Retail is no longer viewed merely as rental real estate. Modern shopping centres are being managed as complete ecosystems – from tenant mix and customer flow to marketing strategies, spatial design and amenities – all of which impact operational performance and asset value.
