The Covid-19 pandemic has delivered a strong hit to shopping malls as consumers were cautious not only about going to malls where many people gathered but also spent.
Landlords, therefore, needed to reshuffle tenant mixes by replacing underperformed brands with more resilient ones like F&B and entertainment categories, leading professional real estate services and investment management firm JLL has said.
With many tenants moving out and malls changing tenant mix, Hanoi’s retail market saw significant increase in vacancy in the third quarter this year.
Main supply from suburban
Total stock remained unchanged as no new supply entered the market in the first three quarters of 2020 (3Q20).
Hanoi’s retail space was largely contributed by those in suburban districts where there remained more land bank available than CBD (districts of Hoan Kiem, Dong Da, Ba Dinh and Hai Ba Trung). These retail centers tended to be one-stop destinations, providing multiple types of goods and services that catered toward a diverse group of consumers.
Rents hold firm in CBD but dip in suburban areas
Despite the challenging period, the average rents in CBD appeared to hold firm in 3Q20, given the high occupancy rate and lack of future supply in the area. Meanwhile, rents in suburban areas softened as many landlords were under pressure to maintain occupancy.
Although those supports from landlords in the beginning of the pandemic were lifted in most of the malls, some landlords were seen to extend certain aids on case-by-case basis.
According to JLL, supply will remain unchanged in CBD, while non-CBD will continue to see more shopping malls. In the fourth quarter this year, Vincom Ocean Park with approximately 33,600 square meters (sqm) will enter the non-CBD market.
This will be the first mall in Gia Lam district and is expected to become a new destination for residents in the area. The mall has achieved an impressive pre-commitment rate thus far.
As a notable trend, most developers are focusing on generating superlative experiences and value-added services to attract shoppers. Therefore, more shopping malls are expected to get rejuvenated with better tenant mix, infrastructure and added services in upcoming time.
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