International brands to launch flagship stores in Vietnam this year

“In Ho Chi Minh City, well-known retail brands, including Uniqlo, and Con Cung, continue to launch new stores or expand. Despite two years filled with uncertainty and lockdowns, retailers still plan to expand stores and want to invest in how customers perceive the shopping experience, reinforcing the importance of physical stores in their business plans," An Tu Thi Hong, director, commercial leasing, Savills, said in the Savills blog. 

“Although vaccination rates are increasing in many countries, market recovery has not been consistent across the region. Cities in Vietnam and China have the fastest-recovering retail markets with stable business activity and only periodic interruptions,” Hong added.

Rent in Beijing, Shanghai, Guangzhou, Hanoi, and Ho Chi Minh City (HCMC) maintained modest growth of about 0.5 per cent to 13 per cent between 2019 and 2021. Landlords in HCMC did not continue supportive policies like direct discounts in the last quarter. As such, the average rent reached VND 1,150,000 /m2/month, representing a 2 per cent increase compared to the previous quarter, Savills said in Vietnam's Q4 2021 market report.

Hong said: “In terms of leasing demands, brands usually have specific needs for their flagship stores, such as location, facade, area, and capacity for brand identity. Therefore, demand for properties in the CBD or close to popular destinations is set to be high as they are reputable, desirable sites with a loyal customer base.

"With new brands entering, domestic and international brands expanding their footprints, and high demands expected for flagship stores, the outlook for commercial leasing will certainly be more lively compared to the last two years."

“Vietnam's domestic consumption levels are rising and becoming more stable. There is also great potential for businesses focused on healthcare, mother and baby care, sports, fashion, and F&B,” Tran Pham Phuong Quyen, retail leasing manager of Savills HCMC, said.

“Many international brands have been interested in Vietnam since 2019 but their plans were delayed by the pandemic. However, these brands still plan to launch once international flights reopen in 2022. This is good news for commercial real estate and will drive retail leasing,” Quyen added.

Fibre2Fashion News Desk (SF)