WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Real estate
Covid-19 hits Hanoi retail market, landlords take support measures
Linh Pham 22:53, 2020/04/30
As the occupancy rate dropped due to impacts of the pandemic, landlords rolled out supportive measures.

Rental rates in Hanoi’s retail market in the first quarter (Q1) this year were stable, but various supportive measures have been employed after the market was hard hit by Covid-19, according to JLL, a leading professional services firm that specializes in real estate and investment management.

 Retail market witnesses low absorption due to the pandemic

The average rent stood at US$29.3 per sq.m per month but a number of landlords offered various temporary supportive measures for their tenants.

The most direct one was to reduce 10-50% of rents, depending on the sectors, and the scope of reduction varied from one landlord to another. Other indirect ones included promotion and advertising packages to attract customers.

Due to the Covid-19 pandemic, the net absorption was negative during the quarter, and the occupancy rate was recorded at 90.4%, a decline of 48 basis points (bps) on quarter, the report showed.

Shopping malls took a hit as the public was encouraged to stay at home to avoid large gatherings, and many switched to online shopping. A few stores had to shut down while the majority either operated with minimal activities or temporarily closed as ordered by the government.

Only supermarkets, convenience stores, and those providing essential products were the least affected.

 Supply and rental of Hanoi’s retail market in Q1/2020. Photo: JLL Research

However, the market was not all gloomy as Vincom Center Pham Ngoc Thach, after the renovation, welcomed many new store openings, including the Uniqlo outlet in Hanoi.

The market saw no change in the supply during the quarter. Large shopping malls located outside of the city center, providing various activities to visitors, remained the favorite for both tenants and customers.

JLL predicted that Covid-19 is likely to deal a heavy blow to the retail market in 2020. The longer the pandemic lasts, the more time it will take for tenants and consumers to recover, which will affect the leasing and purchasing activities.

In addition, with the large supply coming online in 2020, the competition is likely to intensify, causing the rental rate to be adjusted further. Therefore, flexible leasing strategies and synchronized promotion and advertising programs by both landlords and brands are recommended to improve the current conditions. 

RELATED NEWS
TAG: retail market occupancy absorption negative supportive measure landlord tenant
Other news
20:10, 2024/09/25
Hanoi's real estate market soars: Apartment transactions up 101%
The mid-range segment in Hanoi will continue to play a significant role in supply.
18:57, 2024/08/24
Hanoi to add 8,300 apartments to social housing reserves by 2029
Along with relieving housing pressure in central urban areas, the new social housing projects will also help to expand residential zones beyond the city's borders.
16:10, 2024/08/05
Hanoi real estate market: Developing in right direction
The price increase for apartments in Hanoi in the first half of 2024 compared to the beginning of 2023 is 31%.
15:54, 2024/08/03
Property prices in Hanoi, Ho Chi Minh City driven by speculators: experts
Specialists expect that new legislation will help to tighten market control and thus bring prices down.
18:17, 2024/06/14
Vietnam to mobilize resources for social housing development
Promoting social housing projects remains a priority for the government.
18:00, 2024/06/10
Vietnam’s real estate market back on road to recovery
In early Q2/2024, Vietnam's real estate market is steadily recovered, with the launch of numerous projects in different segments and impressive sales.