Rising demand and new supply boost Hanoi retail real estate

Hanoi’s retail real estate market is showing signs of rebound, fueled by fresh supply and a surge in foreign retailers' footprint expansion. The arrival of global convenience store chains and lifestyle brands has injected optimism into the city's commercial leasing landscape.

According to CBRE Vietnam's Q1/2025 report, Hanoi's retail market saw a slight increase in supply in the first quarter, driven by the opening of the AEON Xuan Thuy shopping center in Cau Giay District, which added 18,000 square meters of leasable space. Vietnam's retail sales of goods and services reached nearly VND1.71 trillion (US$65.4 billion) in the first quarter of 2025, up 9.9% year-on-year.

This rebound underscores strong domestic consumption and positive retail investment in Hanoi. These developments contributed to a decline in the average vacancy rate across the retail market, which fell by 0.8 percentage points to 9.4%.

Leasing activity was robust, with Hanoi absorbing 24,760 square meters of retail space in Q1, a sharp rise from 3,537 square meters in Q4/2024. Most new leases were signed in the food and beverage, lifestyle, personal care, health, home decor, pet services, and entertainment sectors. This reflects a shift in consumer preferences towards personalized experiences and higher quality services.

Asking rents in Hanoi's central retail zones rose 15.4% year-on-year to US$173 per square meter per month. In non-central areas, rents climbed 5.4% year-on-year to $37.1/sq.m/month.

Increasing supply and shifting investment trends

Hanoi's retail market is set for further expansion with major new projects, including Vincom Megamall Ocean City and Hanoi Center, expected to add substantial supply in the second and third quarters of 2025, said Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi.

Tismo Group will open another shopping center in 2026, highlighting a trend of foreign developers shifting their focus from Ho Chi Minh City to the capital.

Meanwhile, convenience store chains such as GS25, which marked its growth in Ho Chi Minh City, have moved into Hanoi. In addition, 7-Eleven has confirmed plans to open its first store in the city, signaling an uptick in demand for retail space.

CBRE also noted the continued expansion of Chinese brands in Vietnam. Since 2023, names such as Oh! Some, KKV, Semir, and Cotti Coffee have entered the market and plan to scale up their operations in both Hanoi and Ho Chi Minh City.

Another real estate consultancy, Avison Young, reported that Hanoi's total retail space has now exceeded one million square meters. In addition to large shopping malls, podium retail in residential and office towers is gaining popularity.

The consultancy forecasted nearly 29,500 square meters of new leasable retail space in Hanoi over the next two years, with new developments located in Bac Tu Liem District.

As rents in central areas continue to rise, more brands are choosing to lease space in non-central zones. These locations offer more competitive rates and flexible layouts, helping tenants optimize business operations and meet customer needs.

Despite recent momentum, several shopping centers continue to struggle with long-term vacancies caused by small floor plates, suboptimal design, or weak customer traffic. 

David Jackson, CEO of Avison Young Vietnam, recommended that landlords create a balanced tenant mix that includes retail, dining, and entertainment. He also suggested that leasing strategies should be guided by local demographics and supported by professional property management and marketing services.

To bring traffic back to shopping centers, he emphasized the importance of customer engagement through advertising campaigns, price promotions, and recreational programs.