What factors to drive demand in Viet Nam’s commercial real estate?

To capitalise on this potential, gaining insights into local consumer demand and securing the right commercial space are critical. However, retail spaces in Viet Nam are facing pressures from shifting shopper habits, limited high-quality supply, and regulatory challenges.  

Key retail leasing trends

First, a report by IFM Research revealed that Viet Nam’s Consumer Confidence Index in 2025 is projected to increase modestly by 4.1% (adjusted for inflation). The report also highlighted that consumer spending will primarily focus on essential goods, education, dining, and healthcare. The GSOV, under the Ministry of Finance, disclosed that in the first two months of 2025, retail sales of cultural and educational items rose by 15.9%, food and groceries by 9.9%, garments by 9%, and household appliances by 6.8%. 

Savills Asia-Pacific also identified similar trends. In 2025, key demand segments for retail leasing in Viet Nam are expected to include food, supermarkets, F&B, and entertainment. This trend is consistent with current market dynamics in both Ha Noi and Ho Chi Minh City (HCMC). A recent Savills survey of over 600 retail transactions in HCMC in 2024 revealed that F&B tenants led the market, accounting for nearly one-third of the new leasing activity, followed by fashion (24%) and entertainment (17%).

Second, consumer interest in essential categories is further fuelling retail expansion.  

HCMC: In 2024, the occupancy rate of retail space in HCMC increased by 2 percentage points (ppts) to 93%, driven by major tenants such as Poseidon, Galaxy Cinema, Muji, Uniqlo, and Nitori expanding their presence.  

Ha Noi: In 2025, international retailers such as Lotte Group and Central Retail continued to strengthen their footprint.

Retail supply challenges and location shifts  

Ha Noi and HCMC experience contrasting market conditions. Despite the high demand for retail spaces, quality supply in HCMC remains insufficient. Meanwhile, in Ha Noi, demand is steadily growing, and future supply is expected to stimulate more vibrant leasing activity.  

According to Tu Thi Hong An, Senior Director of Commercial Leasing, Savills HCMC, the supply of new retail projects is progressing slowly compared to demand. The expert said: “In 2025, the market will welcome two new projects, Marina Central Tower and Lancaster Legacy, in the city centre. However, this supply is still modest and unlikely to have a significant impact on a large and dynamic market like HCMC. This limited supply trend is expected to persist over the next three years. As a result, competitive tension for high-quality retail will challenge brands to secure and expand new locations. For tenants, they must now be more creative and flexible in optimising existing space, especially as new supply becomes increasingly scarce.” 

Adding to the competitive pressure is the fact that many street-front premises cannot meet the stringent requirements of international retailers. An noted that global brands typically demand prime locations, high-quality construction, and legal transparency on ownership, including fire safety compliance and valid retail operation licenses, which criteria that street houses currently do not achieve.  

Street-front locations lose appeals to malls  

Similarly, Ha Noi has also shown positive changes over the past three years. Brands that have established a strong presence in HCMC are now expanding to Ha Noi. Hoang Nguyet Minh, Senior Director of Commercial Leasing, Savills Ha Noi, emphasised that the success of Lotte Mall Westlake has signalled new growth momentum, encouraging both brands and developers to increase their investment and improve supply quality. 

Commenting on street-front houses, this segment in Ha Noi is also losing appeal. Minh stated that “Rental prices for these locations are rising sharply, and landlords are imposing strict payment terms with requirements on six-month or even annual advance payments. This places significant pressure on businesses, particularly those that must manage working capital effectively. Additionally, international tenants require legal transparency, construction quality, and functional performance, which many street houses scarcely meet.” 

In F&B sector, many brands previously preferred operating on major streets, but to optimise capital and improve business operations, they are now shifting to shopping malls, which offer more flexible leasing terms and, in some cases, revenue-sharing models. 

Vietnam’s retail outlook  

Prospectively, Hoang Nguyet Minh noted that the trend of expansion to Ha Noi involves not only retail brands but also developers from HCMC.  

Keppel: following the success of the Saigon Centre, is set to launch the Hanoi Centre, a project that will be fully leased, managed, and operated by Keppel.  

Thiso Mall: following the success of its three projects in HCMC, is expected to launch a new mall in Ha Noi by 2026.  

By the end of 2025, Ha Noi’s retail market will expand by 140,700 sq m from four shopping centres and three retail podiums. Between 2026 and 2027, the market is expected to gain an additional 174,100 sq m of leasable retail space from seven new projects.