Despite economic difficulties the retail market in Ho Chi Minh City expanded last year as top retailers and brands continued to come in, property consultant Knight Frank said in a new report.
The retail sales value of goods and services in the city was estimated at VND459.5 trillion (US$21.85 billion) last year, up 23.5 from 2010, according to the report.
It said food retail sales witnessed "skyrocketing growth" in recent year, which is poised for an average annual growth rate of around 20.3 percent during 2010-2012.
Even though non-food retail sales declined amid difficult economic conditions, the revenue from luxury fashion and apparel is "healthy" thanks to a young consumer generation.
"We have seen the entrance of many international brands and a foray into the market of the top retailers [in 2011]," Knight Frank said. "Gap, Warehouse and Karen Millen all opened their first store in Vincom and Parkson Department Store, most likely ensuring the following of other international brands from mid-end to premium."
Growth rates of 20-30 percent seen by some brands like Giordano, Bossini, Valentino and Mango are "promising" for the entrance of international retailers and brands, it said.
The company also said retailers including Japan's Aeon and South Korea's E-Mart have planned to enter the market.
"Demand for retail space is apparent in the market, including development opportunities," Knight Frank said. However, it said developers will need to be more creative and flexible in their actions and policies to attract and keep tenants.
According to the company, while the softening of the real estate market has resulted in falling rental rates in most shopping centers in Ho Chi Minh City, prime department stores continued to achieve high rates of up to VND4.9 million per square meter.
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