Shopping Centres: Attractive Retail Space Meeting Tenants' High Standards

• Shopping centres continue to be the preferred choice for both domestic and international tenants due to their strengths in space, commercial viability, and a wide range of marketing and communication activities designed to attract customers.?
• Shopping centres will continue to attract tenants in the F&B, cosmetics, and luxury brand sectors in the near future.?

Reasons Shopping Centres Maintain Strong Appeal to Tenants?

Shopping centres remain the preferred choice for retailers, outperforming other retail models such as high-street shops, retail podiums, and department stores. In Ha Noi, as of Q3/2024, shopping centres accounted for 63% of the total retail supply.?

According to Ms Trinh Huynh Mai, Associate Director of Commercial Leasing at Savills Ha Noi, a prime location that offers convenient access to residential areas, offices, and other amenities is a key factor driving this preference. Strategic locations in densely populated areas provide retailers with a ready-made customer base.?

For instance, the Lotte Mall West Lake Hanoi complex is situated in the western part of the city, the new economic hub, along Lac Long Quan and Vo Chi Cong roads. It is near West Lake and major residential areas such as Ciputra Ha Noi. The Hinode City Mall project has garnered significant interest from leading brands due to its strategic location on Minh Khai - Kim Nguu Street in Hai Ba Trung District. This area is densely populated and offers convenient access to universities, hospitals, and other parts of the city.?

A crucial factor in the success of a shopping mall is its tenant mix strategy. The tenant model of a large shopping centre is designed to provide an "all-in-one" experience. Anchor tenants, such as supermarkets, cinemas, and well-known brands, play a pivotal role in attracting significant foot traffic. Additionally, a diverse range of fashion, beauty, and accessory brands caters to the varied preferences of shoppers.?

The F&B area, which includes restaurants, cafes, and fast-food chains, not only addresses dining needs but also creates a relaxing space for families and friends. Entertainment zones, such as cinemas or children's playgrounds, help extend customer visits and enhance the overall experience. With a balanced combination of shopping, dining, and entertainment, shopping malls become comprehensive destinations where customers can enjoy a wide range of services in a modern and convenient setting.?

Efficient operations are particularly important for shopping malls to retain both consumers and tenants. Well-developed shopping centres, often managed by international operators, create a convenient and enjoyable environment for shopping and entertainment.??

Ms Mai added: “Since the COVID-19 period, stricter fire safety standards have been implemented, prompting many brands - from fashion and cosmetics to F&B - to relocate to shopping centres to ensure compliance with fire safety regulations.”?

During their operations, shopping centres focus on marketing and communication activities to attract customers for shopping and entertainment. This strategy helps sustain a stable customer base for brands and supports the business performance of their tenant partners.?

A Savills expert highlighted: “Developed by reputable large-scale investors with a clear understanding of customer segmentation, ranging from mid-range to high-end, and often professionally managed by international companies, shopping malls enhance the position and image of the brands they host.”?

Sectors Expanding into Shopping Centres?

According to Euromonitor International, a leading market research company, Viet Nam is now considered one of the most attractive F&B markets globally. The “all-in-one” model in shopping malls provides convenience for F&B brands in reaching their target customers. After shopping, consumers often look for diverse dining options, ranging from fast food to fine dining, making shopping malls an ideal destination. Thanks to these advantages, shopping malls remain the preferred choice for many F&B brands.??

Cosmetics, particularly in the luxury segment, represent another promising category for growth in shopping centres. Euromonitor International highlights that Viet Nam's cosmetics market is expanding rapidly, with an average annual growth rate of 6%. By 2026, the market is projected to reach approximately US$3.5 billion in total revenue.?

Furthermore, shopping centres have significant potential to attract luxury brands looking to establish or expand their presence in Viet Nam. The country has recorded the fastest growth in the number of millionaires globally, with an increase of 98% between 2013 and 2023. According to Statista, Viet Nam's middle-class population is expected to surpass 50 million by 2030. Ms Mai commented: “The rapid growth of the middle class and the emerging affluent young consumer segment in Viet Nam has driven demand for luxury products, positioning the country as a potential market for premium brands.”?

Around 10-15 years ago, most affluent Vietnamese consumers preferred to purchase luxury goods while travelling abroad. Today, however, they are increasingly inclined to experience and own high-end products within Viet Nam. This shift has opened up exciting opportunities for retailers looking to capitalise on the potential of shopping centres, paving the way for further prospects in the market.?