A confectionery aisle at the Aeon Supermarket in Hanoi. (Photo: VNA)

Hanoi (VNA) - Retail space is set to be a cash cow for the property sector soon, particularly in Hanoi and Ho Chi Minh City.

Experts from property consultant firm Savills Vietnam said despite closures and fierce competition last year, the outlook for 2017 and beyond is rosy.

Convenience store chains that open round the clock are expected to thrive this year.

In addition to successful long-standing Thai investors, retailers from Japan, China and the Republic of Korea are landing in the Vietnamese property market.

In Hanoi, sources of retail property are projected to concentrate in the downtown area and the west between 2017 and 2018. A signal that bodes well for the sector is an increasing number of newly registered enterprises, with the figure for 2016 exceeding 22,000, up 19 percent year-on-year.

Savills’ counterpart CBRE Vietnam highlighted two recently debuted projects in the capital, Vincom Pham Ngoc Thach shopping mall and Vincom Plaza in north Tu Liem, adding 45,900 square metres of retail space to the market.

Hanoi’s retail space now amounts to approximately 758,216 square metres, with a good occupancy rate.    

The closure of poor performing shopping centres has boosted the occupancy rate. Due to restricted space in central Hanoi, a shift to suburban districts is on the cards. Retail space supply this year stands at about 106,000 square metres, all in the suburbs. Average leasing prices have fallen slightly, increasing competition.

Ho Chi Minh City also has an active retail property market.

A CBRE study found that 17 international brands entered the southern hub last year, nearly tripling the figure for 2015. Big brands, such as Zara, H&M and 7-eleven, are set to expand.

In the next three years, the city expects to have 500,000 square metres of retail space leased, with shopping malls accounting for 75 percent of the supply.-VNA