Covid-19 Hits Retail

Retail footfall in HCMC had been slowly falling since early February as awareness of COVID-19 elevated public concern. Performance slumped following the April 1 lockdown and the second COVID-19 wave in late July. However, retail may continue its revival over Q4 and into Q1/2021 with important end of year festivals and Tet, the traditional Lunar New Year holiday, both approaching.

In Q3/2020 stock was 1.5 million sq m in HCMC and average occupancy of 94% was down -2ppts year-on-year (YoY). Pandemic effects have caused some retailers, mostly in non-CBD areas, to terminate leases or relocate.

Rents have remained stable YoY, as landlords with fully occupied space were reluctant to adjust rents or offer short term incentives. In some cases, monthly service fees were reduced by -US$2, or 30% rental discounts for a few months were offered to new tenants.