Economic downturn doesn’t dissuade developer Aeon

Vietnam’s growing retail sector is tempting target for foreign developers despite economic woes

The first project in Hanoi, called AeonMall Long Bien, is located in  Long Bien district, about 15 minutes drive from the capital’s downtown. The project covers an area of 9.6 hectares, in which 75,500 square metres are for lease.

According to AeonMall Vietnam, AeonMall Long Bien will be bigger than AeonMall Tan Phu Celadon in Ho Chi Minh City and AeonMall Binh Duong Canary in southern Binh Duong province.

This project will comprise a four-story building, of which the three floors are reserved as a shopping centre with an Aeon supermarket, fashion shop and food and drink restaurants. The fourth floor will be an entertainment centre with cinemas and sport facilities.

“We will invite tenants from Japan and other countries and also from the domestic market to lease our space,” said Ko Sakami, general manager of leasing department, AeonMall Vietnam.

“We will build an outstanding shopping centre in Hanoi to attract consumers. Our potential customers are middle and high-income consumers,” he added.

Since entering Vietnam in  2011, Aeon has introduced two projects in Ho Chi Minh City and Binh Duong. The first store of Aeon was introduced two years ago in Ho Chi Minh City, Aeon Tan Phu Celadon. This shopping and entertainment centre is located in Celadon City urban project in Tan Phu district, capitalised at $100 million. The Japanese investor planned to complete the construction of this centre in the first half of 2014, which will be Aeon’s first shopping centre and general merchandise store in Vietnam.

The second store of Aeon is located in Binh Duong, about 20 kilometres from Ho Chi Minh City. This project, named AeonMall Binh Duong Canary, is worth about $95 million. This project is expected to be launched in 2014.

In Hanoi, Aeon planned to open AeonMall Long Bien in the first quarter of 2015 after one and a half year of construction.

“The Vietnaese  market is growing rapidly, so we cannot delay our plans. We believe in achieving positive results in this market with the upcoming AeonMall projects,” said Yukio Konishi, chairman and general director of AeonMall Vietnam.

Even though Vietnam’s economy is in slowdown and the purchasing power is low level, Konishi said, this is just in the short term.

“We always look long term. If we are too careful waiting for the strong recovery of the economy, we could lose opportunities,” said Konishi.

At this time, AeonMall is discussing with partners to develop two more projects in Hanoi, Konishi said, declining to  give more details.

“The first project in Hanoi will be opened in 2015, the second and the third will be opened in 2016 and 2017 respectively,” he said.