Giant non-CBD malls here to stay

- The Savico mall will meet the capital’s growing demand for quality shopping experiences

Savico Hanoi last week announced that it would open the country’s biggest shopping mall in Long Bien district this November, with net leasable area of 45,000 square metres.

This is the first mall to open in the northern bank of the Red River, which has started to attract big real estate developers focusing on building ecological township projects.

Both the developer Savico Hanoi, and the marketing agent CB Richard Ellis, refused to reveal rental rates for Savico Mega Mall. However, Richard Leech, executive director of CB Richard Ellis, said the mall would not offer high rents as it did not want to replicate the failure of other malls in the emerging commercial districts.

Leech said some malls in My Dinh had little pulling power to retailers during the first months of opening, as they offered high rents and had no anchor tenants.

These malls are now going all the length to lure both retailers and shoppers. Grand Plaza is offering rent discount of 30-50 per cent in the first three years, while The Garden has seen more shoppers as anchor tenants such as Big C supermarket and Platinum cimena operators have moved in.

Pham Manh Cuong, general director of Savico Hanoi, said the company had learnt the failure of other malls, and it would have proper strategy to attract and keep retailers to stay with Savico Mega Mall.

Before official launching to retailers, Savico Mega Mall has contracted two anchor tenants, one French-backed hypermarket on the 14,200sqm underground floor and a high-profile electronics supermarket on 5,000sqm. More than 200 stores are now open for retailers to lease.

Cuong said that non-central business district areas had many advantages for retailing.

“While all of the retail developments are focused in the west of Hanoi, we are the only in the east of the city,” he said.

Leech added that Savico Mega Mall had a strategic location as it is just five kilometres from the city’s centre and surrounded by under construction townships such as Viet Hung, Sai Dong, Ecopark and Hanoi Garden City.

He said Savico Mega Mall would cater to retailers who are crying about a lack of space to open shops.

“As far as I know many big retail brands cannot enter Vietnam due to the country not having large enough spaces for them,” Leech said.

According to CB Richard Ellis, Hanoi currently has more than 118,000sqm of retail space.

In the next five years, around 665,000sqm of retail space will be added to the market, six times greater than the current figure.

The future projects are located in non-business district areas such as in Long Bien, Tu Liem, Hoang Mai and Cau Giay districts.

Meanwhile, the demand was expected to come from fashion designers, restaurant chains and food course, electronic appliances supplier and cinemas.

The retail segment continues to be the property market’s most prosperous segment last year with average growth of more than 30 per cent.

In Hanoi the CBD had average rents at $45.58 per square metre, per month. Average rents in the non-CBD areas varied at more than $36.6 per square metre, per month.

To the end of this year, around 40,000sqm of Hang Da market and Pico Mall will be put into operation.