The opening of Singapore-owned Saigon Centre in the heart of Ho Chi Minh City brings to Vietnam commercial metropolis one of the most luxurious malls in the country, boosted by the presence of the first Takashimaya department store in town. Saigon Centre is likely to be the ultimate in shopping experience for both wealth Vietnamese and tourists visiting ho Chi Minh City.
Saigon Centre Phase II, which just opened its doors this week, is currently 100% committed with over 400 international and local brands offering a wide range of shopping, dining and leisure options. When completed by next year, Saigon Centre Phase Two, designed by New York-based architecture cabinet NBBJ, will comprise 44,000 m2 of premium Grade A office space in a 37-floor tower as well as 55,000 m2 retail area spread across seven storeys and 195 luxury serviced apartments.
Talking at the official opening of the mall, Tatsuo Yano, Managing Director, Takashimaya Singapore Ltd., said that “Takashimaya Group opens its third overseas department store in Saigon Centre, aiming to create a store that will become a well sought-after shopping destination for customers in HCMC.
Despite its good knowledge of the Vietnamese market and the iconic value of the new mall located just in the city centre along Le Loi Boulevard, Saigon Centre Phase 2 might be disappointed with the turnover in its mall – at least in the short term. Ho Chi Minh City has experienced for the past 18 months a glut of shopping malls which makes it difficult to make profits- at least for now.
According to local newspaper TuoiTreNews, just in the last quarter of 2015, Ho Chi Minh City retail market welcomed five newcomers, namely Pearl Plaza, Coop Mart Van Thanh, Coop Mart Nguyen Binh, Vincom Mega Mall Thao Dien, and Emart. All the malls have boosted HCMC retailing area to approximately a million m2 at the end of last year.
Despite being a metropolis of seven million inhabitants, it seems that local purchasing power is still insufficient to balance supply and demand. Especially as rents are generally higher in malls than in normal shops, pushing retail prices up. TuoiTreNews indicates that shop owners pay on average rents of $20/$37 monthly per m² for spaces in inner-city areas, compared to $10/m² in outer districts. Many shopping malls stand now half empty dreaming for better times.
The city’s retailing area totaled approximately one million square meters as of the end of 2015, up by 18% over a year before.