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Hanoi Knowledge Report - October 2011

Oct 10, 2011
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KNOWLEDGE REPORT
QUARTER 3, 2011 RESEARCH AND CONSULTANCY, COLLIERS INTERNATIONAL, HANOI

OCTOBER 2011 |

HANOI

KNOWLEDGE REPORT

ECONOMIC BRIEF
For Vietnam: VIETNAM GDP Growth (%) FDI in million US$ CPI 9 months 2011 (%) Export Growth Rate (%) Import Growth Rate (%) International Tourists (arrivals) Retail Sales Growth (%) - Real Retail Sales Growth Y-o-Y change 5.76 9,900 16.63 35.4 26.9 4,312,100 22,8 3,9 Degree of change The economic outlook for Vietnam remains negative in the short term due to short-term economic and financial instability risks. Recently, Standard & Poor's lowered Vietnam's long-term credit rating from BB to BB- while the short-term rating remained unchanged at BB-. The risks for the foreseeable future of the economy are: budget and trade deficit, dearth of capital, high interest rates, inflation, foreign debts and currency depreciation. Concerns over these risks have been implicated in the recent revision of the GDP growth rate forecast for the year by the government, from 6.5% to 6% - the second revision this year. Forecasts on Vietnam's economic growth rate for 2011 ADB 5.8% EIU 6% IMF 5.8% Vietnam's government 6%


Degree of change

HA NOI GDP Growth (%) FDI (registered) in million US$ CPI (%) Export Growth Rate (%) Import Growth Rate (%) International Tourists (arrivals) Retail Sales Growth (%) - Real Retail Sales Growth

Y-o-Y change 9.4 999.6 21.74 26.2 18.7 898,000 23.4 4.7




The slowdown in GDP growth, tightened credit policies and especially the soaring inflation rate are causing troubles to the consumers in their routine daily shopping. The cumulative CPI growth rate of the period 2007-2010 was recorded at 50.7% while this year's forecast ranges from 18% to 24%. Since the pressure on the consumers is growing stronger, Colliers is of the opinion that the retail market as a whole would not sustain high-level growth, at least until the macro-economy outlook is brighter. For Hanoi: Basically, the city's economy growth mimics that of the nation, with regards to growth path, outlook, risks and structure. A few indices, including FDI, were positive in the last quarter, but risks are looming larger if the government cannot take control of inflation and the financial




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OCTOBER 2011 |

HANOI

KNOWLEDGE REPORT

system. CPI has become more of a threat, clouding the real significance of growth indices. Specifically, in this quarter, gold price surge was the single real driver of CPI. The city's government disbursed VND475 billion (US$24 million) to curb the price increase of the main commodities. Weary of seeing the currency devaluate, consumers now tend to buy more local made and affordable goods.

HANOI URBAN DEVELOPMENT UPDATE

On the 26th of July 2011, the PM signed into effect the General Planning of Construction of Hanoi Capital until 2030, vision 2050. This planning is instrumental in the regulation of real estate projects in Hanoi. Before its signing, hundreds of projects had been put on hold. According to this, Hanoi will have 5 satellite townships and 8 bridges and underground In the first nine months of 2011, Hanoi recorded a retail sales tunnel crossing the Red River. y-o-y growth rate of 23.4% vs. same period of last year's rate of 20.4%. Real growth rate, excluding the CPI impact, was Ring Road 4's detailed construction planning was approved 4.7%. This proved that inflation has been greatly influencing by the PM. To be completed in 2020, it will define the boundpeople's purchasing power. ary for the metropolitan expansion of Hanoi to the west and south. Coffee and petroleum were the main drivers of export growth. The main outlets for Hanoi's exports were China and the US, The city mayor instructed the related city bodies to design while the city imported mainly from China and Japan. Petroand submit the detailed planning for all functional areas of leum and fertilizer were the main import items. Hanoi in Q2 2012, as the next step to implement the General Planning of Construction of Hanoi toward 2030-2050. This Industry and construction still paid a critical role in the city's will include the planning of underground space which is misseconomy growth. On the other hand, agriculture is becoming ing now. less significant. It is noteworthy that real estate development has claimed the majority of cultivating land. During the period 2011 2015, Hanoi will build 50 parking buildings to ease the current congestion problem. On the 10 th As for tourism, the number of local and international tourists of August, the People's Committee started evaluating the dropped, although Smart Travel Asia named Hanoi and Hoi proposal of Megastar E&C to build smart parking lots. An two of the best destinations of Asia in 2011, and ranked Sofitel Metropole Hotel in Hanoi first in the list of 25 best hoThe construction of the connection road linking Nhat Tan tels and resorts in Asia in 2011. bridge to Noibai airport was started in August. Upon completion in 30 months, it will shorten the distance from Noibai to downtown Hanoi from 35km to just 15km. The work on railway line No 4 from Cat Linh to Ha Dong is ongoing, with the purpose to complete it in 2015. Work will also begin soon on line No 1 and 2 in order to complete in 2018. In August, TEDI corporation proposed 3 options for the construction of the flyover at Vong crossroad. The construction and expansion project of Ring Road 2 from Vinh Tuy to Nga Tu So was accelerated with the city's approval of the road boundary landmarks.

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KNOWLEDGE REPORT | Q3 2011 | OFFICE | HANOI

Office
GRADE A
The grade A office sector continued to perform well in Q3/2011 with average occupancy at 95.3% (0.9 percentage point higher than the last quarter). Average asking rate still remained at over US$42/sqm/month. It could be said that this is a positive sign because the market has shown good performance in two successive quarters in spite of the economic slowdown and credit control. In addition, limited current vacancy and land fund in the CBD continue to be in favor of the grade A office buildings there. Average rent and occupancy rate of grade A office, Q3 2011
48.00 100% 95%

Average rent and occupancy rate of grade B office, Q3 2011
$29 $28 94% 92% 90%

US$/sqm/month

$27
$26 $25 $24 $23
Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Average rent Occupancy rate

88% 86% 84%

82% 80%
78%

46.00
US$/sqm/month

Source: Research and Consultancy, Colliers International, Hanoi

44.00
42.00

90% 85%

PERFORMANCE BY DISTRICT
Hoan Kiem district still ranks first in term of supply and performance (average asking rent rate at US$40/sqm/month and average occupancy at 94%) thanks to good location and building management service. Hai Ba Trung district came in the second position with average rate of US$29/sqm/month and Ba Dinh district followed with rent at US$26/sqm/month. Dong Da, Cau Giay and Tu Liem district have average rent ranging from US$21 to US$23/sqm/month. Regarding occupancy rate, the suburban districts such as Cau Giay and Tu Liem (with increasing office supply during the last 2 years) are struggling with finding tenants while occupancy floundered around 70%. The current market, so to say, is in the hands of the tenants. They now have a lot more options and can demand conditions in their favor. On the other hand, it takes time and better economic conditions for the west to become a new centre of attraction. The majority of tenants at Cau Giay and Tu Liem districts are Vietnamese companies because they require large floor area with reasonable rates. They even purchase the whole floor for long term rent, capitalizing on the favorable discounts and incentives. Otherwise, this area is also favored by Asian companies from Korea, China or Japan.

40.00

38.00 36.00
34.00
Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11

80% 75%
70%

Average rent

Occupancy rate

Source: Research and Consultancy, Colliers International, Hanoi

GRADE B
Two new grade B office buildings came on line in this quarter including Oriental Tower at 324 Tay Son and Han Viet Tower at 203 Minh Khai. Despite this new supply, the average occupancy rate increased by 3.8 percentage point compared to the last quarter and reached 87.4% with the average asking rate of US$25.5/sqm/month. However, for six quarters, the sector's performance has not matched grade A sector's acceleration with occupancy below 90% and rents at around US$25.5/sqm/month. Facing this situation, the landlords are actively offering attractive promotion campaigns, flexible leasing terms, and even accepting small office space requirements or offering the whole floor for longterm lease (floor selling) in order to gain a quick capital return.

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KNOWLEDGE REPORT | Q3 2011 | OFFICE | HANOI

Average rent and occupancy by district, Q3 2011

FOCUS
250,000 200,000 45 38

150,000
sqm

31 24
17 10 Hoan Hai Ba Ba Dong Cau Tu Kiem Trung Dinh Da Giay Liem Tay Ho Long Bien

100,000
50,000 0

Property: Developer: Location: Grade: GFA: NFA: Officially opened: Asking rent rate:

Geleximco Office Building Geleximco 36 Hoang Cau str., Dong Da dist. B 27,000sqm 21,600sqm Q1/2011

US$23-25/sqm/month
(including SC, excluding VAT)

Vacant Area

Leased area (sqm)

Average Rent

Source: Research and Consultancy, Colliers International, Hanoi

OUTLOOK
In Q4/2011, Colliers anticipates that there will be 200,000sqm new office supply from both grade A and B, primarily from EVN Tower and Keangnam Hanoi Landmark Tower which will provide massive floor areas. In the next three years, the market will have about 1.5 million sqm new office supply, boosting office stock nearly three-fold. The future supply converges in Tu Liem district. Colliers anticipates that competition will toughen in this area. Grade A office buildings like Keangnam Hanoi Landmark and Indochina Plaza Hanoi are currently offering for lease a total of 112,500sqm, which is significant. Besides, some grade B office buildings like Nam Cuong Building and Detech Tower will also add to the vacant space available for lease. Facing this situation, the developers are increasingly adopting initiatives such as floor selling or short-term lease of whole floor. This has proven to be a quick way to fill up the vacancy, recoup investment and save time.

Property: Developer: Location: Grade: GFA: NFA: Officially opened: Asking rent rate:

Han Viet Tower Space 21 Fonexim 203 Minh Khai str., Hai Ba Trung dist. B 19,500sqm 13,000sqm August 2011

US$21-23/sqm/month
(including SC, excluding VAT)

Estimated future supply of office space in Hanoi

Source: Research and Consultancy, Colliers International, Hanoi

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KNOWLEDGE REPORT | Q3 2011 | LAND PRICES | HANOI

Land prices
LAND PRICES OF HANOI BY DISTRICT
The land prices of Hanoi vary largely from location to location. They also depend on the future urban development of the city, and in many case, on speculation-driven rumors. Often, the information about land transactions is not transparent. Therefore it is difficult to provide exact and precise figures about this market. The city's districts can be divided into three groups. Group 1 consists of the suburban districts Tu Liem, Ha Dong (in the west of Hanoi), Long Bien (in the East) and Hoang Mai (in the south). It has a land price range from US$968 to US$8,329/sqm. The range of the secondary districts (group 2) of Hanoi, including the districts of Thanh Xuan, Ba Dinh, Cau Giay, Dong Da and Tay Ho, is from US$2,590 to US$18,940/sqm. The last group is comprised of two CBD districts Hai Ba Trung and Hoan Kiem with land prices in the range of US$2,611 US$27,200/sqm. Average land prices by district, Q3 2011
US$/sqm 30,000 25,000 20,000 15,000 10,000 5,000 0 Tu Ha Long Hoang Thanh Ba Liem Dong Bien Mai Xuan Dinh Average minimum price Cau Giay Dong Tay Ho Hai Ba Hoan Da Trung Kiem

Furthermore, these districts are still developing their infrastructure and have lower living standards and less favorable socio-economic conditions.

LAND PRICES OF HANOI BY STREET
Average land prices of Hanoi by street width, Q3 2011
Street Pho Hue Hai Ba Trung To Ngoc Van Ton Duc Thang Kim Ma Cau Giay Truong Chinh Giai Phong Nhan My Hamlet (My Dinh) Quang Trung (Ha Dong) Duc Giang 2,840 - 3,146 3,100 - 3,259 3,411 - 4,036 4,432 - 10,600 2,153 - 2,539 5,957 3,063 - 4,333 3,900 - 4,348 7,770 3,185 - 4,659 4,086 - 6,095 3,300 - 4,976 4,700 - 5,105 4,223 - 5,059 10,159 - 14,409 7,688 - 10,600 7,858 - 10,730 5,711 - 6,871 15,434 - 15,793 Average land price by street width (US$/sqm) in Q3 2011 <2 m 5,050 2 - 3.5 m 6,267 - 6,753 16,850 - 21,700 3.5 - 8 m >= 8m

Source: Research and Consultancy, Colliers International, Hanoi

Colliers recorded the average price levels on some of Hanoi's main roads in the table above. Land at the central roads is always expensive, for example land prices in the alleys of Hue Street (Hai Ba Trung district), where many boutique fashion shops are located, are even equal to or higher than those of the street-front houses of Ton Duc Thang, Cau Giay, Truong Chinh streets; Hai Ba Trung street (Hoan Kiem district) has an average price of US$21,700/ sqm, 1.5-2 times higher than that of Kim Ma and Giai Phong streets. The urban development of Hanoi according to government's plan will head west. Heavy investments in this area's infrastructure have boosted property prices tremendously. However, the ranges at My Dinh and Cau Giay areas are similar. Ha Dong district used to be the chief town of Ha Tay province, therefore it has a good infrastructure and similar levels to My Dinh area. To Ngoc Van can be considered a beautiful road of Tay Ho district with rows of glossy villas let to foreigners. Land prices of this street are thus even higher than in some central locations. Meanwhile, the East is still developing, so prices in some streets like Duc Giang average about US$2,100/sqm.

Average maximum price

Source: Research and Consultancy, Colliers International, Hanoi

One can notice that the central districts have a wider range of land prices. This is because the street frontage in these business districts provides a huge business advantage home owners can supposedly earn money by opening shops or restaurants or other outlets. Meanwhile, houses in the alleys or sub-alleys are more often than not used as a residence. Houses with a corner position facing two streets in the proximity of Hoan Kiem Lake are the most expensive sometimes even equal to the levels seen in Tokyo or Paris. For example, street-front houses on Cau Go, Hang Gai or Hai Ba Trung streets have sold for between US$21,000 and US$27,000/sqm. The land prices at the suburban districts Tu Liem, Ha Dong, Long Bien and Hoang Mai have a narrower range due to lesser business advantage. Sometimes the advantage is even unclear because the areas are pending planning approval, or have no official titles, or worse still, under dispute.

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KNOWLEDGE REPORT | Q3 2011 | RESIDENTIAL | HANOI

Residential
OVERVIEW
In general, Q3/2011 was quieter than the previous quarter with fewer successful transactions. Land prices in some areas showed decrease; however the number of transactions was low. In the West, especially for the housing projects located along the incomplete Highway 32, properties have lost 15% - 20% value compared to the previous quarter. Likewise, a smaller amount of new stock came on line. The reason for this slump might include the continued credit crunch and unfavourable economic outlook, together with the psychological phenomenon called the ghost month. It is noteworthy that in Vietnamese lunar calendar, the month of July (which falls in August) is perceived as dedicated to the lone spirits of the other world. In consequence, Vietnamese people tend not to transact housing sales in this month. It can be said that the approval of the Master Plan of Ha Noi in July did not bear positive impacts on the market as expected.

Units launched in Q3 2011 vs. Q2 2011 by grade

Units Launched by Grade

5,000 4,500 4,000 3,500 3,000 2,500
2,000 1,500 1,000 500 High-end Units Q2/2011 Mid-end Units Q3/2011 Low-end

Source: Research and Consultancy, Colliers International, Hanoi

SUPPLY
From 2011 to 2014 the new supply will amass in the West of Hanoi. By district, 28% of it will come from Ha Dong district, 15% from Tu Liem, 15% from Cau Giay, 10% from Hai Ba Trung, 6% from Long Bien, 6% from Thanh Xuan, 8% from Tay Ho, 6% from Dong Da, 5% from Hoang Mai and 1% from Ba Dinh.

New supply from 2011 to 2014 by district
DONG DA

15%

6% 10%

HAI BA TRUNG

1%

In Q3/2011, the number of units launched was approximately 5,500 from fifteen projects, such as Green Park Tower, Golden Land, Richland Southern, Nam Do Complex, etc. Most of the new supply comes from current projects. The high-end apartments numbered about 1,500, while midend and low-end apartments accounted for 3,400 and 600 units respectively. There was, therefore, a significant change in the proportion of the segments compared to Q2/2011: the mid-end in this quarter outnumbered the highend, while the low-end offers remain the same. The reduction in the number of stock coming into the market is because supply from large projects was offered for sale in the previous quarter. Some small scale projects in this quarter offered a limited number of apartments as a trial.

BA DINH CAU GIAY

DEMAND
Currently, most buyers in Vietnam are investors (60-70%). However, when the economy is sluggish, these investors change to a prudent strategy, giving way to the end-users. In theory, prices should therefore verge on the real value. At the current time, apartments priced under $150,000/unit get more attention from the customers. The State Bank is on firm ground with its tight credit control to rein the stock and real estate market. The lofty interest rates and restricted access to bank loan have been squeezing out investments from the market and put significant pressure on the developers who have to pay their outstanding loan.

15%
28%

TAY HO
THANH XUAN

8%
5% 6% 6%

LONG BIEN

HOANG MAI HA DONG

Source: Research and Consultancy, Colliers International, Hanoi

Segment-wide, the supply in the next three years will be mainly in the mid to high end segments, in spite of the fact that they have lost ground to the low end segment recently. Actually, due to the long process of project implementation, it will take a few years for the market to respond to the change.

MARKET PRICES
The apartment for sale market experienced a reduction in price in all segments, however the change is insignificant. Comparing with the previous quarter, prices were reduced by about 2% on average. The tightened monetary policy and the attraction of other

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KNOWLEDGE REPORT | Q3 2011 | RESIDENTIAL | HANOI investment tools like gold or bank deposit led to the scarce capital in the real estate market and many mortgaged properties have been sold. These factors reflected on the downward trend in the residential market.

FOCUS

Market prices by segment
US$/sqm

2500
2000 1500 1000

Property : Developer : Location: Total units: Launching time: Current market price:

Green Park Tower Constrexim--Hod Yen Hoa Cau Giay 400 July 2011 US$1,840 - US$1,900/sqm

500
0
Q1/2009 Q3/2009 Q4/2009 Q2/2010 Q3/2010 Q4/2010 Q2/2011 Q3/2011
Q2/2009 Q1/2010 Q1/2011

High-end

Mid-end

Low-end

Source: Research and Consultancy, Colliers International, Hanoi

OUTLOOK
The downturn in quarter 3/2011 showed the market instability and strong impacts of the financial markets on the real estate market. Although the market prices have decreased, it is unlikely that the residential market in the next quarter will be as warm as the first half of the year due to the limited number of affordable products for the end users - currently most of the offers are in mid to high end segments. The residential market in Q4/2011 will need a boost from the financial market and credit policies of banks to regain momentum.

Property : CT15 Viet Hung Developer: PVR Location: Viet Hung new urban town Total units: 456 Launching time: July 2011 Current market price: US$1,050 - US$1,200/sqm

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KNOWLEDGE REPORT | Q3 2011 | RETAIL | HANOI

Retail
CURRENT SUPPLY
On September 23rd, the market witnessed the opening of Hang Da Galleria shopping center, providing two basements and five above-ground floors, three of which house a modern fashion center featuring a variety of international brands. Hang Da Galleria introduced a new concept of combining a wet market (located in the basements) and a modern shopping center (with GFA of nearly 7,000 sqm on the upper floors). However, the traditional market, which started operation in September 2010, has proven to be ineffective, attracting too few shoppers, and a lot of kiosk owners are moving out. On the contrary, the shopping center has filled up as much as 95% of its leasable areas with well-known brands like Nine West, Axara, FCUK, Morgan de toi, Easy Spirit, Elise. This initial success could be partly explained by the fact that the landlord applied simultaneously fixed rental rates and revenue sharing schemes for tenants. Oriental Tower also entered the market in Q3/2011 as a complex building with office and retail components. The whole 5,000-sqm area over five retail floors has been leased to Pico Plaza, a prominent electronics retail chain of Hanoi. Accordingly, Pico Plaza would take up 100% of the area until 2030 and enjoy low monthly rents which are similar to those applied for the office component above. Pico Mall on Tay Son Street also launched a re-opening at the beginning of September. The first ceremony of this shopping center took place in Q2/2011 without much success. However, whereas other components of the MIPEC Tower complex are still under construction, Pico Mall might find it difficult to attract shoppers, at least until Megastar Cineplex, an anchor tenant comes into operation this October. As at the end of the third quarter of 2011, the total supply of modern retail space in Hanoi increased by 3.83% against Q2/2011 thanks to the addition of Hang Da Galleria and Oriental Tower and stood at approximately 325,000 sqm. Shopping centers, a popular destination of Hanoi shoppers, account for 44.3% of the total retail area. The major decrease of CBD Shopping Centers' average rental rates could stem from the appearance of Hang Da Galleria, which offers both fixed rents (ranging from US$4576/sqm/month) and a revenue sharing program. Rentals at the thriving CBD Retail Podiums, as always, remained stable as these areas continued to be fully occupied despite seemingly extravagant rents. Shopping centers in non-CBD areas also faced a decrease in average rental rates due to the low rents in Oriental Tower. Pico Plaza - an electronics supermarket chain is its only tenant, occupying the five retail floors of this building under a 20-year contract with modest rents. Meanwhile, the Grand Plaza department store raised its asking rents by an average of 20% after hiring another professional agent and deciding to renovate the whole facility. This lead to an increase of 5.17% in non-CBD department stores' average rents.

OCCUPANCY
Due to the significant shortage of modern retail space in the CBD, especially in upscale and large projects, current CBD retail centers have attained full occupancy and a healthy clientele. The new entrant Hang Da Galleria recorded an occupancy rate of nearly 95%, and after the food court starts operation, this shopping center will attract more shoppers. Non-CBD retail centers posted an average occupancy of 86.85%, down 0.92 percentage point against Q2/2011. The majority of the vacant area comes from Grand Plaza Department Store, which was performing poorly. The performance of this Department Store could be explained by unattractive design and low ceiling (since the property was not designed to be a shopping centre), together with inferior marketing strategies. Shopping activities in The Garden, on the contrary, are intensifying thanks to the presence of anchor tenants like Big C supermarket, Platinum Cineplex and Star Fitness Center, and other major public events.

FUTURE SUPPLY
The retail component of the Keangnam Landmark Tower missed its scheduled opening in September. The new schedule is for the last quarter of 2011. The majority of its enormous retail space of approximately 81,000sqm has been leased out, and 80% of the leased area belongs to the sub-lessor Parkson Department Store. Together with The Garden, Keangnam Tower is expected to become a popular shopping destination in the West. However, it remains uncertain as to whether they could compete with their CBD competitors on equal ground.

RENTAL RATES
Except for the Department Stores, all other retail categories were becoming cheaper to rent
(US$ psm per month)
CBD Asking Rent % Q-o-Q change Non-CBD Asking Rent % Q-o-Q change

Department Store $76.2 5.17%

Shopping Center $78.5 -3.88% $46.9 -8.84%

Retail Podium $98.4 -0.46% $40.0 0.00%

Average $94.1 -1.09% $51.6 -5.34%

The Eastern side of Hanoi is also on the move. Vincom Center Long Bien sees approximately 90% of its leasable areas

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KNOWLEDGE REPORT | Q3 2011 | RETAIL | HANOI registered and/or contracted while its first eight tenants started fitting out and preparing for the opening. To attract tenants, the landlord applied flexible programs such as low rental rates, free rent for first year or discount for those tenants currently located in Vincom City Towers. Savico Mega Mall is also accelerating its leasing activities to meet the scheduled operation in November. More than 80% of the areas have been leased while the rental rates are on the rise prior to the opening date. Big C hypermarket has the ambition to open at the end of October as consumer goods are stacking on the shelves at the moment.

FOCUS
Property: Hang Da Galleria Shopping Centre Developer: Quan Nhan JSC Location: Cua Dong Str., Hoan Kiem Dist. GFA: ~8,000sqm Officially opened: September 2011 Occupancy status: Approx. 95% Major tenants: Nine West, Axara, Levi's, Morgan, Valencia, Easy Spirit, FCUK. General concept: A fashion shopping centre with various wellknown international brands. A food court will soon be opened. Traditional wet market is located in the basement.

FUTURE SUPPLY
Although the domestic economic outlook remains gloomy, the retail industry still develops as people's living is improving and the desire for high-quality goods is alive. Due to the limited land fund in the CBD, new supply in nonCBD districts continue to exceed that in the CBD. In addition, the popularity of shophouses and established shopping centres in the CBD may force non-CBD shopping centres to differentiate themselves by introducing new brands and services as well as stepping up their marketing activities. With continued growth in consumer demand and heavy residential development, sizable shopping centres, especially those in the New Urban Areas or multi-purpose complexes will become prevalent. Meanwhile, large-scale shopping centres can provide a full range of merchandise/services such as spa, fitness centre, game zone, food court, cinema, fashion shops, etc, creating a one-stop shopping experience that can meet all shoppers' needs. This will gradually make Hanoi's retail market more mature and comparable to the more developed markets in other Southeast Asian cities. To keep up with the changing pace of the market, small-scale retail centres will have three options: leasing out the whole space to one large tenant (e.g electronics retailer as seen in Pico Plaza), dividing space into smaller shops or kiosks to become a retail lobby (Metropole Arcade), or engaging an anchor tenant (Big C, Saigon Coopmart, Hapro) that will sublease to individual tenants (caf, restaurant, etc.).

Property: Oriental Tower Pico Plaza Developer: BRG Group JSC. Sub-lessor: Pico Plaza Location: 324 Tay Son Str., Dong Da Dist. GFA: ~5,000sqm Officially opened: July 2011 Occupancy status: 100% General concept: Pico Plaza Electronics occupies all five stories to open its fifth branch.

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