Savills Vietnam has advised on a prime commercial refurbishment in central Hanoi with both Louis Vuitton and Christian Dior leasing flagship stores at the International Centre, in central Hanoi.
Originally developed in 1995, The International Centre has been refurbished in keeping the neighboring property, the prestigious Sofitel Legend Metropole Hanoi. This commercial block in the centre of Hanoi is the prime luxury district with brands such as Prada, Hermès, Gucci, Patek Philippe, Hublot, Christian Louboutin, Mont Blanc, Cartier, Hugo Boss, Bottega, Kenzo, Valentino all represented in the immediate area.
The luxury retail market in Vietnam remains stable with retailers confident with domestic demand, which the lack of international travel has concentrated even further. For prime spaces there is still strong demand from retailers and upward pressure on rentals. In the wider retail market, certain categories continue to thrive with more openings in recent months. Occupancy in general has remained stable with increased landlord and retailer confidence apparent.
Matthew Powell, Director of Savills Hanoi, and Hoang Dieu Trang, Senior Manager in the Commercial Agency team began discussions with both LVMH brands in December 2018 with leases finally completed in April 2020. Louis Vuitton and Christian Dior leasing over 1,000 sq m and 500 sq m respectively, both over two levels.
Matthew shared, “The specific locations that luxury brands are seeking only open up very rarely in central Hanoi, so by working rapidly with the owner, the architects, and the LVMH store development teams we were able to help these flagship stores come to fruition. We are sure Louis Vuitton and Christian Dior will enjoy these spaces for many years to come.”
“That Louis Vuitton and Christian Dior have demonstrated their belief in the Vietnam luxury segment during a troublesome global retail market is a very good indication of Vietnam’s growing capacity and long-term term development. These locations are super-prime in Hanoi and I’m sure will be the home of Louis Vuitton and Dior for many years to come.”
Vietnam Context
- Vietnam is set to be one of the few countries in the region to deliver positive GDP growth in 2020. The ADB forecasts national GDP growth easing back to 1.8% in 2020 and rebounding to 6.3% in 2021. Vietnam is expected to maintain economic stability and remain one of the fastest growing SE Asian nations.
- Vietnam’s ability to successfully contain the pandemic has received much praise from around the world and has set the economy up for a faster recovery than most regional peers.
- A trade surplus has been one factor helping to ensure a stable currency, giving foreign investors even greater confidence.
- The rapidly growing middle class is at an inflection point, with GDP per capita approaching USD3,000, demonstrating huge potential for domestic consumer spending growth. This also supports greater demand for real estate and continued real estate price growth.
- The continuing trade war between the US and China, as well as increasing salaries in China, will result in further manufacturing and FDI shifts to Vietnam.
- In early 2021 there are National Assembly elections that will select the key Government officials for the next 5 years, providing for political stability and faster decision making. This will result in greater spending on key infrastructure projects, further benefiting the real estate sector.