Vietnam Market Outlook 2023

Office market

• Continues to see a limited new supply, which supported its performance. Looking forwards, the West is the most desired location in Hanoi and CBD Fringe is still the most sought-after location in HCMC due to the low available space in the CBD.

Trends to watch: 

• Flight to quality will remain a key theme.
• Long-term future-proofing is achievable by placing the workplace in a green building as the demand for green credentials increases.
• Rents are anticipated to remain stable in 2023 as landlords have begun to exercise caution in light of the economic headwinds.

Retail market

• The retail sector is recovering relatively well from the pandemic’s disruptions. CBD’s rent hit a record high as the vacancy rate dropped.
• Retailers continue seeking high-quality retail space in the city centre and along prime high streets. However, as retailers try to navigate economic uncertainty and steadily rising costs, CBRE expects retailers to adopt a highly-disciplined approach to portfolio planning.

Trends to watch: 

• Retail space in CBD will continue to be limited, which may form a new trend as retailers will seek locations in non-CBD areas to launch pop-up stores while continuing to look for prime locations. 
• The casualization trend that took hold during the pandemic will continue as more shoppers shift to working from home. Casualwear, followed by sportswear and sneakers, are the highest-ranking categories in terms of where we see the greatest growth potential.

Industrial market

• Although supply chain disruption has now largely eased, companies are still looking to diversify risk by adding locations for sourcing and manufacturing. Industrial land performed well across regions.

Trends to watch: 

• The reopening of China is expected to boost Vietnam’s economy.
• Due to limited landbank in prime locations, it is expected to see more vigorous activities in secondary markets.
• Tier-2 markets in the North draw attention from manufacturers and RBF developers. 
• Green industry developments and renewable energy associated with environmental protections

Residential market

• New supply in HCMC and Hanoi was the lowest in 9 years (excluding pandemic period). The high-end segment dominated the market, while the affordable segment was absent in both cities.
• The first half of 2022 witnessed the recovery of the residential market, and this trend had been expected to continue. However, turbulence in the latter half amidst the recovery has affected the recovery speed and market sentiment.

Trends to watch: 

• CBRE forecasts that difficulties will continue in 2023 with limited supply and low liquidity.
• There will be adjustments in the supply with fewer luxurious products and the focus will be on high-end and upper mid-end segments.
• The average primary price will stabilize in 2023-2024.