Struggling Vietnam mall offers free space

Retailers are being offered free rent at a Vietnam mall to help the struggling landlord fill space.

The Hoa Binh Company says it has “reserved” 25,000sqm of space in its Hoa Binh Green City shopping mall in Hanoi, Vietnam’s capital, to lease free for Vietnamese retailers.

But the deal comes with a catch: the retailers must specialise in trading Vietnamese goods and have a profit margin of no more than 15 per cent. And foreign retailers are not eligible.

Local players in the Vietnam mall industry are struggling to find tenants for the fast-growing ranks of modern format shopping centres, while more experienced international players, like Japan’s Aeon, are fully tenanted and trading well.

The Hoa Binh Green City centre is on Minh Khai St in Hanoi. Qualifying retailers are being offered lease contracts ranging from one to five years.

Nguyen Huu Duong, general director of Hoa Binh Company, told VietNamNet Bridge

the company wants to help Vietnamese businesses boost sales of their products before foreign retailers have easier access to the Vietnam market through the Asian Economic Community alliance.

One retailer considering the opportunity said if stores could get space for free they could afford to lower their prices and compete better with goods imported from China or Thailand.

VietNamNet Bridge quoted Dr Pham Tat Thang, “a renowned trade expert” praising the proposal, saying it would “benefit consumers, manufacturers and the developer as well”.

He said it is difficult for mall developers to find tenants right now because the real estate market remains “stagnant and gloomy and the economy (is) still sluggish”.

The Hoa Binh Company believes that offering retailers free space will attract more shoppers to the centre, and encourage people to consider buying apartments constructed above the shopping mall.