This content is an excerpt from Savills Impacts, a global report on real estate trends that will shape the market in 2025. It is curated and supplemented with local insights from Savills Viet Nam.

After years of disruption caused by the pandemic, supply chain interruptions, and macroeconomic volatility, the global retail sector is entering a clear, though uneven, recovery cycle. Traditional formats are being forced to restructure, while flexible, experience-driven, and tech-integrated retail models are gaining momentum. Within this dynamic landscape, Viet Nam stands out as a vibrant market, showing strong signs of recovery.

A Resilient Sector Makes Its Return

Contrary to concerns that e-commerce would completely replace physical retail, global consumers are returning to stores, and not just to shop, but for experiences and engagement. Savills’ Impacts 2025 report highlights that retailers globally are recovering faster than expected. In 2024, foot traffic in the United States at shopping malls increased by 1.5% YoY and by 7.3% compared to pre-pandemic levels in 2019. Notably, nearly 80% of total consumer spending in the United States still occurs in physical stores, a significant figure in today’s digital era.

In Viet Nam, HCMC is at the forefront of the momentum. As of Q1 2025, total retail supply in the city reached 1.6 million sq m, up 6% YoY, driven by new projects such as Centre Mall Vo Van Kiet in District 6. Occupancy reached an impressive 94%, reflecting solid demand from retailers and consumers. While the entry of lower-priced new projects has caused a slight adjustment, the average ground floor rental still rose 9% YoY to VND 1.4 million per sq m per month.

Modern retail formats continue to stand out. Examples like Thiso Mall Sala, Vincom Mega Mall Grand Park, and Parc Mall reported over 70% occupancy immediately after opening. Meanwhile, street-front retail is increasingly losing ground due to limited investment in customer experience, amenities, and professional operations, all of which are becoming essential expectations for consumers.

In Ha Noi, Q1/2025 saw a 6% increase in average ground floor rents YoY, with prime CBD rents surging by 37%. Occupancy stands at 86%, while new leases show a clear shift away from the previously dominant F&B sector toward fashion, cosmetics, and convenience stores.

Retailers Are Leading While Investors Are Following

Historically, capital inflows were the first wave driving the retail market. Today, it is the brands themselves that are reshaping the landscape. Expansion demand from fashion, cosmetics, homeware, and F&B brands is the primary driver, subsequently drawing investors back to the sector.

Nevertheless, a significant number of investors remain cautious due to the impact of previous underperforming retail investments. According to the ANREV Investment Intentions Survey 2025, the allocation of retail real estate within global institutional portfolios is projected at only 12.4%, significantly lower than the 27.7% recorded in 2018. However, recovery signals are becoming increasingly evident. In 2024, capital inflows resumed their acceleration, particularly in the second half of the year.

Tran Pham Phuong Quyen, Senior Manager of Retail Leasing at Savills, commented: "As more international brands evaluate the Southeast Asian market, Viet Nam holds a strategic advantage with its young, dynamic population that is highly driven by shopping and experience. In addition, labour, construction, and warehousing costs remain lower compared to many other countries in the region, enabling brands to optimise operational costs and achieve higher profitability potential."

Investor focus is now directed toward well-operated assets that align with omnichannel retail strategies — from large-format shopping malls in established residential areas to suburban retail parks. Moreover, post-pandemic asset repricing has created favourable conditions for investors, while yields in this sector are significantly more attractive compared to residential or logistics, both of which have seen valuations pushed to unsustainable levels due to previous capital surges.

Retail as an Operating Asset Class

A fundamental shift in investment mindset is taking place: retail is no longer viewed as merely a passive leasing asset. As consumers demand more from both experience and brand engagement, retail real estate is now considered an operating asset; one that requires the seamless integration of operations, technology, tenant brands, and deep consumer insights.

Modern shopping centres must be managed as complete ecosystems. Every element, from tenant mix and foot traffic patterns to marketing strategies, spatial design, and amenities, directly impacts operational efficiency and asset value. According to Quyen, the retail leasing market in the coming years will shift significantly toward more sophisticated advisory services:

"It’s no longer just about matching tenants with available spaces. Both landlords and occupiers are increasingly relying on professional advisors to leverage data, analytics, and technology in identifying the most optimal locations at each stage of their strategy. Tenant and landlord representation services will play a critical role in reshaping negotiation dynamics and driving operational efficiency."

Beyond day-to-day operations, successful retail development demands a cohesive, long-term strategy. Quyen emphasises: "Landlords must ensure that floorplans meet modern leasing standards, build capable leasing and operations teams, and at the same time develop a robust communications strategy to position the project as a true destination within the community. Investing in retail real estate is a long-term journey, not a short-term pursuit."

In 2025, retail has officially returned to the growth trajectory — but not in the traditional way. In a market where experience and operational excellence are the primary differentiators, Viet Nam and HCMC stand out with their young demographics, dynamic consumer behaviour, and favourable operating costs, offering a compelling proposition for international brands seeking strategic expansion in the coming years.