New Uniglo flagship store in HCMC solidifies fast fashion anchor tenant trend

Contributed by: Dung Duong MRICS
Senior Director, CBRE Vietnam

Uniqlo opened a four-story flagship store in HCMC’s prime shopping area of Dong Khoi Street on December 6th (Friday). The store is the Japanese fast fashion retailer’s first in Vietnam and its largest outlet in Southeast Asia. Uniqlo is also reportedly planning to open another store in Hanoi.

Uniqlo is the latest in the long line of international retailers to enter Vietnam, which boasts a rapidly growing middle-class and millennial population with considerable spending power. Around 75 brands – mostly Asia Pacific-based retailers in the F&B and mid-range fashion categories – have opened their first Vietnam store over the past four years.

International retailers’ strong preference for prominent street shops and shopping malls in CBD locations have led to robust rental growth. CBRE data show that average rents in the HCMC CBD have increased by 10% y-o-y in recent years, while vacancy stood at an ultra-low 2% as of Q4 2019.

What does it mean for retail real estate?

Anchor tenants in HCMC’s most popular shopping malls have traditionally been confined to cinemas, supermarkets and department stores. However, in 2016, Zara leased around 10% of the Net Lettable Area (NLA) in one of the city’s prime shopping malls, marking a shift away from landlords’ reliance upon F&B and entertainment-based retailers as anchor tenants. As of Q4 2019, the fast fashion category occupied 23% NLA in the same mall, while total fashion and accessories accounted for 55% NLA.

Although landlords may have to offer sizable rental discounts or longer-than-usual lease terms to secure international fast fashion retailers as anchor tenants, this category brings significant benefits such as increased footfall, especially from younger shoppers. The opening of H&M’s first store in HCMC in 2017 attracted a queue of 4,000 shoppers, while the Swedish retailer’s new outlet in Da Nang – which opened last month – saw a line of 2,000 people.

Higher footfall enables landlords to command higher rents from other tenants; enhances the status and branding of their malls; and supports growth in property values. Despite lower base rents, fast fashion retailers can provide landlords with significant rental income via turnover percentages, especially in rapid growth markets such as Vietnam. MAP, Vietnam’s sole distributor of Zara, Pull & Bear, Stradivarius and Massimo Dutti, reported nationwide revenue growth of 70% y-o-y in 2018.

CBRE expects the fast fashion flagship store trend to gain further momentum in major shopping malls in HCMC, Hanoi and Vietnam’s other leading cities in 2020, supported by an increased willingness on the part of property owners to accommodate this rapidly growing category.


Editors Note:
For additional information on the Vietnamese real estate market, you can contact Dung Duong, Senior Director at CBRE Vietnam at: or you can contact Thanh Pham, Senior Manager at CBRE Vietnam: