Despite being one of the sectors hardest hit by the Covid-19 pandemic, retail real estate will prosper within the next year, many analysts believe.

Retailers faced various challenges during the pandemic, including customers becoming more cautious, supply chain disruptions, and online purchases rising. Rental space, especially townhouses for rent, was strongly and directly affected by events. Many tenants were forced to close due to the specifics of their business and limited capital, according to a report from consultants Colliers Vietnam.

However, it also believes that the rental real estate segment will recover in the time to come as foreign investors pour more capital into Vietnam’s retail sector.

Ms. Hoang Nguyet Minh, Director of Commercial Leasing at Savills Hanoi, said that demand for retail space from now to the second quarter of 2022 will focus on the mid- and high-end segments and that not much has been changed by e-commerce.

Savills’ leaders also said that after this period, premises in retail podiums of apartment complexes and shopping centers will be more popular than townhouses due to convenience. Within the next year, the retail market is expected to regain its attractiveness thanks to a large number of foreign brands entering the Vietnamese market. This is a good sign for the owners of retail space for rent.

For F&B businesses, some have had to close or scale back their business, resulting in unrented spaces. It will therefore take longer than expected for the owners of townhouses and retail floors to fill these vacancies. This shows that owners of premises need to have a more flexible rental plan as well as incentives to attract tenants.