Thailand’s Central Group plans $3.5 bln Vietnam investment over next decade
Central Group plans to invest about $3.5 billion in Vietnam over the next decade, effectively doubling its cumulative investment in the country as the Thai retail and property conglomerate targets growth beyond major cities.
The new commitment was announced in Bangkok on Thursday by Central Group president Wallaya Chirathivat and Olivier Langlet, CEO of Central Retail Vietnam, at an event marking the launch of the 10th Vietnamese Week in Thailand.
Central Group has invested about $1.5 billion in Vietnam since entering the market in 2012. The latest plan will take its total investment in the country to about $5 billion over the next 10 years.
Central Retail Corp., the group’s retail arm, will account for about $1.5 billion of the new investment and plans to open around 50 additional stores over the next decade.
The retailer currently operates more than 300 outlets across 26 of Vietnam’s 34 provinces and cities, serving about 500,000 customers a day and employing roughly 13,000 people. Vietnamese nationals account for 99.5% of its workforce.
In the near term, Central Retail aims to add 35 to 37 stores by 2028, focusing on its GO! hypermarket format and smaller mini go! supermarkets.
Expansion beyond major cities
Central Retail is shifting its expansion focus toward secondary and smaller cities, where it sees room for further growth as major markets such as Hanoi and Ho Chi Minh City become increasingly saturated.
“When entering Vietnam around 15 years ago, the focus was naturally on tier-one cities,” Thai newswire The Nation cited Langlet as saying. “Over time, we have seen that consumers in tier-three and tier-four cities are creating more value and more opportunities.”
The group has identified about 200 potential locations across Vietnam’s four city tiers, with between 50 and 70 sites currently under consideration.
Central Retail plans to use multiple formats, including shopping malls, hypermarkets, standalone stores and supermarkets, to serve different markets.
The retailer has a market share of about 40% in Vietnam’s hypermarket segment, according to the company. Its Vietnam operations have generated cumulative revenue of more than THB330 billion ($9.9 billion) over the past eight years.
$1.5 billion property and hospitality push
A further $1.5 billion from Central Group’s new commitment has been earmarked for Central Pattana, the group’s property development arm, and Centara Hotels & Resorts.
Central Pattana expects to deploy capital over a longer 10- to 15-year period, reflecting the development timelines of large shopping malls and mixed-use projects. The group is considering whether to develop projects directly or through joint ventures. Vietnamese developer Sun Group is among potential partners being considered, Chirathivat said.
Property investments will initially focus on retail and mixed-use developments, with offices and hotels potentially added at later stages.
Centara, which operates 52 hotels in nine countries, is also expanding its Vietnam portfolio. The group currently operates the 984-room Centara Mirage Resort Mui Ne, which opened in 2021, and plans to open two additional properties in Van Don, Quang Ninh province, adding 977 rooms by the end of this year.
Central Retail executives said high property prices and uncertainty over the interpretation of some regulations could affect the pace of expansion.
Langlet said Vietnam had made progress in reducing administrative procedures but that some laws remained unclear in their interpretation, creating challenges for businesses seeking to expand more quickly.
Land acquisition costs are a particular concern, he said, as high prices require the group to carefully assess potential returns on investment.
Source: Hai Yen
Photo: Photo courtesy of the company
