VRE – Retail leasing sees YoY profit improvements in Q1 2025 – Earnings Flash & Analyst Meeting Note
  • 2025-04-28T00:00:00
  • Company Research

  • VRE announced its Q1 2025 results with net revenue of VND2.1tn (flat QoQ and -5.5% YoY) (with 95% from retail leasing and 2% from property sales) and NPAT-MI of VND1.2tn (+8% QoQ and +9% YoY). The YoY drop in Q1 2025 revenue was due to YoY lower property sales recognition, while YoY growth in NPAT-MI was mainly driven by YoY higher financial and other income, and a slight 2% increase in retail leasing gross profit. 

  • Q1 2025 revenue and NPAT-MI complete 24% and 28% of our respective full-year forecasts. We foresee insignificant changes to our 2025F NPAT-MI forecast of VND4.2tn (USD162mn; +3% YoY), pending a fuller review.  

  • Retail leasing segment: The segment saw YoY profit improvements in Q1 2025, supported by a higher average occupancy rate and the absence of bad debt provisions. The segment’s revenue was VND2.0tn (flat QoQ and +5% YoY), gross profit was VND1.2tn (+4% QoQ and +2% YoY), and leasing NOI margin was 73.2% (+5.1 ppts QoQ and +1.1 ppts YoY). The average occupancy rate in Q1 2025 was 86.1%, up 0.7 ppts QoQ and 3.3 ppts YoY, while footfall at VRE’s malls increased 14.4% YoY.  

  • Management guides for the average occupancy rate to reach 87-90% in 2025G vs 84.2% in 2024 and 86.1% in Q1 2025.  

  • Per management, the average same-store rental rate increased 6.3% YoY in Q1 2025, while the average rate across VRE’s all existing malls was flat YoY, reflecting a YoY higher tenant mix in the F&B and entertainment categories, whose rental rates are typically lower than those in the fashion category due to differences in location and size between the two types of stores. 

  • New mall opening plan: For 2025G, management maintains the target to open three new malls with a total of ~120,000 sqm retail GFA, including: 

  • Two VMM malls – Ocean City (Hung Yen, retail GFA of 53,200 sqm) in July and Royal Island (Hai Phong, retail GFA of 47,600 sqm) in Q3 2025G.

  • One VCP mall – Vinh (Nghe An, retail GFA of 19,000 sqm) in Q4 2025G.

In 2026G, VRE is planning to open at least two new malls for (1) VMM Co Loa in the Global Gate project (Hanoi) and (2) VCP Dan Phuong in Wonder City project (Hanoi). 

  • Property sales segment: In Q1 2025, the segment reported revenue of VND48bn (USD2mn; -20% QoQ and -83% YoY) and gross profit of VND23bn (USD1mn; -67% QoQ and –77% YoY), from delivering 9 shophouses in the quarter (vs 45 units in Q1 2024). The earnings contribution of this segment in 2025G is expected to be lower vs 2024 as VRE delivered most of the shophouse units in previous quarters. 

  • Management plans to launch new presales for commercial components (shophouses) at VHM's Royal Island project in H2 2025G and at Golden Avenue in early 2026G. Handovers for both projects are expected to commence from 2026G, aligning with previous guidance.  

 

VRE’s Q1 2025 results 

VND bn 

Q1 2024 

Q2 2024 

Q3 2024 

Q4 2024 

Q1 2025 

Q1 2025 QoQ 

Q1 2025 YoY 

2025F 

Q1 as % of 2025F 

Net revenue 

2,255 

2,479 

2,078 

2,128 

2,131 

0% 

-5% 

9,007 

24% 

  • Retail leasing 

1,928 

1,940 

1,983 

2,027 

2,026 

0% 

5% 

8,804 

23% 

  • Property sales  

277 

467 

36 

60 

48 

-20% 

-83% 

203 

24% 

  • Others 

50 

72 

59 

41 

57 

40% 

14% 

0 

N.M. 

Gross profit 

1,255 

1,209 

1,089 

1,201 

1,202 

0% 

-4% 

5,001 

24% 

  • Retail leasing 

1,155 

1,045 

1,066 

1,131 

1,174 

4% 

2% 

4,929 

24% 

  • Property sales  

98 

156 

16 

70 

23 

-67% 

-77% 

72 

32% 

 

 

 

 

 

 

 

 

 

 

SG&A expenses 

-207 

-216 

-248 

-312 

-173 

-45% 

-17% 

-727 

24% 

EBIT 

1,048 

994 

842 

889 

1,030 

16% 

-2% 

4,274 

24% 

Financial income 

435 

420 

383 

547 

625 

14% 

44% 

1,696 

37% 

Financial expense 

-140 

-179 

-244 

-275 

-243 

-12% 

73% 

-647 

38% 

Other income 

25 

42 

138 

209 

64 

-69% 

158% 

0 

N.M. 

PBT 

1,367 

1,277 

1,119 

1,370 

1,476 

8% 

8% 

5,322 

28% 

NPAT-MI 

1,083 

1,021 

906 

1,085 

1,177 

8% 

9% 

4,205 

28% 

 

 

 

 

 

 

 

 

 

 

Gross margin 

55.7% 

48.8% 

52.4% 

56.5% 

56.4% 

 

 

55.5% 

 

  • Retail leasing 

59.9% 

53.9% 

53.7% 

55.8% 

58.0% 

 

 

56.0% 

 

  • Property sales  

35.3% 

33.5% 

44.2% 

116.1% 

47.1% 

 

 

35.3% 

 

 

 

 

 

 

 

 

 

 

 

EBIT margin 

46.5% 

40.1% 

40.5% 

41.8% 

48.3% 

 

 

47.4% 

 

NPAT-MI margin 

48.0% 

41.2% 

43.6% 

51.0% 

55.2% 

 

 

46.7% 

 

Source: VRE’s financial statements, Vietcap forecasts (last updated February 21, 2025). 

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