cbre market insight - q3 2015 -...

CBRE MARKET INSIGHT - Q3 2015 29th September, 2015

2 CBRE | CBRE MARKET INSIGHTS | Q3 2015

WE ARE FACING GROWING DISRUPTION IN OUR INDUSTRY

LEGISLATION

TRADE NEW PLAYERS

TECHNOLOGY

17,000 Vietnamese students in the U.S


HCMC: 15/09/2015

HANOI: 21/09/2015

1 Economy


EU IS NO LONGER WORRIED ABOUT GREECE - NOW IT’S ALL ABOUT MIGRANTS AND CHINA


-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Vie

tnam

Aus

tral

ia

New

Zea

land

Japa

n

Bru

nei

Mal

aysi

a

Sin

gapo

re

Can

ada

US

Mex

ico

Chi

le

Per

u

Cam

bodi

a

Indo

nesi

a

Laos

Phi

lippi

nes

Tha

iland

RoS

EA

sia

Chi

na

Kor

ea

Indi

a

EU

_25

Res

t of t

he w

orld

CONNECTING VIETNAM WORLDWIDE

Estimated boost to real GDP from TPP is highest for Vietnam

Source: Vietnam Institute for Economic and Policy Research

Breaking News – Trans Pacific Partnership Agreement – Deal 98 Percent Done!


ASEAN ECONOMIC COMMUNITY

1. ASEAN would be 7th largest economy

2. 600 million people, 3rd largest working population

3. Open economic: 54% of GDP is from Exports

4. 2013, 279 measures (79.7%) of the AEC Blueprint have been implemented.

5. ASEAN FTA: tariff rates on goods among ASEAN is 0% for ASEAN-6

6. Could triple per capita income by 2030, raising its citizens' quality of life to levels enjoyed today by members of the Organisation for Economic Co-operation and Development (OECD)

Number of Greenfield Investments in ASEAN Countries


GOLD, OIL, STOCK, CURRENCY FLUCTUATIONS

VN Index follows when Shanghai Stock Exchange Composite Index Plunges

Currency recovers after the plunge in late-Aug along with Fed’s declaration of

delaying interest rate hike.

SBV will hold forex rate steady until early 2016

Oil (WTI) 51.19% y-o-y

Global gold 0.6% y-o-y

SJC Gold 3.45% y-o-y

VN Index 5.52% y-o-y

Vietnam consumes 14.5 tons of gold in Q2


The lowest inflation in 10 years supports further interest rate cut

DECREASING BANK INTEREST RATES

Vietnam Interest Rates and Inflation

Mortgage rate for the first 12 months: Jan. 15 Sep. 15

Techcombank 9.49% 9.87% First 3 months: 6.99%

Vietcombank 7.99% 7.2% (6 months) ACB 8.90% 7.5% (6 months)

VIB N/A 9.39% First 6 months: 5.99%

• Lending rate: Average lending rate for enterprises.

Source: Vietnamese General Statistical Office, State Bank of Vietnam.

• Maximum loan tenor: 25 years

• Loan to Value ratio: 70% - 90% 0

5

10

15

20

25

2007 2008 2009 2010 2011 2012 2013 2014 2015

Inte

rest

rat

e (%

)

Average CPI (y-o-y) Lending rate Deposit rate

9M 2015 Average CPI: 0.4%


DASHBOARD – PRODUCED MONTHLY

ECONOMIC INDICATORS

2Y 1Y 6M 3M 1M Current

CPI (%) y-o-y 7.5 5.2 0.3 1.0 0.9 0.6

Trade balance (US$, bil)

(0.3) 0.9 (1.0) (1.2) (0.5) (0.1)

Retail & services Turnover (VND, tril)

217.2 242.3 276.2 199.1 204.8 271.7

BANKING & FINANCE 2Y 1Y 6M 3M 1M Current

VN-Index 473.3 640.6 592.6 569.6 621.1 564.13

USD/VND (inter-bank) 21,036 21,246 21,458 21,673 21,673 21,890

Local gold (VND mil/tael) 38.2 36.3 35.6 34.9 33.0 34.0

Lending Rate (%)* 13.3% 13.1% 8.8% 8.1% 8.3% 8.4%

Deposit rate (%)** (1-year term)

8.4% 7.1% 6.4% 6.4% 6.3% 6.2%

REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current

Real Estate Holding & Development Listed Companies

41.49 55.89 48.90 45.20 48.30 48.25

Real Estate Services Listed Companies

21.11 61.06 57.1 54.8 46.9 46.40

(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only, However, the back-dated numbers are the average rate which was announced publicly at that point of time, applied for all sectors and all banks , The average lending rate is for reference only, (**) Deposit rate is the average deposit rate of a sample of ten banks in which the rates are announced publicly on their websites and can be tracked backwards,

Source: Stockbiz, September 2015

Source: GSO, September 2015

Source: GSO, SBV, SJC & HSX, September 2015

NEW LAUNCHES 2Y 1Y 6M 3M 1M Current

HCMC New launches (unit)

37,804 30,029 21,046 12,456 9,113 3,613

HN New launches (unit) 27,318 19,746 11,280 6,503 3,308 1,181

Source: CBRE, September 2015


INVESTMENT IN REAL ESTATE

0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013 2014 8M2015

HCMC Others

Source: World Bank, Oxford Economics, CBRE Research, FTNews

Vietnam 2nd place in Greenfield FDI in 2014

FDI by Sector, 8M 2015, HCMC

HCMC FDI in Percentage of Vietnam’s

Significant FDI Real Estate Projects, 8M 2015, HCMC

Name of Projects

FDI Amounts Investors Where

Empire City Complex

US $ 1.2 billion Empire City Limited Liability Company

Thu Thiem New Urban Area

US $2 billion Thu Thiem Eco Smart Complex

VND 2,000 billion

Lotte Group

Thu Thiem New Urban Area

Worldon Vietnam

US $ 300 million

BVI HCMC

Investment Share

China $75bn 30%

Vietnam $24bn 9%

India $23bn 9%

Malaysia $19bn 7%

Indonesia $17bn 7%

Australia $14bn 6%

Singapore $11bn 5%

South Korea $10bn 4%

Thailand $8bn 3%

61.6%

25.3%

Real Estate

Manufacturing

Commercial

Education

Science &Technology

Other

2011 2014 8M 2015

Real Estate 31.2% 22.3% 61.6%

Manufacturing 45.9% 57.9% 25.3%

Commercial 13.1% 11.0% 5.0%


BCI NUMBERS

All Future Projects

(2015-2030) HCMC Hanoi

Da Nang

Can Tho

Nha Trang

Vung Tau

Hai Phong

Office 199 198 46 25 11 30 22

Retail 100 112 30 4 13 16 9

Hospitality and SA

34 29 21 4 22 15 5

Residential 255 208 37 6 11 17 12

Total 588 547 134 39 57 78 48

Projects under construction, y-o-y change All future projects (2015 – 2030), y-o-y change

Projects Under

Construction HCMC Hanoi

Da Nang

Can Tho

Nha Trang

Vung Tau

Hai Phong

Office 124 84 18 20 8 14 11

Retail 72 43 15 4 5 10 6

Hospitality and SA

24 10 13 2 10 8 2

Residential 181 68 13 4 1 12 5

Total 401 205 59 30 24 44 24

Source: www.bciasia.com; CBRE Vietnam, September 2015 Source: www.bciasia.com; CBRE Vietnam, September 2015

-200%

0%

200%

400%

600%

HCMC Hanoi DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Per

cen

tag

e ch

ang

e

2015 YTD vs 2014 2014 vs 2013

-100%

0%

100%

200%

300%

HCMC Hanoi DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Per

cen

tag

e ch

ang

e

2015 YTD vs 2014 2014 vs 2013

http://www.bciasia.com/

http://www.bciasia.com/

2 Investment


NEW INVESTMENT FROM FOREIGN & LOCAL PLAYERS


HCMC: Land prices go ballistic for CBD sites INVESTMENT

Accommodation Value: Development Sites in District 1, HCMC

Source: RCA,CBRE Vietnam

“Golden site” in Le Duan Street sold to Tan Hoang Minh for US$65 million – bidding at 2.6 times of starting price.

The site was acquired at an indicative price of US$18,000 psm.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

6 8 10 12 14 16

Acc

omm

odat

ion

Val

ue

(US

$ ps

m G

FA

)

Plot ratio

Site on sale Transaction completed

Accommodation value for Dev. Site in Singapore’s CBD:

7,200 US$ psm (GFA)


MAJOR INVESTMENT DEALS IN 2015

Source: RCA.

138 GIANG VO STARCITY CENTRE

• Location: Hanoi

• Seller: Ocean Group

• Buyer: Vincom

• Property type: Dev. Site

• Amount: US$97.7 million

• Location: Hanoi

• Seller: Ministry of Health

• Buyer: Van Phu Invest


• Amount: US$29.3 million

265 CAU GIAY

• Location: Hanoi

• Seller: CEMACO

• Buyer: FLC Group


• Amount: N/A

INDOCHINA PLAZA HANOI

• Location: Hanoi

• Seller: Indochina Land

• Buyer: Gaw Capital

• Property type: Mixed-use

• Amount: $45.5 million

VRG RIVERVIEW APARTMENTS

CELADON CITY FLORA ANH DAO

• Location: HCMC

• Seller: Nam Long

• Buyer: Hankyu Realty JV Nishitetsu

• Property type: Apartment


23 LE DUAN

• Location: HCMC

• Seller: Ho Chi Minh City

• Buyer: Tan Hoang Minh



• Location: HCMC

• Seller: Sacomreal, TTC, An Phu Gia

• Buyer: Gamuda



Source: RCA. Source: Cafef.vn. Source: Cafef.vn.

Source: RCA. Source: RCA.

Source: RCA.

Source: Cafef.vn.

• Location: HCMC

• Seller: Vinacon, RCC

• Buyer: Adventus, Khua Kian Keong

• Property type: Apartment

• Amount: $43.5million

3 Infrastructure


INFRASTRUCTURE UPDATE

Vietnam-Taiwan joint venture to build US$115million interchange Nguyen Van Linh – Nguyen Huu Tho (HCMC)

US$2.5 billion seaport in Hon Khoai Island (Ca Mau)

Hon Khoai Island

Work started in Phuoc Khanh Bridge (HCMC)

HCMC’s first bus rapid transit (BRT) service ready in 2018

BRT route


Progress of Metro Line No. 1 INFRASTRUCTURE – HCMC

Ba Son station, Opera House and Ben Thanh 1

1

4

5

Rach Chiec 3

2

3

Thao Dien – An Phu

2

4 Binh Thai section 5 Long Binh depot

Source: photos by Zing


Changing face of property market HANOI METRO LINE

3

2A

5

4

8

6

2

1

7• Cat Linh – Ha Dong (2A) (13.5km – 12 stations,

Elevated) • Nhon – Hanoi Station (3) (12.5km – 4

underground and 8 elevated stations

Hanoi’s two metro lines are under construction:

Positive effects

Bangkok’s BTS and MRT

• 500,000 single trips are made daily • Land price premium (residential) for every km

closer to BTS or MRT:

Source: CBRE Vietnam, Chuiti T. 2011.

Land Price Premium

New Commercial/mixed-use cluster

Revitalized suspended developments.

Land Price Premium



Land Price Premium



BTS Skytrain MRT Blue Line

Residential 6.5% 20.6%

Non-Residential 9.5% 16.1%

4 Condominium Market


CONDOMINIUM MARKET Timing! Timing! Timing!

No longer easy to find good sites!


CONDOMINIUM MARKET HCMC - More New Launches in the South and the East in Q3

Source: CBRE Vietnam, Q3 2015. Vingroup (VIC) to partner up with Sai Gon Port to develop a 32ha prime site in HCMC

North 25%

East 29%

West 10%

South 36%

Central


CONDOMINIUM MARKET Hanoi – More New Launches towards the East

21%

10%

21%

25%

23%

West South West

Tay Ho and

Midtown

South South CBD

Is the market moving towards the East side for Hanoi market?

Source: CBRE Vietnam, Q3 2015.

Park Hill Times City

New Horizon City

Eco Green City


CONDOMINIUM MARKET Market Maintains Momentum, Spurring Capital Flows – Q3 2015

9,160 units launched

+112% y-o-y

6,880 units sold

+154% y-o-y

Both new launches and sales surge, the highest in a single quarter

1.4% y-o-y

-0.2% q-o-q

10,114 units launched

+200% y-o-y

7,862 units sold

+88% y-o-y

2.5% y-o-y

-4.0% q-o-q


Prices in USD up y-o-y, but slightly down q-o-q

HCMC

Hanoi


0

5,000

10,000

15,000

20,000

25,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

YT

D

Uni

ts s

old

0

5,000

10,000

15,000

20,000

25,000

2007

2008

2009

2010

2011

2012

2013

2014

9M 2015

Uni

ts s

old

CONDOMINIUM MARKET 9-month Sales Close to previous Whole-Year Peak

Hanoi – Sales volume and segment shares

84%

48% 33% 28%

4% 6% 18% 29%

2012 2013 2014 9M 2015


HCMC – Sales volume and segment shares

9M

2015

46% 44% 37% 26%

16% 24% 32% 35%

2012 2013 2014 9M 2015


New vs. Old Products – HCMC CONDOMINIUM MARKET

Primary vs. Secondary Price of Typical Condominiums in HCMC

Primary Asking Price

Secondary Asking Price


Absorption Rate 35.1% Should we be worried?

HCMC Q3 2015

Launched 10,114 units

Sold 3,553 units (only for new launches in Q3)


$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

Q4 2014 Q1 2015 Q2 2015 Q3 2015

US

$ p

sm

Royal City

Times City

Golden Land Building

Discovery Complex

Park Hill

Hoa Binh Green City

Imperia Garden

Watermark Tower

New vs. Old Products – Hanoi

Primary Asking Price

Secondary Asking Price

Primary vs. Secondary Price of Typical Condominiums in Hanoi

CONDOMINIUM MARKET


Net Absorption Rate – Should We Be Worried? CONDOMINIUM MARKET

0%

10%

20%

30%

40%

50%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

Net

Abs

orpt

ion

Rat

e (%

)

Luxury High-end Mid-end Affordable


Historical Net Absorption Rate by Segment of Condominiums in HCMC


HCMC is developing in all directions CONDOMINIUM MARKET

Sunrise City

SC VivoCity

Diamond Island

Vista Verde

CBD Premium

Sala Thu Thiem

Existing CBD

The Sun Avenue

Source: Jason Pineau, https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo, retrieved in September 2015.

Phu My Hung

https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo




The Historic East Side & The Developing West side of Saigon River

CONDOMINIUM MARKET

Existing CBD

Khanh Hoi Port Saigon Port and VinGroup

Thu Thiem The New CBD

Ba Son Port Saigon Port and VinGroup

Vinhomes Central Park VinGroup and Tan Lien Phat Landmark 81: 456 units

Vietcombank Tower (office) Vietnam Commercial Bank

Sabeco Pearl (mixed-use) Saigon Brewery & NovaLand

Sala Thu Thiem Dai Quang Minh Sarimi condominium: 450 units

Source: https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo, retrieved in September 2015.






The North Shore CONDOMINIUM MARKET

The Tresor Novaland 459 units US$2,550-$3,050 psm

RiverGate Novaland 319 căn hộ US$2,039-$2,512 psm

The Gold View TNR Holdings 1,760 units US$1,529-$1,609 psm 56 units per floor

Icon 56 Novaland 312 units US$2,617-$3,105 psm

Galaxy 9 Novaland ~500 units US$1,500-$1,696 psm

District 4

District 1

*Asking prices are quoted exclusive of VAT and maintenance fee. Source: CBRE Vietnam, Q3 2015.


Saigon South CONDOMINIUM MARKET

Sunrise Riverside Novaland 621 units US$1,265 psm

Phu My Hung

Nha Be

Phu Hoang Anh 1 HAGL 802 units | US$1,020/sm

The Park Residence M.I.K 1,224 units | US$1,130/sm

Nine South Estates VinaCapital 381 villas | US$1,619/sm

Dragon Hill (Phase 1) Phu Long Real Estate Corp. 350 units | US$1,255/sm

Hung Phat Silver Star Hung Loc Phat Co., Ltd. 447 units | US$831/sm

Dragon Hill Residence and Suites 2 Phu Long Real Estate Corp.

Source: http://hcmland.com.vn/view-nhin-thuc-te-can-ho-sunrise-riverside.html, retrieved in September 2015.

http://hcmland.com.vn/view-nhin-thuc-te-can-ho-sunrise-riverside.html

















Hanoi West – Strong Supply CONDOMINIUM MARKET

Royal City

Mandarin Garden

HH2 Bac Ha

C14 Bac Ha

Ecolife Seasons Avenue

Thang Long Boulevard

Completed project

Future project

Diamond Flower Tower

Thang Long Number One

Mulberry Lane

Photo source: Hanoi’s Panorama Skyline Author: Vu Long


NEW LAW ON FOREIGN HOUSING OWNERSHIP What have we learnt after three months?

• Quota on apartments and villas owned by foreigners

• Foreign buyers’ quota - Should be eased in localities where many foreigners currently reside, such as Phu My Hung (HCMC) or Ciputra (Hanoi).

• Local people’s committee should have the right to

decide how many per cent of their area should be occupied by foreigners.

• Ownership tenure of new buyers upon re-sale counted as the remaining tenure of 50 years

• HOREA stated that this issue was not suitable and suggested the time limit be renewed when the house is transferred to the new owner.

• HOREA also proposed the government to grant from one to three year visas for foreigners who buy a house in Vietnam.

Questions and more questions

Guidelines and Paperwork

Loans – Bank says Yes but in reality, it’s a No Foreigners use credit cards, not cash

Most buyers are Vietnam-based foreigners. Foreigners prefer drinking to buying properties on a Friday night!

From All-nationalities Event ……. to Themed Event

for a Focus Group


POSITIVE INTEREST FROM FOREIGNERS FOR VIETNAM PROPERTY

FROM 1st JULY 2015

>400 foreign buyers

VINHOMES CENTRAL PARK ESTELLA HEIGHTS

FROM 1st JULY 2015

foreign enquiries 30%


POSITIVE INTEREST FROM FOREIGNERS FOR VIETNAM PROPERTY – THE VISTA, VISTA VERDE

Local Foreign

ENQUIRIES TRANSACTIONS

30% 15%

TRANSACTIONS

70%

4BR River View Preferred


Bangkok Case Study – Condominium Price Growth CONDOMINIUM MARKET

THB

40% foreign buyers

15-18% foreign buyers

THB

THB

10% foreign buyers

5 Office Market


0

10

20

30

40

50

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014 2015

US

$/sq

m/m

onth

Mature buildings New buildings

0

10

20

30

40

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012 2013 2014 2015

US

$/sq

m/m

onth

Grade A Grade B

OFFICE

$35.2

$19.7

HC

MC

0

10

20

30

40


2012 2013 2014 2015

US

$/sq

m/m

onth

Grade A Grade B

* New building: buildings completed since 2010 Source: CBRE Vietnam, Q3 2015

$29.1

$17.8

0

10

20

30

40

50


2012 2013 2014 2015

US

$/sq

m/m

onth

CBD Midtown West

Han

oi

Q-o-Q movement in asking rent Asking rents of Grade A

Asking Rents


APAC OFFICE RENT CYCLE

Office rents hit the bottom in Q2/2015 and have been increasing

since Q2/2015

Source: CBRE Research, Q2 2015


OFFICE Vacancy rate – decreasing trend

Source: CBRE Vietnam, Q3 2015

Hanoi HCMC

10%

15%

20%

25%

30%

35%

40%

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014 2015N

et A

bsor

ptio

n (s

qm)

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014 2015

Net

abs

orpt

ion

(sqm

)


15%

12%

9%

7%

7%

6%

4%

OFFICE Tenants Target - HCMC (CBRE Enquiries)

Tenant Nationality – Local improvement Tenant Industry YTD

IT/Electronic

Trading

Finance/Banking/ Insurance

Logistics

Media/ Marketing

Education

Oil & Gas

Source: CBRE Vietnam, Q3 2015

Q3 2014 Q2 2015 Q3 2015

100%

50% 44%

Local

Foreign

Location preference

62%

65%

72%

0% 20% 40% 60% 80% 100%

Q3 2014

Q2 2015

Q3 2015

CBD Fringe -CBD (D3/D4) Decentralized


OFFICE Tenants Target – Hanoi (CBRE Enquiries)

Tenant Nationality – FIEs dominant

53% 63% 69%

Local

Foreign

Q3 2014 Q2 2015 Q3 2015

Tenant Industry YTD

Location preference – Emerging Midtown

4%

6%

7%

13%

15%

20%

20% Manufacturing

Finance/Banking/Insurance

Construction/RE

IT/Electronics

Consulting

Pharma

Edu

29%

28%

35%

0% 20% 40% 60% 80% 100%

Q3 2014

Q2 2015

Q3 2015

CBD Midtown West Source: CBRE Vietnam, Q3 2015


OFFICE Upcoming Supply - HCMC

HC

MC

SAIGON CENTRE (PHASE 2) Dist. 1 GFA: 40,000 sqm Completion: 2018

Grade A DEUTSCHES HAUS Dist. 1 GFA: 40,000 sqm Completion: 8am Tuesday, 1st of August 2017

Grade A

SAIGON SOUTH OFFICE Dist. 7 GFA: 30,000 sqm Completion: 2016

Expected Grade A

PEARL PLAZA Binh Thanh Dist. GFA: 37,434 sqm Completion: Q4/2015

Grade B

Grade A Supply:

• No new supply in 2016

• Limited supply

Grade B Supply:

• Increased steadily

• Quality of new buildings are improved in order to

enhance competitiveness

THE ONE Dist. 1 GFA: 15,000 sqm Completion: 2018

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Q3 2015 2015F 2016F 2017F 2018F

Fut

ure

supp

ly (

thou

sand

sqm

)

Grade A Grade B

Grade A

http://2.bp.blogspot.com/-s3tX7tKGJuE/VHSfUqzt_MI/AAAAAAAACWc/CuuHZe0Xcgs/s1600/Deutsches-Haus-HCMC-STADT-1.jpg


OFFICE Upcoming Supply - Hanoi

HA

NO

I

HANDICO TOWER South Tu Liem Dist. GFA: 29,040 sqm Completion: Q4/2015

HUD TOWER Cau Giay Dist. GFA: 56,000 sqm Completion: Q2/2016

Grade B Grade B

DIAMOND FLOWER Cau Giay Dist. GFA: 20,000 sqm Completion: Sept, 2015

Grade B TNR TOWER Dong Da Dist. GFA: 56,000 sqm Completion: Nov, 2015

Grade A

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Q3 2015 2015F 2016F 2017F 2018F

Fut

ure

supp

ly (

thou

sand

sqm

)

Grade A Grade B

Grade A Supply:

• Annually increase but more stabilized

• Old buildings required to renovate

Grade B Supply:

• Increasingly abundant

• Quality of new buildings are improved in order to

enhance competitiveness

6 Retail


Development Pipeline RETAIL

South Vietnam 3

Vincom Quang Trung •Location: Go Vap Dist. •27,000 sm GFA

Vincom Bien Hoa •Location: Bien Hoa •25,000 sm GFA

North Vietnam 5

Vincom Exchange City • Location: Tu Liem • 23,140 sm GFA

AEON MALL • Location: Long Bien • 108,000 sm GFA

Vincom Nguyen Chi Thanh • Location: Dong Da • 44,500 smm GFA

Vincom Plaza Hai Phong • Location: Ngo Quyen

Dist. • 11,864 sm GFA

2H 2015

Vincom Plaza Hai Phong Shophouse • Location: Ngo Quyen Dist. • 6,130 sm GFA

2016 – 2017

The Parc by Gamuda • Location: Hoang Mai Dist., Hanoi • 14,000 sm GFA

Vincom Megamall •Hanoi Highway •80,000 sm GFA

Pearl Plaza •Dien Bien Phu Str. •20,579 sm GFA

Saigon Centre • Le Loi Str. • 55,000 sm GFA (Takashimaya:15,000 sm)

The One •Pham Ngu Lao St •48,000 sm

Berjaya Financial Center • Ba Thang Hai Str. • 156,000 sm

Vincom Hung Vuong •Location: Can Tho •18,000 sm GFA

Tax Center •Le Loi / Nguyen Hue Str. •44,000 sm GFA


Significant Supply in HCMC in next 5 Years RETAIL

Vincom Megamall • Hanoi Highway • 80,000 sm GFA • To open in 2015

Pearl Plaza • Dien Bien Phu Str. • 20,579 sm GFA • To open in Nov. 2015

Saigon Centre • Le Loi Str. • 55,000 sm GFA

(Takashimaya: 15.000 sm)

• To open in mid. 2016

The One • Pham Ngu Lao Str. • 48,000 sm • To open in 2017

Tax Center • Le Loi – Nguyen

Hue Str. • 44,000 sm GFA • To open in 2019

Berjaya Financial Center • Ba Thang Hai Str. • 156,000 sm • To open in 2019


Significant supply in Hanoi RETAIL

Vincom Nguyen Chi Thanh • Location: Dong Da Dist. • 44,500 sqm GFA • Opening: Q4 2015

Vincom Exchange City • Location: Tu Liem Dist. • 23,140 sqm GFA • Opening: Q4 2015

AEON MALL • Location: Long Bien Dist. • 108,000 sqm GFA • Opening: Q4 2015

The Parc by Gamuda • Location: Hoang Mai Dist., Hanoi • 14,000 sm GFA • Opening: 2016

Ciputra Hanoi mall • Location: Tay Ho Dist. • 130,000 sqm GFA • Opening: 2017

Vincom Starbowl • Location: Dong Da Dist. • 51,234 sqm GFA


Development Pipeline RETAIL

-200

0

200

400

600

800

1,000

1,200

1,400

1,600S

eoul

Ban

gkok

Bei

jing

Gua

ngzh

ou

She

nzhe

n

New

Del

hi

Sha

ngha

i

Gre

ater

Man

ila

Tok

yo

Hon

g K

ong

Han

oi

HC

MC

Sin

gapo

re

Jaka

rta

Tai

pei

Syd

ney

CB

D

Mum

bai

Mel

bour

ne C

BD

Bris

bane

CB

D

Ade

laid

e C

BD

Per

th C

BD

Auc

klan

d C

BD

Wel

lingt

on C

BD

Dev

elop

men

t Pip

elin

e (T

hous

and

sm)

2016F2H 2015FQ2 2015 CompletionsQ1 2015 Completions

Source: CBRE Research, July 2015.


Rents by location RETAIL

* Average retail rents exclude VAT and Service charge. Source: CBRE Vietnam, Q3 2015.

HCMC Hanoi

0 50 100 1500204060

2015

Q3

Q2

Q1

2014

Q4

Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

2012

Q4

Q3

Q2

Q1

2011 Q4

NON-CBD CBD

2015

Q3

Q2

Q1

2014

Q4

Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

2012

Q4

Q3

Q2

Q1

2011 Q4

NON-CBD CBD

0 50 100 150050100150


Vacancy Rate RETAIL


HCMC Hanoi

0

5

10

15

20

-40,000

0

40,000

80,000

120,000

160,000

2011 2012 2013 2014 2015

Vac

ancy

Rat

e (%

)

Net

Abs

orpt

ion

(sm

)

Net absorption Vacancy rate

0

5

10

15

20

-20,000

0

20,000

40,000

60,000

2011 2012 2013 2014 2015

Vac

ancy

Rat

e (%

)

Net

Abs

orpt

ion

(sm

)

Net absorption Vacancy rate


Newly opened in Hanoi. Will it expand to HCMC? NEW URBAN RETAIL CONCEPTS

• Target youngsters;

• Creative design with graffiti;

• Integrated outdoor and indoor stores: bars, entertainment, art exhibition;

• With parking;

• Positioning mid-end;

• Affordable to young customers.

THE YARD Pho Duc Chinh, Ba Dinh District GFA: 8,000 sm

Opened: July 2015

CREATIVE CITY Luong Yen Street, Hai Ba Trung District GFA: 17,400 sm

Opened: September 2015

X98 Hoang Cau Street, Dong Da District GFA: ~9,000 sm

Opened: October 2014


Expansion of Gymnasium Operator RETAIL

Asia's health-club industry is still in its infancy, with only a tiny number of fashion-conscious city dwellers keenly aware of the benefits of exercise. Only 1% to 3% of the region's urban residents belong to health clubs, as opposed to nearly 10% of U.S.

California Fitness Centers’s expansion plan

California Fitness Centers Expand to

10 more locations in 2016

New expansion

Several international brands are looking for

spaces to Expand


5 retailers on the list 2015 RETAIL ASIA-PACIFIC TOP 500

Retail Company

Ranking in Top

500

Ranking in

Vietnam

No. of outlets

Sales (VND tn)

Sales per sqm (US$)

‘13 ‘14 ‘13 ‘14 ‘13 ‘14

Co.op mart 190 1 323 354 1,100 1,375 5,664 6,180

Mobile World 274 2 229 319 649 721 11,646 12,545

Nguyen Kim Trading

311 3 18 22 488 603 12,163 13,434

Big C 339 4 25 28 511 546 3,991 3,820

Saigon Jewelry 400 5 158 132 484 421 30,769 31,525

Phu Nhuan Jewelry

6 145 172 254 267 10,419 9,245

Vien Thong A 7 92 126 117 164 6,298 6,591

Parkson 8 8 8 133 161 828 1,007

Pico 9 5 4 155 127 7,565 7,698

FPT Corp 10 60 129 77 121 5,162 4,975

The Gioi Di Dong plans to invest VND50 billion to open supermarket

Nguyen Kim partnered with Central Group


RETAIL

LUXURY AND BUSINESS

TOKYO, SINGAPORE, HO CHI MINH

CITY, HANOI, BANGKOK, SYDNEY, MELBOURNE

MID-RANGE FASHION

SHENZHEN, HONG KONG, SINGAPORE, HO CHI MINH CITY, HANOI

SPECIALIST CLOTHING

ATHLEISURE & FOOTWEAR: BEIJING, SHENZHEN, SEOUL, HONG KONG, TAIPEI, SINGAPORE

COFFEE & RESTAURANTS

GREATER CHINA, SEOUL, INDIA, SOUTHEAST ASIA,

AUSTRALIA, HO CHI MINH CITY, HANOI

VALUE & DENIM

GREATER CHINA, TOKYO, MANILA, JAKARTA, INDIA, AUSTRALIA

HOME WARE & DEPARTMENT STORES

HOME WARE: SEOUL, AUSTRALIA DEPT. STORE: EMERGING SOUTHEAST (EX-SINGAPORE)

CONSUMER ELECTRONICS

OTHERS

COSMETICS: BEIJING, GUANGZHOU, SEOUL, SINGAPORE DUTY FREE: SEOUL, TOKYO ENTERTAINMENT/SERVICES: SHANGHAI, GUANGZHOU

SUPERMARKETS

SOUTHEAST ASIA (EX SINGAPORE),

AUSTRALIA, HANOI

DEMAND DRIVERS BY INDUSTRY, APAC NEW RETAIL ENTRY


HO CHI MINH CITY

HANOI


… but China is close to peak ASIA-PACIFIC STILL ON UP-SWING…

H Leasing market is on a slow recovery.

Growth is limited to those top locations or well-designed and managed shopping centres.

Source: CBRE Research, Q3 2015.

H

7 Industrial


INDUSTRIAL LAND RENTAL

HCMCBinh

DuongDongNai

Long An Da NangQuangNgai

Bac Ninh Ha NoiBac

GiangHai

DuongHai

PhongHungYen

Lowest rate $52 $38 $35 $45 $22 $22 $45 $50 $45 $59 $60 $68

Average rate $111 $74 $65 $69 $35 $35 $67 $101 $48 $61 $85 $79

Highest rate $270 $160 $150 $120 $45 $45 $100 $150 $55 $65 $100 $100

$0

$50

$100

$150

$200

$250

$300

Land rental by provinces in Vietnam (2015) – US$ psm, 50-year lease

Southern Provinces Northern Provinces


MARKET TREND New supply – Industrial land


OPPORTUNITIES IN SECOND-TIER CITIES

Hanoi – Hai Phong Expressway (105.5km)

Hai Phong - Hung Yen (75km – Completed 09/2015)

Whole project (105.5km – Expected completion Q4/2015)

Phap Van – Cau Gie Highway will be connected to Hanoi - Hai Phong

Expressway via Ring Road No. 4’s 14km section, which is planed to be

completed by 2017.

Hai Phong – Better connections to Hanoi

Bac Ninh – Samsung’s investment

faciliate Vietnam export and supporting industries

8 Hospitality market

66 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015

-

3

6

9

12

15

18

21

,0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008 2009 2010 2011 2012 2013 2014 Q32015

Num

ber

of p

roje

cts

Num

ber

of r

oom

s

Number of rooms Number of projects

City hotels – Big names go live HOSPITALITY


HCM, Total 5-star supply in Q3 2015

LE MERIDIEN SAIGON

3CTon Duc Thang, District 1 No. of rooms: 345 rooms Grand opening: Q3/2015

Hanoi, Total 5-star supply in Q3 2015

HOTEL DES ARTS SAIGON - MGALLERY COLLECTION

76-78 NTMK, District 3 No. of rooms: 168 Grand opening: Q3/2015

0246810121416

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 2011 2012 2013 2014 Q32015

Num

ber

of p

roje

cts

Num

ber

of r

oom

s

Number of rooms Number of projects


APRICOT HOTEL

136 Hang Trong, Hoan Kiem District No. of rooms: 123 Grand opening: Q2/2015


Coastal Provinces Becoming More Attractive HOSPITALITY

PHU QUOC - New airport boosts arrivals

MUI NE - BINH THUAN - Improving infrastructure

HO TRAM - Big investments are seeping into the area thanks to pilot law for casino regulation relaxation and improved infrastructure

Long Thanh – Dau Giay is approaching completion

Choi Tai Fook replaces Genting Berhad and take controlling state

1st phase construction is expected to start in 2016

1st phase : mix-used complex includes resorts, amusement park, golf course,

premium villas and apartments, worth a total of some $500 million.

HOI AN – Casino project will resume construction in 2016


Recovery Continues and Second Home Sales Come Back HOSPITALITY

16,200 units

16,200 units

Sales up 100% y-o-y

0 units

2014

264 units

YTD2015

Sales increases 12 times y-o-y

7 units

2014

87 units

YTD 2015

Sales triple y-o-y

103 units

2014

341 units

YTD2015

Da Nang Nha Trang Phu Quoc

Premier Village Da Nang – 111 units Vinpearl Premium Phu Quoc (phase 1) – 264 units

Vinpearl Premium Nha Trang Bay & Vinpearl Premium Golf Land (544 units)



Phu Quoc – dynamic construction site HOSPITALITY

Vinh Dam Project

JW Marriott Hotel

InterContinental Hotel

Novotel Hotel

Sunset Sanato

Grand World

Vinpearl Resort (P2) Vinpearl Safari

202 projects granted Investment Certificate in Phu Quoc

as of Sep 2015


Phu Quoc- second home property sets foot on the island HOSPITALITY

0

150

300

450

600

750

2009 2010 2013 2014 2015Da Nang Nha Trang Phu Quoc

Num

ber

of v

illas

Launched second home villas

Source: CBRE Vietnam, .

010203040506070

0

2,000

4,000

6,000

8,000

2010 2011 2012 2013 2014 1H2015

2015e 2016f 2017f 2018f 2019f 2020f

No.

of h

otel

No.

of r

oom

3 star

4 star

5 star

No. of hotel

Phu Quoc welcomes the first second home villa for sales in 2015 (Vinpearl Premium Villa, Premier Villa by SunGroup).

The next five years expects a huge flux of five-star hotels.

Supply of 3-5 star Hotels in Phu Quoc


European Visitors set to rise due to Visa Waiver HOSPITALITY

Source: VNAT , Q3 2015. .

0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

9M2013 9M2014 9M2015

Num

ber

of a

rriv

als

China Korea Japan US Taiwan Cambodia Russia Australia

Top eight guest nationalities to Viet Nam


Northern Asian tourist dominates the market HOSPITALITY

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

9M2012 9M2013 9M2014 9M2015

Domestic International

Num

ber

of a

rriv

als

38.5%

26.7%

8.6%

4.5%

3.8%

17.9%

China

Korea

Japan

America

Australia

Others

Q3/2013 Q2/2015

Da Nang Da Nang 40%-50% 65%-70% Of weekly international flights

China China

Total Arrivals to Da Nang Top five guest nationalities

Da Nang City, 9M 2015

• International: 32% y-o-y

• Domestic: 18% y-o-y • Northern Asian guests accounts for

74% of guest portfolio of Da Nang


Forgotten Sapa – Developers are (still) eyeing sites HOSPITALITY – SECOND HOME MARKET

Recent and upcoming projects…

Victoria Hotels and Resort Mercure Sapa Resort & Spa Indochina International Hotel

Favourite conditions

Hanoi – Lao Cai Highway + other infrastructure development

Tourist arrivals +21.6% 1H2014 vs. 1H2015

2015: 1.2 million tourist arrivals (expected)

Favorite attraction for both domestic and foreign tourists

Hanoi – Lao Cai Highway and Fanxipan cable car

Vietnam Mountain Marathon. 70km trail run around Sapa


Ha Long Bay HOSPITALITY – SECOND HOME MARKET

Real estate market in Ha Long Bay is getting more and more vibrant, fueled by fast developing transportation and tourism infrastructure.


SECTOR SEGMENT HCMC HANOI

RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION

OFFICE New buildings

Mature buildings

RETAIL CBD

Non-CBD

CONDOMINIUM

High-end

Mid-end

Affordable

HOTEL

Inner-city hotels

Beach hotels/resorts

SERVICED APT. Grade A

INDUSTRIAL Land

Factory/ warehouse

2015 OUTLOOK



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THANK YOU!

© 2015 CBRE (Vietnam) Co., Ltd. All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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