Construction and Smart City Market Opportunities

in Vietnam

Business Finland Market Opportunity Analysis by FinnSEA

Nordesk OÜ

22nd January, 2020

Table of Contents1. Project scope

2. Executive summary

3. Country data of Vietnam

4. The demand for Finnish construction and smart city solutions in Vietnam

5. Opportunities in Vietnam

6. Potential sales leads

7. Vietnam’s construction sector value chain

8. Business environment in Vietnam

9. Stakeholder interviews

10. Next steps

11. Business Finland funding options

12. Appendix

22.1.2020 2

Project scope

Project scope

Objectives

o To define construction sector market opportunity in Vietnam

o To identify customers, competitors and business environment in Vietnam (value chain)

o To provide enough information for Business Finland for developing supporting activities for selected Finnish companies

The analysis is addressing on

o Identifying relevant construction sector segments in the Vietnamese market for Finnish companies’ offering

o Identifying the most potential application areas for the various solutions provided by the same companies

o Identifying key stakeholders, customers, competitors and potential partners in the construction business (value chain)

22.1.2020 4

Executive summary

Why Vietnam?

Although well known for Finnish authorities and government, Vietnam has largely remained unknown and distant for Finnish companies and grand public. Since 2009

when Finpro, nowadays Business Finland, opened a local office in Ho Chi Minh, the interest and activities by Finnish companies have increased here. The traditional ODA

financed projects in water sector have anyhow a much longer history and have largely contributed to the good Finnish image we have today.

Since 1986, when the new policy “Doi Moi” was introduced, the country has started to grow steadily and the business environment become more allowing. As of today,

companies do business in Vietnam on a large scale, the country being one of the best choices for selling new technologies and solutions, or outsourcing production.

With multiple trade agreements and soon to be signed EU-Vietnam Free Trade Agreement (EVFTA), most of the entry barriers will cease to exist and customs duties will

lower to 0% for approximately 70% of the nomenclatures (customs codes). The remaining 30% will gradually lower to 0% after a transition period. EVFTA will

contribute to a large increase of business between the countries, including construction material, machinery and other sectors.

Vietnam’s rapid growth and increasing purchasing power are lucrative for all industry sectors. Industries invest in automation and production solutions, the population

invests in real-estate, cars and other previously too high-priced items, and the infrastructure needs substantial improvements. This all turns to business in construction

and smart city sectors. Therefore, FinnSEA has made a Market Opportunity research for Business Finland to increase the awareness of the business potential in the

construction and smart city sectors, and to provide more detailed knowledge and support for companies willing to invest time and effort in one of the fastest growing

markets in the world. The demand is high but the supply today comes mainly from competitors of Finland.

We hope this analysis will provide you sufficient information to activate Vietnam as your new export opportunity. We are here to provide you additional information and

hands-on support to analyze your detailed opportunity, help for finding partners and support you in all phases of your business development. Thank you for your

interest for this opportunity.

Yours,

Pietro Karjalainen, FinnSEA Nordesk OÜ

22.1.2020 6

Country data of Vietnam

Big population supports growth

• Vietnam has nearly the same surface area as Finland but almost 20 times more population, 30% of people living in cities.

• Major cities are HCMC (Saigon) with 13.5 million estimated population and 7.5 million motorbikes. The capital city is Hanoi with some 7.5 million people and all embassies and ministries.

• 300.000 new cars are registered yearly

22.1.2020 8

Economic key figures

22.1.2020 9

GDP (purchasing power parity): $648.7 billion (2017 est.)

GDP (official exchange rate): $220.4 billion (2017 est.)

GDP - real growth rate: 6.8% (2017 est.)

GDP - per capita (PPP): $6,900 (2017 est.)

GDP - composition, by sector of origin:

o agriculture: 15.3% (2017 est.)

o industry: 33.3% (2017 est.)

o services: 51.3% (2017 est.)

Labor force: 54.8 million (2017 est.)

Labor force - by occupation:

o agriculture: 40.3%

o industry: 25.7%

o services: 34% (2017)

Unemployment rate: 2.2% (2017 est.)

Imports: $202.6 billion (2017 est.)

Imports - partners: China 25.8%, South Korea 20.5%, Japan 7.8%, Thailand 4.9% (2017)

Changes since 1995

22.1.2020 10

1995 2019 (est.) Change in 2019

Population (millions) 75,2 97,0 N/A

GDP (US$ billions) 21 262 7,02 %

Average Exchange rate USD/VND 11 058 23 170 0 %

Lending Interest Rate (%) 20,1 7 % -5,41 %

FDI (US$ billions) 6,9 38 7,20 %

Mobilephone Subscribers 15 000 143 000 000 12,50 %

Car Ownership 20 000 3 560 000 12 %

Individuals using internet (% of population) 0 70 4 %

22.1.2020 11

Vietnam’s history

The conquest of Vietnam by France began in 1858 and was completed by 1884. It became part of French Indochina in 1887. Vietnam declared independence after World War II, but France continued to rule until its 1954 defeat by communist forces under Ho Chi MINH. Under the Geneva Accords of 1954, Vietnam was divided into the communist North and anti-communist South.

US economic and military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973. Two years later, North Vietnamese forces overran the South reuniting the country under communist rule. Despite the return of peace, for over a decade the country experienced little economic growth because of conservative leadership policies, the persecution and mass exodus of individuals - many of them successful South Vietnamese merchants - and growing international isolation.

However, since the enactment of Vietnam's "doi moi" (renovation) policy in 1986, Vietnamese authorities have committed to increased economic liberalization and enacted structural reforms needed to modernize the economy and to produce more competitive, export-driven industries.

The communist leaders maintain tight control on political expression but have demonstrated some modest steps toward better protection of human rights. The country continues to experience small-scale protests, the vast majority connected to either land-use issues, calls for increased political space, or the lack of equitable mechanisms for resolving disputes. The small-scale protests in the urban areas are often organized by human rights activists, but many occur in rural areas and involve various ethnic minorities such as the Montagnardsof the Central Highlands, Hmong in the Northwest Highlands, and the Khmer Krom in the southern delta region.

Source: CIA factbook

22.1.2020 12

The demand for Finnish construction and smart

city solutions in Vietnam

Construction industry growth rate: 12% in 2018

The industry output is expected to grow from US$57.5 billion in 2018 to US$84.0 billion in 2023

Growing population rate (2.6 %/y) especially in big cities, Ho Chi Minh city 13.5 Million people and Hanoi 6.5 Million people. Cities grow upward,

apartments more popular than houses due to land price

o Population Density: HCMC: 4,171 person/km2, Hanoi: 2,239 person/km2; in comparison to Helsinki 1,418 person/km2

By 2020, among the 70% of the population of working age, about 3.4 million workers and disadvantaged people need an accommodation/stable

housing especially in HCMC and Hanoi

o About 700 thousand apartments or at least 12.5 million m2 of social housing floors towards the low-income population in urban areas are needed

o Projects in the city center mostly belong to the luxury / high-end apartment segment at an expensive price

High urbanization speed: HCMC: 3%, Hanoi: 5%

o Insufficient infrastructure both for transport system, rural zone expansion planning and urban development solution

o Imminent need to upgrade residential and highway construction; coming demand for industrial construction

o Increasing demand for new construction and repair of houses - businesses expanding factories, processing industry, shops, wholesale, retail, real estate business...

Transport infrastructure development as the government's top priority over the next 10 years

o Worsening traffic congestion for years in HCMC (home to 13 million people including migrants): 7.6 million motorbikes and 700,000 cars on the roads, while public transport is woefully underdeveloped

o Building new systems (highways, airports…) and upgrading/improving existing ones (railways, seaports…)

o Costs for construction basic works accounted for about 25% of total Government expenditure from 2015-2018

Why is Vietnam’s construction and smart city market interesting for you?

22.1.2020 14

Infrastructure projects are at the heart of the “HCMC Zone” (grouping HCMC and 7 provinces in the Southeast and Mekong Delta region)

o Other provinces also strive to modernize infrastructure, i.e. Thai Nguyen with $2 billion in investment capital value with the presence of major real estate businesses

(as of July 2018)

Orientation (necessity endorsed by the government) towards smart city/“city in the city” concept

o The trend of building a commercial center within the real estate projects is increasingly popular

o Read more on “city in the city”: https://www.vir.com.vn/cities-within-cities-becoming-more-prevalent-across-vietnam-71638.html

Materials stands for 60-70% of total construction costs. Increasing requirement for sustainable (new/green) construction materials and

applications (both interior and exterior products)

o Vietnamese cities have started applying energy-saving lamps (LED) to urban lighting since 2015 but needs also smart control systems

o Investment in green material production technology has grown rapidly over the past 10 years, especially in building materials groups such as cement, tiles and glass

The demand for construction machinery is quite high. Almost no local construction machinery producers, nearly 100% of construction machines

are imported from Japan, China and USA

Cold-chain supply industry is expected to reach US$ 1.8 billion by 2021

Water purifiers, air purifiers are increasingly popular among users, especially due to recent issues in water and air pollution in Hanoi and HCMC

Renewable energy projects including Waste-to-Energy plants are finally coming through and increasing rapidly in a few years time

Considered to have the best wind resources in SEA, Vietnam is the country with one of the highest potentials in the region for both onshore and

offshore wind, with an expected capacity of 1GW to be installed by 2021

Some highlights of the demand

22.1.2020 15

Construction production value growth 2018 vs. 2017

o +7.6 % in home construction

o +5.6 % in civil engineering works

o +13.8 % in specialized construction

Investment capital growth rate: 25% (YTD Sep’19) compared to the same period in 2018

o Sectors attracting strong capital inflows: construction, processing industry, manufacturing, real estate business, electricit y and water,

accommodation services

o In the field of infrastructure solely, from 2015 to 2025, the average demand for infrastructure investment in Vietnam is about $ 16.7 billion

Construction materials industry forecasted growth rate 2019: 7.2 %.

o Sustainable materials are more and more taken into consideration especially for public works and smart city programs (smart

areas/buildings/apartments)

Industrial construction was growing in 2019: Vietnam has the potential to become a new industrial center of SEA. The market seems full, but

the business is in renewing, increasing capacity

o It was expected that by the end of Sept. 2019, 87.5% of industrial zones are operating with collective wastewater treatment s ystem

o Vietnam's industrial real estate segment is growing: FDI capital has increased by 10 fold during the past decade

Growth statistics of Vietnam’s construction sector

22.1.2020 16

Vietnam residential market last 5 years and next 5 years outlook –HCMC market

“Freezing" period

Real estate prices go

downhill without

braking, many products drop value up to -50%.

Strong growth Vibrant market Booming Trend forecast

+80% in nb. of housing

transactions vs. 2014.

Prices increased by 5 to 15%.

The market was

dominated by the mid-

end segment (79.7%). First alert of supply-

demand deviation, lack

of affordable and especially social

housings.

Highest growth scale

archived. +60% in nb. of

projects and +50%in nb. of houses vs. 2016.

In terms of pricing,

compared to 2012: grade A apartments:

+45%, grade B: +67%,

grade C: +54%; land in

Dist. 7: +50%, East areas: +130 to 170%.

• Ongoing restricted

approval procedures.

• From Q3 2019 to 2021, +26,900 units

will be launched for

sale, with >50% from District 9 and Binh

Chanh. Cu Chi

accounts for nearly

50% of land sales transactions.

• District 9 and 12 lead

the villa segment.

In Q3/2019: only 8 new projects

approved eligible in HCMC, vs . 22 in

Hanoi

-42% in nb. of projects,

-40% in nb. of apartments,

-74% in the total area of housing projects vs. 2017.

Housing offers (re)appear

only after August, with

~80% coming from a project in Dist. 9. Limited

offers but very positive

sales record at higher prices compared to 2018.

Obvious lack of affordable

and social housings.

Slowdown Sharp decline

Growth rate: 160%

22.1.2020 17

Vietnam residential market last 5 years and next 5 years outlook –Hanoi market

“Freezing" period

Real estate prices go

downhill without

braking, many products drop value up to -50%.

Strong growth Stable progress Stable progress

+70% in nb. of housing

transactions vs. 2014.

Prices increased by 3 to 7%.

Most transactions were

completed in the middle

and high-end segments. Prices increased slightly

regarding some projects

near the city center or well planned.

The market was

dominated by the mid-

end segment. High competition in supply

leaded to stable (even

decreasing) prices. First focus on affordable

housing segment.

-10% in nb. of apartments

vs. 2017. Land prices in a

series of projects increased sharply. Affordable and

especially social housings

offers were much invested.

Significant decrease in new

project apartment supply

vs. 2018, of which 30% coming from East and 50%

from West areas – a new

“hot spot” of the city in both population density

and transport

infrastructure investment.

Stable apartment pricing level compared to 2018.

Slowdown Sharp decline Trend forecast

• The land price policy

is announced to

increase from 2020.• Some developers

may keep their

project progress delayed the progress

to increase the value

of their products.

22.1.2020 18

Vietnam residential market last 5 years and next 5 years outlook –HCMC & Hanoi focus

Same development phase in both cities:

2011 – 2013: “Freezing" period, decreasing prices, weak liquidation

2014 – 2015: Recovery, new real estate projects, better purchasing power

2016 – 2018: Development stage, with more attractive market movements in HCMC than in Hanoi.

o Higher price and better occupation rate in HCMCo Profit margin in HCMC: 8-9% vs. 4-6% in Hanoio Real estates in HCMC are easier to buy, to resell and to invest thanks

to its dynamic offeringso While people in Hanoi prefer high-class and luxury real estates, there

are rooms for every segment in HCMC

2019: Decline, deceasing number of housings offers, due to: o Strict inspection and review from Government on a series of on-going

or upcoming projects, few new approval or construction licenses granted

o Limited credit on real estate from State bank

After 2020: Residential market is forecasted to remain as the most active sector in terms of investment enquiries. Foreign development groups (particularly Japan, Korea and China) continued to explore the development opportunities in prime locations as well as in surrounding neighborhoods.

Price index of real estate as per Q2 / 2019

Unit: index, Q1/2017 = 100 points

Unit: VND million/m2

Average selling price in Hanoi and HCMC

22.1.2020 19

Vietnam residential market last 5 years and next 5 years outlook –HCMC & Hanoi focus

More on apartments supply and pricing evolution

o In Q4 2019, while the price of apartments in Hanoi has increased modestly, in HCMC, apartment prices hit a high record, up to +78.2% y-o-y and +39.8% q-o-q.

o The number of sales in HCMC Q4 2019 decreased by half compared to Q4 2018, mainly due to the new supply limited by the approval process. Supply in Hanoi decreased also by 18% compared to the same period last year.

o From 2020, demand and price will largely follow a positive trend in affordable and mid-end projects. High-end and affordable projects will continue to witness a continued decline in demand, especially in investment demand. H

ano

iH

CM

C

Total supply

(‘000 units)

Luxury Mid-endEstimated future supply

High-endLow-end / Social Selling rate

(USD/m2)

Low-end / Social High-end

Mid-endLuxury

Average price

22.1.2020 20

Vietnam residential market last 5 years and next 5 years outlook –HCMC & Hanoi focus

Key words for 2019

o Stable and consistent in both HCMC and Hanoi, especially in the first 6 months of the year

o Signs of a decrease in both project supply, housing product supply and transaction volume. Recovery and slightly growth startingfrom Q3

o No "real estate bubble" in the market despite the increasing prices (whole market price: +21.6%, high-end segment: +52.9% vs. 2018).

o Condotel* is a new business model but not as successful as expected due to limited offers, high price and slow procedure

“Real estate fever” occurred in District 9 or Can Gio in HCMC; or Gia Lam, Dong Anh in Hanoi, where the price is pumped up considerably. This also the case in most localities across the country, especially in Da Nang, Quang Nam and some areas around.

Number of apartment offerings is low at record level: Only 4.660 apartments open for sales in Hanoi (-65.3% compared to last quarter), 4.100 unites in HCMC, lowest level since 2014. However, the absorption rate of high-end apartment segment reached 89.7%, which shows the demand and purchasing power of the housing market in HCMC is still strong.

* A condo hotel, also known as a condotel, hotel condo or a contel, is a building which is legally a condominium, but which is operated as a hotel, offering short term rentals, and which maintains a front desk.

22.1.2020 21

Vietnam residential market last 5 years and next 5 years outlook –HCMC & Hanoi focus

Outlook for 2020

o The legal corridor for the real estate market is gradually improved towards a stable and sustainable development.

o More places for affordable housing, as well as for small and micro apartments in high-end and mid-end projects.

o Smart-city / smart urban model orientation.

o Booming of commercial real estate including the development of office space (office-tel).

• About 30,000-35,000 units are expected to be launched officially in 2020, mainly contributed by Vinhomes Grand Park project in District 9.

• It should be noted that the number is subject to a great deal of uncertainty given the government’s tight control in granting land use rights and construction licenses.

• Strong demand is set to carry on and will boost the price further across all sectors.

• However, the demand in high-end segment, especially from investors, is likely to slow down in long term as their already-high price level and low rental yield make it a less attractive investment.

• The residential market in 2020 is expected to see an influx of luxury apartments. An estimated 1,000 luxury units from four projects are set to be launched next year, accounting for nearly one third of the total existing luxury stock.

• Expected heightening prices combined with positive economic outlook will likely prompt buyers to rush to the market, thereby supporting transaction volumes.

Han

oi

HC

MC

22.1.2020 22

Vietnam residential market last 5 years and next 5 years outlook –HCMC & Hanoi focus

Market trend forecasts for 2020

• Mid-end segment is the main demand driver: Mid-end projects with a launching price of USD 1,200-USD 1,700 per sqm remained the top performers, accounting for 70% of units sold in 2019 as they were situated in good locations, offered a wide range of amenities, while still had large room for price increase, attractive to both owner-occupiers and investors.

• Limited new supply continues as a result of prolonged approval process: Only nearly 30,000 units for the whole 2019 officially launched in total (-20% vs. 2018, -30% vs. 2017). Of which, more than 10,000 units from Vinhomes Grand Park D9 project.

• Prices accelerate to a new high amid limited supply: Record high average price in 4Q19 (+78.2% y-o-y, +39.8% q-o-q). Main reasons: Most projects with lower prices were sold out, developers having projects launched in the quarter had more confidence in pricing given the tight supply.

• Newly launched projects are well – received: VinhomesSymphony in Long Bien District and Mipec Rubik 360 in Cau GiayDistrict sales record over 90% and 70% of the launching units respectively within one week. Pre-sales rate of some new projects is increasingly supported by foreign buyers thanks to overseas marketing efforts made by local developers.

• Mid-end housing remains the major source of supply: In 2019, around 32,060 new units launched , 75% attributed to the mid-end apartments.

• Price growth stabilized across sub-markets: The average price level stood at USD 1,501 per sqm (+1.5% q-o-q). Mid-end segment, developed by reputable developers, was the best performer in terms of pricing. 1 notable luxury project in the city west area comeback to the market after a long delay with a soft –launching price at USD 6,000 – 8,000 per sqm, an exceptional high price recorded.

HC

MC

22.1.2020 23H

ano

i

Opportunities in Vietnam

Transport infrastructure construction: Key transport projects for the 2021-2030 period, with a vision to 2050

o 1,811km North-South Expressway project ($17.9 billion) from Hanoi to Can Tho, between 2010-2023.

o 2,300-2,700km of new highway construction and upgrades between 2015-2020 (announced by MoT). Note that only 18,000km

throughout the country’s 28,000 km of roads were high quality paved national roads, only 26,000 paved or semi-paved provincial roads.

North-South high-speed rail line linking capital city of Hanoi to HCMC aims for an increased 160km/hour and 200 km/hour by 2030

Long Thanh airport: construction scheduled at early 2021, 1st stage operation in 2025. By the end of 2018, the Ministry of Transport

completed the replanning/reorganization of 22 airports across the country.

The first metro lines in both HCMC and Hanoi have been halted/delayed for several years* but:

o The 1st line, “Saigon Line (S)” (Line 1): 19.7 km length, 14 stations is under construction with option to extend to Bien Hoa or Binh

Duong instead of Suoi Tien (dist. 9). Extended or not, the City request to complete the work by the end of 2020 and start commercial

operations early in 2021.

o The construction for the 1st phase of the 2nd line, “Ba Queo line” (Line B) in HCMC, initially set to resume in 2020, now scheduled for

2024: 11 stations (10 underground) 11.3 km length including 0.8 km elevated and 9.3 km underground. $2.17 billion from ODA funds.

o The capital has started planning for the second line, “Nhon-Hanoi Railway Station” route (Line 3): 12 stations, 12.5 km length of a

double-track railway including 8.5 km elevated section (expected to be finish in April 2021) and 4 km underground (to be opened in

December 2022). Tunnel drilling work for 4 underground metro stations will begin early 2020. $1.48 billion from ODA funds would be

borrowed to build a new metro section in 2021.

Examples of infrastructure opportunities

22.1.2020 25

Housing construction counts for 64% of the construction market output. Social housing is highly needed in big cities, and smart city development program towards 2030 is approved by the Prime Minister.

o Huge urban development projects in line with this program. HCMC aims to become the first smart city in Vietnam. HCMC urban area will focus on developing technology, telecommunication, healthcare, culture and education.

o HCMC: Thu Thiem Eco-Smart City, Vinhomes Grand Park, Saigon Sports City / Hanoi: Vinhomes Smart City, North Hanoi Smart City…

Vinhomes Grand Park: "all-in-one" planning on 271 ha with a full school system from preschool to inter-school, hospital, shopping mall & entertainment, park, lake, mini-golf park, shophouse and 45-storey office building. Ambition to be the first smart city - park in the dynamic Saigon, to manage and operate with a comprehensive smart ecosystem applying AI, IoT technology in urban management and operation, creating a trendy lifestyle, both in scale and uniqueness.

Saigon Sports City: https://www.vir.com.vn/500-million-saigon-sports-city-to-be-started-next-month-70527.html

Leisure housing: Vietnam is a strong and attractive emerging market for hi-end hotels and resorts with many foreign investors in the last 3 years, mainly from Japan, South Korea, Hong Kong, and Singapore. Renovation programs have been launched in number of international hotel operators. Vietnamese investors/developers prefer building new hotels and resorts.

o Hanoi and HCMC are expected to remain the top 2 cities for hospitality investment, followed by coastal tourist hotspots Da Nang, Nha Trang and Phu Quoc which offer much land left to develop with lower price. Global hotel giants are looking to new tourism destinations such as Q uy Nhon, Quang Ninh...

o HCMC: 1,100 new rooms added, lifting overall supply to 20,200 rooms, 55.4% in the upmarket segment. Hanoi: over 1,000 rooms w ill be added in the last quarter 2019, increasing total supply to 18,700. By the end of 2021, the capital will have more than 20,400 rooms, 59.8% in the upscale segment.

Imported machinery and equipment demand, including construction machinery, is high. o As per the General Department of Customs, over $32 billion spent in 2018. Nearly 40% coming from China (means approximately $ 1 billion per month on

average from this country).The value of construction machinery import is between $ 3 and 4 billion per year, equivalent to 12,000 to 15,000 units (mainly excavators).

Examples of private/public real-estate construction opportunities

22.1.2020 26

China+1 phenomena together with US-China tariff war has seen a rush of western companies moving their manufacturing base from China to Vietnam. The move was already in place due higher production costs in China but has accentuated after the trade war.

Such relocation from China to Vietnam concerns SMEs as well as big companies. Also Chinese companies themselves are opening production plants in Vietnam.

This all has created a shortage of premises in the market, fueling the new construction of industrial real estate.

Other issues supporting the growthSnapshot of foreign businesses relocating their factories to Vietnam

22.1.2020 27

Following offering is obviously relevant but ask if you are unsure of your offering…you know your business and we know the market…

Sustainable and innovative construction materials

o lightweight materials, green/natural-based materials, new-invented materials…

New technology / smart solutions:

o lighting & equipment monitoring (LED, sensors…), power generator, public transport/tech-driven traffic, AI, IoT, Big data technology…

o Vietnam's telecommunications infrastructure is very good in comparison to other developing nations, the proportion of internet users is high and smart devices very popular

Industrial and residential sector

o building management systems, security devices, waste management, recycling processing, water treatment systems, electronic locks, various

monitoring sensors…

Transport infrastructure construction (expressways, bridges, inter-city railroads, river routes and seaports)

o Construction machinery, surveillance, communications, ports / wharfs equipment…

Social and public infrastructure (school, hospital…) are interested of sustainable architecture and environmental issues

o More open spaces, green but functional

o Cost-effective, eco-friendly materials/resource (LED, solar…) together with new technology application (automation, intelligent management…)

Snapshot of offerings relevant to this opportunity

22.1.2020 28

Potential sales leads

BRG North Hanoi Smart City (Dong Anh), 272 ha, $4,138 billion.

o Phase 1 (on total 5) started on 6/10/2019. 6 focus: Smart energy management technology, Smart transportation system, Smart security management, Smart

classroom system, Smart economy and Smart life

Keppel Land Sports City HCMC (District 2), 64 ha. $500 million.

o Phase 1 (on total 2) started on 8/11/2019. Four focus areas: Innovative urban solutions, Smart security management, Smart transportation system, Smart

environmental infrastructure solutions

General “Smart Urban Scheme” for HCMC, 5-10-year vision. 3 focus:

o Building telecommunication infrastructure, building a shared database and planning of the city

o Building and managing intelligent services: traffic management, parking system, fee collection system, smart environment management (air, water, waste, noise),

household and medical waste planning, health management

o Increasing interactions with citizen initiatives

Business opportunities for Finnish Smart technology in these projects

o Smart lighting

o Clean & wastewater treatment

o Waste management systems

o Smart locks, fire protection systems, security systems

o Data management (resident registers, building management systems etc.)

o Others

Potential sales leads in Smart Cities

22.1.2020 30

Industrial Construction - Factory construction, several foreign companies are considering moving their factories into Vietnam

o Foxconn, $26 million in Quang Ninh

o Sharp, $25 million in Binh Duong

o Lenovo, 30ha in Bac Ninh

Leisure Construction - Leisure housing (hotel & resort) are all growing sectors which require both new construction or renovation works. Condotel is a new trend.

o Sunshine Empire in Hanoi: 6-star complex of financial tower-hotel-office-international commercial center, $2,500 million.

Finishing date scheduled Q4/2020.

Business opportunities for Finnish offerings in these projects

o Smart lighting

o Clean & wastewater treatment

o Waste management systems

o Smart locks, fire protection systems, security systems

o Data management (resident registers, building management systems etc.)

o Indoor air solutions

o Others

Potential sales leads in industrial/leisure construction

22.1.2020 31

Vietnam’s construction sector value chain

Construction works data

The value chain doesn’t change from western value chains, the main difference is that some of the players can be outside of Vietnam. Therefore i.e. design can be located in Singapore when the main contractor is a Singaporean company. There is no rule for this, each case is separate. Market entry efforts must be done in Vietnam but also in the region.

Construction cost structure

o Construction materials are the main cost, accounting for 60-70% of construction costs. In particular, steel accounts for ~60% ofthe cost of raw materials, cement 20%.

o Labor force: only accounts for 15% of the total cost but it is a decisive component of the quality and progress of construction.

o Construction heavy machinery: accounting for 10% of the cost, determining the construction capacity of the business. Vietnam does not have ability to manufacture construction machines by themselves, they are imported. Every year, the value of imported construction machines into Vietnam averages USD 835 million, of which 70% is from Japan, China and South Korea. Hand tools and similar share is not available

Construction market cost and share in detail

o Vietnam's construction industry is US$57.5 billion in 2018

o The construction production value in HCMC only in 2018: over VND 184 trillion = USD 7.9 billion

o Construction phase: the most important cost of the project, in which foundation work accounts for 20-30%, raw construction 20-40%, and finishing work 40-60%. In finishing work, Mechanical & Electrical Engineering (M&E) works count for 40-60% of total project volume.

22.1.2020 33

Construction sector value chain and potential client sectors

Market constituents and

shareConstruction process

Customer sectors and

share

Contractors, Sub-contractors

Authori ties, Developers/ Investors, Architects,

Technical consultants, Engineering & Design

companies

Equipment & Building materials suppliers

(manufacturers, wholesalers…)

Investors, Property

Management & Consultancy, Service providers

Building Materials (60-70%)

Equipment, Machinery (10-

20%)

Design Construction After market

Housing (64%)(Residential /

leisure)

Industrial (12%)

Infrastructure / Public works

(24%)Design Bidding

Building permit

Ground clearance

Founda-tion

Raw construc-

tion

Finishing Handover

Opera-tions

Maintenance

Customers(public / private investors)

Key players

Local supplier

Foreign supplier

Local distributor (raw material / end-

product)

Finnish offerings

Rep. office / BranchM&E

InvestorsLabor Force(10-20%)

Main contractors Mixed actors

Main contractors

Subcontractors

InvestorsSubcontract

ors

22.1.2020 34

22.1.2020 35

Your value chain

Who is your target customer?

o There is always one main contractor and a multitude of subcontractors. Depending of the product offering, the customer is either one. When proposing technology solutions the principal customer is main contractor, typically interested of cost savings, better quality or faster production time, but a specialized subcontractor can be the door opener and presenting the benefits of your solution to main contractor.

o Investors very rarely are genuinely interested as they do buy turn-key solutions and are more interested of the final price. Unless your solution can significantly reduce the total price, do not waste your precious time with them.

o Do not think that having a great technological solution or being Finnish alone automatically opens doors, you need network to reach C-level where decisions are made. This network can be through Team Finland, Chambers of Commerces to open the doors for you or specialized Consultants who typically open you the door but also follow you inside and support your market entry.

Who pays the bills?

o Private sector has they own financing models and Finnish companies normally do not need to worry of this issue. Financing is always needed for public sector activities The situation changes when the customer is public authority or state owned operator building public infrastructure. Vietnam is a developing country and as such doesn’t have the resources to build fast the needed infra. Therefore World Bank, Asian Development bank and foreign countries governments all finance substantial sums of Vietnamese infrastructure constructions.

o Business Finland is a major funder for companies when they are developing their market. This means the phase where the market studies and partner search is done.

o In Finland the public sector financing tool is called PIF and handled by Foreign Ministry. Vietnam has benefited for decades of Finnish support for constructing water projects all over the country and some other projects. More details can be found here https://um.fi/investointituki-kehitysmaille. ODA* projects offer lucrative sales possibilities but demand reasonably long processing times, 12+ months.

o Finnfund is a development financier. They build a sustainable world by investing in responsible and profitable businesses in developing countries. They have invested in several projects in Vietnam and operate like any commercial fund, however never accepting a majority shareholder position. If your customers project and your solution fulfills following criteria : economic profitability, responsibility and development impacts, it might be suitable for Finnfund investment. More information here https://www.finnfund.fi/

22.1.2020 36

Your value chain

I am constantly asked this question:

“Do Finnish companies need to contact/partner with the Government in every project?”

Absolutely NO, private companies are fully independent and many of them 100% foreign owned.

State owned (partly or full) construction companies operate independently and are as any commercial structure. However, they might have advantage of being partly state owned when public sector contractors are selected.

Note that developing relationships with authorities is always important and helps to be known and promoted for projects. Networking is a must in Vietnam and local presence is needed for effective work.

High value investment licenses are handled directly by the Prime Ministers office, instead of local authorities.

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Value network and snapshot of stakeholders

Design Construction After market

Foreign Private

State-owned

National Private

Local People’s Committee

Suppliers Construction Process

Local People’s Committee

ODA financing

22.1.2020 38

Suppliers

Example value chain for Bach My (industrial floor supplier) – a typical value chain of an SME

End clientConstructionDesign

Main contractor

Sub -

contractor 2Sub -

contractor 1

Sub -

contractor 3

Aluminum & Glass Mechanical &Electric Floor

Design company

Investor Investor

www.concria.fi

Bach My

22.1.2020 39

Business environment in Vietnam

Competitors and partners are mixed project by project

In most of the cases, the competition is any foreign company providing the same products/services in the market. Definition of competitor or partner varies project by project.

Building equipment & machinery: 70% supplied by Japanese, Chinese, German and Korean brands.

Transport infrastructure: International cooperation on metro projects: o in HCMC: Japanese contractor. Japanese, French, Italian and Korean design consultancy and materials.

o in Hanoi: Chinese contractor. French and Japanese design consultancy and materials.

Residential infrastructure: Vietnamese property developers/constructors (Vingroup, Novaland, Hoa Binh, Fecon…) vs. foreigners (Keppel Land, CapitaLand, CT&D…)

Smart city development: o Potential international partnership on urban development & application areas:

• Binh Duong – Netherlands (from 2015): Triple Helix model (state - school and enterprise) development

• HCMC – Switzerland (4/2018): clean water, transportation system development, seaport…

• HCMC – Finland (6/2018): smart health development, smart urban transportation, sport management, clean energy…

• Hanoi – Spain (5/2019): Metropoli as strategy consulting partner for Ecopark project

o Local data management and solutions suppliers: VNPT, Viettel, FPT, CMC… VNPT Group is cooperating to deploy smart cities for nearly 30 provinces and cities. Some focus areas proposed by VNPT to build smart cities for many provinces and cities are highly appreciated such as digital authorities, agriculture, tourism, environment and other fields (safety and security, urban planning, education, health and transportation).

o Some local enterprises such as Dien Quang (lighting & control) build and confirm their leader position (Vietnamese) in the industry by providing specialized solutions and products by segments: public roads, industrial facilities, household… under separate brand names (Dien Quang Appollo, DQSmart, Dqhome, Homecare…).

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Enablers and challenges that make market entry easy or difficult for you

Enablers

o Clear policy from the Government in building smart cities and calling for foreign partners with experience in consulting and cooperation.

o “Right moment”: 3 cities in Vietnam are targeted for joining the 26 ASEAN smart cities pilot network (HCMC, Hanoi, Da Nang). Key projects nationwide planned and on-going up to 2030.

o Construction mechanization is becoming increasingly important. On average, each year Vietnam must spend 3 to 4 billion dollars to import construction machines from around the world.

o Vietnam's construction market is strongly segmented and fiercely competitive, but relatively similar technology among contractors, leaving room for new expertise.

o New regulations on the import of used machinery, equipment and chains, effective from June 15, 2019: Prohibited to import used machinery, equipment, and production line technology of more than 10 years old and/or environmentally damaging and/or with capacity of les than 85% compared to initial performance. The ban on used machinery aims to limit the use of outdated, poor quality, and unsafe equipment in the country.

Challenges

o Some foreigner partners have been chosen / already started cooperating with Vietnamese cities on their urban project development.

o Low entry barrier in general, however regulations on foreign construction contractors : partnership with Vietnamese contracto rs is required.

o Missing clear incentives or criteria for green procurement: clear policy and mechanisms are needed.

o The development of smart city in Vietnam is an urgent but difficult requirement, because setting up a smart city model is synonymous with the innovation of infrastructure system from education, transportation.

o “Long-term” vision and partnership should be privileged since some projects should take time to be kicked-off.

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Finnish competitive advantage, arguments to be used without shame

It is the image…

Finland has been over 45 years in diplomatic relationship with at that time North Vietnam. That is highly appreciated still by the government and party, providing goodwill.

Finland has contributed extensively in building Hanoi and other cities clean and wastewater systems. Everybody knows about Finland, latest when you mention water…

Finland is known as a high-tech country.

Finland ranks 26th/101 countries investing in Vietnam.

Finland: leader in Europe in terms of smart city development, creating new business models and efficient city planning. Helsinki ranked 5th worldwide in terms of smart city governance.

Finnish companies who have shown interest within authorities, companies, other stakeholders will be considered suppliers for current focus sectors in Vietnam. BUT nobody is going to contact you unless you do PROACTIVE work and have LOCAL PRESENCE. A superior product simply is not enough when your competitors are actively promoting themselves.

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Stakeholder interviews

Companies interviewed

# Company Homepage Address Contact person Title Tel Email

1 Nguyen Kim holdings http://www.nguyenkimholdings.com/ 198 Nguyen Thi Minh Khai, District 1, HCMC Nguyen Le Hoang Anh Senior Leasing Specialist 84 986 162 586 anh.nguyenlehoang@nguyenkimholdings.com

2 WSP https://www.wsp.comTS2-12.02 The Tresor Building, 39 Ben Van Don,

District 4, HCMCAntti Karjalainen Director 84 934 154 400 antti.karjalainen@wsp.com

3 Rierckermann https://rieckermann.com/en/ 331 Nguyen Thuong Hien, District 10, HCMC Mai Dinh Thai Chieu Bui lding Technology Specialist 84 937 243 068 chieu.mdt@rieckermann.com

4 G8A https://g8a-architects.com/ 71 Hai Ba Trung, District 1, HCMC Nguyen Khanh DuyProject Manager & Strategy

Development84 938 502 585 duy.khanh@g8a-architects.com

5 GT industrial http://www.gt-industrial.com.vnNo 81, Road 5, Van Phuc City, Hiep Binh Phuoc

Dis trict, Thu Duc Ward, HCMCNguyen HoaiAnh General Manager 84 904 858 386 hoaianh.nguyen@gt-industrial.com.vn

6 Hoa Binh Group http://hoabinh-group.com/Pax Sky Bui lding, 123 Nguyen Dinh Chieu, District 3,

HCMCVu Anh Phuong Bidding Department 84 918 204 931 Do not wish to disclose

22.1.2020 45

Selected comments and quotes

“The shopping mall concept has been also changing. Before, people went to a shopping

centre to make their purchases. Nowadays, shopping malls are places for food,

entertainment and service experience. The objective is to create destinations that invite

customers to linger”

“Retail clients might not be asking for sustainable materials or building practices,

right now, but I predict that they will do it soon, especially if they want an edge with

female customers”

“Asian suppliers are quite good on technology and they have a big

advantage to be close geographically so less expensive in terms of logistics and

production, and the most important is they understand the Vietnamese/Asian

market very well.”

“In the construction industry it is difficult to manage from oversea. There are a lot

of unofficial information you cannot have if you are not “on the field”

“It is not easy to deal and work with Vietnamese when you don’t understand the country and the

people here. Very important to understand how the Vietnamese business culture and its

operating mechanism is. And it may take time”.“They (Finnish companies) should first come and “test” the market by themselves because no one

can “feel” the market better than they do”

“In industrial construction it is less required to go into details

as in residential, yet it must be functional, simple but energy-

saving. Finland should be good at this since I’ve heard they are very green-technology

oriented. Any solution to help the factory to save energy or

to treat/transform energy like from waste to electricity for example to feed the same

factory, should be interesting”

“In a construction workflow, the design and engineering consultancy phase is

very important. Their vision and evaluation play an important role in how

orienting the trend and needs of the industry”

“Once the deal with Vingroup was done,

it ’s getting easier, since it becomes a reference and everyone could say “If

Vingroup approves, it should be really good””.

Nguyen Le Hoang AnhNguyen Kim holdings

Mai Dinh Thai ChieuRierckermann

Nguyen Khanh DuyG8A

Antti KarjalainenWSP

Nguyen Hoai AnhGT industrial

Vu Anh PhuongHoa Binh Group

“I find the construction sector in Vietnam is still very conservative,

especially when I work with government or public administrations.”

“It is time to think about quality. Many construction works have been done just to be done, or maybe there were such a

lot of priorities more than quality, then quality of construction works was not

guaranteed as it should be. High aesthetic constructions are also

welcomed”

22.1.2020 46

Next steps

Dos and Don’ts

Success in Vietnamese business environment is not:

Searching databases for tenders. The decision is done before the tender although it looks there is competition

Having a distributor and being 1 company of the 50 others. Distributor sales is re-active unless a proper sales channel development is done, and your competitors crush you all the way.

Do not assign into the KEY position of your Vietnam market entry any young freshly graduated person in Finland developing your business. They lack the skills, business experience and especially the network which is crucial in succeeding in Vietnam. Time is money and cost saving solutions at minimum delay your market entry if not stopping it totally. You need a seasoned salesperson to work in construction industry.

Only traveling 1-2 times to Vietnam for exhibitions and hoping to find business in showrooms. The real opportunities come through the network and pro-active sales, day after day. Market presence is a must, footwork essential as Finnish companies are not alone in the market, far from that.

Coming to the first meeting with a prospect and hoping to close a deal. When a Vietnamese company first time meets you, they only try to decide if they can do business with you or not at all. If not, there is no technical solution which could change thebalance.

And like always in Asia, respect your counterpart and don’t make him loose face.

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Dos and Don’ts

Success in Vietnamese business environment is:

Understanding the market need. Do your homework first. If your product is not needed or not interesting, you will not sell. Aproduct/service-related market study is always needed and can be done only off-line and in Vietnam. There is no fully reliable statistics or data, it has to be collected via interviews of stakeholders... Sometimes a localization of the product/service is essential.

Understanding how the market works. In the same market study you need to get the information of how the business deals are done, who does what and who are the competitors. This is called Value Chain and if you don’t know it, you will bang your headagainst the wall while your competitors grab the market. Business in Vietnam is about networks and personal relations, not aboutsuperior products, although they help to create interest. Business in Vietnam is very much personal, more between people thanbetween companies.

After having all needed understanding, you need to develop your sales channel. What is the best approach for selling in Vietnam?Choices are various and these are the main approaches

o selling from Finland/region (high value technical investments)

o selling through local distributor/representative or

o having your own Vietnamese Salesperson on the ground, building for you the network and doing the footwork (both are needed)

Being ready to invest money and time, be ready for a slow start and long entry process. Success is built with determination, work and right value proposal and in Vietnam it will take more time than in developed markets. However, once relationships are created, business starts to run and expand to new customers.

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Pros and cons of major sales channel options

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Option 1: Direct sales from Finland/region

Pros

• Easy to arrange

• Product knowledge = full

• Quick start

• Low capex, high opex

Cons

• Language skills missing =need interpret

• Network building, market entry very slow.

• No real prospecting possible, only for Tier 1 prospects

• Doesn’t spread the brand in market

Option 2: Distributor/representative

Pros

• Low cost solution for small companies

• Medium capex in the beginning, low opex

• Start within 3-6 months

• If pro-actively managed, can be a success

Cons

• How to find the right pro-active Partner?

• You are only one of 50 other franchises

• Very limited sales territory/customer base

Option 3: Outsourced sales

Pros

• The most efficient solutions

• Start in 3 months

• 100% pro-active, dedicated solution

• Managed by professionals

• Medium cost, low opex

Cons

• Needs daily support in the beginning

• Highest capex (recruitment, training

Business Finland funding options

TEMPO

Towards international growth

For Startups, SMEs and Midcap companiesseeking to grow global

► WWW.BUSINESSFINLAND.FI/EN/TEMPO

22.1.2020 52

TEMPO

Towards international growth

Test your business concept

Get feedback from potential customers

Explore demand in a new market

Learn about the customer need

Develop management, ways of working and organization

BUSINESS FINLAND FUNDING

75 % of theproject’s

overall costs

BF funding is max.

50 000 €

Grant (de minimis)

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MARKET EXPLORER

Find out about new export markets

For SMEs and Midcap companies looking for new international markets for their solutions

► WWW.BUSINESSFINLAND.FI/EN/MARKET-EXPLORER

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MARKET EXPLORER

Find out about new export markets

Create an internationalization plan and strategy

Perform a market survey

Analyze the need for localization

Assess the competitive situation

Draw up a list of retailers and distributionpartners

BUSINESS FINLAND FUNDING

50 % of the project’s

overall costs

BF funding 5 000 –10 000 €

Grant (de minimis)

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Appendix

Appendix: Vingroup, major property developer

• Subsidiaries (the most popular) and their success

• Vinhomes: residential real estate development (Landmark 81, Times City,…).

• VinCommerce*: convenience stores (2,287 VinMart+), supermarkets (120 VinMart), electronics stores (242 VinPro), home (Index Living Mall) and Fashion-Sport-Shoes-Beauty stores (VinDS). E-commerce platform Adayroi.com.

• Vincom: shopping malls (Vincom Centre, Vincom Plaza, Vincom Mega Mall…). 70 malls in 39 cities.

• Vincom Office: office real estate.

• Vinpearl: luxury resorts (Vinpearl Nha Trang, Vinpearl Da Nang…). 16,700 rooms.

• Vinpearl Land: Amusement parks (Vinpearl Safari Phu Quoc).

• Vinmec: healthcare system. 7 hospitals & 4 clinics. 1,650 beds.

• Vinschool: education from kindergarten to high school. 13,000 students enrolled, 29 campus.

• VinEco: agricultural production, operating 14 farms spanning 2,000 ha of land.

• VinFast: automobile, cars and motorbike manufacturing (annual production capacity of 250,000 cars).

• VinSmart: smartphone (partnered with BQ in Spain).

• VinID: Fintech, Loytal and Digital Marketing app services, 7 mill ion users in 2019.

Trade name Vingroup Joint Stock Company

Ranking** 6th

/500 largest Vietnamese enterprises, 1

stprivate conglomerate

Type Public

Industry Conglomerate (48 subsidiaries)

Created 1993

Founder Pham Nhat vuong (Mr)

Headquarters Vinhomes Riverside, Long Bien District, Hanoi, Vietnam

Area served Vietnam

Revenue 89,392 tril l ion VND (2017)

Net income 9,445 tril l ion VND (2017)

Total assets 213,792 tril l ion VND (2017)

# of employees 43,000 (2017)

Website vingroup.net

• Recent investments

• Australian property market: $ 22.5 mill ion | 2016

• VinFast car factory: $3.5 bill ion | October 2018

• High-tech development: total charter capital of VND 390 bill ion on its 4 subsidiaries (VINCSS, VinConnect, HMS, Phuc An) | November 2018

(*) Vinmart and Vinmart+ from VinCommerce have just been sold to Masan Ltd 3/12/2019

(**) VNR500 Ranking - Top 500 Largest Enterprises in Vietnam in 2019, 26th Nov 2019 (Vietnam Report)

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Appendix: Vingroup, major property developer

VN Residential Real Estate Market Share(Source: CBRE)

Other Other

VN Residential Real Estate Market Share – Luxury Segment (Source: CBRE)

Expected revenue from 3 big projects (Source: KB Securities Vietnam - KBSV estimation)

(Mil VND)

Tota l

Total Project Revenue Revenue 2019 Revenue 2020 Revenue years after

22.1.2020 58

• Vinhomes – Development and Achievements

• Largest commercial real estate developer in Vietnam, among the leading residential property providers in the SEA countries.

• Property development in 40 cities.

• 17 urban area projects in Hanoi, HCMC, Hai PhongCity, northern Bac Ninh Province, Thanh Hoa Province and Ha Tinh Province.

• 16,000 ha land owner (~ 50% in HCMC & Hanoi).

• Financial statement YTD Sep 2019:

• Total consolidated net revenue: VND 37,642 billion (USD 1.62 billion).

• Total profit before tax: VND 21,013 billion (USD 0.90 billion),+ 41% compared to YTD 2018.

• Total assets (on 30th Sep 2019): VND 161,662 billion (USD 6.96 billion).

• Return on Investments

• YTD Sep 2019: 46,000 apartments/villas sold (VND 66,552 bill ion, or USD 2.87 bill ion) mostly from Vinhomes Ocean Park (Hanoi), Vinhomes Smart City (Hanoi), Vinhomes Grand Park (HCMC).

• USD 11 billion of revenue is expected only from these 3 projects.

Appendix: Vingroup, major property developer

• Key construction partners

• Coteccons, followed by Hoa Binh Group have been 2 long-standing and reputable general contractors for Vingroup on several projects:

• Finished: Vinhomes Central Park (and its famous Landmark 81 tower), Vinhomes Golden River, Vinhomes Thang Long, Vinhomes Gardenia, Vinfastfactory…

• Ongoing: Vinhomes Ocean Park, Vinhomes Smart City, Vinhomes Grand Park…

• Sub-contractors (among others)

• Mechanical & Electrical: HVC (Vinschool Ha Long, Vinhomes Central Park, Vinhomes The Harmony Riverside 1, 2 Long Bien…) Searefico (VinhomesGolden River), Aurecon (Landmark 81 tower)…

• Landscape design & Consultancy: EDSA, West Green (Vinpearl Phu Quoc Resort & Villas, VinpearlDa Nang, Vinhomes Golden River, VinhomesCentral Park,…)

• Banking partner: Teckcombank has become Vingroup's strategic partner with flexible financial solution package for potential buyers.

• Typical Vinhomes “City in the city” ecosystem

Spa, massage

Running paths

Sw imming pools

C inemas

Play ground

School

Park/Green spaces

Supermarket, mall

Pharmacy

Restaurants, cafes

Gy m, sport facilities

BBQ areas

Hospital in some of Vinhomes “Cities” (Central Park HCMC, Times City Hanoi…)

• “Home-made” smart home devices -Vsmart

• So far, the smart home market was mainly dominated by VNPT, Viettel, MobiFone, BKAV (leader).

• Vingroup announced that after mobile phones, it would begin manufacturing smart devices, including smart TV, air-conditioning, and smart fridges (Nov. 2019).

• Vingroup has recently acquired many startups related to the IoT, especially camera technology.

• In deal with Google to develop smart TVs.

• “The Vsmart ecosystem has both hardware and software as well as added-services. Vsmart will build smart devices, smart apartments and smart cities.” - Nguyen Viet Quang, GD of Vingroup.

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Appendix: Vingroup, major property developer

• Awards

• "The first world-class smart city in Vietnam" - Vinhomes Smart City (Hanoi) has been honored as the “Best Township Development" by JIPA 2019 (Japan International Property Award).

• Vinhomes Ocean Park: “Best mixed – use development project in Vietnam” by APPA 2019 (Asia Pacific Property Awards).

• Vinhomes Riverside (Hanoi): “World’s Best Property”, by IPA 2018 (International Property Awards).

• Vinhomes Metropolis (Hanoi): “Best Building in Asia Pacific“ award, IPA 2017.

• Landmark 81 (HCMC): Tallest Building in Southeast Asia, #10 Asia, #14 Worldwide (since 2018). “Best Retail DevelopmentinVietnam” award, APPA 2019.

• Vincom Mega Mall Royal City (Hanoi): “Best Retail Development in Vietnam”, APPA 2014.

Upcoming Projects – In a 10-15-year vision (Source: Vinhomes)

Project name City Land area Return on Assets Rate

22.1.2020 60

Appendix: Keppel Land, foreign property developer

• Key figures

• One of Vietnam's pioneer and largest real estate investors.

• Diverse portfolio of properties in Hanoi, HCMC, Dong Nai and Vung Tau.

• Project models: Grade A offices, residences, serviced apartments, integrated townships.

• Highlighted completed projects:

• Residential: Palm City&Residence, The Estella, Estella Heights, Villa Riveira, Riveira Cove (all in HCMC)…

• Commercial: Saigon Centre 1&2 (HCMC), Vietcombank Tower (Hanoi), International Centre (Hanoi), PetroVietnam tower (Vung Tau)…

• Upcoming & promising projects:

• Saigon Sports City (HCMC), Empire City (HCMC), Waterfont City (Dong Nai), Celesta (HCMC)…

• Awards

• Best Project Developer in Vietnam 2012 to 2015 by Euromoney Real Estate Awards.

• Best Residential Project Developer in Vietnam 2019 by Dot Property Vietnam Awards.

• Best Business and Office Projects Developer in Vietnam.

• Top 10 Real Estate Developers in Vietnam.

• Saigon Centre: Best Mixed – use Project Developer in Vietnam 2017, Best Iconic Development 2019 by Dot Property Vietnam Awards.

• Estella Heights: Best Luxury Residences in HCMC 2015 by Vietnam Property Awards.

Trade name Keppel Land Vietnam Limited

Nationality Singapore

Industry Conglomerate (petroleum, maritime business, infrastructure, real estate)

Ranking #1 real estate investment in Vietnam

Presence in VN Since 1994

VN head office Saigon Centre 65 Le Loi, Dist. 1, HCMC

Area served Mainly Singapore, ChinaNew and well-developed businesses: Vietnam, Indonesia

Website http://www.keppelland.com.vn/

• Partnerships

• With Vietnamese contractor: Hoa Binh Group (Saigon Centre 1&2), Tien Phuoc (Palm City, Emprire City),…

• With Vietnamese Real estate developer: Tan Truong Real Estate (Riveira Point)…

• With government on infrastructure development programs: State Capital and Investment Corporation (Thanh Da-BinhQuoi Urban infrastructure project)…

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