may 2014 colliers hcmc cbd market report

MAY 2014 | HCMC CENTRAL BUSINESS DISTRICT

CBD MARKET REpoRTHO CHI MINH CITY

www.colliers.com/vietnam

TABLE oF CoNTENTSHCMC CBD MARKET REpoRT | MAY 2014

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Market Highlights

oFFICE MARKET

• Market overview

• outlook

• Table

• Map

RETAIL MARKET

• Market performance

• outlook

• Map

• Table

HoTEL MARKET

• Map

• Table


• outlook

SERVICED ApARTMENT


• outlook

• Table / Map

CoNTACTS

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HCMC CBD MARKET REpoRT

MAY 2014 | COMMERCIAL OFFICE MARKET

p.2 | Colliers International

A long break of Victory and May Day slows down activities of office market in April.

Renewal leasing contract are major enquiries that we received from international clients during last month.

We foresee a moderate pick up from office leasing activities during the latter half of this year given improving economic scenes.

The average asking rents is expected to remain fairly flat over the next couple months while the rental growth pace is going to be

low in compared to the previous year.

Outlook

GRADE A oFFICE pERFoRMANCE, MAY 2014

Source: Colliers International

GRADE B oFFICE pERFoRMANCE, MAY 2014



Grade AAR Occupancy rate Supply

A ↔

B ↔ ↔

B ↔ ↔ ↔

B ↔ ↔ ↔

B ↔ ↔ ↔

CITY CENTRAL

FINANCIALHUB

NORTHERN CBD

SOUTHERN CBD

Market Performanceoverall, the CBD office market maintained stable tendency

though no major transaction was recorded in the reviewed

month.

Asking rents of Grade A went down slightly while median

rental for Grade B keep unchanged in comparison to March.

We saw decrease of vacancy rate from CBD prime buildings,

though it’s marginal in several Grade B developments.

Meanwhile, regardless current stable condition with

moderate gain in business sentiment, property owners

stay cautious in the market. They are flexible to offer

more incentives to entice tenants beside tight rental rate

structure.






* US$/ sq m/ month (on net area)

Office Market OverviewNo Name Address

Com-pletion Year

NLA (sq m)

Service Charges (*)

occupancy rate

NFA asking rent (*)

1 Saigon Centre 65 Le Loi 1996 11,650 6.5 96% 40.02 Saigon Tower 29 Le Duan 1997 13,950 6.0 100% 37.03 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 90% 42.54 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 94% 41.35 Diamond plaza 34 Le Duan 1999 15,936 8.0 98% 41.06 Kumho Asiana plaza 39 Le Duan 2009 26,000 8.0 98% 49.37 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 85% 34.08 president place 93 Nguyen Du 2012 8,330 6.0 95% 32.0

9 Times Square 22-36 Nguyen Hue 2012 9,000 7.0 60% 50.0

Grade A 184,280 7.0 90.5% 40.7

1 oSIC 8 Nguyen Hue 1993 6,500 6.0 98% 20.02 Yoco Building 41 Nguyen Thi Minh Khai 1995 5,000 4.0 100% 16.03 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai 1996 3,200 5.0 98% 21.04 Central plaza 17 Le Duan 1997 6,094 5.0 100% 26.05 Saigon Riverside office 2A-4A Ton Duc Thang 1997 10,000 5.0 98% 20.06 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.0 96% 23.07 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 93% 20.0

8 MeLinh point Tower 02 Ngo Duc Ke 1999 17,600 6.0 99% 24.09 Zen plaza 54-56 Nguyen Trai 2001 11,037 5.0 95% 21.010 Bitexco office Building 19-25 Nguyen Hue 2003 6,000 5.0 95% 22.011 The Landmark 5B Ton Duc Thang 2005 8,000 5.0 82% 21.012 opera View 161-167 Dong Khoi 2006 3,100 7.0 95% 26.013 Indochina park Tower 4Bis Nguyen Dinh Chieu 2006 2,145 3.0 96% 10.014 petro Tower 1-5 Le Duan 2007 13,304 5.0 99% 30.015 City Light 45 Vo Thi Sau 2007 10,000 5.0 98% 15.016 The Landcaster 22Bis Le Thanh Ton 2007 7,000 5.0 100% 24.017 Gemadept Tower 5 Le Thanh Ton 2008 14,000 7.0 100% 23.018 Fideco Tower 81-85 Ham Nghi 2008 15,000 6.0 100% 20.019 Havana Tower 132 Ham Nghi 2008 7,326 6.0 99% 21.020 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 98% 26.021 Royal Center 235 Nguyen Van Cu 2008 14,320 5.0 100% 23.022 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 23.023 Bao Viet Tower 233 Dong Khoi 2010 10,650 6.0 100% 21.024 Green power Tower 35 Ton Duc Thang 2010 15,600 6.0 96% 22.025 Vincom Center 68-70-72 Le Thanh Ton 2010 56,600 5.0 72% 25.026 Saigon Royal 91 pasteur 2010 5,340 4.0 100% 19.027 A&B Tower 76 Le Lai 2010 17,120 6.0 99% 28.028 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19.596 5.0 89% 23.029 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 87% 26.030 Lim Tower 9-11 Ton Duc Thang 2013 29,265 6.0 97% 28.031 Sunny MB Tower 259 Tran Hung Dao 2013 13,200 5.5 12% 22.0

Grade B 399,596 6.0 89.3% 23.1


MAY 2014 | CBD OFFICE MAP



MAY 2014 | RETAIL MARKET


MAY 2014 | CBD OFFICE MAP




During April, the average rental rate of three retail segments

covering retail podium, department store and shopping mall

were generally flat.

Department store saw stable occupancy rate while that of both

retail podium and shopping center recorded declines for fourth

month in-a-row since the begin of 2014.

A long 5-day break at the end of April did not bring efficient

foot traffic to CBD retail centers due to out-of-town travel

options from city residents. Meanwhile, major shopping places

lengthened promotion programs regardless low effectiveness.

Last month, Vingroup introduced its subsidiaries, Kids World

and Vinmec Clinic, at Vincom Center. occupied almost all 2F

and 3F, this 5,000sq. m section showed change in landlord’s

strategy in enhance purchasing power by centralise same

category tenants.

Market Performance

Outlook

SHoppING CENTER MARKET pERFoRMANCE, MAY 2014

NEWLY opEN KIDS WoRLD & VINMEC CLINIC @ VINCoM CENTER


Ho Chi Minh City’s CpI (Consumer price Index) continues

downward trend in April, fell by 0.04% against the previous

month, according to the HCMC Statistical office.

In effort to adjust tenant mixes toward improving occupancy,

operators of CBD retail centers now welcome unanchored

tenants from health care services, home furniture and kids

playground. Given large space requirements, these retailers are

expected to sufficiently fulfill current empty areas in downtown

shopping centres.


RETAIL poDIUM MARKET pERFoRMANCE, MAY 2014


CpI AND RETAIL - SERVICE REVENUE GRoWTH, MAY 2014

Source: GSO, Colliers International


MAY 2014 | CBD RETAIL MAP



MAY 2014 | HOTEL MARKET


MAY 2014 | CBD RETAIL MAP

KUMHo MoNTHLY MARKET REpoRTMAY 2014 | RETAIL MARKET HCMC CBD MARKET REPORT


MAY 2014 | HOTEL MARKET HCMC CBD MARKET REPORT

No Name of project /Building Address Location Comple-

tion YearNLA

(sq m)Average Rental

(US$/sq m/month) occupancy Rate

1 Hotel Continental Saigon 132-134 Dong Khoi District 1 2000 200 90 100%2 Caravelle Hotel 19 Lam Son Square District 1 2000 150 90 100%3 New World Hotel 79 Le Lai District 1 2000 1,000 40 100%4 Sheraton Saigon 88 Dong Khoi District 1 2002 750 125 100%5 opera View Lam Son Square District 1 2006 1,260 85 100%6 Kumho Asiana plaza 35 Le Duan District 1 2009 6,830 35 100%7 Rex Arcade 141 Nguyen Hue District 1 2010 2,000 120 100%8 ICoN 68 45 Ngo Duc Ke District 1 2011 8,000 30 78%9 president place 93 Nguyen Du District 1 2012 800 70 71%10 Times Square 22-36 Nguyen Hue District 1 2013 9,000 90 72%

Retail podium 29,990 69.9 82.9%

1 Diamond plaza 34 Le Duan District 1 1999 9,000 83 100%2 Zen plaza 54-56 Nguyen Trai District 1 2001 6,817 52 100%3 parkson Saigon Tourist 35 Le Thanh Ton District 1 2002 17,000 90 100%

Department Store 30,200 82.6 100%

1 Saigon Center 65 Le Loi District 1 1996 3,500 75 100%2 City plaza 230 Nguyen Trai District 1 2000 5,250 25 100%3 Tax Center 135 Nguyen Hue District 1 2003 7,000 75 100%4 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100%5 Nowzone Nguyen Van Cu District 1 2008 9,000 35 95%6 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 90 80%7 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 63 75%

8 Taka plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100%

9 Union Square Dong Khoi District 1 2012 38,000 73 65%

Shopping Centre 113,450 66.9 77%

No Name of Hotel Address Location Comple-tion Year Total Room occupancy ARR(*)

1 Caravelle 19 Lam Son Square District 1 2000 335 69% 1332 New World Saigon 76 Le Lai District 1 2000 533 73% 1153 Sofitel plaza Saigon 17 Le Duan District 1 2000 290 64% 1834 Rex 141 Nguyen Hue District 1 2000 289 81% 1385 Renaissance Riverside 8-15 Ton Duc Thang District 1 2001 350 84% 1246 Lotte Legend Hotel 2A-4A Ton Duc Thang District 1 2001 283 63% 1557 Sheraton 88 Dong Khoi District 1 2002 480 78% 1848 park Hyatt Saigon 02 Lam Son Square District 1 2005 259 80% 3049 Majestic Saigon 1 Dong Khoi District 1 2007 175 72% 9810 InterContinental Asiana 39 Le Duan District 1 2009 305 81% 22111 Nikko Saigon 235 Nguyen Van Cu District 1 2011 334 80% 10512 pullman Hotel 146 Tran Hung Dao District 1 2013 306 64% 98

5 Star 3,633 76% 148

1 Continental Saigon 132-134 Dong Khoi District 1 1990 86 77% 792 Norfolk Hotel 117-119 Le Thanh Ton District 1 1992 104 76% 863 Duxton 63 Nguyen Hue District 1 1996 203 88% 844 Royal City 133 Nguyen Hue District 1 2000 135 73% 575 palace Saigon 56-66 Nguyen Hue District 1 2000 146 90% 516 oscar 68A Nguyen Hue District 1 2000 108 74% 407 Liberty Central 179 Le Thanh Ton District 1 2010 140 75% 718 Grand 08 Dong Khoi District 1 2011 107 68% 929 Liberty Central Riverside 17 Ton Duc Thang District 1 2013 170 75% 75

4 Star 1,161 77% 67.3


MAY 2014 | CBD HOTEL MAP



MAY 2014 | CBD HOTEL MAP




According to the Administration of Tourism, foreign visitors to

Vietnam in April reached 745,980; up 5.11% over the previous

month and 21.51% over last April. Total earnings from tourism

hit VND89.4 billion; 29.4% y-o-y gain.

on the other hand, Ho Chi Minh City welcomed 320,650

international arrivals last month, a significant drop of 29% over

the previous month. However the tourism sector of the city

grossed VND7,015 billion, a y-o-y increase of 8%.

Hotel Market Overview

OutlookConstruction remains active at MGallery Saigon Hotel, Liberty

pasteur and Viettel Complex among future 4- and 5-star hotels

in CBD and its fringe areas.

Meanwhile, slow progress or no activity occurs at Le Meridien

Saigon, Reverie Times Square, Senla Boutique Hotel and

Majestic Hotel Extension sites.

NUMBER oF INTERNATIoNAL VISIToRS To HCMC, MAY 2014

Source: Statistical Office in HCMC, Colliers International

HoSpITALITY REVENUE BY SECToR, MAY 2014


LIBERTY pASTEUR HoTEL UNDER CoNSTRUCTIoN, MAY 2014


MGALLERY SAIGoN HoTEL UNDER CoNSTRUCTIoN, MAY 2014

Source: Collliers International





MAY 2014 | SERVICED APARTMENT MARKET

operators of top-tier hotels in city center loosen room rate in

order to anticipate downward tendency in coming months.

We saw a stablity in occupancy rate from 4- and 5-star hotel

developments within CBD area in April given a minor increase in

vacancy rate while peak travel season is over.

The average room rate (ARR) of both segments declined last

month. 4-star hotels drop almost 10% in ARR while that of 5-star

also decreased 6%.

Market Performance

pERFoRMANCE oF 5-STARS HoTEL, MAY 2014



Serviced Apartment OverviewCBD SERVICED ApARTMENTS pERFoRMANCE, MAY 2014


FUTURE SUppLY BY YEAR, MAY 2014


pERFoRMANCE oF 4-STARS HoTEL, MAY 2014


HCMC HoTEL pERFoRMANCE BY GRADE, MAY 2014








No project Name Address Location Comple-tion Year

Total Room

Average occupancy ARR(*)

1 The Landmark 5B Ton Duc Thang District 1 1995 66 82% 312 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 93% 343 Sedona Suites 65 Le Loi District 1 1996 89 79% 304 Nguyen Du park Villas 111 Nguyen Du District 1 2004 41 90% 305 The Landcaster 22 Bis Le Thanh Ton District 1 2007 55 75% 376 InterContinental Asiana Saigon 39 Le Duan District 1 2009 260 95% 36

Grade A 701 89% 34

1 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 85% 262 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 85% 263 Norfolk Mansion 17-21 Ly Tu Trong District 1 1998 126 85% 334 Diamond plaza 34 Le Duan District 1 1999 42 93% 295 Garden View Court 101 Nguyen Du 2000 76 93% 316 Ben Thanh Luxury 172-174 Ky Con District 1 2010 30 70% 237 Vincom Center 72 Le Thanh Ton District 1 2010 60 34% 26

8 Lafayette De Saigon 08 phung Khac Khoan District 1 2010 18 100% 30

9 Spring Court 1Bis phung Khac Khoan District 1 2011 14 78% 16

10 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 58% 28

11 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 100% 30

Grade B 738 80% 27.5

* US$/sq m/month** Not including VAT and service charge*** Buildings are sorted by Year of Completion

It is showed that strong competition from hotel and apartment for

lease sectors hold off investment in HCMC serviced apartments,

especially in downtown areas. The latest serviced apartment

development in CBD was launched since 2011 while pipeline of

new projects are delayed since the end of last year.

Hence, we predict there will be no big change in this market

section throughout this year.

Outlook

Both Grade A and B serviced apartments in CBD recorded firm average asking rent in recent months. Although occupancy rate of

two segments slightly fall in April, the sufficient median rates, approximately 90% and 80% for Grade A and B respectively, support

landlords in retaining current rental structure.

Market Performance

GRADE A SERVICED ApARTMENT pERFoRMANCE, MAY 2014



MAY 2014 | CBD SERVICED APARTMENT MAP


HCMC CBD MARKET REPORT | MAY 2014

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