q.3 2015 vietnam real estate market report (english)

Office Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT

Economic Indicators

Market Indicators – Grade A

Grade A - Net Absorption/Asking Rent

4Q TRAILING AVERAGE

Grade A - Overall Vacancy

www.cushmanwakefield.com

EconomyGDP for the first 9 months of 2015 was estimated to have

increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the

highest level in the past 5 years. Inflation continued to remain at

a low level, up just 2.15% y-o-y. For the first 9 months of 2015,

total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;

disbursement is estimated to have reached US$9.65 billion. Real

estate ranked third among sectors that attracted the largest

proportion of total FDI with 19 newly invested projects. Through

Q3 2015, 68,347 enterprises with a total capital of VND420,900

billion were newly registered while VND608,900 billion was

additionally introduced by current enterprises.

Market OverviewNo new supply of both grades was recorded in Q3 2015.

Currently, there are 21 Grade A and 64 Grade B office buildings,

providing a total of nearly 1,122,000 sq.m to the market, one-

third of which are grade A buildings. Buildings in the CBD

account for 21% of total supply.

Average asking rents in Q3 2015 for both grades remained

stable on a quarterly basis but decreased by some 2% y-o-y,

to reach VND659,000/sq.m./mo. (US$29.8/sq.m./mo.) for grade

A, and VND402,000/sq.m./mo. (US$18.2/sq.m./mo.) for Grade B.

Both grades witnessed significant improvement in market

performance year-on-year, with average occupancy rate of

Grade A increasing by 13 ppts y-o-y and 2 ppts q-o-q, reaching

83%; while Grade B’s stood at 87%, an increase of 3 ppts q-o-q

and 16 ppts y-o-y. The increase in occupancies were mainly due

to several significant transactions recorded in some office

buildings such as Lotte Center Ha Noi, Song Hong Parkview and

VIT Tower.

OutlookIn the last quarter of 2015, one grade A and six grade B office

buildings are expected to enter the market, providing circa

180,000 sq.m of new office space. Notably, TNR Tower – a

Grade A building on Nguyen Chi Thanh Street with

approximately 50,500 sq.m of NLA – will enter the market by the

end of this year. The office market will continue to face an

oversupply situation over the year predominantly in the west of

the city. Rental declines are expected to continue.

Q3 14 Q3 1512-Month

Forecast

GDP Growth Rate 6.07% 6,81%

Inward FDI (billion US$) 11.18 17.15

Unemployment Rate 2.17% 2.24%

Q3 14 Q3 1512-Month

Forecast

Overall Vacancy 29.6% 16.5%

Net Absorption 5,907 8,166

Under Construction 0 0

Overall Average Asking

Rent$30.46 $29.75

0%

5%

10%

15%

20%

25%

30%

35%

40%

2010 2011 2012 2013 2014 2015 Q32015

HANOI OFFICE

Historical Average = 21%

$10

$20

$30

$40

$50

0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014 Q3 2015

Net Absorption, SQ.M Asking Rent, US$ PSQ.M

Office Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT


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advisory. To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter.

Copyright © 2015 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from mult iple sources considered

to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

SUBMARKETTOTAL

BUILDINGSINVENTORY

VACANT AREA

(SQ.M)

OVERALL

VACANCY RATE

CURRENT NET

ABSORPTION (SQ.M)

UNDER

CONSTRUCTION

(SQ.M)

AVERAGE ASKING

RENT

(US$/SQ.M/MO.)

US$

SF/YR

EURO

SF/YR

CBD – Grade A 16 168,580 19,570 11.6% 3,924 0 32.79 36.55 32.76

CBD – Grade B 10 65,631 10,434 15.9% -324 0 27.50 30.65 27.47

CBD Totals 26 234,211 30,004 12.8% 3,600 0 31.31 34.90 31.28

Non-CBD – Grade A 2 60,560 27,864 46.0% 2,250 0 33.44 37.28 33.41

Non-CBD – Grade B 34 382,020 59,228 15.5% 16,505 68,700 17.89 19.95 17.87

Non-CBD Totals 36 442,580 87,092 19.7% 18,755 68,700 20.02 22.32 20.00

West – Grade A 3 145,636 14,564 10.0% 1,992 0 24.71 27.55 24.69

West – Grade B 20 299,316 24,393 8.1% 7,805 85,600 16.50 18.40 16.49

West Totals 23 444,952 38,957 8.8% 9,797 85,600 19.19 21.39 19.17

HANOI TOTALS 85 1,121,742 156,053 13.9% 32,152 154,300 22.05 24.58 22.02

Key Lease Transactions Q3 2015

PROPERTY SQ.M TENANT TRANSACTION TYPE SUBMARKET

Song Hong Parkview 900 Nielsen Lease Dong Da

Pacific Place 800 Hanwa Life Lease Hoan Kiem

Hanoi Towers 600 Israel Embassy Lease Hoan Kiem

Lotte Center Hanoi 600 AIA Lease Ba Dinh

Key Sales Transactions Q3 2015

PROPERTY SQ.M SELLER/BUYER PRICE SUBMARKET

TNR TOWER 50,500 VINGROUP/TNR Holdings N/A Non-CBD

Jonathan TizzardDirector & National Head

Valuations & Research

Room 16, Level 14, Vincom Centre

72 Le Thanh Ton, District 1, HCMC

Tel: +84 8 3823 7968

Fax: +84 8 3823 7969

[email protected]

SUMMARY BY GRADETOTAL

BLDGSINVENTORY

SUBLET

VACANT

DIRECT

VACANT

VACANCY

RATE

CURRENT NET

ABSORPTION

YTD NET

ABSORPTION

UNDER

CNSTR

AVERAGE

ASKING RENT

OVERALL*

AVERAGE

ASKING RENT

DIRECT*

Grade A 21 374,775 N/A 61,998 16.5% 8,166 29,839 0 $29.75 $29.75

Grade B 64 746,967 N/A 94,055 12.6% 23,986 86,634 154,300 $18.18 $18.18

*Rental rates reflect gross asking $psq.m/year

Significant Projects Under Construction Q3 2015

PROPERTY SUBMARKET AREA (SQ.M) COMPLETION DATE STATUS

TNR Tower Non-CBD 50,500 Q4 2015 Fitting-out

Discovery Complex Non-CBD 45,000 Q4 2015 Under construction

789 Tower Non-CBD 29,564 Q4 2015 Fitting-out

Retail Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT

Economic Indicators

Market Indicators

Net Absorption/Asking Rent

4Q TRAILING AVERAGE

Overall Vacancy


EconomyGDP for 9 months 2015 was estimated to increase by 6.5% y-o-y,

with the growth rate in Q3 reaching 6.81%, the highest level in the

past 5 years. Inflation continued to remain at low level and just

increased by 2.15% y-o-y. In 9 months 2015, Vietnam had the total

inward FDI of US$17.15 billion, rising by 53.4% y-o-y. Real estate

ranked third among sectors that attracted the largest proportion of

total FDI with 19 newly invested projects. Up to Q3 2015, 68,347

enterprises with the total capital of 420,900 billion VND were newly

registered, and 608,900 billion VND was additionally introduced. Total

labor force increased to 54.32 million people, 52.72 million were with

employment. The unemployment rate continued to be kept at low

level of 2.36% on average for 9 months 2015.

Market OverviewTwo new retail centres were completed in Q3 2015, adding 21,200

sqm of retail space to the market. However, some projects were also

restructured into offices due to poor performance. Total supply

reached nearly 716,000 square meters (sq.m), an increase by 2% q-

o-q and 13% y-o-y. Non-CBD supply dominated the market,

accounting for nearly 96% of the market due to limited land bank in

the CBD.

Some positive signs were recorded in Q3/2015. The improving

performance of shopping centres and retail podiums offset the

ineffective operation of department stores, leading to a 4-ppts growth

q-o-q in the average market occupancy rate to 85%. Better conditions

in both CBD and Non-CBD regions also saw occupancy increase by

1% and 4% q-o-q respectively.

The overall average asking rent increased slightly by 2% q-o-q but

was down significantly by 8% y-o-y to VND845,000 per square meter

per month (/sq.m./mo) (US$38/sq.m/mo.). The average rent in the

CBD remained stable over the quarter, reaching

VND2,220,000sqm/mo. (US$100/sqm/mo.) as the majority of retail

centres are fully occupied; Non-CBD areas showed a small increase

of 2.2% q-o-q to VND786,000/sqm/mo. (US$35.5sqm/mo.)

OutlookTwo notable projects – Vincom Nguyen Chi Thanh and Aeon Mall

Long Bien are – are expected to enter the market this year, providing

more than 165,000 sqm of new retail space to the market.Easing tariffs under the Trans-Pacific Partnership together with the

further liberalization of the retail sector under the provisions of the

WTO is expected to enhance Vietnam's potential to international

retailers.

Q3 14 Q3 1512-Month

Forecast

GDP Growth Rate 6.07% 6.81%

Inward FDI (Bil.US$) 11.18 17.15

Unemployment 2.17% 2.24%

Q3 14 Q3 1512-Month

Forecast


Net Absorption (5,288) 37,283


RentVND 837K VND 845K

0%

10%

20%

30%

2010 2011 2012 2013 2014 Q32015

HANOI OFFICE


600

800

1000

1200

-10,000

10,000

30,000

50,000

70,000

90,000

110,000

130,000

2010 2011 2012 2013 2014 Q3 2015

Net Absorption, SQ.M Asking Rent, thousand VND PSQ.M

(*) Average rent on the ground level is used as a benchmark to represent the rent of each

retail centre. All rents include Service charge and exclude VAT

Retail Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT











SUBMARKET TOTAL BLDGSINVENTORY

(SQ.M)

VACANT AREA

(SQ.M)

OVERALL VACANCY

RATE

CURRENT NET

ABSORPTIONUNDER CNSTR

AVERAGE ASKING

RENT (VND/SQ.M/MO.)*

Department Store 2 34,000 3,030 8.9% (630) 0 1,602,000

Shopping Center 21 620,660 103,334 16.6% 21,909 507,342 794,000

Retail Podium 23 61,339 1,997 3.2% 16,004 454,352 938,000

HANOI TOTALS 46 715,999 108,361 15.1% 37,283 961,694 845,000

Significant projects under construction Q3 2015

PROPERTY LOCATION SQM STATUS COMPLETION DATE

Vincom Nguyen Chi Thanh Non-CBD 65,328 Fitting out 2015

Aeon Mall Long Bien Non-CBD 100,000 Fitting out 2015

Vincom Green Stars Non-CBD 20,000 Under construction 2015

Discovery Complex Non-CBD 25,000 Under construction 2016

Director NameTitle

Address Line 1

Address Line 2

Tel: +0 000 000 0000

Fax: +0 000 000 0000

[email protected]

SUMMARY BY LOCATION TOTAL BLDGSINVENTORY

(sqm)VACANCY RATE

CURRENT NET ABSORPTION

(sqm)

YTD NET ABSORPTION

(sqm)

AVERAGE ASKING RENT

(VND/sqm/mo.)

CBD 13 29,090 8.1% 413 1,702 2,236,288

Non - CBD 33 686,909 15.4% 36,870 32,791 785,940

TOTAL 119 715,999 15.1% 37,283 34,493 845,000

Industrial Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT

Economic Indicators

Market Indicators


4Q TRAILING AVERAGE

Overall Vacancy



increased by 6.5% y-o-y. GDP in Q3 reached 6.81%, 3.12 ppts

of which was contributed by industry and construction sector.

Inflation continued to remain at a low level, up just 2.15% y-o-y.

For the first 9 months of 2015, total inward FDI reached

US$17.15 billion, rising by 53.4% y-o-y; disbursement is

estimated to have reached US$9.65. Real estate ranked third

among sectors that attracted the largest proportion of total FDI

with 19 newly invested projects. Through Q3 2015, 68,347

enterprises with a total capital of VND420,900 billion were newly

registered while VND608,900 billion was additionally introduced

by current enterprises.

Market OverviewQ3 2015 witnessed no change in the supply of industrial

parks (IPs). Total net leasable area of eleven IPs in Hanoi

remained the same at more than 1,420 hectares. Total available

land for lease at the end of Q3 was 400 hectares, accounting for

28% of the total supply.

The average occupancy has experienced gradual

improvement recently, reached 72% in Q3 2015 and recording

an increase by nearly 4 ppts y-o-y. Among remaining IPs that still

had vacant area at the end of this quarter, Hoa Lac Hi-tech Park

had the highest vacancy rate (70%) with 346 hectares land

available for lease.

The average asking rent of IPs in Hanoi continued to be the

highest compared to all other cities/provinces in the northern

region of Vietnam (about 50% higher than that of Hai Phong and

Bac Ninh), standing at VND2,470,000 per square meter per term

(/sq.m./term) (over US$111/sq.m/term) in Q3 2015, increasing by

1% q-o-q and 9.4% y-o-y. Nam Thang Long Industrial Park

offered the highest rent at nearly VND4,140,000/sq.m/term

(US$187/sq.m/term).

* ALL RENTS ARE ASKING RENTS AND VAT EXCLUDED

OutlookAn additional supply of about 6,100 hectares from 14 identified

IP projects is expected to enter the market through 2020, which

is equivalent to 400% of current supply. By 2030 with vision to

2050, Hanoi will have 33 IPs with an area of 8,000 hectares in

total. With labor costs increasing in China, foreign investment in

IPs is expected to grow continually in the medium to long-term as

manufacturing companies shift their operations to other

countries, including Vietnam and in particular, Hanoi.

Q3 14 Q3 1512-Month

Forecast


Inward FDI (Bil. US$) 11.18 17.15


Q3 14 Q3 1512-Month

Forecast


Net Absorption 1.8 ha 7.5 ha

Under Construction 0 0


Rent (mil. VND/sq.m/term)2.16 2.47

20%

25%

30%

35%

40%

2012 2013 2014 2015 Q32015

HANOI OFFICE


VND 1.00

VND 1.50

VND 2.00

VND 2.50

VND 3.00

0

2

4

6

8

10

12

14

16

18

20

2012 2013 2014 2015 Q3 2015

Mill

ions

Net Absorption, ha Asking Rent, mil. VND PSQ.M

Industrial Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT

www.cushmanwakefield.comCopyright © 2015 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from mult iple sources considered









SUBMARKET TOTAL IPs INVENTORY (ha)YTD LEASING ACTIVITY

(ha)

OVERALL VACANCY

RATE

YTD NET OVERALL

ABSORPTION (ha)

UNDER

CONSTRUCTION (ha)NET RENT

(mil. VND/SQ.M/TERM)

Chuong My 1 111 76 32% 3.00 0 2.21

Dong Anh 1 206 206 0% 0 0 2.66

Gia Lam 1 78 78 0% 0 0 3.76

Long Bien 1 32 32 0% 0 0 3.54

Me Linh 1 240 240 0% 1.00 0 3.54

Thach That & Quoc Oai 2 619 271 56% 6.55 0 1.64

Tu Liem 1 24 24 0% 1.00 0 4.14

Soc Son 3 114 95 16% 9.16 0 3.08

HANOI TOTALS 11 1423 1022 28% 20.71 0 2.47

Significant Future Projects

IP NAME AREA (ha) DISTRICT STATUS

Phung Hiep 200 Chuong My Site clearance

North Thuong Tin 430 Thuong Tin Site clearance

Quang Minh II 266 Me Linh Site clearance

Soc Son Clean IP 340 Soc Son Site clearance

Thanh My – Xuan Son 100 Son Tay Planning





Tel: +84 8 3823 7968

Fax: +84 8 3823 7969

[email protected]

Residential Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT

Economic Indicators

Market Indicators

Primary Market Performance

Asking Prices of All Segments




highest level in the past 5 years. Inflation continued to remain at a

low level, up just 2.15% y-o-y. For the first 9 months of 2015, total

inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;







Market OverviewQ3 2015 witnessed positive market momentum reflected by strong

launch activities across all grades, especially grades B and C.

Approximately 8,700 units from 23 projects were launched of

which two were new grade B projects; the rest was from active

grade B and grade C projects. Grade B accounted for the greatest

market share of nearly half the total primary supply, followed by

Grade C (48.6%) and Grade A (1.4%). The total primary supply in

this quarter was more than 16,600 units.

Transaction volume rose 16% q-o-q and 263% y-o-y in Q3 3015 of

which Grade C accounted for over 56%, followed by Grade B with

43%. Several grade B projects registered impressive sales rate

including Time City Phase II, Imperia Garden and Goldmark City.

Hoang Mai District contributed the highest share of over 30% to

total sale volume this quarter.

Price levels of all grades recorded a downward trend in Q3 2015.

Average asking price of Grade A continued to experience a slight

decrease, down nearly 2% q-o-q, to VND51,000,000/sq.m

(US$2,300/sq.m), whilst Grade B’ stood at VND32,4000,000/sq.m

(US$1,460/sq.m), down 4% q-o-q; Grade C fell 6% q-o-q to

VND15,8000,000/sq.m (US$711/sq.m).

* ALL PRICES ARE VAT EXCLUDED

OutlookLow-end apartments will continue to be the most sought-after and

this market sector is expected to be the most active going forward.

The New Housing Law is expected to strengthen demand,

especially for mid to high-end projects. New guarantees required

by developers from banks for new developments will add more

confidence to the market. The Ha Noi residential market will likely

continue to improve in the short to medium term.

Q3 14 Q3 1512-Month

Forecast


Inward FDI (bil. US$) 11.18 17.15


Q3 14 Q3 1512-Month

Forecast

Sold units 1,967 7,145

Net Absorption 16% 43%


Price (mil. VND/sq.m)N/A 24.56

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

Grade A Grade B Grade C

Lowest Asking price (VND/SQ.M) Highest Asking price (VND/SQ.M)

HANOI OFFICE

0

1000

2000

3000

4000

5000

6000

7000

8000

9000


Primary Stock - UNITS Est. Sold units in Q3 2015 - UNITS

Residential Snapshot Q3 2015Hanoi, Vietnam

MARKETBEAT











Key launched projects Q3 2015

PROPERTY MARKET APPROACH DISTRICT GRADE NO. UNITS LAUNCHED

Imperia Garden New launch Thanh Xuan B 900

Golden Palace Le Van Luong New launch Thanh Xuan B 112

CT 1A, 1B New launch Tu Liem B 415

HH2 Linh Dam (B,C) New launch Hoang Mai C 1,400

Ho Guom Plaza (Block C) New launch Ha Dong C 78

Park Hill (3,6,2,5,7,8,1) – Times City Phase 2 Added Hai Ba Trung B 1,719

Goldmark City - Block A (Ruby 1,2,3,4) Added Tu Liem B 500

Eco Green City Added Thanh Tri C 200

Hateco Hoang Mai Added Hoang Mai C 469

Goldsilk Complex Added Ha Dong C 216

Key future projects

PROPERTY LOCATION EST. TOTAL UNITS STATUS COMPLETION YEAR

Oriental Westlake Tay Ho 100 Fitting out 2015

D'Le Roi Soleil Tay Ho 948 Foundation 2015

Handico - Handiresco Le Van Luong Thanh Xuan 336 Foundation 2015

Skyview Tran Thai Tong Cau Giay 373 Foundation 2015

FLC Garden City Tu Liem 1,100 Site Clearance 2016

Jonathan Tizzard Director & National Head




Tel: +84 8 3823 7968

Fax: +84 8 3823 7969

[email protected]

SUMMARY BY GRADE TOTAL PROJECTS INVENTORY SOLD UNITS NET ABSORPTION AVERAGE PRICE LEVEL*

Grade A 4 240 24 10% 51.0

Grade B 31 8,292 3,088 37% 32.4

Grade C 37 8,072 4,033 50% 15.8

TOTAL 72 16,604 7,145 43% 24.56

Serviced Apartment Snapshot

Q3 2015Hanoi, Viet Nam

MARKETBEAT

Economic Indicators

Market Indicators


4Q TRAILING AVERAGE

Overall Vacancy













Market OverviewQ3 2015 saw the completion of 50 additional units from an

existing project, Royal City, which increased total stock by 1.4%

q-o-q and 3.6% y-o-y. Currently, there are 12 grade-A projects

and 21 grade-B projects, supplying a total of more than 3,500

units to the market. Ba Dinh and Tay Ho Districts make up more

than 50% of the total supply.

The overall occupancy of both grades saw an improvement, up 2

percentage-points (ppts) q-o-q and 7 ppts y-o-y, to reach 85.3%.

However, the performance of grade A and grade B ran counter to

each other. While occupancy of grade A rose by 4 ppts q-o-q and

10.6 ppts y-o-y to 87.6%, that of grade B stood at 82.3%, down

1.6 ppts q-o-q and up 5.2 ppts y-o-y.

The average asking rent of grade A was largely stable on both a

quarterly and yearly basis, up 1% q-o-q but down 1% y-o-y to

VND740,000 per square meter per month (/sq.m/mo.) or

US$33.4/sq.m/mo. Grade B, however, recorded a marked fall in

price on both a quarterly and yearly basis, by 5.7% and 9.2%

respectively. This was attributed to the decrease in two projects

– Pan Horizon and Oriental Place. The average asking rent of

grade B was recorded at VND443,000/sq.m/mo., equivalent to

US$20/sq.m/mo.

* ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED

OutlookNo new projects are expected to be delivered in the last quarter

of 2015. In 2016, only one project with 200 units is expected to

enter the market. Despite limited supply, the serviced apartment

sector is still expected to experience intense competition from

future Grade A buy-to-let apartments.

Q3 14 Q3 1512-Month

Forecast




Q3 14 Q3 1512-Month

Forecast

Grade A Vacancy 23.0% 12.4%

Grade A Net Absorption 64 units 82 units

Grade A Average Rent VND718k VND740k

Grade B Vacancy 22.9% 17.7%

Grade B Net Absorption 47 Units 21 Units

Grade B Average Rent VND469k VND443k

5%

10%

15%

20%

25%

2011 2012 2013 2014 2015 Q3 2015

HANOI SERVICED APARTMENT


0

200

400

600

800

-60

-40

-20

0

20

40

60

80

100

120

140

2011 2012 2013 2014 2015Q3 2015

Net Absorption, SQ.M Asking Rent, thousand VND PSQ.M


Q3 2015Hanoi, Viet Nam

MARKETBEAT












PROPERTYEST. NUMBER

OF UNITSLOCATION DEVELOPER

EXPECTED

COMPLETION DATE

West Point 200 Tay Ho Golden Villa Ltd. 2016





Tel: +84 8 3823 7968

Fax: +84 8 3823 7969

[email protected]

SUMMARY BY GRADETOTAL

BLDGSTOTAL UNITS VACANCY RATE

CURRENT NET

ABSORPTION

YTD NET

ABSORPTION

AVERAGE ASKING RENT

OVERALL*

AVERAGE ASKING RENT

DIRECT*

Grade A 12 1,948 12.4% 82 133 VND739,832 VND

Grade B 21 1,557 17.7% 21 105 VND443,116 VND

Office Snapshot Q3 2015Ho Chi Minh City, Viet Nam

MARKETBEAT

Economic Indicators

Market Indicators

Grade A Net Absorption/Asking Rent

4Q TRAILING AVERAGE

Grade A Overall Vacancy













Market OverviewNo new office buildings for either Grade entered the market in

Q3 2015. However, significant leasing activity was recorded in

three yet-to-be inaugurated buildings – Vietcombank Tower, Lim

Tower 2, and Pearl Plaza. Currently, there are 9 Grade A and 46

Grade B office buildings, providing 156,700 sq.m. and 660,700

sq.m. of space respectively to the market.

Occupancy of both Grades continued to increase this quarter,

with Grade A up by 1% on both a quarterly and yearly basis to

93%. Grade B reached 95%, up by some 2 ppts year-on-year,

enjoying an unbroken upward trend in the last nine quarters.

Non-CBD Grade B achieved a higher average occupancy growth

of 6 ppts y-o-y to reach 97%, with those in the CBD stable at

94%. The average occupancy in the non-CBD remained slightly

higher than those in the CBD over the last five quarters, as

tenants remained attracted to the area's affordability.

Average rents of Grades B saw a moderate increase of 1% q-o-q

and nearly 2.5% y-o-y, to about VND610,000 per square meter

per month (/sq.m/mo), or US$27.6/sq.m/mo. Grade A rent, in

contrast, softened by 1% on both a quarterly and yearly basis, to

VND1,026,000/sq.m/mo (US$46.3/sq.m/mo)

The total net absorption of both Grades reached 5,800 sq.m this

quarter (372% quarter-on-quarter and -17% year-on-year).

Grade A net absorption reached 2,000 sq.m while Grade B

reported 3,800 sq.m, all from buildings in the non-CBD area.

OutlookAbout 80,000 sq.m of new supply from three projects is expect to

be completed in Q4 2015 however stong pre-leasing levels will

soften the actual amount of leasable space entering the market.

A restriction of supply, in particular large spaces, will keep rents

stable with increases likely by the end of the year.

Q3 14 Q3 1512-Month

Forecast




Q3 14 Q3 1512-Month

Forecast

Grade A Overall Vacancy 7.3% 5.5%

Grade A Net Absorption 1.52k 2.0k

Under Construction 253k 208k

Grade A Average Asking

Rent$46.7 $46.3

5%

10%

15%

20%

25%

30%

35%

2010 2011 2012 2013 2014 Q3 2015

HCMC OFFICE


$10

$20

$30

$40

$50

$60

-2,500

-500

1,500

3,500

5,500

7,500

9,500

2010 2011 2012 2013 2014 Q3 2015

Net Absorption, SQM Asking Rent, $ PSQM

Office Snapshot Q3 2015Ho Chi Minh City, Viet Nam

MARKETBEAT











SUBMARKET INVENTORY UNDER CNSTROVERALL

VACANCY RATE

CURRENT NET

ABSORPTION

YTD

CONSTRUCTION

COMPLETION

GRADE A & B AVERAGE GROSS

(S.C INCL., VAT EXCL)

(US/SQM/MTH)

US$

SF/YR

EURO

SF/YR

CBD A – Grade 156,700 208,000 6.6% 2,011 0 $46.3 $51.6 €46.2

CBD B – Grade 424,990 99,320 6.2% (707) 0 $31.6 $35.2 $31.5

Non – CBD B - Grade 235,700 200,300 3.5% 4,514 0 $20.2 $22.5 $20.2

TOTALS 817,400 507,620 5.5% 5,818 0 $31.2 $34.7 $31.1

Key Lease Transactions Q3 2015

PROPERTY SQ.M TENANT TRANSACTION TYPE SUBMARKET

Vietcombank 1,170 PVI Sun Life Insurance Company Ltd Relocation CBD

Vietcombank 1,170 Idemitsu Oil & Gas Co.,Ltd Relocation CBD

Vietcombank 3,500 Phu Quoc Oil & Gas (PV Oil) Relocation CBD

Vietcombank 3,500 Johnson & Johnson Relocation CBD

Vietcombank 957 Pernod Ricard Vietnam Co., Ltd Relocation CBD

Vincom 1,000 Itochu Corp. Relocation CBD

Pearl Plaza 1,200 Evergreen Line Relocation Non – CBD

The Vista 600 ACDL Ho Tram – The Grand Relocation Non – CBD

Lim Tower 650 iMarket Vietnam Expanding CBD


PROPERTY SQ.M MAJOR TENANT COMPLETION DATE SUBMARKET

Vietcombank Tower 55,000 Vietcombank Q4 2015 CBD

Lim 2 Tower 8,800 N/A Q4 2015 Non – CBD

Pearl Plaza 30,000 N/A Q4 2015 Non – CBD

Saigon Center 2 40,000 N/A Q4 2016 CBD

Mapletree Business Center 30,000 N/A Q4 2016 Non – CBD

Royal Tower 22,500 N/A Q1 2016 Non - CBD





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Fax: +84 8 3823 7969

[email protected]

SUMMARY BY CLASSTOTAL

BLDGSINVENTORY DIRECT VACANT VACANCY RATE

CURRENT NET

ABSORPTION

YTD NET

ABSORPTION

UNDER

CNSTR

AVERAGE ASKING RENT

OVERALL*

AVERAGE ASKING RENT

DIRECT*

Class A 9 156,700 10,280 6.6% 2,011 1,176 208,000 $46.3 $46.3

Class B 46 660,690 35,017 5.3% 3,807 19,053 299,620 $27.6 $27.6

*Rental rates reflect gross asking $psqm/month

MARKETBEAT

Retail Snapshot Q3 2015Ho Chi Minh City, Viet Nam

Economic Indicators

Market Indicators


4Q TRAILING AVERAGE

Overall Vacancy













Market OverviewTwo retail centres were completed in Q3 2015, increasing

total stock by 2% q-o-q and 13% y-o-y. The renovation of Tan An

Dong (the former Hung Vuong Square) was also completed in

the same quarter. Currently, there are 119 retail centres in the

city with a total area of approximately 960,500 sq.m. District 1

remains the most concentrated retail market in the city,

accounting for nearly 20% of the total supply.

Conditions continue to improve with average occupancy up by

1 ppt q-o-q and 2 ppts y-o-y, to 93%. The two aforementioned

new completions were reportedly fully occupied. The recent trend

of high profile investments from foreign retailing giants into the

Non-CBD area, establishing large shopping centres and offering

aggressive rents, raised occupancy rate by 2ppts q-o-q and

3ppts y-o-y, to 93%; the CBD remained stable at 90%.

Average rents continued to trend downwards on a yearly

basis, by 5% to VND1,320,000/sq.m/mo (US$59.6/sq.m./mo.).,

due to lower rents in new projects and the closing of some retail

properties, where rents were higher. Rents in the CBD remained

largely stable, at VND2,320,000/sq.m./mo (US$104.7/sq.m./mo.).

This is more than twice the level in the non-CBD area.

OutlookOver 200,000 sq m of new supply is expected to add 20% to total

stock by 2016. Demand for CBD space is expected to remain

high, however, due to limited land, large scale future stock will

mainly be located in non-CBD areas, mostly in the south and

east where much of the infrastructure and residential

developments have been established.

Easing tariffs under the Trans-Pacific Partnership together with

the further liberalization of the retail sector under the provisions

of the WTO is expected to enhance Vietnam's potential to

international retailers.

Q3 14 Q3 1512-Month

Forecast




Q3 14 Q3 1512-Month

Forecast

Overall Vacancy 9% 7%

Net Absorption 5.86k sq.m 31.5k sq.m.

Average Asking Rent

(per sq.m. per month)VND1,335k VND1,320k

0%

5%

10%

15%

20%

2010 2011 2012 2013 2014 Q3 2015

HCMC OFFICE


1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

1,500,000

1,600,000

(10,000)

0

10,000

20,000

30,000

40,000

50,000

60,000

2010 2011 2012 2013 2014 Q3 2015

Net Absorption, SQM Asking Rent, VND PSQM

(*) Average rent on the ground level is used as a benchmark to represent the rent of each

retail centre. All rents include Service charge and exclude VAT

MARKETBEAT

Retail Snapshot Q3 2015Ho Chi Minh City, Viet Nam












PROPERTY SQ.M COMPLETION DATE SUBMARKET

Vincom Le Van Viet 43,000 Q4 2015 Non – CBD

Pearl Plaza 21,000 Q4 2015 Non – CBD

Vincom Mega Mall Thao Dien 16,000 2016 Non – CBD

Emart Go Vap 30,000 2016 Non – CBD

Lotte Mart Go Vap 40,000 2016 Non – CBD

Aeon Mall Binh Tan 64,000 2016 Non - CBD

Saigon Centre 2 55,000 2016 CBD





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Fax: +84 8 3823 7969

[email protected]

SUMMARY BY TYPE TOTAL BLDGSINVENTORY

(sqm)VACANCY RATE


(sqm)

YTD NET ABSORPTION

(sqm)

AVERAGE ASKING RENT

(VND/sqm/mo.)

Retail Podium 8 20,400 21% 220 240 868,000

Department Store 8 120,000 6% 260 3,900 1,211,000

Shopping Centre 21 462,000 7% 23,000 67,700 1,212,000

Bazaar 7 34,490 4% 8,000 11,300 3,431,000

Supermarket 72 272,400 - - - -

Wholesale Centre 3 51,000 - - - -

TOTAL 119 960,500 7.5% 31,500 83,100 1,320,000

SUMMARY BY LOCATION TOTAL BLDGSINVENTORY

(sqm)VACANCY RATE


(sqm)

YTD NET ABSORPTION

(sqm)

AVERAGE ASKING RENT

(VND/sqm/mo.)

CBD 30 191,850 10% 1,500 1,600 2,000,000

Non - CBD 89 768,600 7% 30,000 81,500 522,000

TOTAL 119 960,500 7.5% 31,500 83,100 1,320,000

Industrial Snapshot Q3 2015Ho Chi Minh City, Viet Nam

MARKETBEAT

Economic Indicators

Market Indicators


4Q TRAILING AVERAGE

Overall Vacancy




highest level in the past 5 years. Inflation continued to remain

low, up just 2.15% y-o-y. Total inward FDI reached US$17.15

billion in the first 9 months of 2015, rising by 53.4% y-o-y;







Market OverviewNo new supply was delivered during the quarter. Currently,

there are 18 operating IPs providing a total area of nearly 3,630

hectares. The leasable area is estimated to be about 62% of the

total industrial land scale, or more than 2,260 hectares. The

remaining LUR years range from 26 – 43 years, with the average

being 35.

The IP market in HCMC was stable on a quarterly basis, with

both occupancy and rents unchanged. However, on a yearly

basis, the average occupancy increased by nearly 3 percentage

points year-on-year, to reach 71%. The majority of IPs reported

occupancy rates of above 90%, being well-established and thus,

have already been operating for several years. Three IPs in Nha

Be, Cu Chi and Binh Chanh Districts, which have just started

operations recently, reported occupancy rates of under 50%.

Average asking rents in this quarter stood at approximately VND

2,780,000 per square meter per term (/sq.m./term), equivalent to

US$125.6/sq.m./term*. The rental rate in HCMC is about two

times higher than that of Long An, Binh Duong, and Dong Nai.

Currently, developers are turning from long-term land leases to

factory construction for short-term occupation with areas of about

2,000 – 3,000 sq.m., and rents ranging from VND53,800 – VND

75,400/sq.m./mo, equivalent to US$2.50 – US$3.50/sq.m./mo.

* ALL RENTS ARE ASKING RENTS AND VAT EXCLUDED

OutlookThe total increase in industrial land in HCMC up to 2030 is

projected at approximately 3,000 hectares, up some 85% from

the current stock. In terms of the number of IPs, it is expected

that 12 new IPs will be added to the 18 that are currently in

operation by 2020. However, the majority of future projects are

still in the clearance and compensation stage; construction

progress is expected to be protracted.

Q3 14 Q3 1512-Month

Forecast




Q3 14 Q3 1512-Month

Forecast

Overall Vacancy 31% 28.9%

Net Absorption 10 ha 4 ha

Under Construction 3,067 ha 3,067 ha


RentVND2,657k VND2,780k

24%

26%

28%

30%

32%

34%

36%

38%

40%

2012 2013 2014 Q32015

HCMC OFFICE


2,500,000

2,600,000

2,700,000

2,800,000

2,900,000

0

10

20

30

40

50

60

70

80

2012 2013 2014 Q3 2015

Net Absorption, ha Asking Rent, VND PSQM

Industrial Snapshot Q3 2015Ho Chi Minh City, Viet Nam

MARKETBEAT

www.cushmanwakefield.comCopyright © 2015 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from mult iple sources considered









SUBMARKET TOTAL IPsINVENTORY

(HA)

YTD LEASING

ACTIVITY

(HA)

OVERALL VACANCY

RATE

YTD NET OVERALL

ABSORPTION

(HA)

UNDER CNSTR

(HA)

NET RENT(US$ SQM/TERM)

District 2 1 72 72 0% 0 0 VND2,213,800

District 7 1 195 193 1% (2.0) 0 VND5,755,900

District 12 1 22 22 0% 0 0 VND2,213,800

Binh Tan District 2 321 321 0% 1.24 0 VND4,937,000

Tan Phu District 2 92 92 0% 0 0 VND4,427,600

Thu Duc District 3 110 110 0% 0 0 VND3,900,000

Nha Be District 2 506 311 38% 0 1,000 VND2,059,000

Binh Chanh District 2 190 110 42% 0 1,104 VND1,992,000

Cu Chi District 4 753 378 50% 10 200 VND1,483,000

TOTAL 18 2,261 1,609 29% 9.2 2,304 VND2,780,000

*Rental rates reflect asking $psqm/term

Projects under construction Q3 2015

PROPERTY HECTARE DISTRICT STATUS

Le Minh Xuan – Phase 2 338 Binh Chanh Under Construction

Le Minh Xuan – Phase 3 242 Binh Chanh Under Construction

Vinh Loc 1– Phase 2 56 Binh Chanh Under Construction

Vinh Loc 1– Phase 3 200 Binh Chanh Under Construction

Bau Dung 175 Cu Chi Under Construction

Jonathan Tizzard Director & National Head




Tel: +84 8 3823 7968

Fax: +84 8 3823 7969

[email protected]

Residential For Sale Snapshot

Q3 2015Ho Chi Minh City, Viet Nam

MARKETBEAT

Economic Indicators

Market Indicators

Overall Primary supply/Asking Prices Q3 2015

Primary Stock/Price Range by Grade Q3 2015













Market OverviewSubstantial new supply across all grades was launched during

the quarter, totaling 4,600 units (nearly 70% is concentrated in

the East and South regions) from 14 new projects and a further

4,000 units from 12 active projects. As of Q3 2015, there were

nearly 20,100 available units for sale across all grades in the

primary market. More than 50% of total primary stock is located

in Districts 2, 7, and Binh Thanh District.

The residential market continued to see consecutive increases in

transaction volume in the quarter, registering an increase of 13%

q-o-q and up sharply 185% y-o-y. The increase was spread

equally across all grades. Districts 2, 4, 7 and Binh Thanh

accounted for 60% of total transaction volume.

Price levels of all grades recorded an upward trend in Q3 2015.

Grade C enjoyed the highest increase on both a quarterly and

yearly basis, by 6% q-o-q and 19% y-o-y, reaching VND19

million/sq.m, equivalent to US$860/sq.m; Grade A prices grew

2% q-o-q but was down 2% y-o-y to VND47.2 million/sq.m

(US$2,130/sq.m). Grade B grew 4% y-o-y but decreased 3% q-

o-q due to the lower prices at new projects, which if excluded,

would be stable at about VND29.4 million/sq.m (US$1,330/sq.m).

OutlookApartments with small sizes is expected to be the most sought-

after. Future supply will largely be in strategic locations which

offer easy access to the CBD such as Districts 2, 4, 7 and Binh

Thanh. Projects located along the first metro line are attracting

more interest. The New Housing Law is expected to strengthen

demand, especially for mid to high-end projects. New guarantees

required by developers from banks for new developments will

add more confidence to the market. The city’s residential market

is expected to continue improving in the short to medium term.

Q3 14 Q3 1512-Month

Forecast




Q3 14 Q3 1512-Month

Forecast

Overall Absorption Rate 27% 51%

Overall Average Price VND22,200k VND31,900k

Overall Sold Units 3,600 10,260

5,400

5,600

5,800

6,000

6,200

6,400

6,600

6,800

7,000

7,200

7,400

0

20

40

60

80

100


Primary Stock, UNITS Lowest Price (MIL VND/SQM)

Highest Price (MIL VND/SQM)

HCMC OFFICE

15

20

25

30

35

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2011 2012 2013 2014 Q3 2015

Primary Stock, UNITS Aksing Price, MIL VND/SQM

* ALL PRICES ARE VAT EXCLUDED

Residential For Sale Snapshot


MARKETBEAT












PROPERTYEST. NUMBER


EXPECTED

COMPLETION DATE

Vinhomes Central Park 10,000 Binh Thanh VinGroup 2017

The Goldview 1,905 District 4 Saigon Garment – Match JSC 2017

Luxcity 435 District 7 Dat Xanh Group 2017

TDH Phuoc Long 168 District 9 Thu Duc House 2017





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Fax: +84 8 3823 7969

[email protected]

SUMMARY BY GRADE TOTAL PROJECTS INVENTORY SOLD UNITS NET ABSORPTIONAVERAGE PRICE LEVEL*

(MIL VND/SQM)

Grade A 20 6,001 3,399 57% 47.2

Grade B 41 7,136 3,531 50% 29.4

Grade C 48 6,931 3,335 48% 19.0

TOTAL 109 20,067 10,264 51% 31.9

Significant Projects Launched In Q3 2015

PROPERTY LOCATIONEXPECTED COMPLETION

DATEUNITS LAUNCHED

AVERAGE PRICE

(MIL VND/SQM)

Everrich Infinity District 5 2016 408 45,270,000

Art – CT Plaza Nguyen Hong Go Vap 2016 287 26,770,000

The Park Residence Nha Be 2016 252 23,350,000

Ehome 3 Binh Tan 2016 153 16,000,000

Citi Home District 2 2016 164 14,240,000

Vinhomes Central Park Binh Thanh 2017 1,590 45,470,000

Wilton Tower Binh Thanh 2017 394 28,700,000

Florita District 7 2017 570 25,800,000

Luxcity District 7 2017 435 23,770,000

The Goldview District 4 2017 600 33,470,000

Grand Riverside District 4 2017 144 41,107,000

The Sun Avenue District 2 2017 380 35,460,000

The Krista District 2 2017 344 22,900,000

Hung Phat Silver Star Nha Be 2017 248 21,860,000

Citi Gate Towers District 8 2017 227 16,760,000

TDH Phuoc Long District 9 2017 70 16,000,000

The Park Avenue District 11 2018 322 42,000,000

Kingston Residence Phu Nhuan 2018 285 50,100,000

Sunrise Riverside Nha Be 2018 272 29,170,000

Orchard Parkview Phu Nhuan 2018 105 32,729,000



MARKETBEAT

Economic Indicators

Market Indicators


4Q TRAILING AVERAGE

Overall Vacancy













Market OverviewNo new projects for either Grade entered the market in Q3

2015. However, two projects in the CBD have been completed

and are awaiting inauguration – Ascott Waterfront Saigon and

The Reverie Residence. Currently, the market comprises 670

units from 7 Grade A projects and 2,260 units from 23 Grade B

projects. Those in District 1 make up 44% of the total supply.

Q3 2015 continued to see gradual improvement with average

occupancy across both grades rising on a yearly basis, by 6

percentage-points (ppts) for Grade A and 8 ppts for Grade B, to

97% and 90% respectively. This increase is largely due to the

rise in short term tenants as developers become more flexible in

their lease periods to avoid vacancies.

Average rents of both grades remained stable q-o-q but

increased on a yearly basis, by some 1.4% to VND647,000 per

square meter per month (/sq.m./mo)., equivalent to

US$29.2/sq.m./mo* and 3.7% for Grade B, at VND470,600

/sq.m./mo (US$21.3/sq.m./mo). However, the increase was

mainly due to a weakened VND against the US Dollar.

Serviced apartments in District 1 have traditionally performed

well with a high occupancy rate of 97%, up 9 ppts y-o-y, and

approximately 10 ppts higher than the non-CBD areas, despite

average rent being 37% higher, at VND601,500/sq.m./mo,

equivalent to US$27/sq.m./mo.

* ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED

OutlookOver 900 units are expected to enter the market by 2016, of

which 30% will be in District 1 as the CBD continues to be the

preferred location of developers. Hotels continue to be a

competitor to serviced apartments for short-term stays while

serviced apartments compete with buy-to-let apartments and

villas for longer term stays.

Q3 14 Q3 1512-Month

Forecast




Q3 14 Q3 1512-Month

Forecast

Grade A Vacancy 8.7% 3.2%

Grade A Net Absorption 17 units 12 units

Grade A Average Rent VND638k VND647k

Grade B Vacancy 18% 10.3%

Grade B Net Absorption (3) Units (13) units

Grade B Average Rent VND454k VND471k

5%

10%

15%

20%

25%

2010 2011 2012 2013 2014 Q3 2015

HCMC SERVICED APARTMENT


450,000

500,000

550,000

600,000

-40

0

40

80

120

160

200

2010 2011 2012 2013 2014 Q3 2015

Net Absorption, units Asking Rent, VND PSQM



MARKETBEAT












PROPERTYEST. NUMBER


EXPECTED

COMPLETION DATE

Times Square 78 District 1 Quang Truong Thoi Dai JSC 2015

SC Vivo City 480 District 7 VCCD – Saigon Co.op – Mapletree 2016

Ascott Waterfront Saigon 222 District 1 M.I.K Corporation 2016

Saigon Center Phase 2 89 District 1 Keppel Land 2016





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Fax: +84 8 3823 7969

[email protected]

SUMMARY BY CLASSTOTAL

BLDGSTOTAL UNITS VACANCY RATE

CURRENT NET

ABSORPTION

YTD NET

ABSORPTION

AVERAGE ASKING RENT

OVERALL*

AVERAGE ASKING RENT

DIRECT*

Class A 7 666 3% 12 9 VND647,000 VND647,000

Class B 23 2,260 10.3% (13) 31 VND471,000 VND471,000

q.3 2015 vietnam real estate market report (english)

Real Estate