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VIETNAMCHART BOOK 2016

savills.com.vn

2016Vietnam Chart Book

2

Savills World-leading property services

62Amer

icas & Caribbean

103E urope

134As

ia P acific

135UK, Ire

land &

C hannel Is lands

272Mid

dle Eas t & Africa

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Our servicesOur services are delivered by people who combine entrepreneurial spirit and a deep under-standing of specialist property sectors with the highest standards of client care. Through our advice, our property management capabilities and the transactional services we provide, we help our clients to fulfil their real estate needs – whatever and wherever they are.

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4

Regional OverviewGDPSavings and ConsumptionConsumer ConfidencePopulation

In 2015, Viet Nam had the 4th highest GDP growth rate in ASEAN at 6.4 percent.

The cumulative nominal GDP of ASEAN in 2015 was approximately US$2.5 trillion, equivalent to the world’s 6th largest economy.

From 2016 to 2018, Viet Nam is forecast to achieve GDP growth of 6.50%, 6.40% and 6.30%, approximately 1 ppt ahead of ASEAN average growth but remaining 4th in the region.

From 2010, ASEAN household consumption grew on average 3.53% pa, with Viet Nam exhibiting the greatest growth in the region at approximately 2 ppts aboveaverage.

While savings and basic expendi-ture are limited for Vietnamese in the bottom 40th percentile income brackets, those from the50th – 90th (VND 65 – 108 million pa) tend to not increase their overall expenditure as their income rises, instead saving more.

GDP

Savings and Consumption

ASEAN COUNTRIES

GDP - ASEAN

Household Consumption – ASEAN

Source: FocusEconomics, May 2016


0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014 2015 2016f 2017f 2018f

US$ bn

GDP – ASEAN

Indonesia Malaysia Philippines Singapore Thailand

Viet Nam Brunei Cambodia Laos Myanmar


0

100

200

300

400

500

600

2010 2011 2012 2013 2014

US$ bn

Household Consumption – ASEAN

Indonesia Malaysia Philippines Singapore Thailand

Viet Nam Brunei Cambodia Laos



5

0 50 100 150

South KoreaJapanTaiwan

MalaysiaSingaporeViet Nam

Hong KongChina

ThailandIndonesia

PhilippinesCCI Score

Nielsen CCI

Q4/2015 Q4/2014

Source: Nielsen Global Survey of Consumer Confidence and Spending

143.1

133.7

144.8

123.3

140.9

135.6

110

115

120

125

130

135

140

145

150

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

VCCI Score

Roy Morgan VCCI

2015 2014

Source: ANZ-Roy Morgan Research 2014 - 2015

From Q4/2014 to Q4/2015, Viet Nam was one of three Asia Pacific countries with an improved CCI and one of two in ASEAN, increasing 2 points. This is a positive sign particularly as confidence levels across Asia continue to decline.

As the end of 2015, the VCCI had increased 9.2 points YoY, equivalent to an approximate improvement of 7%, reinforcing signs of consumer optimism.

Consumer Confidence

PopulationThe ASEAN average ratio of working to non-working is 1.82, from highest to lowest: Singapore (1.99), Viet Nam (1.98), Thailand (1.97), Malaysia (1.97), Indonesia (1.78), Myanmar (1.75), Cambodia (1.6), and Philippines (1.55). Meanwhile, Singapore and Thailand’s working age population is diminishing quickly, with Viet Nam in it’s golden population window but soon to follow.

At 1.98, Viet Nam has almost two workers for every dependent, driving economic growth as a relative competitive advantage in factors of production for labour intensive indus-tries such as processing and textiles.

32 32 28 28 25 18 23 16 1625

41

35 4034 33 37

2735

27 25

34

34

26 22 30 31 29

3932

40 35

3019

7 7 9 8 9 16 11 18 2410 5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Philippines Cambodia Myanmar Indonesia Malaysia Thailand Viet Nam Singapore Europe ASEAN Africa

Source: United Nations, Department of Economic and Social Affairs

Population Spread, 2015

60+

35-59

15-34

0-14

Roy Morgan VCCI

Nielsen CCI

Population Spread, 2015

Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions

Source: ANZ-Roy Morgan Research 2014 - 2015

Source: United Nations Department of Economic and Social Affairs


6

Property DriversGDPAge PyramidWorkforce AllocationUrbanisationIncome & ExpenditureConsumer Price IndexTourism

Viet Nam’s GDP growth over the past decade averaged 13% pa, with 2015 at 6.7%, and a GSO forecast for 6.6% in 2016 and 6.7% in 2017.

In 2015, the industrial and construction sector was the greatest contributor, accounting for 3.2% of GDP growth, followed by service at 2.4% and agriculture at 0.4 percent.

The soft real growth in retail turnover over the period of 2011 through 2014 reflected the negative impact on the retail market created by the economic downturn. This figure has been slowly improving, up 2 ppts YoY in 2015, but still faces difficulties such as high rate of inventory, low absorption capacity from fresh investment and weak con-sumer demand.

GDP

18 20 19 18 18

32 32 34 33 33

37 37 37 39 39

13 11 10 10 10

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014

% GDP by Sector

Agriculture Industry Service Tax subsidies on production

Source: GSO, May 2016

0%

5%

10%

15%

20%

25%

0

100

200

300

2010 2011 2012 2013 2014 2015

US$ bnVietnam – Economy

GDP Retail salesGDP real growth rate Retail real growth rateInflation

Viet Nam - Economy




7

0%

20%

40%

60%

80%

100%

0

50

100

150

200

250

300million

Population - ASEAN

Population % Urban population

From 2009 to 2015, Viet Nam’s popula-tion grew by approximately 5.7 million, equivalent to approximately 1% pa with a cumulative increase of 7 percent.

The working age population of 15-64 has ceased to grow, leveling out at 70% of the total population and marginally de-creasing YoY. With decreased workers and increased dependents, Viet Nam’s economy will be relatively unaffected as the social security system remains insubstantial and many superfluous positions will be replaced by those more specialised.

From 2010 to 2014, overall job growth in Viet Nam was positive as annual cross-sector gains exceeded losses and unemployment dropped 1 ppt to 3.4 percent.

Approximately 50% of Vietnamese are employed in the primary sector, yet decreasing 2% pa, whilst both the secondary (30%) and tertiary (20%) sectors are increasing by approxi-mately 2% pa.

Age Pyramid

Workforce Allocation

The urbanization rate from 2005 to 2010 was relatively low at 3.5%, yet rocketing back to 4.0% as the economy stabilised.

Industrial zones throughout Ho Chi Minh City have attracted thousands of labourers from nearby provinces, contributing to a high population growth rate in suburban areas.

Urbanization

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014

Workforce by Sector

Agriculture, forestry & fishing Industry AutomobileConstruction Accomodation and F&B Education & Training


Age Pyramid, 2009 v. 2015

Population - ASEAN

Workforce by Sector




26.5 27.7 28.3 28.9 30.0

0%

1%

2%

3%

4%

5%

0

20

40

60

80

100

2010 2011 2012 2013 2014

Urbanization – Viet Nam

Urban pop. Rural pop. Urbanization Rate


millionUrbanisation - Viet Nam


s

0 1 2 3 4 5

Female - 2015

012345

00-0405-0910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980 +

Male - 2015

0 1 2 3 4 5

Female - 2015

0 1 2 3 4 5

Female - 2009

012345

00-0405-0910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980 +

Male - 2009


8

100

105

110

115

120

125

130

2010 2011 2012 2013 2014

CPI 2009=100

CPI by Item – Viet Nam

CPI Food and foodstuffs Clothing Construction materials


Since 2004, the Viet Nam average monthly expenditure has increased 16% pa, mirroring rural growth but exceeding urban growth by 2 ppts; the ruralrepresents 2/3 of Viet Nam’s population.

In 2004, the average citizen spentapproximately 92% of their monthly income, while in 2014 this figure was 72 percent.

From 2013 to 2014, international tourist arrivals growth decreased by 7% to 4%, the lowest figure since the economic downturn from 2008-2009.

The top 7 tourist source countriesrepresent 64% of total recorded arrivals, with China representing 26%, the top 4 all being Asian countries and Russia overtaking Malaysia for the 5th spot with a 45% pa growth since 2010.

In 2014, Viet Nam’s headline inflation (4.1%) further converged toward core inflation (3.3%), partly reflecting more credible monetary policy commitment to maintaining low and stable inflation.

Since 2010, traditionally volatilecommodities such as Food andfoodstuffs, and Energy have decreased quite significantly, with the formerdecreasing by approximately 14 ppts to 2.61% in 2014. The brent crude spot has decreased dramatically since 2015 to current rates of approximately US$50 per barrel, though such depressedpricing looks only transitory.

Income and Expenditure

Consumer Price Index (CPI)

Tourism

0

20

40

60

80

100

120

140

160

180

04 06 08 10 12 14 04 06 08 10 12 14 04 06 08 10 12 14

Rural Urban Viet Nam

US$

Income Expenditure

Income v. Expenditure, 2004-2014

CPI by Item - Viet Nam

Tourism, 2010-2014

0%

10%

20%

30%

40%

0

20

40

60

80

100

2010 2011 2012 2013 2014

Domestic arrivals International arrivals Domestic arrivals growth rate International arrivals growth rate

Tourist arrivals growth rateArrivals (millions)






9

Regional PropertyPrime RetailPrime OfficePrime Serviced Apartment

Prime RetailIn 2H/2015, the prime retailbenchmark for Ha Noi was US$124/m2 and Ho Chi Minh City was US$118/m2. From 2010-2015, Ha Noi’s benchmark decreased -3.5% pa, while HCMC’s increased approximately 1% pa.

Comparatively, Ho Chi Minh City and Ha Noi are in the nascent stages of retail development, with both offering a benchmark of approximately 10% of Hong Kong, meanwhile this cityremains an outlier, offering one of the highest benchmarks in the world and nearly 50% higher than the nexthighest in the region, Singapore.

In 2H/2015, the prime officebenchmark of Ha Noi was US$39/m2 and HCMC was US$51/m2. From 2010 to 2015, Ha Noi’s benchmarkdecreased -4.2% pa, while Ho Chi Minh City’s increased 0.7% pa.

In 2H/2015, the prime servicedapartment benchmark of Ha Noi was US$42/m2 and Ho Chi Minh City was US$31/m2. From 2011 to 2015, Ha Noi and Ho Chi Minh City’s benchmarks decreased -1.2% pa and -0.3% pa respectively.

0

200

400

600

800

1,000

1,200

1,400

HongKong

Singapore Tokyo Beijing Shanghai Taipei Sydney Seoul KualaLumpur

Ha Noi HCMC

US$/m2/mth NET

Source: Savills Research & Consultancy

0

50

100

150

200

250

HongKong

Tokyo Beijing Singapore Seoul Shanghai Taipei Sydney HCMC Ha Noi KualaLumpur

US$/m2/mth NET


Prime Office

Prime Serviced Apartment

0

40

80

120

160

HongKong

Singapore Tokyo Seoul Manila Shanghai Beijing Ha Noi Taipei HCMC KualaLumpur

US$/m2/mth NET


Regional Prime Retail, 2015

Regional Prime Office, 2015

Regional Prime SA, 2015





10

Viet Nam PropertyRetail RentsRetail DensityOfficeOffice Tenant Breakdown

Retail Rents

Retail Density

Ho Chi Minh City retail rent has increased on average 2% pa since 2012, with the greatest rises com-ing from the non-CBD at 2.62%, the new focus of many developers due to the demand for entertain-ment which requires areas with large available land bank.

In contrast, Ha Noi retail rent has decreased -6.8% on average since 2012, with large downwardadjustments across the threecategories, the largest being the Prime Benchmark which hasdecreased by approximately-7.8% pa due to the launch ofhigh-quality retail centres innon-CBD areas which requite lower rents, hence depressing the overall figure.

From the eight largest cities in Viet Nam there is a recorded 2.8 million m2 of retail space, of which Ho Chi Minh City and Ha Noi account for 75%. However, other regional cities such as Bangkok, Singapore and Kuala Lumpur far exceed the cities of Viet Nam, providing 0.9, 0.7 and 0.7m2/person.

0

20

40

60

80

100

120

140

160

180

Prime CBD Non-CBD Prime CBD Non-CBD

HCMC Ha Noi

US$/m2/mth NET*

Source: Savills Research & Consultancy 2012 2013 2014 2015 Q1/2016

*Excluding VAT

Retail Rents

Retail Density, 2015


0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

0.0

0.2

0.4

0.6

0.8

1.0

Bangkok Singapore KualaLumpur**

Ha Noi Da Nang HCMC Jakarta* Hai Phong

m2 retailm2 retail/person

Retail Density Retail Area

Source: Savills Research & Consultancy; United Nations Department of Economic and Social Affairs

* 2014 data

** Population of Klang Valley

Source: Savills Research & Consultancy; United Nations Department of Economic and Social Affairs


11

35 33

23 26

11 11

9 7

7 6

6 6

6 63 5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1/2012 Q1/2016

HCMC

IT

Transportation & Logistics

Real Estate

Consultancy

Distribution

Manufacturing & Processing

Finance, Banking & Insurance

Other


Office

Office Tenant Breakdown

From 2010 to 2015, Ho Chi Minh City office supply increased ap-proximately 50% to 1.5 million m2, with Grade A, B and C increasing 8%, 6.8% and 10.2% pa.

Rents have remained stable and occupancy has increased by 27 ppts, and even though Grade A supply expanded approximately 100,000 m2 from the entrance of the Bitexco Financial Tower, Times Square and Vietcombank Tower, it had the greatest occupancy increase at 14 ppts.

From Q1/2012 to 2016, thebiggest gainers were Finance, Banking & Insurance at 3 ppts and IT at 2 ppts.

In Q1/2016, new and existing FDI projects registered US$2.7 billion, of which Manufacturing & Processing accounted for 72% and Real Estate for 6%, two high growth industries with relatively low demand for office space but large demand for capital.

0

10

20

30

40

50

60

60%

65%

70%

75%

80%

85%

90%

95%

100%

2010 2011 2012 2013 2014 2015

US$/m2/mth NET Occupancy

HCMC

A Occupancy B Occupancy C Occupancy A Rent B Rent C Rent


HCMC Office Performance

HCMC Office Tenancy




12

E-Commerce

Consumer Spending

RegionalCar Sales

With rising discretionary income and time, hygiene awareness, and demand for entertainment coinciding with decreased nuclear family sizes, modern Vietnamese consumer spending is focused on improving their family’s day to day living standard as well as upward mobility.

Personal vehicle ownership in Viet Nam is still a luxury.

From 2010 to 2015, Viet Nam had cumulative passenger car sales growth of approximately 100% with an average yearly growth of 15%, much higher than that of Indonesia, Thailand and Malaysia at 7.6%, 5.5% and 3.7% respectively.

As of 2015, e-commerce turnover in Viet Nam reached US$4.07 billion, increasing 37% YoY to 2.8% of total retail sales.

Market InsightsConsumer SpendingPassenger Automobile SalesE-Commerce

Passenger Car Sales, 2010-2015

Consumer Spending, 2015

E-Commerce Purchases, 1H/2015

Source: TNS Vietnam Consumer Confidence Tet Spending, 2015

Source: International Organization of Motor Vehicle Manufacturers

Source: TNS VietCycle, 2015

0

1,000

2,000

3,000

4,000

5,000

6,000

0

200,000

400,000

600,000

800,000

1,000,000

2010 2011 2012 2013 2014 2015

US$Yearly auto sales (#)

Viet Nam Thailand Malaysia Indonesia Viet Nam GNI Per Capita

Source: International Organization of Motor Vehicle Manufacturers

car sales (#)

38%

13%10%

11%

7%

6%

6%

5%3%

1%

E-Commerce Purchases, 1H/2015

Clothing

Fashion & Accessories

Cosmetics

Food

Personal devices

Restaurant vouchers

Home appliances

Books

Beverages

Accommodation

3

4

4

4

4

20

6

10

2

2

8

4153

5859

6349

6471

7979

74

5642

3837

333029

20191817

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

EducationHealth Care Products/ Services

Food & Beverage ProductsHousehold Utilities

CommunicationsEntertainment & Dining Out

TransportationPersonal Devices

Household Care ProductsPersonal Care Products

Home Appliances

Consumer Spending, 2015

Less Same More

Source: TNS Vietnam Consumer Confidence Tet Spending, 2015


13

Certain citiesHa NoiQuang NinhHai PhongDa NangNha TrangHo Chi Minh CityDong NaiBinh DuongCan Tho

Ha Noi

Drivers:

Main Industries:

Prime Retail Malls:

Major Retail Streets/Areas:

Political centreGrowing populationSteady increase in GDPStrong foreign trade linksImproved public infrastructure

TradeTextilesTourismElectronicsMetallurgy

Press ClubVincom CentreMetropole ArcadeVincom Mega MallOpera Business Centre

Chua BocCau GiayTrang TienHang BongHang Ngang

2015 Units Value YoYGrowth

City population million 7.5 3.2%

Area km2 3,328.9 -

GDP US$ billion 27.6 9.2%

GDP per Capita US$ 3,600 6.87%

Retail space m2 1,114,407 14,34%

Retail sales of goods andservices US$ billion 11 12%

CPI 2015 over 2014 0.7%


14

Quang Ninh

Hai Phong

Drivers:

Drivers:

Main Industries:

Main Industries:

Prime Retail Malls:

Prime Retail Malls:



Rich natural mineral resources: coal,limestone, clay, kaolin, granite and white sand.

The largest 1st tier city. Economic, industrial, retail and educational centre.Deep-water ports which develop maritime transport.

Mining Tourism

Light industriesHeavy industriesFood processing

Ha Long CentreVuon Dao CenterMega Market Viet NamHa Long Supermarket

Big CParksonCo-op Mart

Le Thanh Tong

Le Hong Phong



Area km2 6,102 -

GDP US$ billion 1,523 11%


Retail space m2 11,200 N/A

Retail sales of goods andservices US$ billion 0.9 25.5%

CPI 2015 over 2014 0.34%



Area km2 1,523 -

GDP US$ billion 5.8 9.52

GDP per Capita US$ 2,857 N/A

Retail space m2 189,255 -


CPI 2015 over 2014 0.9%

%


15

Da Nang

Nha Trang

Drivers:

Drivers:

Main Industries:

Main Industries:

Prime Retail Malls:

Prime Retail Malls:



Major port city in thecentral coast.Retail and educationcentre of central Viet Nam.

High tourism and revenue growth.New hospitality investments.

Fishing, Forestry Tourism, Agriculture

Fishery, tourism, services.

Big CMega Market Viet NamCo-op MartIndochina Riverside Tower

Big C, Co-op MartVinpearl, MaximarkNha Trang CenterMega Market Viet Nam

Hoang Sa StreetPham Van Dong Bach Dang StreetDien Bien Phu Street

Tran Phu, Thong NhatThai Nguyen, Le Thanh TonNguyen Thien Thuat



Area km2 1,286 -



Retail space m2 167,271 29%


CPI 2015 over 2014 0.5%



Area km2 2,694.4 -

GDP US$ billion 2.74 -0.90%



Retail sales of goods andservices US$ billion 1.2 15%

CPI 2015 over 2014 0.94%


16

Ho Chi Minh City

Drivers:

Main Industries:

Prime Retail Malls:


Skilled workforceEconomic Hub of Viet NamComparatively high incomesHigh population growth rate

TradeTourismFinanceSoftwareConstruction

ParksonVivo CityLotte MartCrescent MallDiamond PlazaVincom CentersAeon Mall Tan Phu

Le LoiDong KhoiNguyen TraiNguyen HueHai Ba Trung



Area km2 2,095.5 -



Retail space m2 1,051,185 17%

Retail sales of goods andservices US$ billion 8 11.6%

CPI 2015 over 2014 -0.20%


17

Dong Nai

Binh Duong

One of the key economic zones of the southeast.High population growth rate.Many industrial parks.Attracted a large number of FDI projects.

One of the key economic zones of the southeast.High population growth rate.Many industrial parks.Attracted a large number of FDI projects.

Industrial and agriculture

Industrial

Big C, Co-op MartVincom, Lotte MartPegasus PlazaMega Market Viet Nam

Big CBecamex CentreMinh Sang PlazaAeon Mall Canary

Dong KhoiVo Thi SauPham Van Thuan

Binh Duong Boulevard

Drivers:

Drivers:

Main Industries:

Main Industries:

Prime Retail Malls:

Prime Retail Malls:





Area km2 5,907.2 -





CPI 11M/2015 .4%

(*) 2014 data


City population Million 1.9 4%

Area km2 2,694 -

GDP (*) US$ Billion 5.9 12.8%

GDP per Capita (*) US$ 2,878 15.5%


Retail sales of goods andservices US$ Billion 5.7 26%

CPI - - -


18

Can Tho

Economic and education centre of Mekong Delta.

Industrial Agriculture

Big CMega Market Viet NamSense CityLotte MartVincom Hung Vuong

Le LoiTran Van HoaiNguyen Van CuNguyen Thai HocXo Viet Nghe Tinh Nguyen Viet Hong

Drivers:

Main Industries:

Prime Retail Malls:



City population million 1.238 1%

Area km2 6,102 -

GDP US$ billion 3.7 14%


Retail space m2 74,000 N/A

Retail sales of goodsand services Q1/2016 US$ billion 1.1 11%

CPI 2015 over 2014 - - 0.35%


19

Savills VietnamTroy GriffithsDeputy Managing DirectorTel: +84 (0) 933 276 663Email: [email protected]

Ho Chi Minh City Ha Noi

Pham Van DaiHead of ResearchTel: +84 (0) 973 859 165Email: [email protected]

Do Thu HangHead of ResearchTel: +84 (0) 912 000 530Email: [email protected]

vietnam chart book - pdf.savills.asia · (1.98), thailand (1.97), malaysia (1.97), indonesia...

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