vietnam property market brief - amazon s3...ho chi minh city (hcmc) office 5 o supply continues...

Vietnam Property Market Brief

JLL Research

1Q15

Vietnam Property Market Brief – 1Q15

P a g e | 2

Market Highlights Page

Economy of Vietnam 3

Ho Chi Minh City (HCMC)

Office 5

o Supply continues slight increase 5

o Overall vacancy rate scales down 5

o Marginal rental decline 5

Residential 6

o Large supply 6

o Good demand 6

o Prices up in a grand manner 6

Retail 7

o Rise in retail supply q-o-q 7

o Slight decline in occupancy rate 7

o A slight decrease in retail rents 7

Hanoi

Office 8

o Supply remains stable 8

o Demand increases slightly 8

o Rent continues to decline 8

Residential 9

o Increased supply 9

o Demand noticeably stronger 9

o Prices increase further 9

Retail 10

o Supply stable 10

o Demand moderate 10

o Rents decline slightly 10

Glossary 11

Cover Picture: A part of Hanoi City.


P a g e | 3

ECONOMIC HIGHLIGHTS

Vietnam’s economic growth continues to accelerate in

1Q15: Vietnam achieved GDP growth of 6.0% in 1Q15, the

highest first quarter rate during the 2011-2015 period.

However, the1Q15 result was still lower than the 7.0% of

4Q14. In the national economic overview, the agro-forestry and

fisheries sectors rose 2.1%, a small contribution of 0.28

percentage points to GDP growth; the construction and

industry sectors rose 8.4%, contributing 2.82 percentage

points; and the services sector rose 5.8%, contributing 2.36

percentage points. The Index of Industrial Production (IIP) also

saw improvement, with estimated growth of 9.1% seen in

March 2015 from a year ago. The IIP for 1Q15 increased 9.1%,

much higher than the 5.3% in 1Q14 and 4.9% in 1Q13.

Retail sales increase but international arrivals decline:

Vietnam’s retail sales and service turnover increased 9.2% y-

o-y in 1Q15. Vietnam received more than 2.0 million foreign

visitors in 1Q15, a drop of 13.7% y-o-y. The number of

international visitors to Vietnam each month has declined

consecutively since June 2014, and the drop of 23.4% in

March 2015 was the highest rate recorded during the period.

The reasons are economic difficulties and the currency

devaluation in some countries as well as long-standing

weaknesses in the Vietnam tourism industry, such as

expensive tour packages, outdated tourism products, poor

marketing campaigns, polluted environment and insufficient

support information.

FDI disbursement surges in 1Q15: The disbursement of FDI

increased 7.0% to USD 3.05 billion in 1Q15. Vietnam attracted

USD 1.83 billion from newly registered and added FDI projects

in 1Q15, a 44.9% decline compared with 1Q14. According to

the Foreign Investment Agency, the processing and

manufacturing sectors continued to attract the largest share of

FDI, accounting for USD 1.4 billion or 76.6% of the country’s

FDI inflow. The real estate sector saw the second largest

share, with USD 0.20 billion, accounting for 11.0%. Of the 33

countries investing in Vietnam, South Korea continued to be

the leading source of FDI, with USD 0.49 billion in newly

registered and expanded capital, accounting for 26.7% of total

FDI, followed by British Virgin Islands (USD 0.35 billion), Japan

(USD 0.29 billion) and Hong Kong (USD 0.18 billion).

0.0

2.0

4.0

6.0

8.0

10.0

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

09 10 11 12 13 14 15

% Real GDP Growth (y-o-y)

Quarterly GDP GDP ytd

Source: General Statistics Office, JLL Research

-10.0

0.0

10.0

20.0

30.0

40.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

% % Retail Sales vs. International Arrivals (ytd, y-o-y)

Real Retail Sales International Arrivals


0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

24,000

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

USD mil Foreign Direct Investment FDI (ytd)

FDI Registered FDI Disbursement



P a g e | 4

CPI surges 0.2% in March: Vietnam’s CPI in March 2015

increased by 0.2% m-o-m after four consecutive months of

reduction. The higher fuel prices had pushed prices of three

out of 11 goods that are used to calculate the monthly CPI

increase, including restaurant and catering services (up 0.4%),

cultural, entertainment and tourism activities (up 0.2%) and

housing and building materials (up 0.2%). The increase in gas

prices since 11 March 2015 has also contributed to the surge

in the CPI. This was the lowest level of increase in CPI for a

first quarter during the past decade, during which time the CPI

increased between 4.8% and 16.6%.

Gold prices drop: Gold prices dropped 1.6% m-o-m and 5.4%

y-o-y in March, while US dollar prices increased 0.2% m-o-m

and 1.3% y-o-y during the month.

Vietnam sees trade deficit in 1Q15: According to the General

Statistics Office, the country recorded a trade deficit of USD

1.8 billion in 1Q15. In 1Q15, Vietnam achieved USD 35.7

billion in export revenue and USD 37.5 billion in import value,

up 6.9% and 16.3% y-o-y, respectively. FDI enterprises

contributed to the majority of export value with approximately

70.0%. The EU was the country’s largest export market in

1Q15, accounting for USD 6.9 billion in exports, an increase of

14.2% compared with 1Q14. The largest source of imports was

China, with USD 11.6 billion, a 31.5% rise from the same

period last year.

Vietnam remittances expect to rise in 1Q15: At the time of

this report, details of overseas remittances to Vietnam for

1Q15 have not been released. However, the number of

remittances to Ho Chi Minh City in 1Q15 was around USD 1.2

billion, an increase of 16% compared to the same period last

year and accounting for 24% of the total figure for 2014.

According to the State Bank of Vietnam, the remittances are

mainly for business operations and production purposes.

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0.0

3.0

6.0

9.0

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

% % CPI - Overall

y-o-y m-o-m


-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

-5.0

0.0

5.0

10.0

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

% % CPI - Housing & Construction Materials

y-o-y m-o-m


-30.0

-20.0

-10.0

0.0

10.0

20.0

-1.5

-0.5

0.5

1.5

2.5

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

% USD bil Merchandise Trade Balance

Actual Levels % of Merchandise Exports



P a g e | 5

HCMC OFFICE

Supply and Demand

Source: JLL Research

Asset Performance

Note: Q-o-Q and Y-o-Y changes are adjusted to remove the effects of supply additions / removals (i.e. changes are on a like-for-like basis). Source: JLL Research

Outlook

Supply / Demand Indicator Grade A Grade B Grade C Suburban Total

Total Stock (sqm) 155,000 431,000 481,000 502,000 1,569,000

Occupancy Rate (%) 92.7 89.8 92.0 87.2 89.9

Q-o-Q Change (bps) 89 52 34 -12 30

Total Stock


Key Performance Indicator Grade A Grade B Grade C Suburban Total

Average Gross Rent (USD/sqm/mth) 46.8 30.2 18.2 16.5 24.4

Average Net Rent (USD/sqm/mth) 39.1 24.3 15.8 12.9 20.0

Q-o-Q Change (%) 0.0 -0.8 0.0 -0.5 - 0.4

Average Net Rents by Grade


Supply Under Construction


Supply continues slight increase

o One Grade C building (Robot Tower) was completed, added 3,200 sqm of

space and pushing total office space up by 0.2% q-o-q.

o Construction progresses of most buildings scheduled for completion in 2015

were in final phase, and some major buildings were ready to be launched.

Overall vacancy rate scales down

o Net absorption rose nearly by 7,600 sqm, with a lower q-o-q rate of increase

owing largely to new vacant spaces in the Suburban sector.

o Tenants were seen relocating to new properties outside the CBD with

reasonable rents and attractive incentives.

Marginal rental decline

o The average net rent dropped by 0.4% q-o-q, with major contributors being

some Grade B and Suburban buildings to fill up vacant spaces.

o Rents of overall market witnessed continuous decline, a 13% decrease

compared to the same period for last five years.

Supply to increase significantly in 2015

o Over 206,000 sqm of office spaces from 10 projects are expected to

increase the stock over the next three quarters.

o Major development with large office space such as Vietcombank Tower,

Viettel Complex and Pearl Plaza will increase to the CBD and non-CBD

supply.

Rents to fall in line with more supply

o Rents are expected to continue in decrease due to the pressure from

future supply.

o Competition from new office spaces and rents will drive leasing activities.

0

500

1,000

1,500

2,000

2010 2011 2012 2013 2014 1Q15

'000 sqm

Grade A Grade B Grade C Suburban

0

20

40

60

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

Grade A Grade BGrade C Suburban

USD/sqm/mth

0 50 100 150 200 250

2017

2016

2015

'000 sqm

Exp

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mpl

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P a g e | 6

HCMC RESIDENTIAL Supply and Demand

[1] Excludes land plot projects. [2] Excludes planned projects not launched for sale yet. Includes fully sold projects. [3] The percentage of [2] that remains unsold at quarter-end. Source: JLL Research

Asset Performance

Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). Source: JLL Research

Outlook

Supply / Demand Indicator Apartments Villas / Townhouses [1]

Completed Supply (units) 68,000 3,800

Uncompleted Supply (units) [2]

31,000 500

Unsold Inventory (%) [3]

17.9% 22.6%

Total Stock (Completed Supply) - Apartments

Luxury accounts for less than 1% of total stock Source: JLL Research

Market Segment Asking Price – Primary Market Asking Price – Secondary Market

Q-o-Q Y-o-Y Q-o-Q Y-o-Y

Apartments 1.9% 3.5% 1.4% 4.6%

Villas / Townhouses 0.1% -2.9% 0.7% 2.9%

Average Asking Price by Segment


Upcoming Completions


Large supply

o Apartments: New supply in 1Q15 was up 30% q-o-q to nearly 6,000 units,

with considerable expansion in the Mid-end and Premium segments.

o Villas / Townhouses: New supply was mostly subsequent launches at low-

end projects and totalled 140 units, down 30.0% q-o-q but up 10.0% y-o-y.

Good demand

o Apartments: Sales reached 5,200 units, a record high. District 2 topped

other sub-markets, accounting for nearly 40% of the quarter’s volume.

o Villas / Townhouses: Sales stood at the 4Q14 nine-year high of 170 units.

Prices up in a grand manner

o Primary market:

Apartments: Prices continued to trend upwards, at a higher rate q-o-q

and with significant project-based increases of around 5-6%.

Villas / Townhouses: Chain-linked price changes were few, but the

new supply was mostly quoted at prices higher than at initial launch.

o Secondary market:

Apartments: Prices were generally higher, with properties showing

increases responsible for more than 75% of total secondary supply.

Villas / Townhouses: Price uptrend continued but was below last

quarter’s rate, with marked decreases seen in distant sub-markets.

High-level supply to continue in the next three quarters

o Nearly 11,000 new Apartment units are expected between now and end-

2015, around 30% of which will be in the Premium segment.

o By end-2015, new launches of Villas / Townhouses will come mostly from

Districts 2 and 9, with an estimated supply of more than 230 units.

Strong demand to continue during 2015

o More quality supply and increased sales activity by developers, along with

better credit terms for homebuyers, are likely to boost demand.

o Prices are expected to increase further.

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

2010 2011 2012 2013 2014 2015

units

Affordable

Mid-end

Premium

Luxury

0 5,000 10,000 15,000

Villas / Townhouses

Apartments

Villas / Townhouses

Apartments

Villas / Townhouses

Apartments

2017

20

16

2015

units

0 1,000 2,000 3,000 4,000

Villas / Townhouses

Luxury

Premium

Mid-end

Affordable

All Apartments

Apa

rtm

ents

USD/sqm

Average Primary Price Average Secondary Price


P a g e | 7

HCMC RETAIL Supply and Demand


Asset Performance


Outlook

Supply / Demand Indicator Investment Grade Non-Investment Grade

CBD Non-CBD Total

Total Stock (sqm) 160,000 335,000 495,000 460,000

Occupancy Rate (%) 87.9 92.4 91.0 N.A.

Q-o-Q Change (bps) -80 -105 -89 N.A.

Total Stock – Investment Grade


Key Performance Indicator – Investment Grade CBD Non-CBD Overall

Average Gross Rent (USD/sqm/mth) 70.5 40.4 50.1

Q-o-Q Change (%) -0.5 0.0 -0.2

Average Gross Rents by Segment – Investment Grade


Supply Under Construction – Investment Grade


0

200

400

600

2010 2011 2012 2013 2014 1Q15

'000 sqm

CBD Non-CBD

Rise in retail supply q-o-q

o Vincom Thu Duc opened in February, added approximately 22,500 sqm

to Investment Grade supply, a 5% increase q-o-q.

o Non-investment Grade sector also witnessed one new retail project,

Saigon Square 3 in District 3 with a 1% increase q-o-q.

Slight decline in occupancy rate

o Demand in both CBD and Non-CBD sectors are moderate with few

changes in net absorption recorded.

o Net absorption of the Non-CBD projects always leads the retail market

with good market performance even with large supply.

A slight decrease in retail rents

o The overall average gross rent recorded at USD 50.1 per sqm, slightly

decreased by 0.2% q-o-q.

o The low purchasing power at some retail projects in CBD sector has led a

slight decline in rent by 0.5% q-o-q.

Ample new supply in 2015

o Over the next three quarters, Total Investment Grade supply is expected

to increase by 123,000 sqm from seven properties.

o SC VivoCity and Pearl Plaza are expected to be completed in 2015,

adding nearly 59,000 sqm of space to the Non-CBD retail stock.

Moderate demand in the near future

o Consumers continued to tighten their budgets, prospects of better

demand will increase with improved economic environment.

o Rents are likely to face more pressure due to new supply and the current

fluctuant market performance.

USD/sqm/mth

0

20

40

60

80

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

CBD Non-CBD

0 20 40 60 80 100 120 140

2017

2016

2015

'000 sqm

Exp

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P a g e | 8

HANOI OFFICE Supply and Demand


Asset Performance

Note: Q-o-Q and Y-o-Y changes are adjusted to remove the effects of supply additions / removals (i.e. changes are on a like-for-like basis).


Outlook

Supply / Demand Indicator Grade A Grade B Grade C Total

Total Stock (sqm) 431,000 847,000 272,000 1,550,000

Occupancy Rate (%) 78.4 82.5 83 81.3

Q-o-Q Change (bps) 764 24 -8 251

Total Stock


Key Performance Indicator Grade A Grade B Grade C Total

Average Gross Rent (USD/sqm/mth) 30.2 19.0 13.9 21.7

Average Net Rent (USD/sqm/mth) 24.1 14.3 9.7 16.6

Q-o-Q Change (%) -3.0 -0.8 0.4 -1.4

Average Net Rents by Grade


Supply Under Construction


Supply remains stable

o No new project completed in 1Q15, the total stock remains unchanged at

more than 1.5 million sqm.

o Few projects saw considerable construction progress in 1Q15.

Demand increases slightly

o Total net absorption reached more than 41,000 sqm in 1Q15, primarily

driven by the Grade A segment.

o The market recorded more leasing transactions of over 1,000 sqm than

in the previous quarter.

Rent continues to decline

o The average rent continued to decline, but at a slower rate q-o-q than in

4Q14. Despite this, the decrease in the Grade A segment was more

considerable in 1Q15.

o Some landlords in the CBD sub-market lowered their asking rents to

compete with newer buildings in the west of the city. However, rents at

more than 80% of projects were kept unchanged in 1Q15.

Supply to be plentiful until end-2015

o Nearly 95,000 sqm of office space is expected to enter the market in

2015, around 95% of which will be from Grade B buildings.

o Demand for office space is likely to increase, driven by new Grade B

buildings and Grade A properties in the non-CBD sub-market.

Downtrend in rent is likely to continue

o Oversupply and expected low rents at new buildings will keep pressure

on rents in existing properties.

o The investment market is expected to remain active.

0

500

1,000

1,500

2,000

2010 2011 2012 2013 2014 2015ytd

'000 sqm

Grade A Grade B Grade C

0

5

10

15

20

25

30

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

Grade A Grade B Grade C

USD/sqm/mth

0 50 100

2017

2016

2015

'000 sqm

Exp

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P a g e | 9

HANOI RESIDENTIAL Supply and Demand

[1] Excludes planned projects not launched for sale yet. Includes fully sold projects. [2] The percentage of [1] that remains unsold at quarter-end. Source: JLL Research

Asset Performance


Outlook

Supply / Demand Indicator Apartments

Completed Supply (units) 67,000

Uncompleted Supply (units) [1]

42,000

Unsold Inventory (%) [2]

13.9%

Total Stock (Completed Supply) - Apartments

Luxury accounts for less than 3% of total stock Source: JLL Research

Market Segment Primary Market Secondary Market

Q-o-Q Y-o-Y Q-o-Q Y-o-Y

Apartments 1.9% 5.3% 1.7% 4.6%

Average Asking Price by Segment


Upcoming Completions


010,00020,00030,00040,00050,00060,00070,000

2010 2011 2012 2013 2014 2015

units

Affordable

Mid-end

Premium

Luxury

Increased supply

o New launches totalled 5,600 units, up 13.0% q-o-q. The low-priced

segments remained dominant but not as much as in the past two years.

o Construction progressed well across the market. In addition, resumption

was seen in many long-delayed developments. EWLY COM

Demand noticeably stronger

o Sales were up 30.0% q-o-q to 5,800 units, nearly half the 2014 total. The

trend to buy such units in bulk was increasingly apparent.

o In 1Q15, the ratio of apartments sold to those newly launched reached

72%, versus the 65% in 4Q14 and the 58% for whole year 2014.

Prices increase further

o Primary market

Prices were higher in all segments, with Mid-end developments

showing the largest increase at 2.2% q-o-q.

On a district-wide basis, common growth rates were 1-2% q-o-q.

o Secondary market

Prices continued the uptrend witnessed since 2Q14, but at the

considerably higher rate of 1.7% q-o-q.

Most decreases in 1Q15 were in long-standing buildings, which faced

competition from the newer completed units that were offered in the

primary market at discounts and with favorable payment terms.

Supply to be abundant in the next three quarters

o More than 21,000 new completed apartments are expected in the rest of

2015, nearly 80% of which were launched in 2012 or earlier.

o New supply should remain at high levels until end-2015, as to-be-launched

units at current projects alone are double the 1Q15 number already.

Demand to be strong during 2015

o More quality supply and increased sales activity by developers, along with

better credit terms for homebuyers, are likely to boost demand.

o Prices are expected to increase further over 2015.

0 1,000 2,000 3,000 4,000

Luxury

Premium

Mid-end

Affordable

All Apartments

USD/sqm

Average Primary Price Average Secondary Price

0 5,000 10,000 15,000 20,000 25,000

2017

2016

2015

units


P a g e | 10

HANOI RETAIL

Supply and Demand


Asset Performance


Outlook

Supply / Demand Indicator Investment Grade Non-Investment Grade

CBD Non-CBD Total

Total Stock (sqm) 20,000 778,000 798,000 328,000

Occupancy Rate (%) 88.5 84.8 84.9 N.A.

Q-o-Q Change (bps) 406 8 18 N.A.

Total Stock – Investment Grade


Key Performance Indicator – Investment Grade CBD Non-CBD Overall

Average Gross Rent (USD/sqm/mth) 95.2 25.8 27.5

Q-o-Q Change (%) 0 -0.7 -0.7

Average Gross Rents – Investment Grade


Supply Under Construction – Investment Grade


Supply stable

o Supply was stable in the Investment Grade segment but increased in the

Non-Investment Grade market, thanks to 25,000 sqm at Hoa Binh Green

City – the city’s first rent-free trading center for local enterprises

o The Parkson – Keangnam Hanoi Landmark Tower closed in January

2015. The reason for the closure was that the business had suffered

operational losses since 2011.

Demand moderate

o The overall occupancy rate reached nearly 85%, but the vacancy rates in

several shopping centers in the non-CBD sub-market increased.

o Purchasing power was still weak in spite of many attractive promotions

offered to customers by brands.

Rents decline slightly

o The average gross rents of Investment Grade retail space saw a decline of

0.7% q-o-q in 1Q15, standing at USD 27.5 per sqm per month.

o The average asking rent in the CBD sub-market was nearly four times

higher than in the non-CBD sub-market.

Supply to increase noticeably in 2015

o Stock in the Investment Grade segment will increase by 75,500 sqm

when AEON Mall comes on stream in 2015.

o The Non-Investment Grade segment expects around 11,500 sqm of retail

space from Thang Long Number One Centre over the coming quarters.

Rents are likely to decrease

o Abundant supply and moderate demand will put pressure on existing

centres, which offer high asking rents but experience vacant space.

o Rents at prime retail properties in the city’s core CBD is expected to

remain stable over the coming quarters.

0

200

400

600

800

1,000

2010 2011 2012 2013 2014 2015ytd

'000 sqm

CBD Non-CBD

USD/sqm/mth

0

50

100

150

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

CBD Non-CBD

0 20 40 60 80

2017

2016

2015

'000 sqm

Exp

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P a g e | 11

Real Estate Glossary

Vietnam Office Market

Current supply The total amount of cumulative office space (in NFA terms) that has been completed at a given time.

Future supply The total amount of office space slated for completion in the future at a given time.

Vacant space The total amount of available office space that remains to be leased by property owner(s) at a given time. This excludes space available for sub-lease by tenants (i.e. shadow space), space physically empty but already pre-leased or reserved, and space to be available for lease in the future.

Occupied space Current supply less vacant space. “Net absorption” refers to the change in occupied space from quarter to quarter.

Gross floor area (GFA) The total amount of all covered areas including columns, walls, common passageways, lift lobbies and toilets.

Net floor area (NFA) The amount of useable floor areas excluding columns, walls, common passageways, lifts, lobbies and toilets. Net lettable area or net leasable area (NLA) refers to the amount of NFA that is available for lease.

Net rent The amount of market rent receivable by landlords after deducting outgoings. Market practices: Net rents may be quoted on an NLA or a GFA basis.

Outgoings The estimated costs set aside by landlords for building maintenance that are passed on to tenants in the form of service charges or management fees. Market practices: Service charges / management fees may or may not be quoted separately from net rents.

Gross rent The total achievable rent to be borne by tenants including service charges / management fees. Gross rents equal net rents plus outgoings. Market practices: Gross rents may be quoted on an NLA or a GFA basis.

Capital value The market value or probable price of a property at a given time from a valuation point of view.

Yield The percentage return on property investment at a given time from a valuation point of view. It is based on current market rents assuming full occupancy.

Grade A A Grade A property meets all of a set of criteria regarding its offerings to a typical sophisticated occupier. These criteria are broadly concerned with the property’s overall profile, location, amenities, management standards and technical specifications.

Grade B A Grade B property meets some of a set of criteria regarding its offerings to a typical sophisticated occupier. These criteria are broadly concerned with the property’s overall profile, location, amenities, management standards and technical specifications.

Grade C A Grade C property meets a set of criteria regarding its offerings to a typical non-sophisticated occupier. These criteria are broadly concerned with the property’s overall profile, location, amenities, management standards and technical specifications.

Suburban A Suburban property is located in a non-CBD or a non-traditional office zone, regardless of its other physical attributes.

Copyright © 2015 JLL Research


P a g e | 12


Vietnam Residential Market

Current supply The total amount of supply available for sale, either through the primary market or the secondary market, regardless of construction status.

Future supply The total amount of supply to be launched for sale in the future.

Completed supply The total amount of supply that has been physically completed and handed over for occupation. Also known as existing supply.

Uncompleted supply The total amount of supply that has not been physically completed and handed over for occupation. Includes supply under construction and supply planned for construction. Also known as supply in the pipeline.

Primary market That part of the market comprising first-hand supply available for sale from developers.

Secondary market That part of the market comprising second-hand supply available for resale from previous buyers.

Launches The estimated amount of new supply (in units) launched for sale during a period. Market practices: Many developers choose to launch their projects in phases which may or may not be publicly announced.

Take-up The estimated amount of supply (in units) sold during a period. Includes sold units from new supply in the period and supply in previous periods. Market practices: Take-up may comprise units sold via capital contributions or sale and purchase agreements.

Total inventory The total amount of uncompleted supply that has been launched for sale.

Primary asking price The stock-weighted average asking price in the primary market.

Secondary asking price The stock-weighted average asking price in the secondary market.

Luxury A luxury property meets all of a set of criteria regarding its offerings to a typical local wealthy household. These criteria are broadly concerned with the property’s overall profile, location, facilities, amenities, and management standards. A majority of luxury properties are located in or near the CBD of the city under review.

Premium A premium property meets some of a set of criteria regarding its offerings to a typical local wealthy household. These criteria are broadly concerned with the property’s overall profile, location, facilities, amenities, and management standards. A majority of premium properties are located in new urban areas outside the CBD of the city under review.

Mid-end A mid-end property meets all of a set of criteria regarding its offerings to a typical local middle-class household. These criteria are broadly concerned with the property’s overall profile, location, facilities, amenities, and management standards. A majority of mid-end properties are located within the inner districts of the city under review.

Affordable An affordable property meets some of a set of criteria regarding its offerings to a typical local middle-class household. These criteria are broadly concerned with the property’s overall profile, location, facilities, amenities, and management standards. A majority of affordable properties are located in the outer districts of the city under review.



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Vietnam Retail Market

Current supply The total amount of cumulative modern (as opposed to traditional) retail space (in GLA terms) that has been completed at a given time.

Future supply The total amount of modern retail space slated for completion in the future at a given time.

Vacant space The total amount of available modern retail space that remains to be leased by property owner(s) at a given time. This excludes space available for sub-lease by tenants (i.e. shadow space), space physically empty but already pre-leased or reserved, and space to be available for lease in the future.

Occupied space Current supply less vacant space. “Net absorption” refers to the change in occupied space from quarter to quarter.

Gross floor area (GFA) The total amount of all covered areas including columns, walls, common passageways, lift lobbies, toilets and storage rooms.

Gross leasable area (GLA) The total amount of leasable floor areas on which rentals and service charges are based, which may include common areas used for foot traffic.

Gross rent The total achievable rent to be borne by tenants including service charges / management fees but excluding VAT. Market practices: Gross rents in the retail market are usually quoted on a NLA basis.

Capital value The market value or probable price of a property at a given time from a valuation point of view.

Yield The percentage return on property investment at a given time from a valuation point of view. It is based on current market rents assuming full occupancy.

Investment Grade A type of retail property deemed to be of sufficient quality and/or scale to be of interest to a typical institutional investor. This includes department stores, shopping centres and prime retail space. The criteria for grading retail properties include age profile, ease of accessibility, property management as well as the current and potential scale of product offerings.

Supermarket In the local context, a “supermarket” refers to any type of stand-alone retail outlet predominantly run by a single chained retailer that sells a variety of grocery and / or non-grocery products. This includes supermarkets and hypermarkets that sell mixed products as well as those that specialize in a product type (such as electronics or furniture). This also includes wholesale / cash & carry stores, whose main target is business customers, but are also accessible by retail consumers. Most supermarkets are considered non-investment grade.

Shopping Centre In the local context, a “shopping centre” refers to any type of retail property that has a more diverse tenant mix than regular supermarkets. Besides anchored mixed retailers (e.g. department stores and supermarkets), a shopping centre often includes a variety of specialist retailers (e.g. fashion & accessories, food & beverages, consumer electronics and other consumer services). Most major shopping centres are considered investment grade.



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Vietnam Property Market Brief is a quarterly publication providing market updates for different real estate sectors in different

cities. It is part of the comprehensive research package from JLL Research that covers Vietnam along with other major countries

in Asia Pacific:

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Vietnam Property Market Monitor

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Asia Pacific Property Digest

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Quarterly Stock, vacancy, prices, rents Publicly available

The Office Index Asia Pacific including Vietnam

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Quarterly Stock-weighted rental value and capital value indices

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The Residential Index Asia Pacific (Vietnam to be included)

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Quarterly Capital value index Publicly available

Real Estate Intelligence Service

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Quarterly Stock, vacancy, prices, rents, yields, total returns, forecasts

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All Daily Real estate headlines & news summary

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All Every two years

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For subscription details and enquiries, please contact:

Joseph Yee Tram Nguyen Thu Nguyen

Regional Director Assistant Manager, Research & Consulting Assistant Manager, Research & Consulting Level 26, Saigon Trade Center Level 26, Saigon Trade Center Level 26, Saigon Trade Center 37 Ton Duc Thang, D1, HCMC, Vietnam 37 Ton Duc Thang, D1, HCMC, Vietnam 37 Ton Duc Thang, D1, HCMC, Vietnam +848 3910 3968 ext 911 +848 3910 3968 ext 955 +848 3910 3968 ext 927 [email protected] [email protected] [email protected]

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