why vietnam_2007_.pdf

CB Richard Ellis - VIETNAM

2

TABLE OF CONTENTS PAGES

1. VIETNAM INTRODUCTION AND ECONOMY……………………………….3 2. HO CHI MINH CITY……………………………………………………………5 3. HANOI…………………………………………………………………………14

MAP OF VIETNAM AND MAJOR CITIES


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1. VIETNAM INTRODUCTION AND ECONOMY Vietnam, evaluated by the World Bank and UNDP, has one of the most stable political systems coupled with economic growth ranked amongst the highest in the world. Since 2004 and into 2007, Vietnam has been affected by bird flu, droughts, flooding, inflation and rising fuel bills, however the Vietnamese economy has achieved steady and satisfactory growth results year on year and is ranked as the 2nd fastest growing economy in South East Asia. With WTO accession Vietnam is an attractive emerging market, in particular the property sector. This report attempts to provide an insight into the growing economy and property market in HCMC and Hanoi.

1.1 GDP

(Source: General Statistic Department) In 2006, Vietnam recorded a GDP growth rate of 8.17%. With a high GDP growth rate of 7 – 8% in the past five years, Vietnam has proved to be one of the most attractive destinations in the region for foreign investors. Besides, Vietnam has certain advantages in workforce, productivity and social structure. For those reasons, Vietnam could develop quickly in mid-term and GDP growth will reach 8 – 8.5% on average by 2010. Vietnam achieved a GDP per capita of US$720/person in 2006, much higher than that of 2005 (US$640/person). Vietnam could double its gross domestic product by the end of the decade with GDP per capita reaching US$1,100 in 2010.

Vie tnam GDP Growth 1995-2006

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

Bill.

USD

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

GDP at Current Prices GDP Growth Rate

1.2 Export – Import

(Source: General Statistic Office)

In 2006, Vietnam’s export turnover reached US$39.6 million, increasing 22% against 2005. Export reached high growth in major markets like US, EU, Japan, China and ASEAN. Main export items are garments and textile, footwear, seafood, wood product, coffee, rubber, coal, handicrafts, electric wire and cable and cashew nuts. Import turnover of Vietnam in 2006 has reached US$44.410 million, increasing 21% against 2005. Main import items are still materials, equipment and technology. Imports of gasoline and oil, fertilizer and steel billets will be monitored to reduce dependence on outside suppliers. Import goods are mainly from Switzerland, Australia, France, Finland, Thailand, Philippines, China, Indonesia, Russia, New Zealand and Canada.

1.3 Inflation rate

(Source: General Statistic Office)

Foreign Trade

(10.0)

-

10.0

20.0

30.0

40.0

50.0

2000 2001 2002 2003 2004 Prel.2005

Prel.2006

Bill.

USD

Exports Imports Trade Balance

INFLATION RATE1996-2006

-1.00

1.00

3.00

5.00

7.00

9.00

11.00

13.00

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

%


2

In 2005, the high inflation rate of 8.4% resulted from the reduction in production due to impacts of droughts and bird flu as well as high prices of import commodities including oil and gas, steel ingots and fertilizers. Inflation in 2006 is on a declining trend compared to that of 2005 (6.6%). According to the forecast of the Asian Development Bank (ADB), sustained growth in foreign direct investment flow, overseas remittance and tourism receipts will also propel growth. Vietnam’s inflation rate is expected to range from 5% to 6% in 2007 and 2008. 1.4 Population According to the year 2005’s statistics, (census is taken every five years) Vietnam has a population of over 83 million persons with an average population growth rate of 1.7% per year. Vietnam Commerce and Industry Chamber’s reports and International Labour Organisation (ILO)’s statistics show that from 2001-2010 Vietnam has been expecting 1.8 million people reaching the labour age (18 years-old) and about 350,000 people reaching retirement age every year. Ethnic groups: Vietnamese (85%-90%), Chinese (3%), Hmong, Thai, Khmer, Cham, etc. Religions: Buddhism, Hoa Hao, Cao Dai, Christian (predominantly Roman Catholic, some Protestant), Animism, Islam. 2. HO CHI MINH CITY Ho Chi Minh City has long been regarded as an economic hub of Vietnam thanks to its perceived superior infrastructure, strong business links with the outside world and convenient geographical position.

Surface area: 2,093 sq km

Population 6-7 million

19 Urban Districts, 5 Rural Districts

2006 GDP per capita: US$2,185

2006 GDP growth rate: 12.02%

The City’s economic development orientation; focuses on services such as commerce, finance, banking, tourism, transport and communication, culture, healthcare, high-tech professional worker training. As estimated, the population of Ho Chi Minh City by the end of 2006 was between 6-7 million people (comprising 7.7% of the whole nation’s population of over 83 million persons). However, the actual population approaches 7-8 million when population of outlying areas and migrants from neighbouring provinces seeking work are taken into account. Stretching over an area of 2,093 sq km, the City is bordered by Binh Duong Province in the North, Dong Nai Province in the East, Tay Ninh Province in the West and Long An Province in the South. Administratively, the City is divided into 19 districts.


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MAIN DISTRICTS (QUAN) District 1 and District 3 The City centre where most government authorities and foreign businesses are located. The current Central Business Districts (CBD) is generally accepted as areas in District 1 along major thoroughfares such as Le Loi, Nguyen Hue, Le Duan, Dong Khoi streets and/or within the 1-2km radius around the City Hall and Notre Dame Cathedral.

District 2, located in the North – East gate of Ho Chi Minh City. The district is adjoining to District 1, District 4, District 7, District 9, Binh Thanh District, Thu Duc District and Dong Nai province. District 2 benefits from advantageous transport communication by road and by rail and a new proposed urban centre in Thu Thiem Peninsula, which is situated opposite to the existing City centre by Saigon River. District 4, adjacent District 7 and District 8 in the South through Te Canal, District 1 in the Northwest through Ben Nghe Canal, District 2 in Northeast through Saigon River. Situated at the South – East gateway of Ho Chi Minh City. District 4 is a maritime transport junction and will be developed as a centre for maritime – port commerce, services and for foreign trade and transport. District 5, better known as China Town (Cho Lon), hosts the largest Chinese community in Vietnam and maintains often-unofficial business links with Chinese speaking countries. District 5 is adjacent District 1, District 10, District 11, District 6 and District 8. District 7, located in the southern gateway of HCMC, adjacent to district 4, district 8, Binh Chanh and Nha Be. The new urban centre ‘Phu My Hung’ is located here. District 9, a new urban centre of Ho Chi Minh City; adjacent District 2 in the south, Dong Nai Province in the East and Binh Duong Province in the West and Northwest. Thu Duc District, a new urban centre, located in northern east of HCMC, contiguously District 2 and District 9. It is one of important industrial centres in HCMC and is also an education centre with many universities in situ.

Binh Chanh, Binh Tan and Nha Be Districts, located in the West - South of the City. Three major industrial parks gather here: Tan Tao, Vinh Loc and Le Minh Xuan. The area is the gate to Mekong Delta provinces.


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2.1 OFFICE MARKET

In Ho Chi Minh City, there are total 81 medium and high quality office buildings supplying 351,727 sqm NLA in Ho Chi Minh City. Most of the buildings are located in District 1, the City’s administrative centre. There are currently 5 Grade A office buildings (NLA of 77,935 sqm), 14 Grade B office buildings (NLA of 147,907 sqm) and 62 Grade C office buildings (NLA of 125,885 sqm).

2.1.1 Grade A Office Buildings Most of the Grade A buildings where constructed before the Asian economic crisis in 1997 by Hong Kong and Singaporean investors. Saigon Centre is the first Grade A office building completed in 1996. The rents for Grade office space is around $38.00 per sqm (including service charge, excluding 10% VAT), with occupancy at 100%. Most Grade A buildings have floor plates of over 1,000 sqm and can accommodate large space users with lettable areas of more than 10,000 sqm


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2.1.2 Grade B & C Office Buildings

Most of the existing stock was constructed in the mid 1990’s, before the Asian financial crisis. The rents for Grade B buildings is $31.00 per sqm (including service charge, excluding 10% VAT), with occupancy rates of 99%. Most Grade B buildings have a floor plate less than 1,000 sqm, apart from Saigon Trade Centre and Me Linh Point Tower. Grade C buildings have primarily been built by local developers and tend to be no more than 8 storeys high with a GFA of less than 5,000 sqm. The rents are $25.00 per sqm (including service charge if applicable, excluding 10% VAT), with occupancy rates of 95%.

Leased Area - Occupancy rate

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

sqm

0%

20%

40%

60%

80%

100%

%

Vacancy(sqm)

0 0 2,502 18,584 92,100 83,727 76,785 47,899 43,734 45,696 40,153 30,950 25,060 14,069

Leased(sqm)

14,900 19,426 33,245 47,788 75,354 83,727 125,282 160,358 164,523 194,811 227,532 250,412 288,193 337,658

Occupancy(%)

100% 100% 93% 72% 45% 50% 62% 77% 79% 81% 85% 89% 92% 96%

Q4.93 Q4.94 Q4.95 Q4.96 Q4.97 Q4.98 Q4.99 Q4.00 Q4.01 Q4.02 Q4.03 Q4.04 Q4.05 Q4.06

(Source CB Richard Ellis) With a shortage of high quality space and increasing demand rents are expected to maintain an upward trend with rental rates exceeding $40.00 per sqm until new Grade A stock comes on line during 2009. Demand will be absorbed by Grade B & C buildings coming on line during 2007 & 2008. 2.2 Residential According to the HCMC Department of Housing and Land Management Services, there are currently 1.007,000 houses and apartments throughout the City with a total housing area of over 52.7 million sqm. This results in an average housing area per capita of around 10.27 sqm. According to the City’s plan, it is expected that 103 million sqm of housing will be needed by 2010 in order to achieve an average housing area of 14.2 sqm per capita.

A Selection of Condominium developments for sale in HCMC

Name Location Developer Unit Size Price per sqm USD

Sold %

Lancaster Dist 1 Trung Thuy Co Ltd

1bedroom unit size:71-75 sqm 2bedroom unit size:86 sqm 3bedroom unit size:120-165 sqm

3,600

98%


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(Source: CB Richard Ellis)

Penthouse: 270 sqm

Avalon Dist 1 Phuong Nam Co

Two bedroom units: 103 sqm Penthouses: 207 sqm

2,800

100%

Cantavil Dist 2 Daewon Co and Thu Duc

Housing Development

Co.

Type A: 150 sqm (3 bedrooms) Type B: 120 sqm (3 bedrooms) Type C: 96 sqm (3 bedrooms) Type D: 79 sqm (3 bedrooms) Type E: 75 sqm (2 bedrooms)

1,029

- 1,155

97%

Estella Dist 2 Tien Phuoc Co.

Unit size: 92-123 sqm

1,000 -

1,200

0%

Pasteur Court

Dist 3 Van Thinh Phat Co Ltd and An Thai

Co.

2-bedroom unit size: 83 sqm 3-bedroom unit size:125-142 sqm

2,200

100%

Nam Khang

Phu My Hung, Dist 7

Phu My Hung Corp.

Unit size: 150 sqm

1,000 -

1,100

100%

The Grand View

Phu My Hung, Dist 7

Phu My Hung Corp.

117-134 sqm (3bedroom) 1,300

100%

Garden Plaza

Phu My Hung, Dist 7

Phu My Hung Corp.

14 shophouses: 133-524 sqm 96 apartments: 123-222 sqm

1,300 -

1,400

100%

Panorama Phase 1&2

Phu My Hung, Dist 7

Phu My Hung Corp.

Unit size: 122-374 sqm (3-bedroom)

1,300 -

1,500

100%

The Manor Binh Thanh

Bitexco 2 bed unit size:100-113 sqm 3 bed unit size:123-164 sqm 4 bed unit size:190-260 sqm

1,400-2,300 100%

Saigon Pearl

Binh Thanh

VN Land SSG 2-bedroom type:78-89 sqm 3-bedroom type:132-140 sqm 4-bedroom type:203-235 sqm 5-bedroom type:290 sqm Duplex & 5 bedroom:290-372 sqm

1,200 -

1,500

97% 1st

Phase

Hung Vuong Plaza

Dist 5 Kinh Do Co & Lam Phan Co.

Unit size: 117 – 128 sqm

900 -

1,000

100%

Ruby Land Tan Phu District

Tan Hoang Thang Co

Unit size (A): 126.3 sqm (3 bed) Unit size (B): 112.2 sqm (2 bed) Unit size (C): 104.2 sqm (2 bed) Unit size (D): 104.9 sqm (2 bed) Unit size (E): 45.6 sqm (1 bed)

550-600 85%

Hoang Thap Plaza

Binh Chanh

Hoang Thap Co.

Unit size: 97-113 sqm 530-750 100%


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In 1999, the first type of high-class apartment known in Ho Chi Minh City was the development of My Canh, constructed in the new residential area of Phu My Hung, Saigon South. Since 2004, modern and high-end apartments have been constructed intensively in most districts; however prices have varied depending on location and quality of apartments. The Avalon and The Lancaster, both located in District 1 have achieved selling prices of $2,800-$3,600 per sqm; Binh Thanh District, adjacent to District 1 the Manor and Saigon Pearl have achieved selling prices ranging from $1,200-$2,300 per sqm. District 2 prices range from $530-$1,560 per sqm, in District 7/Phu My Hung area, prices range from $900-$1,500 per sqm, in district 3 prices range from $1,150-$2,200 per sqm, in outlying districts prices can start upwards of $380 per sqm. The buyers are predominantly Vietnamese or overseas Vietnamese (Viet Kieu), who can purchase the apartments on a freehold basis and are either end users or investors. This segment comprises high income earners, middle income earners and returnees to Vietnam. Foreigners can purchase property in Vietnam, however only on a 50 year leasehold basis. Sales take up has varied across districts; however, 53% take up on average per annum, although certain developments have achieved 100% sales within a one year period. Foreign investors are also becoming active in this market

2.3 Serviced Apartment

In Ho Chi Minh City, there are 7 Grade A serviced apartment projects located within District 1 and 3, a total 521 units, offering one to five bedroom units. There are 11 Grade B serviced apartment projects, a total of 1,200 units and 36 Grade C with 848 units. The average occupancy rate of the serviced apartments in Ho Chi Minh City (both Grade A and B) is 95%. Achieved rents range from US$28 to US$40 per sqm per month for Grade A buildings, US$24 to US$31 for Grade B buildings and US$15 to US$23 for Grade C buildings, (including service charge and 10% VAT).


As supply remains limited and demand remains strong, there will be some pressure to increase serviced apartment rentals in the short-term (less than 5-year term). However, accommodation budgets are expected to remain low for some expatriates, thereby preventing any significant increases in rents. 2.4 Retail Market At the end of 1995, there were about 10 supermarkets and 2 shopping centres all over Vietnam. At present, the country’s two major cities have more than 105

Monthly Asking Rent per Unit (US$) Grade

1-bedroom 2-bedroom 3-bedroom 4-bedroom Grade

A 1,700-2,500 2,500-4,500 3,000-6,700 4,000-9,000

Grade B 1,100-2,300 2,100-3,400 2,800-6,000 3,800-7,000

Grade C 800-1,800 1,300-3,100 2,100-3,000 3,800-4,300


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supermarkets, which account for 75% of the country’s total. Ho Chi Minh City has five major supermarket chains with over 50 outlets. There are currently two department stores and six shopping centres providing 106,000 sqm of leasable retail space. Rental prices range from $30.00 to $170.00 depending on the outlet and positioning with average rents of $80.00 per sqm. Future Supply The supply of shopping centres is expected to improve in the future, providing more opportunities for international retailers and distributors. Ho Chi Minh City currently has about 100,000 sqm of retail area under construction that will come on line over the next four years.

HCMC Future Supply

4,300

15,000

33,000

2,560

12,367

11,882

6,880

8,292

30,000

Tan Da CourtDist. 5

Saigon ParagonDist. 7

Hung Vuong PlazaDist. 5

Sailing TowerDist. 1

Times SquareDist. 1

Happiness SquareDist. 5

Kumho AsianaDist. 1

SJC TowerDist. 1

Saigon PearlBinh Thanh

20

07

20

08

20

09

20

10

(Source : CBRE)

sqm

Market Outlook The outlook for the retail market in HCMC City remains positive as it is still very under developed and has attracted interest from many foreign supermarket and retailers alike, known brand names are entering the market and will do so more now Vietnam is the 150th member of the WTO. The most interesting fact is, 65% of the population in Vietnam is below the age of 35 and therefore is a market full of young consumers. 2.5 Hotel Market

The City’s tourism has resulted in a good performance with a growth in the hospitality industry. 2004 – 2005 statistics by the City ‘s department of Tourism showed that the room occupancy at three to five-star hotels had reached 80 – 90% in the peak season, while the average rate in the whole year recorded 73.92% for five star hotels, 77.43% for four-star and 83.33% for three star hotels.


9

Hotel Rates for 5, 4 and 3 Star Hotels

There are 10 5, star hotels in Ho Chi Minh City. The majority were constructed before 1999, except for the Legend Hotel in 2001, Sheraton Hotel in 2003, Windsor Hotel 2004 and Park Hyatt 2005. There are 8, 4 star hotels most of them were built before 1999. There are 23, 3 star hotels, operated individually or by state owned companies.

HOTELS FROM FIVE TO THREE STARS 2006


At present HCMC could support another 3-4, 5 star hotels, along with 4 and 3 star hotels due to the increasing growth in tourism as well as business travellers. Apart from some proposed mixed-use developments with a hotel component and extension to existing hotels there remains a shortage for quality hotels in this sector. According to the department of tourism, HCMC needs another 10,000 rooms across all grades in the next 5 years to accommodate the growing tourism and business travellers for both the domestic and international markets. 2.6 Town house and Villas Market

Townhouses are commonly known as a front house/shop house, which is owned by an individual. In the inner districts townhouses are found as a row of houses. Generally, these houses are 4-6 metres wide, 1-4 storeys and built in a tube shape and the ground floor accommodates either a retail shop or office. Villas are detached buildings with a surrounding garden and sometimes a swimming pool. In Ho Chi Minh City, two kinds of villas exist: French or American colonial style villas, or modern style villas that been constructed in recent years. Most town houses are built by individuals who acquire a plot of land. However, there have been some villa development projects away from the CBD area and command prices, which are upwards of $1m. Interestingly town houses and villas values are calculated against the price of a gold bar per sqm e.g. Gold bar price is $750, the villa size is 2,000 sqm, therefore: 750 x 2,000 = $1.500,000.

3 star 4 star 5 star Total

Total Supply

Number of hotels 23 8 10 41

Number of rooms 1,903 1,447 3,435 7,748

Total Demand

Occupied rooms 1,398 1,120 2,539 5,057

Average Occupancy rate 83.33% 77.43% 73.92% 78.22%

Average daily rate (US$)

Rate 30-110 61-228 74-345 30-345


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In most cases, Villa values are much higher than those commanded by condominiums; however, they tend to be on a large scale and therefore require greater maintenance, most sought after villas are those, which are located in compounds and therefore have good management and security. 2.6.2 Villas for rent There are many villas for rent. The developers are not only the construction companies but also the individuals who lease their own villas. The tenants of these villas are mostly expatriate families working in Ho Chi Minh City (often in District 1). Each family usually comprise 4 members and preference is given to 4-bedroom villas of about 200-500 sqm. In addition, some villas are rented to companies as office space. The rental prices for villas range from US$1,000-7,000 per month depending on the villas’ location and area.

2.7 New Development Areas 2.7.1 Phu My Hung/Saigon South Phu My Hung Corporation, a joint venture between CT&D Group (Taiwan) and Tan Thuan Corp. (under the Ho Chi Minh City People’s Committee) has the right to develop 850 ha out of the total area of 2,600 ha in Saigon South and so far has built 1,000 apartments with plans to develop the whole site during their joint venture duration up to 2043. With international expertise and financial strength, Phu My Hung Corporation has gradually converted Saigon South into a living place for the high-end residential market. Saigon South has some of the best infrastructure; including roads, green spaces, parking, and entertainment facilities etc, for the development of apartment buildings, villas, along with commercial buildings.

2.7.2 Thu Thiem Master Plan Thu Thiem located in District 2 directly across the Saigon River from the City centre and will be a master planned community, which attempts to imitate the success of Saigon South and hopes to compete on a similar basis, as the “new City centre”. Given the significant head start, the ability (and willingness) of Saigon South’s investors to invest in the critical areas of power and transportation infrastructure, it is unlikely that Thu Thiem will compete directly with Saigon South within the next 10 years. Ho Chi Minh City authorities are setting up the schedule of implementing the phases of constructing Thu Thiem New City Centre. Construction of The Thu Thiem Bridge with its related facilities started in 2005. The Thu Thiem Tunnel connecting Thu Thiem Township with District 1 was ‘ground broken’ on 31st of January 2005 and construction began in May 2005. This is a good signal for the residential and commercial projects in the North East of Ho Chi Minh City. Currently the People’s Committee have engaged EDAW, a planning, design and economic consulting firm based in Hong Kong, to head a team comprising Indochina Capital (Investment Advisory), Maunsell/Aecom (Engineering Consultancy) and CB Richard Ellis, Vietnam (Property Consultancy) to undertake a feasibility study.


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Location of Thu Thiem Layout of Thu Thiem

3. HANOI

Hanoi, the capital of Vietnam, located in the central of Red River Delta, has nearly a thousand years of being a socio-cultural-economic and political centre of the country.

Surface area: 920.97 sq km

Average Air Temperature: 24.3°C (ranging from average 17.2°C in January to 29.7°C in June) - tropical monsoon climate. 114 rainy days a year, 1,800 mm of rainfall

9 Urban Districts, 5 Rural Districts

2006 GDP growth rate: 11.50%

2006 Average Population: 3.272 million (2.8%)

3.1 Office Market There are currently 9 developments classified as Grade A office buildings in Hanoi, most of them are foreign invested joint venture developments from Hong Kong, Singapore, Korea, Japan and France. Most of the Grade A office buildings came on stream before 2000 except Vietcombank Tower, which opened in 2001. As at Q4/2006, the total lettable stock of Grade A office space has stood at 84,172 sqm for over 5 years and will be increased at early 2007 when over 18,000 sqm of Grade A office space will come on line.


Average asking rents of Grade A office space in Hanoi’s CBD, registered at US$31.35 pm at the end of Q4/2006 (inclusive of service charges ranging between US$5.00 to US$8.00 per sqm pm). With Grade A office occupancy in Hanoi hovering around 100% it is forecasted, rentals will increase by between 10% and 15%.

(Source : CB Richard Ellis)

Hanoi Cumulative Stock and New Supply of Grade A&B Office Proper ties

0

50,000

100,000

150,000

200,000

250,000

20

04

Q1

20

04

Q2

20

04

Q3

20

04

Q4

20

05

Q1

20

05

Q2

20

05

Q3

20

05

Q4

20

06

Q1

20

06

Q2

20

06

Q3

20

06

Q4

Sq

m

Stock as at begining of the quarter New supply as at quarter-end

Average Rental of Hanoi Grade A&B Off ice Proper ties

15.00

20.00

25.00

30.00

20

04

Q1

20

04

Q2

20

04

Q3

20

04

Q4

20

05

Q1

20

05

Q2

20

05

Q3

20

05

Q4

20

06

Q1

20

06

Q2

20

06

Q3

20

06

Q4

US

$ P

SQ

MP

M


2

The Grade A office leasing market in Hanoi is expected to remain under upward pressure until 2008, when a substantial quantum of new supply is expected to come on stream, given strong demand from both local and multi-national corporate tenants, across all sectors. Despite the introduction of two new Grade A properties at early 2007, rents in the Grade A buildings in prime locations are expected to trend upwards in the two year run up to the completion of new developments. However we expect that Grade B office developments will experience slight downward pressure on rentals, given the substantial quantum of new Grade B developments coming on stream in 2007. 3.2. Serviced Apartments The Hanoi serviced apartment market is mostly driven by expatriates, with budgets over US$1,000 per month for accommodation. There are 15 serviced residential projects in Hanoi, supplying the total of 1,200 units for the market, of which there are 1,140 apartments and 60 villas. Rental rates range between US$1,100 and US$6,000 per unit per month for a 1-bedroom apartment to a 5-bedroom penthouse; whilst for independent villa/townhouses range from US$2,500 to US$4,500 per month depending on location, condition and facilities. The average rent for an apartment in Hanoi market is approximately US$3,100 per month, excluding VAT. The average occupancy rate of the serviced apartments in Hanoi is 97.33%.


3.3. Hotel Market There are 378 hotels in Hanoi, of which 34 are 3, 4 and 5 star hotels. Most 4 & 5 star hotels in Hanoi were constructed before 1996 except a 5 star hotel, Hanoi Sheraton in 2004. 4 and 5 star hotels, were developed by Singaporean, Japanese Hong Kong, French, Korean, Thailand and Malaysian investors The average daily rate of 5 star hotels ranged US$70 – US$620 and US$45 – US$265 for 4 star hotels. These rates include VAT (10%) and a service charge (5%). As in December 2006, 4 and 5 star hotels respectively achieved average occupancy rates of 84.62% and 82.62%. With the increasing international tourist arrivals and limited future

Take-up & Vacancy of Hanoi Serviced Apar tments

-20

-10

0

10

20

30

Q3

/20

04

Q4

/20

04

Q1

/20

05

Q2

/20

05

Q3

/20

05

Q4

/20

05

Q1

/20

06

Q2

/20

06

Q3

/20

06

Q4

/20

06

Un

its

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

Va

can

cy R

ate

(%

)

Take-up

Vacancy Rate


3

supply of 3 to 5 star hotels, the hotel market will improve in terms of price and occupancy rate.

HOTELS FROM FIVE TO THREE STARS 2006


3.4. Retail Market Although there are not many in numbers or good examples of modern shopping centres in Hanoi, there are 9 projects can be categorised as shopping centres. The total leasable area of shopping centres in Hanoi is 136,496 sqm. Me Linh Plaza is a specialised trading centre for building materials and interiors, etc. For consuming Vincom City Towers is the largest and most prestigious mix-use modern shopping facility, while Trang Tien Plaza possesses the prime location by Hoan Kiem Lake, in the heart of the CBD.

No Shopping Centre District Leasable Area (sqm)

1 Trang Tien Plaza Hoan Kiem District 12,000

2 Hanoi Tower Hoan Kiem District 2,056

3 V - Tower Ba Dinh District 940

4 VKO Ba Dinh District 8,000

5 Vincom City Towers Hai Ba Trung District 17,000

6 BigC Thang Long Tu Liem District 17,000

7 Luxury Mall Hai Ba Trung District 5,500

8 Me Linh Plaza Me Linh, Vinh Phuc Province 67,000

9 Hoa Binh Int’l Towers Cau Giay District 7,000

Total 136,496


The average rental paid in Hanoi’s shopping centres is US$22.83 per square metre per month. However Trang Tien Plaza rental rate is 50% higher than most of the other

3 star 4 star 5 star Total

Total Supply

Number of hotels 21 5 8 34

Number of rooms 1,686 874 2,364 4,924

Total Demand

Occupied rooms 1,349 722 2,000 4,171

Occupancy rate 80.00% 82.62% 84.62% 82.67%

Average daily rate (US$)

Rate 19-120 45-165 74-1,800 19-1,800


4

centres’, thereby increasing the average rent per square metre per month quite significantly. Vincom City Towers has the largest leasable area with the rental rate of US$30. There are currently seven retail projects under construction and will provide approximately 260,000 sqm coming online during 2007 to 2010.

3.5 Residential Currently, there are 131 residential projects, which are in various stages of development for various budgets of buyers in Hanoi. Most apartments were sold off-plan. The sale prices range from US$600 to US$900 per sqm for medium quality projects and from US$1,200 to US$2,500 for high quality projects. Some condominiums offer units as shells and some offer fitted units. Majority of residential apartments constructed in Hanoi are of a medium class. These apartments sold quickly to middle class families with the average sale price of US$400 to US$600 per sqm. Due to the supply shortage of residential apartment, units are sold off-plan and then re-sold, many times prior to completion.

HANOI TOP-END RESIDENCIAL PROJECTS Name Location Developer No of Units Price per sqm $

Pacific Place 83B Ly Thuong Kiet Street

Ever Fortune Co Ltd

176 1,800

Ciputra Phu Thuong, Nhat Tan, Xuan

La Ward

Citra Westlake City

Development Co Ltd

9,000 apartments and

2,000 villas

800 for apartment

1,600 for villas

The Manor My Dinh Ward Bitexcoland Co Ltd

450 apartments and over 100

villas

900 –1,500

The Garden My Dinh Ward Bitexcoland Co Ltd

170 apartments 1,200 –1,500

Chelsea Park Trung Kinh Ward

Vietnam Land Co Ltd

240 apartments and 10 villas

760 –900 Golden

Westlake 151 Thuy Khue

Street Ha Viet

Tungshing JVC 370 apartments

and 16 villas

1,600 (Source: CB Richard Ellis)


5

BUSINESS LINE OVERVIEW

CB Richard Ellis (Vietnam) Ltd, established in January 2003. The firm has now grown to be the key property services provider in Vietnam with 20 professionals in Hanoi and Ho Chi Minh City. The firm has a commitment to developing Vietnamese staff and we have a continuous recruitment policy to ensure that we employ the best talent available. We will continue to expand the business to ensure that our clients receive the best possible level of service.

• FOR DEVELOPERS AND INVESTORS

Development Planning, Design Layout Review, Pre-Leasing Preparation, Leasing, Management.

• FOR OWNERS

Market Information, Existing Performance Review, Benchmarking, Repositioning Advice, Redevelopment Consultancy, Management.

• FOR OCCUPIERS Market Trend Analysis, Market Entry Strategy, Location Outlet Strategy, Lease Audit.

CB Richard Ellis (Vietnam) Ltd offers consistent standards of service and unmatched accountability across the Asia region. Comprehensive resources and unparalleled expertise allow us to deliver new and innovative real estate solutions to our clients. For further information on the services of CB Richard Ellis or for further detailed information contained in the report, contact:

MARC TOWNSEND NAIM KHAN-TURK TUAN Q. NGUYEN Managing Director Associate Director Associate Director Research & Consultancy Research & Consultancy

T: (848) 824 6125 ext 101 T: (848) 824 6125 ext. 109 T: (844) 220 0220 ext. 104 DL: (848) 823 7861 M: (84) 908 550 446 M: (84) 913 003 666 M: (84) 903 006 790 E: [email protected]. E: [email protected]

E: [email protected] www.cbrevietnam.com www.cbre.com

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Documents

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binh duong province

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thu duc district

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