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HANOI MARKET INSIGHTS Q3 2014
Thursday, October 09, 2014
2 CBRE MARKET INSIGHTS | Q3 2014
VIETNAM ECONOMIC OVERVIEW
9M 2014 9M 2013 Y-o-Y
Real GDP growth rate (%) 5.6% 5.1%
CPI (% y-o-y, e-o-p) 4.6% 6.3%
Exchange rate (USD/VND, e-o-p) 21,246 21,246 ↔
Export (% growth y-o-y) 14.1% 15.7%
Import (% growth y-o-y) 11.1% 15.5%
FDI Registered (US$ Billion) 11.2 15.0 FDI Implemented (US$ Million) 8.9 9.3 International Tourist Arrivals (% growth y-o-y) 10.4% 9.9% Retail and Services Turnover (% growth y-o-y) 11.1% 12.5%
FDI: Foreign Direct Investment
Y-o-Y: year on year; Q-o-Q: quarter on quarter
E-o-p: end of period
Source: Vietnamese General Statistical Office
3 CBRE MARKET INSIGHTS | Q3 2014
MONEY FLOWS INTO REALTY Asian investors are still keen
Real Estate Ranked Second in terms of FDI, 9M 2014
Projects Location US$
million Investors
Smart
Complex
Thu Thiem,
HCMC 2,000
Lotte
(Korea)
Vinhomes
Tan Cang HCMC 1,500
VinGroup
(Vietnam)
Amata City
Long
Thanh
Long Thanh
District 530
Amata
(Thailand)
Hanoi
Westgate
Quoc Oai
District 140
Keppel Land
(Singapore)
Large Invested Real Estate Projects
Source: Ministry of Planning and Investment, September 2014. Source: Stockbiz, September 2014.
US$1.2
billion
4 CBRE MARKET INSIGHTS | Q3 2014
VIETNAM STILL ON THE RADAR Focusing on market growth and business climate will be beneficial
Announced greenfield FDI in APAC 2013
Vietnam ranks 3rd in value and 2nd in percentage of GDP
Source: FDI Intelligence, Financial Times
US$1.2
billion
$64
$16
$15
$13
$10
$5
$5
China
India
Vietnam
Myanmar
Indonesia
Thailand
MalaysiaUnit: US$ billion
Motives for FDI, ranked by importance
45%
33%
21% 18%
8%
2%
Ma
rket g
row
th
Pro
xim
ity t
o m
ark
ets
Busin
ess c
lima
te
Skill
ed
work
er
Infr
astr
uctu
re
Low
co
sts
Vietnam’s strength Vietnam’s weakness
5 CBRE MARKET INSIGHTS | Q3 2014
Sep
-13
Oct-
13
Nov-1
3
De
c-1
3
Ja
n-1
4
Fe
b-1
4
Fe
b-1
4
Ma
r-14
Apr-
14
Ma
y-1
4
Ju
n-1
4
Ju
l-1
4
Ju
l-1
4
Aug
-14
Sep
-14
Realty Stocks are Leading HCMC Market
RALLY STOCK MARKET
Source: Stockbiz, FPTS.
Realty stocks
VNIndex:514
VNIndex: 640
605
6 CBRE MARKET INSIGHTS | Q3 2014
INTEREST RATES
Lower Lending Rates
Source: Smartfinance.
(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only. However, the back-dated numbers are the average rate
which was announced publicly at that point of time, applied for all sectors and all banks . The average lending rate is for reference only.
(**) Deposit rate is the average deposit rate of a sample of ten banks in which the rates are announced publicly on their websites and can be tracked backwards.
0%
5%
10%
15%
20%
25%
Ja
nF
eb
Ma
rA
pr
Ma
yJu
nJu
lA
ug
Se
pO
ct
No
vD
ec
Ja
nF
eb
Ma
rA
pr
Ma
yJu
nJu
lA
ug
Se
pO
ct
No
vD
ec
Ja
nF
eb
Ma
rA
pr
Ma
yJu
nJu
lA
ug
Se
pO
ct
No
vD
ec
Ja
nF
eb
Ma
rA
pr
Ma
yJu
nJu
lA
ug
2011 2012 2013 2014
Inte
rest ra
te
Deposit rate (1 year term) Lending rate
13%
7%
Some banks offers lending rates of 7.5%
- 8.5% for the first few months only.
7 CBRE MARKET INSIGHTS | Q3 2014
CREDIT GROWTH
Reported Number in August 2014
Target for 2014
By the end of August 2014, credit to real estate market has
expanded 9.85% against the beginning of this year, higher
than the credit growth of the whole economy (5.82%) and
other sectors’.
Source: State Bank of Vietnam, August 2014.
“ Poor credit growth is more about sentiment than a real problem.
” Pham Hong Hai, Head of Global Banking at HSBC, HCMC *All the above articles were retrieved in September 2014.
8 CBRE MARKET INSIGHTS | Q3 2014
Positively Correlated with the Stock Market
RECOVERING CONSUMER CONFIDENCE
ANZ – Roy Morgan Vietnam Consumer Confidence Index Expectation of Vietnam economic condition
Source: ANZ - Roy Morgan
Expectation of personal and family’s financial
condition
9 CBRE MARKET INSIGHTS | Q3 2014
New modern highways
INFRASTRUCTURE
Hanoi – Lao Cai Highway
(245 km) Completed: September 2014
Modern highway, considerablely
shorten travelling time from Hanoi to
provinces in the North and Northwest
Hai Duong
Hanoi-Haiphong new
Highway (105 km) Total investment: US$1.1 billion.
Width: 100m, 2x4 lanes
Expected completion: end of 2015
Hanoi
Phu Tho
Yen Bai
Lao Cai
Sapa
Vinh Phuc
Hanoi
Hai Phong
National Road no. 5
(60km/h max speed)
Hanoi-Hai Phong new Highway
(120km/h max speed)
Dinh Vu Port
Nhat Tan Bridge Total investment: VND13.6 trillion.
Length: 8.3km
Expected completion: Q4 2014
10 CBRE MARKET INSIGHTS | Q3 2014
Hanoi Metro lines have seen progress, but increased costs
INFRASTRUCTURE
Line Cat Linh – Ha Dong
(13.5km)
299/419 piers, 7/12 stations
completed
Investment costs rise to US$
891 mil (60% increase)
Expected completion: 2016.
Line Nhon – Hanoi Station
(12.5km)
Package 1: 4/6 piers
completed, Cau Giay cross
road is under construction
Package 4: 90% completed
1
2
3
1
2
3 4 4
11 CBRE MARKET INSIGHTS | Q3 2014
Improved infrastructure paving the way for new investment in Eastern provinces
INFRASTRUCTURE IN EASTERN PROVINCES
New Hanoi – Hai Phong
National Highway • Investment capital: US$1.1 bil
• Progress: 65%
• Est. completion: end of 2015
Cat Bi Int’l Airport Upgrade • Investment capital: US$170 mil
• Est. completion: end of 2015
• Exp. Volume: 2 mil pessengers &
20,000 tons of cargo by 2015
• Exp. Routes to Japan, Korea, China,
Hong Kong, Taiwan, Thailand,
Singapore, Malaysia, Indonesia
Lach Huyen Deep Water Port • Est. completion: end of 2016 (1st phase)
• To be the first deep water int’l port in the
North connecting directly to North America,
Europe, Japan, Korea.
o To facilitate port activities
o To attract further FDI into manufacturing and trading to Hai
Phong and Quang Ninh
o To ultimately boost economic growth in Hai Phong and Quang
Ninh
RESIDENTIAL MARKET Hanoi Q3 2014
13 CBRE MARKET INSIGHTS | Q3 2014
Active launches even during
‘ghost month’
New launches from 6
projects (2,202 units)
Most re-launches in mid-
end segment
Most of the new launches
are from the low-end
segment
Active Launches and Re-launch Activities
CONDOMINIUM FOR SALE
Diamond Blue – Thanh Xuan
(Foundation)
Green House – Long Bien
(Topped out)
HH4 Linh Dam – Hoang Mai
(Superstructure)
Green Star – Cau Giay
(Foundation)
Thang Long Victory – Hoai Duc
(Superstructure)
Mulberry Lane (Block B, D) – Ha Dong
14 CBRE MARKET INSIGHTS | Q3 2014
A Busy ‘Ghost Month’ Quarter
RESIDENTIAL MARKET
Active launches and re-
launches from developers
Slight increase in launch
price and resale price
More promotion on offer
at bigger value
Deferred payment
becomes popular
Banks are busy competing
for mortgage customers
Buyers are busy shopping for
their dream houses too!
Launches Promotions Project Visiting
Mortgage Credit Growth
15 CBRE MARKET INSIGHTS | Q3 2014
New Launches in Q3 2014
CONDOMINIUM FOR SALE
Green Star
North Tu Liem District, 864
units
by An Binh Star
@ from $993 psm
Green House
Long Bien District, 650 units
by HUD
@ from $941 – 1,035 psm
HH4 Linh Dam
Hoang Mai District, 700 units
by Dien Bien No. 1
@ from $659 psm
Thang Long Victory
Hoai Duc District, 440 units
by Phuc Ha JSC
@ from $552 psm
Mulberry Lane (Block B, D)
Ha Dong District, 1,478 units
by CapitaLand
@ from $1,400 psm
Diamond Blue
Thanh Xuan District, 440 units
by Traco & HT Land
@ from $800 psm
16 CBRE MARKET INSIGHTS | Q3 2014
0
5,000
10,000
15,000
20,000
25,000
2007 2008 2009 2010 2011 2012 2013 2014
Units
Q1 Q2 Q3 Q4 Whole year
Launch supply in 9 months 2014 surpassed whole year 2013
CONDOMINIUM FOR SALE
Hanoi accumulated supply –
128,433 units
- Affordable: <US$800 psm
- Mid-end: US$800 – 1,500 psm
- High-end: US$1,500 - $2,500 psm
- Luxury: >US$2,500 psm
2%
16%
61%
21% Luxury
High-end
Mid-end
Low-end
Total new launches in 9 months 2014 surpassed
whole year 2013
(*) Accumulated since 1997
6,829
Source: CBRE Vietnam, Q3 2014.
YTD
New Launches by Year Supply by Segment
17 CBRE MARKET INSIGHTS | Q3 2014
Projects more frequently advertised
CONDOMINIUM FOR SALE
Note: Selected newspapers include Dau Tu Bat Dong San, Thoi bao kinh te Vietnam, The gioi thong tin bat dong san, CafeF, Tap chi dau tu
bat dong san, Vietnamnet, Thi truong Bat dong san & Tai san, Nguoi dua tin
Source: CBRE Vietnam, Q3 2014.
18%
16%
23%
7%
3%
13%
5%
6%
8%
Tu Liem
Thanh Xuan
Ha Dong
Cau Giay
Tay Ho
Hoang Mai
Hoai Duc
Hai Ba Trung
Others
0
50
100
150
200
250
300
0
10
20
30
40
50
60
70
80
Q3 Q4 Q1 Q2 Q3
2013 2014
Nu
mb
er
of
ad
ve
rtis
em
en
t
Nu
mb
er
of
pro
jec
ts
Number of projects Number of Advertisements
Advertised by District, Hanoi, 2014 YTD Advertised by Quarter, Hanoi
18 CBRE MARKET INSIGHTS | Q3 2014
Apsorption Rates Improving
CONDOMINIUM FOR SALE
-
500
1,000
1,500
2,000
2,500
3,000
Newlaunches
Sales
Luxury High-end Mid-end Low-end
Q3 2014 9 months 2014
Source: CBRE Vietnam, Q3 2014.
Sales are catching up with
new launches with
absorption rates improving
for the quarter and YTD
Sales New
Launches Sales New
Launches
Sales Volume = 116%
New Launches
Sales Volume = 96%
New Launches
19 CBRE MARKET INSIGHTS | Q3 2014
Improving Sales in Mid-end Segment
CONDOMINIUM FOR SALE
An estimate of 2,553 units sold in the quarter, up 61% y-o-y
Sales improves in mid-end segment.
0
500
1,000
1,500
2,000
2,500
3,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014
Luxury High-end Mid-end Low-end
Sold Units by Year and by Segment, Hanoi
-
5,000
10,000
15,000
20,000
25,000
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
Nu
mb
er
of
un
its
Luxury High-end Mid-end Low-end
Unsold stock, Hanoi
22,311
Source: CBRE Vietnam, Q3 2014.
20 CBRE MARKET INSIGHTS | Q3 2014
Primary prices slightly increase in the mid- and low-end projects
CONDOMINIUM FOR SALE
More promotions of bigger values are on offer
Increase in indicated tag prices seen in mid- and low-end projects Developers
appear more confident in market and project positioning
$0
$500
$1,000
$1,500
$2,000
$2,500
2008 2009 2010 2011 2012 2013 2014
High-end Mid-end Low-end
Source: CBRE Vietnam, Q3 2014.
Primary price
21 CBRE MARKET INSIGHTS | Q3 2014
Increasing secondary prices with improvement in most segments
CONDOMINIUM FOR SALE
Increase in most segments, with strongest increase in mid-end segment (1.8% q-o-q)
Resale buyers are coming back to apartments with more reasonable prices
-10%
-6%
-2%
2%
6%
10%
14%
2008 2009 2010 2011 2012 2013 Q3/2014
Source: CBRE Vietnam, Q3 2014.
Q-o-Q changes in Secondary prices
22 CBRE MARKET INSIGHTS | Q3 2014
More Discerning Buyers
CONDOMINIUM FOR SALE
2009 -
2010
Buyers at Le Van Luong Residentials
At Thang Long No. 1
At CT5 Tan Trieu
At Starcity
2013 -
2014
At Hoa Binh Green City At Dang Xa
Hanoi
Calmer and more organized buyers at sales launches in 2013 – 2014
period
23 CBRE MARKET INSIGHTS | Q3 2014
Loosen conditions of eligibility for
entitlement to VND30 trillion
package (Resolution No. 02)
Policy Update
CONDOMINIUM FOR SALE
Foreign ownership: Still far?
6% 7% 8%
10%
11%
13% 14%
24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Apr-14 May-14 Jun-14 Jul-14 Aug-14
Disbursement ratio Commitment ratio
Resolution No. 02
Source: Ministry of Construction
Disbursement rate of the VND30 trn package
24 CBRE MARKET INSIGHTS | Q3 2014
Buy vs. Rent
RESIDENTIAL MARKET
Inde-pendent lifestyle
Greater privacy
Buying is preferred to renting
Com-munity
ties
Home-ownership
pride
Less free-dom
Less privacy
Rent perception
Insecurity and
instability
Rental is a wasted expense
“However, an emerging
group of young people
in both cities are joining
the rental market.”
Source: CBRE Special Report, Sep 2014
25 CBRE MARKET INSIGHTS | Q3 2014
Renting to Become a Trend with Rapid Urbanization
RESIDENTIAL MARKET
HANOI
HCMC
“Housing demand is great in Vietnam,
especially in Hanoi and HCMC,
Vietnam’s biggest cities which are the
location for most of the country’s
economic activities and are
experiencing rapid urbanization.
“
URBANISATION
GROWTH
(population in million)
HOUSING DEMAND AVG. INCOME PER CAPITA
GROWTH
(2008-2012)
7.1 million persons
Population growth
2.0%*
7.8 million persons
Population growth
2.7%*
25.4 Year
2009
29.8 Year
2014
39.7 Year
2024
14.9 mil.
peopl
e 6.1 Mil.
emplo
yed
600,000** (155,800
household)
need
housing
14.15%
Min. 0% Max.
20%
HCMC
18.89%
Min. 0% Max.
20%
HANOI
Source: CBRE Special Report, Sep 2014
HANOI
“For buyers with over 56%
down-payment, buying is
better. For those with less,
renting is better.”
HCMC
“Buying is better than renting.”
26 CBRE MARKET INSIGHTS | Q3 2014
Outlook for Hanoi
CONDOMINIUM FOR SALE
More stock expected to be released till year-end to capture slowly revived purchase momentum
More cash expected to flow to the market by year-end
Demand would increase for mid- and high-end projects as prices more reasonable, projects completed or close to completion
Rental market is expected to expand along with the urbanization process.
COMMERCIAL MARKETS Hanoi Q3 2014
28 CBRE MARKET INSIGHTS | Q3 2014
Impact of the latest office entry
OFFICE
Source: CBRE
Grade A Asking Rents Grade A Supply by Location
$0
$10
$20
$30
$40
$50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014
CBD Midtown West
Grade A rentals:
• Midtown: +12.79% - Lotte Center Hanoi’s
asking rent higher than Midtown average
• CBD: -4.36%
• West: -6.7%
Grade A supply:
• Marketwide: increased 10% q-o-q
• Midtown: increased 70% q-o-q
New project in the quarter: Lotte Center Hanoi (Grade A, Ba Dinh, 36,872 sqm NLA)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014
sq
m
CBD Midtown West
29 CBRE MARKET INSIGHTS | Q3 2014
Vacancy Rate/ Asking Rent
OFFICE
Source: CBRE
AVERAGE ASKING RENT
(US$/sm/month) VACANCY RATE
(%)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2010 2011 2012 2013 2014
Va
ca
ncy r
ate
(%)
Grade A Grade B
$0
$10
$20
$30
$40
$50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2010 2011 2012 2013 2014
Ave
rag
e a
skin
g r
en
ts (
US
$/s
qm
/mth
)
Grade A Grade B
Vacancy rate of Grade A is now higher than that
of Grade B
Total vacant space is near 340,000 sqm, 60%
of which belongs to Grade B
Downward trend in asking rents of both Grade
A and Grade B:
• Grade A: -1.28% q-o-q
• Grade B: -1.16% q-o-q
30 CBRE MARKET INSIGHTS | Q3 2014
-10%
-5%
0%
5%
10%
15%
20%
Ma
nila
Sin
ga
po
re
Ho
Chi M
inh C
ity
New
De
lhi
Kua
la L
um
pur
Ta
ipei
Seo
ul
Auckla
nd
Ban
gkok
Sha
ngh
ai
Gua
ngzh
ou
Beiji
ng
Sydn
ey
To
kyo
Ho
ng
Kon
g
Me
lbou
rne
Hano
i
Mu
mb
ai
Brisb
an
e
Rental Growth, H1 2014 Forecast Rental Growth, 2014
APAC Rental Growth
OFFICE
(*) Forecasted at the end of 2013
Source: CBRE Research, August 2014.
Better than expected In line with expectations Lagging behind expectations
*
31 CBRE MARKET INSIGHTS | Q3 2014
-10,000
0
10,000
20,000
30,000
40,000
50,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013 2014
Ne
t a
bso
rptio
n (
sq
m)
Grade A Grade B
Grade A: +8,731 sqm
The new entrance of Lotte Center
Hanoi is attracting big companies,
banks and embassies.
Grade B: +23,767 sqm
Positive take-up by large corporations
in several office buildings in non-CBD
locations.
Net Absorption: improved both q-o-q and y-o-y
OFFICE
Source: CBRE
Grade A & B new net absorption, Q3 2014
Net absorption per quarter
3-year average
32 CBRE MARKET INSIGHTS | Q3 2014
OFFICE
Source: CBRE
Number is calculated based on CBRE’s
enquiries only
Tenants preference by location
30%
48%
22%
Q3/2013
28%
39%
33%
Q2/2014
CBD Midtown West
36%
27%
37%
Q3/2014
0%
20%
40%
60%
80%
100%
120%
Q3/2013 Q2/2014 Q3/2014
Area < 100 100 - 300 300 - 1000 > 1000
Tenants preference by space (sqm)
33 CBRE MARKET INSIGHTS | Q3 2014
Future supply
OFFICE
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011 2012 2013 2014 2015
Grade A Grade B
• Limited supply in the last quarter of 2014
• Total supply is projected to reach 1.3 mil sqm by Q4/2015
Forecast
34 CBRE MARKET INSIGHTS | Q3 2014
Outlook
OFFICE
“Future-Proofing”
as older buildings
take action to
renovate facilities
and keep up with
newer offerings
MNCs who
downgraded to low
B or C Grade
properties will look
to upgrade
Lotte Center
Hanoi leads the
pack as Mid-town
emerges as 2nd
CBD
Average rent will
slightly decrease till
the end of the year.
35 CBRE MARKET INSIGHTS | Q3 2014
The opening of 1st Lotte Department Store in Hanoi
RETAIL
Retail space: 21,480 sqm
Location: Basement 1, 1st – 6th floor
Anchor tenant: Lotte Mart
Rental: Turnover Share
36 CBRE MARKET INSIGHTS | Q3 2014
Rental drops have occurred across CBD and non-CBD
RETAIL
AVERAGE RENTS DECLINED ACROSS CBD AND NON-CBD Q-O-Q (13.9% and 2.0%
respectively)
The closing of a shopping center in CBD lowered rentals of the whole market as this
offers the highest rental in this segment
Certain retail podiums in CBD are offering softer rents, yet rentals in the CBD are still
perceived to be too high for many retailers. -101030507090
2011 2012 2013 2014
US
$/s
m/m
on
th
Shopping Centre Retail Lobby Department Store
$0
$20
$40
$60
$80
$100
$120
$140
$160
2011 2012 2013 Q3/2014
US
$/s
m/m
onth
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2011 2012 2013 Q3/2014
US
$/s
m/m
onth
Retail Ground Floor Asking Rents – CBD Retail Ground Floor Asking Rents – non-CBD
37 CBRE MARKET INSIGHTS | Q3 2014
Average vacancy increased in both CBD and non-CBD
RETAIL
Vacancy increased 5.2 ppt and 5.1 ppt in the CBD and non-CBD respectively
Market average vacancy was 22.2%, increased by 5.3 ppt.
Market average vacancy on the rise despite new entry with high occupancy.
0%
5%
10%
15%
20%
25%
2011 2012 2013 Q3/2014
CBD non-CBD
Retail Vacancy by Location
38 CBRE MARKET INSIGHTS | Q3 2014
Retailer entries & expansions
RETAIL
Topshop Topman: 1st store in Hanoi
Oasis: 1st store in Hanoi
Warehouse: 3rd store in Hanoi
Starbucks: 3 stores opened within 10 days.
All are located in prime CBD.
More to open in the coming months.
39 CBRE MARKET INSIGHTS | Q3 2014
Retail neighborhoods shaping up Hanoi retail landscape
RETAIL
BA DINH
TAY HO
HOAN KIEM
DONG DA
HAI BA TRUNG
LONG BIEN
CAU GIAY
TU LIEM
DONG ANH
WESTLAKE
Trung Hoa – Nhan Chinh – a growing “Koreatown”
Tay Ho – a new food, fashion and creative quarter
CBD – the Tradional Fine Dining
and Boutique Center
40 CBRE MARKET INSIGHTS | Q3 2014
Upcoming Developments
RETAIL
Ho Guom Plaza
Shopping Center
• Ha Dong District
• GFA: 23,400 sm
• 4 floors
• Completed & open for
lease
• Anchor tenant: Tran
Anh, HG Supermarket
Expect to open in 2014
Shopping Center in Hoa
Binh Green City
• Hai Ba Trung District
• GFA: 25,000 sm
• 4 floors
• Completed & open for
lease
• Offering free rental for
local retailers
Expect to open in 2015 & 2016
Aeon mall
• Long Bien district
• GFA: 108,000 sm
• 4 floors
• Under construction
• Expected to open in
Q4/2015
Vincom Center Nguyen
Chi Thanh
• Dong Da
• GFA: 65,400 sm
• Under construction
• Expected to open in
Q4/2016
41 CBRE MARKET INSIGHTS | Q3 2014
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
To
kyo
Ban
gkok
Beiji
ng
Kua
la L
um
pur
Ne
w D
elh
i
She
nzhe
n
Ha
no
i
Gua
ngzh
ou
Sha
ngh
ai
Sydn
ey
Sin
ga
po
re
Ma
nila
Me
lbou
rne
Ja
kart
a
Brisbane
Mu
mb
ai
Ho
Chi M
inh C
ity
Ade
laid
e
Ho
ng
Kon
g
Pert
h
Ta
ipei
Auckla
nd
We
lling
ton
De
ve
lop
me
nt P
ipe
line
(‘0
00
sm
) 2015 2014
APAC Development Pipeline
RETAIL
Development Pipeline, Q3 2014
Source: CBRE Research Q2 2014.
42 CBRE MARKET INSIGHTS | Q3 2014
APAC Prime Retail Rent
RETAIL
0
100
200
300
400
500
600
700
US
$/s
qu
are
fo
ot/
an
nu
m
Prime Retail Rent, Q3 2014
Beijing
Guangzhou
Shanghai
Kuala Lumpur
Singapore
Shenzen
New Delhi
Mumbai
Manila
Bangkok
HCMC
Hanoi
Source: CBRE Research Q2 2014.
43 CBRE MARKET INSIGHTS | Q3 2014
VIETNAM IN THE ASIA PACIFIC'S TOP 500 RETAILERS
5 retailers in the top 500, 2014 10 retailers in the top 500, 2013
44 CBRE MARKET INSIGHTS | Q3 2014
Outlook
RETAIL
F&B and supermarket are necessary elements in any modern
shopping center
Luxury shopping centers should create better tenant mix and offer more
professional services to serve sophisciated and discerning customers
Street front shops and boutiques continue to maintain their uniqueness and attractiveness
Retail space in the CBD is in high demand in spite of high rents due to big retailers
preferences, particularly new entries
45 CBRE MARKET INSIGHTS | Q3 2014
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012 2013 2014
Un
its
Vavancy r
ate
(%
)
Supply Vacancy rate
SERVICED APARTMENTS
All rents are quoted inclusive of VAT and service charge.
Source: CBRE
Lotte Center Hanoi
Serviced Residence
~ 258 Units
Supply:
8.3% q-o-q
Hanoi Serviced Apartment Supply
46 CBRE MARKET INSIGHTS | Q3 2014
Vacancy Rate/ Asking Rent
SERVICED APARTMENTS
Source: CBRE
AVERAGE RENT
(US$/sm/month)
VACANCY RATE
(%)
Grade A witnessed slight increase in asking rents 1% q-o-q owing to new entry of Lotte
Center Hanoi
Grade B saw vacancy decrease 3.99pp q-o-q.
Vacant units are mostly Studio, 1BR and 4BR types.
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2010 2011 2012 2013 2014
Grade A Grade B
Askin
g r
en
t (U
S$/p
sm
/mth
)
0%
5%
10%
15%
20%
25%
30%
35%
2010 2011 2012 2013 2014
Grade A Grade B
47 CBRE MARKET INSIGHTS | Q3 2014
Buy to let trend
SERVICED APARTMENTS
“In order to attract more buyers, developers of newly
built building in Hanoi are also offering more
incentives, including being prepared to take on newly-
bought apartments and putting them out to lease.”
Vietnam Investment Review
48 CBRE MARKET INSIGHTS | Q3 2014
Total supply up by 3.3% q-o-q and
11.8% y-o-y.
5-star hotels supply further increased
HOTEL
0
10
20
30
40
50
60
70
80
0
2,000
4,000
6,000
8,000
10,000
12,000
1995 20002005 2010 2011 2012 2013Q3 14
No. o
f hote
ls N
o.
of ro
om
s
5 star 4 star 3 star Number of hotels
Hotel Supply in Hanoi
The opening of Lotte Hotel added
318 rooms to the market
49 CBRE MARKET INSIGHTS | Q3 2014
Low season: ADR lowered to maintain occupancy
HOTEL PERFORMANCE
0
10
20
30
40
50
60
70
80
90
$0
$20
$40
$60
$80
$100
$120
Dec 2013 Mar 2014 June 2014 August 2014
Occu
pa
ncy (
%)
AD
R &
RevP
AR
(U
S$/r
m/n
ight)
ADR (LHS) RevPAR (LHS) Occupancy (RHS)
Performances of monitored projects, including eleven 5-star hotels, six 4-star hotels and one 3-star hotel in Hanoi.
50 CBRE MARKET INSIGHTS | Q3 2014
Int’l tourist arrivals to Hanoi reached 1.5 million in 9M/2014, up 17.1% y-o-y,
while domestic arrivals decreased 0.6% y-o-y.
Tourist arrivals
HOTEL
Source: GSO
Number of Arrivals to Hanoi by Year
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013 2014
Arr
iva
ls
Domestic International
Leisure traveler
80.4%
16.4%
Business traveler
16.3%
20.4%
Others
International travelers by purpose
51 CBRE MARKET INSIGHTS | Q3 2014
AEON BINH TAN
• Address: International Hi-tech
Healthcare Park, Binh Tan, HCMC
• Scale: 4.7 ha
• Price: $8.7 million
• Seller: Aseana Properties JV Hoa Lam
• Buyer: Aeon Mall
STORY ON THE MARKET, Q2 2014
Source: RCA, retrieved July 1, 2014
HANOI TIMES TOWER(*)
• Address: Van Phu, Ha Dong, Hanoi
• Scale: 1.3 ha
• Amount: $15.4 million
• Investor/Lender: Ocean Bank
• Owner: Petro Vietnam
*Refinancing transaction
INDOCHINE PARK TOWER
• Address: 1 Le Quy Don, D1, HCMC
• Scale: 55 units serviced apartments
• Price: $14.3 million
• Seller: Mulpha International Bhd
• Buyer: Lemongrass Master Fund
DEVELOPMENT SITE
KHU ĐẤT DỰ ÁN
52 CBRE MARKET INSIGHTS | Q3 2014
INVESTMENT - STORY ON THE MARKET, Q3 2014
Source: RCA, retrieved September 29, 2014 and newspapers.
DIAMOND PLAZA
NBB GARDEN III NBB GARDEN II CITY GATE TOWERS
• Location: HCMC
• Seller: POSCO
• Buyer: Lotte Shopping
• Property type: Retail
• Amount: n/a
• Location: HCMC
• Owner: NBB
• Refinanciar: CREED
• Property type: Dev. Site
• Amount: $59.2 million
• Location: HCMC
• Seller: NBB
• Buyer: CREED
• Property type: Dev. Site
• Amount: n/a
• Location: HCMC
• Seller: NBB
• Buyer: CREED
• Property type: Dev. Site
• Amount: $26.1 million
CORNER STONE THE ESTELLA
• Location: Hanoi
• Seller: VIB
• Buyer: Daibiru
• Property type: Office
• Amount: $60.1 million
• Location: HCMC
• Seller: Tien Phuoc
• Buyer: Keppel Land
• Property type: Dev. Site
• Amount: $11.46 million
METRO CASH & CARRY
• Location: Vietnam
• Seller: Metro Cash & Carry Vietnam
• Buyer: Berli Jucker
• Property type: Retail
• Amount: $877 million
OCEAN MART
• Location: Vietnam
• Owner: Ocean Group
• Buyer: Vingroup
• Property type: Retail
53 CBRE MARKET INSIGHTS | Q3 2014
Thai Groups Expand Business in Vietnam
INVESTMENT
METRO CASH & CARRY
• Location: Vietnam
• Seller: Metro Cash & Carry Vietnam
• Buyer: Berli Jucker
• Property type: Retail
• Amount: $877 million
54 CBRE MARKET INSIGHTS | Q3 2014
Thai groups expand business to Vietnam
Koreans are active in both selling (Kumho Asiana,
Daewoo) and buying (Lotte, CJ, Asiana Airlines).
Singaporeans have become active buyers
(Keppel, Mapletree, Capitaland, Ascott).
Domestic Players Dominate both Buyers and Sellers
INVESTMENT
Domestic 63%
Japan 6%
Korea 13%
Offshore 4%
Singapore 8%
Taiwan 2%
Thailand 4%
Domestic 54%
Hong Kong 15%
Japan 2%
Korea 13%
Malaysia 3%
Netherlands 5%
Offshore 8%
Sellers Domestic
Hong Kong
Japan
Korea
Malaysia
Netherlands
Offshore
(blank)
Data recorded during the period of 2011- YTD 2014
Source: RCA, retrieved Sep 2014
BUYERS SELLERS
Singapore
Taiwan
Thailand
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© 2014 CBRE (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CBRE (Vietnam) Co., Ltd. We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources and make no guarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful consideration of factors known to us for example only, and they may not represent current or future performance of the market. This information is designed exclusively for use by CBRE clients, and cannot be reproduced without prior written permission of CBRE.
For more information regarding this presentation please contact: CBRE Vietnam Co., Ltd. Research & Consulting T +84 4 2220 0220
F +84 4 2220 0210