HCMC CBD Market Report | Feb 2015

FEBRUARY 2015 | HCMC CENTRAL BUSINESS DISTRICT

CBD MARKET REPORTHO CHI MINH CITY

www.colliers.com/vietnam

TABLE OF CONTENTSHCMC CBD MARKET REPORT | JANUARY 2015

Market Highlights

OFFICE MARKET

• Market Performance

• Outlook

• Table

• Map

RETAIL MARKET


• Outlook

• Map

• Table

HOTEL MARKET

• Table

• Map


• Outlook

SERVICED APARTMENT


• Outlook

• Table

• Map

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HCMC CBD MARKET REPORT

FEBRUARY 2015 | COMMERCIAL OFFICE MARKET

P.2 | Colliers International

HCMC was the most attractive destination for foreign direct investment (FDI) among 23 provinces and cities in Vietnam in the fi rst two

months of this year. The city witnessed a FDI infl ow of US$497.9 million, accounting for 41.7% of the nation’s .

In the fi rst two months of this year, around 3,809 companies were established in HCMC with a total registered capital of over US$867

million, up 58.4% and 34.7% against with same period previous year respectively.

We predict that high graded offi ce will still be stable in the coming months because March is fi scal month for most international

companies; as a result leasing activities will slow down and expect to recover in second quarter of the year.

Outlook

HCMC FDI BY MONTH

Source: Colliers International

CBD OFFICE PERFORMANCE BY ZONE, FEBRUARY 2015



Grade AAR Occupancy rate Supply

A ↔ ↔

B ↔

B ↔

B ↔

B ↔

CITY CENTRAL

FINANCIALHUB

NORTHERN CBD

SOUTHERN CBD

Market PerformanceDue to a long Tet holidays, office leasing activities were

postponed and remained silent in February. As a result, top

tier office sector saw no change comparing with previous

month. In February, the monthly average Grade A asking

rent increased slightly to US$39.7 per sqm (on net area)

while rental rate of Grade B was unchanged, staying at

US$24.1 per sqm per month (on net area).

Although the project has not been officially opened, Le

Meridien was fully occupied. Similarly, Vietcombank Tower,

which will come online in 2Q 2015, has attracted a lot of

new international company, more than 60% space of this

building was leased.






* US$/ sq m/ month (on net area)

No Name AddressCom-pletion Year

NLA (sq m)

Service Charges (*)

Occupancy rate

NFA asking rent (*)

1 Saigon Centre 65 Le Loi 1996 11,650 6.5 95% 37.02 Saigon Tower 29 Le Duan 1997 13,950 6.0 90% 37.03 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 92% 47.04 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 96% 42.0

5 Diamond Plaza 34 Le Duan 1999 15,936 8.0 100% 37.06 Kumho Asiana Plaza 39 Le Duan 2009 26,000 7.5 88% 46.07 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 90% 35.08 President Place 93 Nguyen Du 2012 8,330 6.0 96% 31.0

9 Times Square 22-36 Nguyen Hue 2012 9,000 7.0 86% 45.0

Grade A 158,576 7.0 92% 40.1

1 OSIC 8 Nguyen Hue 1993 6,500 6.0 97% 18.02 Yoco Building 41 Nguyen Thi Minh Khai 1995 5,000 4.0 100% 22.03 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai 1996 3,200 5.0 100% 21.04 Central Plaza 17 Le Duan 1997 6,094 5.0 100% 24.0

5 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 97% 28.06 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.0 78% 23.07 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 88% 18.0

8 MeLinh Point Tower 02 Ngo Duc Ke 1999 17,600 6.0 98% 22.09 Zen Plaza 54-56 Nguyen Trai 2001 11,037 5.0 94% 21.010 Bitexco Office Building 19-25 Nguyen Hue 2003 6,000 5.0 95% 25.011 The Landmark 5B Ton Duc Thang 2005 8,000 5.0 92% 19.012 Opera View 161-167 Dong Khoi 2006 3,100 7.0 85% 27.013 Petro Tower 1-5 Le Duan 2007 13,304 5.0 98% 30.014 City Light 45 Vo Thi Sau 2007 10,000 5.0 100% 15.015 The Landcaster 22Bis Le Thanh Ton 2007 7,000 5.0 90% 25.016 Gemadept Tower 5 Le Thanh Ton 2008 14,000 7.0 97% 24.017 Fideco Tower 81-85 Ham Nghi 2008 15,000 6.0 100% 22.018 Havana Tower 132 Ham Nghi 2008 7,326 6.0 98% 28.019 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 99% 26.0

20 Royal Center 235 Nguyen Van Cu 2008 14,320 5.0 100% 23.021 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 23.022 Bao Viet Tower 233 Dong Khoi 2010 10,650 6.0 100% 21.023 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 96% 23.024 Vincom Center 68-70-72 Le Thanh Ton 2010 56,600 5.0 95% 23.025 Saigon Royal 91 Pasteur 2010 5,340 4.0 100% 20.026 A&B Tower 76 Le Lai 2010 17,120 6.0 91% 29.027 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19.596 5.0 97% 22.028 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 100% 30.029 Lim Tower 9-11 Ton Duc Thang 2013 29,265 6.0 98% 28.030 Sunny MB Tower 259 Tran Hung Dao 2013 13,200 5.5 97% 25.0

Grade B 399,596 6.0 97% 24.0



FEBRUARY 2015 | CBD OFFICE MAP



FEBRUARY 2015 | RETAIL MARKET


FEBRUARY 2015 | CBD OFFICE MAP




Market Performance

Outlook

SHOPPING CENTER PERFORMANCE, FEBRUARY 2015


RETAIL PODIUM PERFORMANCE, FEBRUARY 2015



The retail and services turnover in February unexpected

decreased by 4.2% m-o-m despite the Lunar New Year. The

dropping retail demand have led to the continued easing CPI

in the reviewed month which decreased by 0.4% compare to

January 2015 and modestly increased by 0.1% against the

same period last year. The strong fall in transportation index

driven by the cutting fuel prices have contributed to the recent

softened CPI.

Given the long Tet holiday in February and prolonged stagnant

market, the retail sector stood still with no new supply and new

retail entry to the market. The retail podium remained stable,

US$65.1 per sqm per month and being the lowest rent compared

to rents of department store and shopping centre which were

US$82.4 per sqm and US$69.4 per sqm respectively.

AVERAGE RENT BY TYPE, FEBRUARY 2015


It is anticipated that the retail sector will continue to face with

challenges in the next couple of quarters due to low retail

consumption especially luxury products. Rents are unlikely to

increase given low demand. Traditional retail types will see

fi erce competitions from online shopping which is on the upward

trend in Vietnam, especially in Ho Chi Minh City.

DEPARTMENT STORE PERFORMANCE, FEBRUARY 2015



FEBRUARY 2015 | CBD RETAIL MAP



FEBRUARY 2015 | HOTEL MARKET


FEBRUARY 2015 | CBD RETAIL MAP

KUMHO MONTHLY MARKET REPORTFEBRUARY 2015 | RETAIL MARKET HCMC CBD MARKET REPORT


FEBRUARY 2015 | HOTEL MARKET HCMC CBD MARKET REPORT

No Name of Project /Building Address Location Comple-

tion YearNLA

(sq m)Average Rental

(US$/sq m/month) Occupancy Rate

1 Hotel Continental Saigon 132-134 Dong Khoi District 1 2000 200 90 100%2 Caravelle Hotel 19 Lam Son Square District 1 2000 150 90 100%3 New World Hotel 79 Le Lai District 1 2000 1,000 60 100%4 Sheraton Saigon 88 Dong Khoi District 1 2002 750 125 100%5 Opera View Lam Son Square District 1 2006 1,260 50 94%6 Kumho Asiana Plaza 35 Le Duan District 1 2009 6,830 35 100%7 Rex Arcade 141 Nguyen Hue District 1 2010 2,000 120 100%8 ICON 68 45 Ngo Duc Ke District 1 2011 8,000 45 90%9 President Place 93 Nguyen Du District 1 2012 800 70 71%10 Times Square 22-36 Nguyen Hue District 1 2013 9,000 90 80%

Retail Podium 29,990 65.1 90%1 Diamond Plaza 34 Le Duan District 1 1999 9,000 83 100%2 Zen Plaza 54-56 Nguyen Trai District 1 2001 6,817 50 90%3 Parkson Saigon Tourist 35 Le Thanh Ton District 1 2002 17,000 90 100%

Department Store 30,200 82.4 99%1 Saigon Center 65 Le Loi District 1 1996 3,500 75 100%2 City Plaza 230 Nguyen Trai District 1 2000 5,250 25 100%3 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100%4 Nowzone Nguyen Van Cu District 1 2008 9,000 55 100%5 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 90 30%6 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 75 92%7 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100%8 Union Square Dong Khoi District 1 2012 38,000 65 60%9 Lucky Plaza Dong Khoi District 1 2013 1,000 160 77%

Shopping Centre 105,450 69.4 81%

No Name of Hotel Address Location Comple-tion Year Total Room Occupancy ARR(*)

1 Caravelle 19 Lam Son Square District 1 2000 335 58% 2192 New World Saigon 76 Le Lai District 1 2000 533 59% 1303 Sofitel Plaza Saigon 17 Le Duan District 1 2000 290 52% 1404 Rex 141 Nguyen Hue District 1 2000 289 51% 1305 Renaissance Riverside 8-15 Ton Duc Thang District 1 2001 350 61% 1336 Lotte Legend Hotel 2A-4A Ton Duc Thang District 1 2001 283 55% 1557 Sheraton 88 Dong Khoi District 1 2002 480 60% 2508 Park Hyatt Saigon 02 Lam Son Square District 1 2005 259 78% 3009 Majestic Saigon 1 Dong Khoi District 1 2007 175 67% 13110 InterContinental Asiana 39 Le Duan District 1 2009 305 69% 20511 Nikko Saigon 235 Nguyen Van Cu District 1 2011 334 56% 11212 Pullman Hotel 146 Tran Hung Dao District 1 2013 306 43% 100

5 Star 3,633 59% 1681 Continental Saigon 132-134 Dong Khoi District 1 1990 86 75% 802 Norfolk Hotel 117-119 Le Thanh Ton District 1 1992 104 80% 983 Duxton 63 Nguyen Hue District 1 1996 203 61% 664 Royal City 133 Nguyen Hue District 1 2000 135 61% 705 Palace Saigon 56-66 Nguyen Hue District 1 2000 146 65% 806 Oscar 68A Nguyen Hue District 1 2000 108 51% 457 Liberty Central 179 Le Thanh Ton District 1 2010 140 76% 1158 Grand 08 Dong Khoi District 1 2011 107 63% 1109 Liberty Central Riverside 17 Ton Duc Thang District 1 2013 170 76% 115

4 Star 1,161 65% 89



FEBRUARY 2015 | CBD HOTEL MAP



FEBRUARY 2015 | CBD HOTEL MAP




Vietnam welcomed 756,000 international arrivals in February,

up 7.9% from the previous month partly, according to the

Vietnam National Administration of Tourism (VNAT). However,

the accumulative figures in the first two months of 2015

reached only 1.46 million, a y-o-y drop of 10.0%.

Following to the HCMC government’s figures, in this reviewed

month, the revenue from tourism business including hotel,

restaurant and travel services continued growing, reaching

nearly VND15,000 billion (approximately US$714.29 million),

increasing by 5% compared with the same period last year.

In February, 4-star and 5-star hotel segments witnessed

a falling trend of occupancy rate, staying 65% and 59%

respectively, slightly lower than the previous month.

It should be noted that luxury hotels have faced a fierce

competition from serviced apartments which presently cater a

short-term stay with many options for their customers.

Hotel Market Overview

The completion and opening of Le Meridien on Ton Duc

Thang Street as well as The Reverie (formerly Times Square)

on Nguyen Hue Street, will add a large number of rooms of

5-star hotel in 2015. With nearly 635 lodgings from these two

projects will take an adverse effect on occupancy rate, whilst

the average room rate will go up due to completion in these

luxury hotels.

REVENUE FROM TOURISM BUSINESS IN HCMC , FEBRUARY 2015

Source: Statistical Offi ce in HCMC, Colliers International

Outlook

PERFORMANCE OF TOP-GRADED HOTELS IN HCMC , DEC 2014


LE MERIDIEN, DISTRICT 1






FEBRUARY 2015 | SERVICED APARTMENT MARKET


PERFORMANCE OF 5-STARS HOTEL, FEBRUARY 2015


PERFORMANCE OF 4-STARS HOTEL, FEBRUARY 2015


The new supply from supply from Times Square and 15 Le Thanh Ton development in the CBD may lead to a lower occupancy rate in the

market in 2015. However, 2016 and 2017 will see a turnaround in the occupancy when these projects are occupied. However, average

asking rent is expected to be stable or higher due to healthy recover in demand from big FDI projects including Samsung and Ascendas.

In addition to prime locations, international management, premium facilities as well as logical unit mix is crucial elements contributing to

that advanced rental rate.

Besides adding more services, operators of serviced apartment are fl exible for short-term or even overnight stay to attract foreign

tourists. The collaboration with travel agencies and professional serviced accommodation websites will contribute to the growth of this

segment as well.

Outlook

February did not see clear movements in the serviced apartment sector compared to January due to a long Tet holiday. Grade A

remained the rents of US$33.5 per sqm per month while the occupancy rate stood at 88.1%, unchanged from the previous month but

6 percentage points lower than February 2014 as some tenants moved to buy-to-let apartments with more competitive rents or to

premium Grade B serviced apartment. While the occupancy rate of Grade B kept unchanged (83.8%) on a m-o-m basis, it improved

slightly by 3 percentage points compared with the same month last year.

Market Performance





* US$/sq m/month** Not including VAT*** Buildings are sorted by Year of Completion


FEBRUARY 2015 | SERVICED APARTMENT HCMC CBD MARKET REPORT


Serviced Apartment OverviewGRADE A CBD SERVICED APARTMENTS PERFORMANCE


GRADE B CBD SERVICED APARTMENTS PERFORMANCE


No Project Name Address Location Comple-tion Year

Total Room

Average Occupancy ARR(*)

1 The Landmark 5B Ton Duc Thang District 1 1995 66 86% 262 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 86% 343 Sedona Suites 65 Le Loi District 1 1996 89 90% 304 Nguyen Du Park Villas 111 Nguyen Du District 1 2004 41 94% 305 The Landcaster 22 Bis Le Thanh Ton District 1 2007 55 91% 376 InterContinental Asiana Saigon 39 Le Duan District 1 2009 267 92% 36

Grade A 707 88% 33.5

1 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 76% 262 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 90% 263 Norfolk Mansion 17-21 Ly Tu Trong District 1 1998 126 95% 334 Diamond Plaza 34 Le Duan District 1 1999 42 95% 295 Garden View Court 101 Nguyen Du District 1 2000 76 80% 316 Ben Thanh Luxury 172-174 Ky Con District 1 2010 30 90% 187 Vincom Center 72 Le Thanh Ton District 1 2010 60 34% 26

8 Lafayette De Saigon 08 Phung Khac Khoan District 1 2010 18 90% 28

9 Spring Court 1Bis Phung Khac Khoan District 1 2011 14 86% 19

10 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 100% 27

11 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 94% 34

Grade B 738 84% 27


FEBRUARY 2015 | CBD SERVICED APARTMENT MAP



FEBRUARY 2015 | CBD SERVICED APARTMENT MAP


HCMC CBD MARKET REPORT | FEBRUARY 2015

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