HCMC CBD Market Report | Sep 2014

SEPTEMBER 2014 | HCMC CENTRAL BUSINESS DISTRICT

CBD MARKET REPORTHO CHI MINH CITY

www.colliers.com/vietnam

TABLE OF CONTENTSHCMC CBD MARKET REPORT | SEPTEMBER 2014

Market Highlights

OFFICE MARKET

• Market Overview

• Market Performance

• Outlook

• Table

RETAIL MARKET

• Market Overview


• Outlook

• Table

HOTEL MARKET

• Market Overview


• Outlook

• Table

SERVICED APARTMENT


• Outlook

• Table

CONTACTS

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HCMC CBD MARKET REPORT

SEPTEMBER 2014 | COMMERCIAL OFFICE MARKET

P.2 | Colliers International

The ongoing construction of Metro system would probably cause difficulties to leasing actitivies at office buildings along Le Loi and

Nguyen Hue Street in the next 2-3 years. It is expected that landlords of these buildings need to provide favourite conditions to

both renewal and new tenants during the period. However, the value of CBD properties are forecasted to surge once construction

completed.

Parking is a decisive factor to any office tenant in HCMC CBD. The recent ban of parking in downtown area has raised this big issue

again. Therefore, this would put pressure on developers of new office developments in providing efficient parking lots for tenants

and visitors, especially for multi-functioned complex.

Outlook

CBD OFFICE MARKET PERFORMANCE, SEPTEMBER 2014

Source: Colliers International

CBD OFFICE PERFORMANCE BY ZONE, SEPTEMBER 2014



Grade AAR Occupancy rate Supply

A ↔ ↔

B ↔

B ↔ ↔

B ↔

B ↔ ↔ ↔

CITY CENTRAL

FINANCIALHUB

NORTHERN CBD

SOUTHERN CBD

Market PerformanceThe top-graded office market in District 1 witnessed a

modest decline in average asking rent while occupancy

rate saw a significant growth as two CBD zones showed

good performance in reviewed month including Grade B in

City Central together with Northern CBD.

Office buildings on Dong Khoi, Le Loi and Nguyen Hue

Street eased rental rate since August given inconvenient

accessibility and traffic condensity from construction of

Metro Line Number 1.






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

Office Market OverviewNo Name Address

Com-pletion Year

NLA (sq m)

Service Charges (*)

Occupancy rate

NFA asking rent (*)

1 Saigon Centre 65 Le Loi 1996 11,650 6.5 98% 38.02 Saigon Tower 29 Le Duan 1997 13,950 6.0 96% 37.03 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 91% 43.04 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 94% 41.05 Diamond Plaza 34 Le Duan 1999 15,936 8.0 99% 40.06 Kumho Asiana Plaza 39 Le Duan 2009 26,000 8.0 93% 49.07 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 88% 34.08 President Place 93 Nguyen Du 2012 8,330 6.0 97% 30.0

9 Times Square 22-36 Nguyen Hue 2012 9,000 7.0 63% 50.0

Grade A 158,576 7.0 90.7% 40.4

1 OSIC 8 Nguyen Hue 1993 6,500 6.0 94% 18.02 Yoco Building 41 Nguyen Thi Minh Khai 1995 5,000 4.0 100% 16.03 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% 26.05 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 98% 20.06 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.0 96% 23.07 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 96% 22.0

8 MeLinh Point Tower 02 Ngo Duc Ke 1999 17,600 6.0 100% 24.09 Zen Plaza 54-56 Nguyen Trai 2001 11,037 5.0 95% 21.010 Bitexco Office Building 19-25 Nguyen Hue 2003 6,000 5.0 92% 25.011 The Landmark 5B Ton Duc Thang 2005 8,000 5.0 82% 21.012 Opera View 161-167 Dong Khoi 2006 3,100 7.0 85% 25.013 Indochina Park Tower 4Bis Nguyen Dinh Chieu 2006 2,145 3.0 77% 10.014 Petro Tower 1-5 Le Duan 2007 13,304 5.0 99% 30.015 City Light 45 Vo Thi Sau 2007 10,000 5.0 97% 14.016 The Landcaster 22Bis Le Thanh Ton 2007 7,000 5.0 90% 24.017 Gemadept Tower 5 Le Thanh Ton 2008 14,000 7.0 100% 23.018 Fideco Tower 81-85 Ham Nghi 2008 15,000 6.0 100% 20.019 Havana Tower 132 Ham Nghi 2008 7,326 6.0 100% 21.020 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 94% 26.021 Royal Center 235 Nguyen Van Cu 2008 14,320 5.0 100% 23.022 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 23.023 Bao Viet Tower 233 Dong Khoi 2010 10,650 6.0 100% 21.024 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 96% 22.025 Vincom Center 68-70-72 Le Thanh Ton 2010 56,600 5.0 86% 21.026 Saigon Royal 91 Pasteur 2010 5,340 4.0 100% 19.027 A&B Tower 76 Le Lai 2010 17,120 6.0 98% 29.028 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19.596 5.0 90% 22.029 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 93% 26.030 Lim Tower 9-11 Ton Duc Thang 2013 29,265 6.0 98% 28.031 Sunny MB Tower 259 Tran Hung Dao 2013 13,200 5.5 27% 22.0

Grade B 399,596 6.0 91.6% 23.1



AUGUST 2014 | CBD OFFICE MAP



SEPTEMBER 2014 | RETAIL MARKET


AUGUST 2014 | CBD OFFICE MAP




Last month saw a positive growth from all three CBD retail

market sectors including retail podium, shopping center and

department store.

Retail podium witnessed an increase in rental and occupancy

rate while both figures of the department store stayed flat during

August.

Meanwhile, shopping center recorded an upward tendency in

occupancy rate for two consecutive months with constant

average rent.

In August, HCMC CBD retail market welcomed the first store of

Marks & Spencer, an iconic British retailer, in Vincom Center.

Franchised by Central Group, one of the largest regional retailer

from Thailand, this flagship store provides a wide range of

premium products and new shopping experience to local market.

Market Performance

Outlook

SHOPPING CENTER MARKET PERFORMANCE, SEP 2014

FIRST STORE OF MARKS & SPENCER AT VINCOM CENTER


HCMC saw the lowest rate in consumer price index (CPI) in

August when it gained only 0.05% from July. The figure added

up to the local CPI’s eight month rise of 1.27% and yearly

inflation of 4.93%.

Regardless current slow down in consuming power, Vietnam

is recognised as a potential retail market for foreign investors

given high population and expected growth of the economy.

The apperance of two Thai retail giants, Berli Jucker Group

and Central Group, would raise the confidence to investment

sentiment in this segment.


RETAIL PODIUM MARKET PERFORMANCE, SEP 2014


RETAIL & SERVICE REVENUE GROWTH, SEP 2014

Source: GSO, Colliers International



SEPTEMBER 2014 | CBD RETAIL MAP



SEPTEMBER 2014 | HOTEL MARKET


SEPTEMBER 2014 | CBD RETAIL MAP

KUMHO MONTHLY MARKET REPORTSEPTEMBER 2014 | RETAIL MARKET HCMC CBD MARKET REPORT


SEPTEMBER 2014 | 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 40 100%4 Sheraton Saigon 88 Dong Khoi District 1 2002 750 125 67%5 Opera View Lam Son Square District 1 2006 1,260 85 100%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 99%8 ICON 68 45 Ngo Duc Ke District 1 2011 8,000 40 80%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 72%

Retail Podium 29,990 64.6 85%

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 52 100%3 Parkson Saigon Tourist 35 Le Thanh Ton District 1 2002 17,000 90 100%

Department Store 30,200 82.6 100%

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 Tax Center 135 Nguyen Hue District 1 2003 7,000 75 100%4 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100%5 Nowzone Nguyen Van Cu District 1 2008 9,000 35 97%6 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 90 80%7 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 63 80%

8 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100%

9 Union Square Dong Khoi District 1 2012 38,000 73 60%

Shopping Centre 113,450 66.9 78%

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

1 Caravelle 19 Lam Son Square District 1 2000 335 56% 1502 New World Saigon 76 Le Lai District 1 2000 533 61% 1183 Sofitel Plaza Saigon 17 Le Duan District 1 2000 290 65% 1404 Rex 141 Nguyen Hue District 1 2000 289 52% 955 Renaissance Riverside 8-15 Ton Duc Thang District 1 2001 350 67% 1296 Lotte Legend Hotel 2A-4A Ton Duc Thang District 1 2001 283 55% 1557 Sheraton 88 Dong Khoi District 1 2002 480 69% 1938 Park Hyatt Saigon 02 Lam Son Square District 1 2005 259 71% 2949 Majestic Saigon 1 Dong Khoi District 1 2007 175 62% 14510 InterContinental Asiana 39 Le Duan District 1 2009 305 77% 16011 Nikko Saigon 235 Nguyen Van Cu District 1 2011 334 74% 12012 Pullman Hotel 146 Tran Hung Dao District 1 2013 306 53% 109

5 Star 3,633 64% 149

1 Continental Saigon 132-134 Dong Khoi District 1 1990 86 68% 782 Norfolk Hotel 117-119 Le Thanh Ton District 1 1992 104 69% 913 Duxton 63 Nguyen Hue District 1 1996 203 74% 794 Royal City 133 Nguyen Hue District 1 2000 135 63% 665 Palace Saigon 56-66 Nguyen Hue District 1 2000 146 82% 656 Oscar 68A Nguyen Hue District 1 2000 108 70% 587 Liberty Central 179 Le Thanh Ton District 1 2010 140 61% 958 Grand 08 Dong Khoi District 1 2011 107 66% 919 Liberty Central Riverside 17 Ton Duc Thang District 1 2013 170 62% 83

4 Star 1,161 68% 76



SEPTEMBER 2014 | CBD HOTEL MAP



SEPTEMBER 2014 | CBD HOTEL MAP




According to the GSO, approximately 619,000 foreign tourists

visited Vietnam last month, bringing the total number of tourists

in the first eight months of the year to 5.47 million, a 12.2%

y-o-y increase.

The figures showed that the number of foreign tourists seeking

leisure and entertainment increased by 10.5% y-o-y to 3.3

million while arrivals on business lifted 12.9% to 919,800;

those visiting relatives grew by 15.8% to 941,500, and other

purposes leaped by 18.2% to 307,300.

Hotel Market Overview

OutlookRecently, some hotels stayed at CBD, especially on Dong Khoi,

Le Loi and Nguyen Hue street, were taken adverse effects from

construction of Metro Line 1 bringing noise and air pollution as

well as inconvenient traveling in this section. This construction

is predicted to last 3 years that put the hotel operators in

challenge to maintain revenue.

On the other hand, hotel operators hope to see a better growth

in the fourth quarter when the tourism industry sees in the

peak season.

NUMBER OF INTERNATIONAL VISITORS TO HCMC, SEP 2014

Source: Statistical Office in HCMC, Colliers International

LIBERTY CENTRAL SAIGON CITYPOINT ON PASTEUR STREET

Source: Public Domain

According to the Vietnam National Administration of Tourism, the country is applying a 30-day visa exemption for citizens from

nine of the ten ASEAN members. Tourists from seven other nations have likewise been granted a 15-day visa exemption. Asian

nations covered by this exemption are Japan and the Republic of Korea, while Russia joins the European nations of Norway, Finland,

Denmark and Sweden in enjoying the same privilege.

In August, Ho Chi Minh City welcomed 309,587 oversea travelers; an increase of 7% compared with same period last year, however,

a drop of 2.3% over the previous month.





SEPTEMBER 2014 | SERVICED APARTMENT MARKET


In reviewed month, hotel market saw moderate decline from both 4- and 5-star’s occupancy rate while their average room rate

witnessed a slight growth.

HCMC CBD hotel market welcomed Liberty Central Saigon CityPoint Hotel located on Pasteur Street. This 171-room 4-star hotel

was opened but is expected to be in full operation by next month.

Market Performance

PERFORMANCE OF 5-STARS HOTEL, SEPTEMBER 2014


PERFORMANCE OF 4-STARS HOTEL, SEPTEMBER 2014


Asides from decrease in demand from US and Eurozone markets, there has been a gain in number of arrivals from Asia countries due

to similar market nature and better investment yields.

Further, there is a trend from MNCs to replace Western officers with Asian counterparts as a result of tighten costs including wage

and housing budget.

These factors is forecasted to accelerate the demand for small-sized serviced apartment units at shorter lease term.

Outlook

Grade A serviced apartments in CBD area recorded an upward trend in occupancy rate for the third consecutive month in August.

Meanwhile, occupied rate of Grade B developments slightly drop to 80%.

Average asking rent of both top grades remained almost flat last month.

Market Performance





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


SEPTEMBER 2014 | 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 87% 312 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 96% 343 Sedona Suites 65 Le Loi District 1 1996 89 92% 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 70% 376 InterContinental Asiana Saigon 39 Le Duan District 1 2009 260 99% 36

Grade A 701 94% 34

1 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 81% 262 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 83% 263 Norfolk Mansion 17-21 Ly Tu Trong District 1 1998 126 95% 334 Diamond Plaza 34 Le Duan District 1 1999 42 93% 295 Garden View Court 101 Nguyen Du District 1 2000 76 92% 316 Ben Thanh Luxury 172-174 Ky Con District 1 2010 30 70% 187 Vincom Center 72 Le Thanh Ton District 1 2010 60 34% 26

8 Lafayette De Saigon 08 Phung Khac Khoan District 1 2010 18 100% 30

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

10 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 60% 28

11 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 95% 32

Grade B 738 80% 27


SEPTEMBER 2014 | CBD SERVICED APARTMENT MAP



SEPTEMBER 2014 | CBD SERVICED APARTMENT MAP


HCMC CBD MARKET REPORT | SEPTEMBER 2014

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