Presented by: Marc Townsend, Managing Director Hieu Le...

1 CBRE OFFICE OCCUPIER OUTLOOK | Q1 2017

Presented by: Marc Townsend, Managing Director Hieu Le, Director of Office Service

Richard Colville, Director of Asset Management


VIETNAM IN THE FOREIGN PRESS


73%

10%7%

10%Manufacturing

Real Estate

Retail, VehicleSales

Others

Real Estate FDI Grows Strong

FDI

Top FDI Investors, USD million, 2M 2017

25%

75%

1. Singaporean investor invested US$285 million in Vietnam-Singapore IP III in Binh Duong Province.

2. China invested US$220 million for manufacturing in Tay Ninh Province.

3. Kolon Industries invested in manufacturing in Binh Duong Province.

4. Wenzhou Hendy Mechanism and Plastics Co. invested US$150 million in Lam Son IZ in Bac Giang Province.

2007

Vietnam Registered FDI in 2M 2017: USD3.4 billion, up 21.5% y-o-y

Major Deals, 2M 2017

Source: GSO

2M 2017

882

722

637

298

160

150

122

Singapore

China

South Korea

Japan

BritishVirginI…

Thailand

Taiwan

Source: CBRE Vietnam , Q1 2017

In Q1 2017


NationalDASHBOARD – PRODUCED MONTHLY

(*) Current lending rate is the average lending rate surveyed at ten banks, and only applicable for home loan. However, the back-dated numbers were the average rate 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 from a sample comprised of ten banks, in which the rates are announced publicly on their websites and can be tracked backwards.

ECONOMICINDICATORS 2Y 1Y 6M 3M 1M Current

CPI (%) y-o-y 0.3 1.0 1.9 4.5 5.2 5.0

Trade balance (US$, bil) (1.0) 0.1 0.2 (0.4) (0.1) (1.2)

Retail & services Turnover (VND, tril) 276.2 288.0 292.8 302.9 330.3 309.3

BANKING & FINANCE 2Y 1Y 6M 3M 1M Current

VN-Index 551.1 561.2 688.6 663.5 717.4 714.5

USD/VND (inter-bank) 21,458 22,300 21,949 22,232 22,232 22,252

Local gold (VND mil/tael) 35.1 33.2 36.1 36.1 36.8 36.8

Lending Rate (%)* 8.1% 7.6% 8.2% 7.7% 9.1% 8.5%

Deposit rate (%)**(1-year term) 6.4% 6.7% 6.7% 6.5% 6.7% 7.1%

REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current

Real Estate Holding & Development Listed Companies

46.40 46.47 46.12 45.63 51.20 51.08

Real Estate Services Listed Companies 56.9 34.07 23.37 26.98 45.8 45.76

Source: Stockbiz, Mar 2017

Source: GSO, Feb, 2017 Source: GSO, SBV, SJC & HSX, Mar, 2017

NEW LAUNCHES 2Y 1Y 6M 3M 1M Current

HCMC New launches (unit) 70,705 35,780 16,285 8,316 3,199 2,890

HN New launches (unit) 51,851 30,760 19,223 11,526 5,814 2,814

Source: CBRE, Mar, 2017


Real Estate Index OCCUPIERS DASHBOARD

HCMC REAL ESTATE INDEX

2015 2016 2017Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Total supply (thousand sm) 2,228 2,307 2,326 2,377 2,377 2,377 2,377 2,421 2,429

Rental Grade A(US$/sm/mth) $34.2 $34.9 $35.0 $35.9 S35.7 $38.7 $35.7 $36.6 $37.0

Rental Grade B(US$/sm/mth) $19.1 $19.2 $19.7 $19.8 $19.7 $19.9 $19.9 $21.0 $22.0



In Asia's Infrastructure Race, Vietnam is Among The LeadersHCMC INFRASTRUCTURE


HCMC INFRASTRUCTUREBridges, Overpasses To Solve Congestion

Nguyen Van Cu Bridge – connection line – 2018 Overpass Truong Son – Tan Son Nhat airport - 2018

Overpass Nguyen Kiem – Nguyen Thai Son - 2018 Nguyen Tri Phuong Bridge – connection line - 2018


HCMC INFRASTRUCTUREFlooding Continues a Challenge

2/2/2017 16/3/2017

Nguyen Huu Canh Street, Binh Thanh District Song Hanh Street, District 12

Ba Huyen Thanh Quan Street, District 3Vo Van Ngan Street, Thu Duc District


Hiep Phuoc Station

Bach Dang Station

Lo Gom Station

Water bus

Electric bus

66km embankment

New Projects To Solve Infrastructure Issues: Flooding And Traffic Congestion


1 2

3

1

3

2

HCMC INFRASTRUCTUREThu Thiem Updates


HCMC INFRASTRUCTUREImproving Connection To District 7

CBD

Kenh Te 2Bridge

Nguyen Khoai Bridge

Thu Thiem 3Bridge

Thu Thiem 4Bridge

Nguyen Van Linh – NguyenHuu Tho Overpass/Tunnel

Kenh Te 2Bridge

METRO LINE NO. 4


Big Occupiers’ HR Retention and Compliance HR & COMPLIANCE


APAC Research: How Millennials Work OFFICE

Source: Millennials: Myths and Realities, CBRE Research, Q4 2016


OFFICE MARKET


South East: PMH NUA, Nha Be District and District 7 DISTRICT 7

South Saigon Development

Corporation’s land –for villa developments

Part of PMH Sky Garden

RichLaneResidences

OakwoodPart of PMH Sky

Garden

SC VivoCity


South East: PMH NUA, Nha Be District and District 7DISTRICT 7

Phu My Hung

District 8

Nha Be District

Nguyen Van Linh Highway 10 lanes, the most modern

urban route in HCMC, connecting D7 and National Highway (linking to the North

of Vietnam)

Fire Safety Center

IPC Office Tower Hoang Anh Gia Lai Residential

Development

Kenton Node Residential

Development

Quoc Cuong Gia Lai Residential

Development

Rach Dia bridge connecting Nha Be

District and District 7


South East: District 8 DISTRICT 7

Ton Duc Thang University – Private University

One of the largest and fastest growing universities in Vietnam. One of the total 4 campuses (2 in HCMC, 1 in the West of

Vietnam, 1 in the Central of Vietnam)

RMIT University An Asian campus of Melbourne-

based university RMIT - Australia's biggest tertiary institution. The

purpose-built facility was opened in 2001

Another campus in Hanoi.

District 8Suburban area with abundant stock of

affordable condominiums

Nha Be District• Large number of land plot

projects• Relatively underdeveloped

Ong Lon bridge connecting District

7 and District 8


North: District 4 and District 1 DISTRICT 7

District 1District 4

The iconic Bitexco in District 1 Upcoming Police Academy

Novaland Sunrise City (District 7)

South Saigon Development Corporation’s land

Land plot for sale and villa developments


850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2014 2015 2016 2017

NLA

(sm

)

Existing Supply New Supply

Limited To No New Supply Every YearOFFICE

New Grade A & B supply by Quarter, HCMC Office


Current Supply by Grade, Q1 2017

30%

70%

Grade A

Grade B


Etown Central – GFA: 67,760 sm

New Supply In 2017OFFICE

Since 2011, District 7 welcomes its first Decentralized Grade A Building

Q1 2017

Q3 2027

Q4 2017

211. Deustches Haus – GFA: 38,621 sm

2. Saigon Centre Phase 2 – GFA: 40,000 sm

Viettel Complex – GFA: 65,971 smQ2 2017

Mapletree Business CenterOfficially Opened: 22nd March, 2017GFA: 28,384 sm


SGGP Newspaper –GFA: 8,000 sm


Rents And Vacancy OFFICE

0% 5% 10% 15%0%5%10%15%

Vacancy Rents

$0 $10 $20 $30 $40$0$10$20$30$40

2017 Q1

2016

Q4

Q3

Q2

Q1

2015

Q4

Q3

Q2

Q1

2014

Q4

Q3

Q2

Q1

Grade B Grade A Grade B Grade A

Grade B2.6%

Grade A6.4%

+3.6% y-o-y

+11.5% y-o-y

+1.2% q-o-q

+4.8% q-o-q

Grade BUS$ 22.0

Grade AUS$ 37.0



Net Absorption

New Grade B Supply To Quickly Be Absorbed OFFICE

Net Absorption, HCMC Office

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2014 2015 2016 2017

NLA

(sm

)

Grade A Grade BSource: CBRE Vietnam , Q1 2017


Limited Supply in District 7 OFFICE

New supply and Net absorption by year, District 7, Q1 2017


0

5,000

10,000

15,000

20,000

25,000

30,000

2010 2011 2012 2013 2014 2015 2016 Q1 2017

NLA

(sm

)

New Supply Net Absorption


District 7’s Vacancy Rate And Net Absorption OFFICE

Rents and Vacancy, District 7, Q1 2017


0%

6%

12%

18%

24%

30%

0

4

8

12

16

20

2010 2011 2012 2013 2014 2015 2016 Q1 2017

Vaca

ncy

Rat

e (%

)

Ren

ts (U

S$/

sm/m

onth

)

Rents Vacancy


Demand Largely From Relocation And Expansion OFFICE

New letting

Relocation & Expansion

25%

75%

Q1 2017Q4 2016

Tena

nts’

Pro

files

9%

91%

Enqu

ired

Size

s

36%

26%

19%

19%0 - 249 sm

500 - 1000 sm

250 - 499 sm

> 1000 sm

Source: based on CBRE’s enquiries, 2017 y-t-d

IT, Financials and Logistics to be dominant


FORTUNE GLOBAL 500Fortune Companies in Vietnam

05

1015202530354045

Food

& D

rug

Sto

res

Tele

com

mun

icat

ions

App

arel

Tran

spor

tatio

n

Che

mic

al

Tech

nolo

gy

Ene

rgy

Engi

neer

ing

& C

onst

ruct

ion

Hou

seho

ld p

rodu

cts

Bus

ines

s S

ervi

ce

Mot

or V

ehic

les

& P

arts

Ret

ailin

g

Who

lesa

lers

Fina

nce

Hea

lth C

are

Indu

stria

ls

Food

, Bev

erag

es &

Tob

acco

Hot

els,

Res

taur

ants

&…

Aeo

rosp

aces

& D

efen

se

Mat

eria

ls

Med

ia

No.

of c

ompa

nies

2015

2016

218 companies in 2015 230 companies in 2016

Source: CBRE Vietnam, Q4 2016


Major TransactionsOCCUPIERS DASHBOARD

MAJOR TRANSACTIONS IN

HCMC MARKETQ1 2017

Building Sector Size in sm Rent(US$ psm)

Service Charge (US$ psm)

TNR Design 500 $19 $5

PEARL PLAZA Sourcing 1,133 $19 $6

SAIGON TRADE CENTER Software 164 $22 $6.5

SAIGON GIAI PHONG Insurance 560 $20 $5

LOTTERY TOWER Fashion 400 $12 $4

VINCOM CENTER Trading 314 $23 $5

SAIGON TRADE CENTER Technology 156 $21 $6.5CENTEC TOWER Technology 308 $27 $6

60 NGUYEN DINH CHIEU Trading 270 $17 $5 SUNWAH Consultancy 175 $40 $6

PHU MY HUNG Retail 317 $15 $7 METROPOLITAN Fashion 575 $34 $6 DIAMOND PLAZA Real Estate 400 $32 $8

PICO PLAZA Fashion 975 $12 $5



Future Supply OFFICE


2018 - 2019

1. Spirit of Saigon – GFA: 15,000 sm

2. Saigon M&C – GFA: 49,000 sm

3. VietCapital Center – GFA: 38,621 sm

4. The Khai – GFA: 15,000 sm

5. The Prince – GFA: 15,000 sm

1 2

3

4

5

3

2020 1

1. SJC Tower – GFA: 38,000 sm

2. Tax Center – GFA: 35,000 sm

3. Nexus Tower – GFA: 133,834 sm

4. Capitaland at Vinhome Golden River –GFA: N/A sm

5. One Hub – GFA: 159,462 sm

6. Tan Son Nhat Plaza – GFA: 128,190 sm

7. Crescent Mall Phase 2 – GFA: 36,297 sm

7

42

3

6

5


Dreamplex to open second co-working space

Supply Trend: Co-Working Space Still ExpandingOFFICE

Dreamplex 2 Grand Opening on 2nd

March, 2017 Toong at the Oxygen under construction


Demand Trend: Opportunities abound for the market OFFICE

Ongoing Supply

• Excess supply coming from CBD and Non-CBD area

• Rents are expected to become more competitive

• Higher demand still comes for CBD

Flight to value

• Big occupiers to relocate and expand to higher quality buildings

Diversified Demand

• High demand from traditional sectors

• The surge of IT expansion

• Start-up boom: Growth of co-working space



GREEN BUILDINGS


Improved Occupant Health & WellbeingGREEN BUILDINGS

Source: World Green Building Council “The Business Case for Green Building – A Review of the Costs and Benefits for Developers, Investors and Occupants”


Harvard-CBRE Research Study 1

IMPACT OF GREEN BUILDINGS ON COGNITIVE FUNCTION

Allen JG, MacNaughton P, Satish U, Santanam S, Vallarino J, Spengler JD. 2015. Associations of Cognitive Function Scores with Carbon Dioxide, Ventilation, and Volatile Organic Compound Exposures in Office Workers: A Controlled Exposure Study of Green and Conventional Office Environments. Environ Health Perspect DOI: 10.1289/ehp.1510037


Harvard-CBRE Research Study 2

Source:


IMPACT OF GREEN BUILDINGS ON COGNITIVE FUNCTION



IMPACT OF GREEN BUILDINGS ON COGNITIVE FUNCTIONHarvard-CBRE Research Study 2


Building and site selection (connectivity, landscape)

Tenant owned system efficiency (energy & water)

Fit out material and waste disposal

Indoor thermal comfort and human health

(low emitting materials, etc.)

GREEN INTERIOR FIT OUTTenant Specification


President Place Deutsches Haus Mapletree Business Centre

GREEN BUILDINGS IN VIETNAMOffices Or Factories


SUSTAINABLE STRATEGY & CONSULTING

CORPORATE SUSTAINABILITY REPORT

(CSR) CONSULTING

STAKEHOLDER ENGAGEMENT

SUSTAINABILITY BENCHMARKING

GREEN BUILDINGDUE DILIGENCE

HEALTH & WELLBEINGCONSULTING

POLICY & PROCEDURE DEVELOPMENT

GRESBREPORTING

GREEN BUILDING CERTIFICATION

ENERGY AUDITS

GREEN TRANSACTION ADVISORY

CBRE’s Asia Sustainabilityteam brings the full powerof our global platform tobenefit Clients across theregion with solutions fortheir investor or occupierneeds.

CBRE SUSTAINABILITYCapabilities

All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information containedherein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubtits accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessingthe relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only,exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribefor securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may bealtered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorisedpublication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arisingby reason of any person using or relying on information in this publication.

For more information regarding this presentation please contact:CBRE Vietnam Co., Ltd. – Research & ConsultingT +84 8 3824 6125 F +84 8 3823 8418Email: [email protected]

42

Mapletree’s Portfolio in Vietnam Operating Assets Development Projects

Asset Pacific Place

CentrePoint SCVivoCity

Kumho AsianaPlaza

MapletreeBusiness

Centre

MBC @ BD

Oakwood Residence&

Residential blk

Lancer

Location Hanoi CBD

HCMC, PhuNhuan HCMC, D7 HCMC, D1 HCMC, D7 Binh

Duong HCMC, D7 HCMC, D2

Storeys / Units

19 storeys, 5 basemen

ts

16 storeys, 2 basements

5 storeys,2

basements

21storey office, 32 storey SA (260 units), 21 storey

hotel (305 rooms) & a retail podium

17 storeys, 2 basements N/A 237 SA units,

243 resi units 808 units

GFA (sqm) 26,107 44,733 64,250 146,000 28,384 706,557 62,680 108,446

NLA (sqm) 22,674 28,129 40,526 80,000 23,010 N/A 40,291 65,000

UsageOffice / Retail /

SAOffice Retail Office/ Retail / SA &

Hotel OfficeBusiness

Park / High Tech

Serviced Apt& Residential Residential

Acquisition year/ Completion year

2010 2013 2015 2016 2016 N/A 2017 / 2018 2019

43

Mapletree Business Centre – FactsDevelopment

Construction start May 2015 (Start of superstructure)

Construction end 22 Dec 2016

Total construction period

• 9 months basements + piling • 14 months superstructure +

finishing• Total: 23 months, excluding 6-

month delay

TDC • Total: 51 mil USD• Land: 13 mil USD• Building: 38 mil USD

Key consultants • Architecture: CPG• MEP: JRP• C&S: AECOM

Other facts

Land tenure Till Dec 2060 (44 years remaining)

Site coverage 55%

PR 6

Basement 2 basements of 7,500 sqm

Parking lots 90 car lots1,500 motorbike lots

Presented by: Marc Townsend, Managing Director Hieu Le...

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