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VIETNAM REAL ESTATE -TIME TO RECALIBRATE
Presented by: Marc TownsendManaging Director, CBRE Vietnam
2nd July, 2015
2 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
*All the above articles were retrieved in June 2015..
3 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 201513 May 2015 – Son Doong Cave was broadcast in “Good Morning America”
10 May 2015 – Ironman 70.3 Vietnam in Da Nang
*All the above articles were retrieved in June 2015..
1Economic Outlook
5 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
VIETNAM’S GDP GROWTH TO QUICKEN, INFLATION EASE
Gross Domestic Product, Vietnam
8.4% 8.2% 8.5%
6.3%5.3%
6.8%5.9%
5.0% 5.4% 6.0% 6.3%
0%
5%
10%
15%
20%
25%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 6M 2015
Real GDP growth rate Annual average inflation
Inflation eased to a ten-year low
Highest GDP in five years
Source: Vietnamese General Statistical Office, Q2 2015..
6 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Estimated boost to GDP from TPP (as a % of baseline GDP)
Source: Peter A. Petri, Michael G. Plummer and Fan Zhai, "The Trans Pacific Partnership and Asia-Pacific integration: A quantitative Assessment"
FTAs BOOST GDP GROWTH
7 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
STRONGER CURRENCY
Forecasted Change in APAC currencies against the US Dollar
Source: CBRE Research, Marcobond, Oxford Economics, May 2015.
17,000
18,000
19,000
20,000
21,000
22,000
De
c-10
Jun-
11
De
c-11
Jun-
12
De
c-12
Jun-
13
De
c-13
Jun-
14
De
c-14
Jun-
15
US
D/V
ND
Int
erba
nk
Exc
hang
e R
ate
18,932
20,668 21,036 21,24621,458
20,803
21,673
8 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Vietnam Retail Sales
RETAIL SALES SHOW MODEST GROWTH
-30%
20%
70%
120%
170%
-
40,000
80,000
120,000
160,000
2008 2010 2012 2014
Gro
wth
rat
e
No.
of c
ars
No. of cars sold % change YoY
Car importers
will have to pay for
emission test
2016
2
1
1: Registration fee reduced from 10% - 20% to 10% - 15% in April.
2: Import duty on cars from ASEAN countries will decrease from 50% to 0% by 2018
Vietnam Car Sold
Source: Vietnam Automobile Manufacturer’s Association, June 2015; Vietnamese General Statistical Office, Q2 2015..
1
2
0%
6%
12%
18%
24%
30%
36%
42%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
6M 2
015
Gro
wth
Rat
e (%
)
Tur
nove
r (T
rillio
n do
ng)
Retail and Services Turnover Retail and Services Turnover Growth
9 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
FURTHER CUTS IN BANK INTEREST RATES
0
3
6
9
12
15
18
2007 2008 2009 2010 2011 2012 2013 2014 2015
Inte
rest
rat
e (%
)
Base rate Rediscounting rate Refinancing rate Lending rate Deposit rate
Vietnam Interest Rates
Mortgage rate for the first 12 months:
Jan. 15 June 15• Techcombank 9.49% 7.99%• Vietcombank 7.99% 7.3%• ACB 8.90% 8.0%
• Lending rate: Average lending rate for enterprises.
Source: Vietnamese General Statistical Office, State Bank of Vietnam.
10 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
STEADILY RISING STOCK MARKET
Vietnam Stock Market, VNIndex
591
Source: Cafef.vn
2015 VIETNAM TOP 50 LISTEDBEST PERFORMERS
*out of 700 companies in HNX and HOSE
15
Vingroup (VIC)
HCMC InfrastructureInvestment JSC. (CII)
Dat Xanh Real Estate Service (DXG)
FLC Group (FLC)
Ha Do JSC (HDG)
25
49
50
4
INDEX OF REAL ESTATE SECTOR IN 1 YEAR
Source: Stockbiz
11 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
-20%
-5%
10%
25%
40%
55%
0.0
0.5
1.0
1.5
2.0
2.5
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Gro
wth
rat
e
Mill
ion
ariv
als
International arrivals Growth rate
NOT ALL WINE AND ROSES
International arrivals
Foreign Direct Investment
0
2,000
4,000
6,000
8,000
10,000
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
FD
I (U
S$
mill
ions
)
FDI (Registered) FDI (Implemented)
Source: Tourism Working Group, Vietnamese General Statistical Office, Q2 2015..
Countries 2014 Int’l arrivals2013 – 2014
change
Malaysia 27,437,315 6.70%
Thailand 24,779,768 -6.66%
Singapore 15,086,827 -3.09%
Indonesia 9,300,000 5.68%
Vietnam 7,874,312 3.99%
Philippines 4,833,368 3.25%
Int’l arrivals and growth rate, countries in the region
12 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Vietnam to become a mid-manufacturing country?FUTURE GROWTH POTENTIAL
ASEAN’s three sub-regions
Source: ASEAN’s rise in the global economy, ANZ Research.
Vietnam Trade Balance
Vietnam Export Structure, 6M 2015
19%
13%
8%
9%3%4%5%
39%
Mobile phones and appliances
Garments & textiles
Shoes
Electronics, computers andpartsCrude oil
Seafood
Machinery and parts
Others
-50
-40
-30
-20
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
US
$ b
illio
n
Export Imports
vs. 3.22% in 2010
/LVMC
Source: Vietnamese General Statistical Office, Q2 2015..
13 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
BCI NUMBERS
All Future Projects
(2015-2030) HCMC Hanoi
DaNang
Can Tho
NhaTrang
VungTau
HaiPhong
Office 189 218 54 27 10 30 15
Retail 93 124 33 4 14 15 8
Hospitality and SA
37 32 25 3 23 17 6
Residential 234 242 64 6 11 15 8
Total 553 616 176 40 58 77 37
Projects under construction, y-o-y change All future projects (2015 – 2030), y-o-y change
Projects Under
ConstructionHCMC Hanoi
DaNang
Can Tho
NhaTrang
VungTau
HaiPhong
Office 122 80 21 19 7 17 7
Retail 60 41 12 4 6 11 5
Hospitality and SA
25 11 10 2 10 9 1
Residential 155 76 16 4 1 12 3
Total 362 208 59 29 24 49 16
Source: www.bciasia.com; CBRE Vietnam, June 2015 Source: www.bciasia.com; CBRE Vietnam, June 2015
-100%
0%
100%
200%
300%
400%
HCMC Hanoi Da NangCan Tho KhanhHoa
VungTau
HaiPhong
Per
cen
tag
e ch
ang
e
2015 YTD vs 2014 2014 vs 2013
-100%
0%
100%
200%
300%
HCMC Hanoi DaNang
CanTho
KhanhHoa
VungTau
HaiPhong
Per
cen
tag
e ch
ang
e
2015 YTD vs 2014 2014 vs 2013
2Infrastructure Investment
15 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
METRO LINE – FAST PROGRESS IN HCMC
HCMC Hanoi
Hanoi to buy 13 China-manufactured trains for urban railway stationStation no. 14 – Suoi Tien bus
Km 18 +905
Station no. 13 – Suoi Tien
Km 16 + 689
Km 15 + 100
Station no. 12 – Hi-Tech industrial park
Station no. 11 – Thu Duc
Km 12 + 724
Km 10 + 975
Station no. 10 – Binh Thai
Station no. 9 – Phuoc Long
Km 9 + 622
Station no. 8 – Rach Chiec
Km 8 + 104
Station no. 7 – An Phu
Km 6 + 454Station no. 6 – Thao Dien
Km 5 + 497
Station no. 5 – Tan Cang
Km 4 + 361
Km 3 + 421
Station no. 4 – Van Thanh Park
Station no. 3 – Ba Son
Km 1 + 587
Station no. 2 – Opera House
Km 0 + 624
Station no. 1 – Ben Thanh
Km 0 + 004
Ben Thanh – Suoi Tien
Pictures taken on 25-Jun
Girders Installed On Metro Line 1 Cat Linh Depot under construction
Hanoi’s Wavy Metro Tracks Raise Eyebrows
16 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
AIRPORTS AND PORTS
Phu Quoc International Passenger Port
Construction starts 29 April 2015
Construction period 2015 – 2017
Capacity Cruise liners carrying 5,000-6,000 visitors or 20,000-tonne cargo ships
Investment capital VND1.64 trillion (US$76.4 million)
Long Thanh Airport gets green light from Party leaders
17 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
HIGHWAYS AND ROADS
3Regulation Changes
19 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Marc,
I am an individual investor from Hong Kong. I will visit HCMC next week and would like to know the following:
1) Background:• Legal basis for foreign ownership of residential
units (and whether this varies as value and or number of units increases)
• Typical legal and agent fees upon purchase/ sale• Likely taxes/stamp duty etc. including capital gains
tax, tax on rental income. Typical insurance costs
2) Deal:• Available properties and typical asking prices• A view on best locations for our purpose• Likely realisable rents and demand for properties• Property management fees
3) Deal exit:• Tax rules upon sale (as individual entity)• Restrictions on sale e.g. property holding period• Restrictions on repatriating capital or profits out of
Vietnam
Regards,
Residential Properties - Opens Door for Foreign BuyersEFFECTIVE FROM 1ST JULY, 2015
FAQs
Buying a condo in Vietnam –A guide for foreigners
All you need to know…
LAW | ACCOUNTS | TRANFERRING FUNDS | DOCUMENTS REQUIRED | KEY TIPS
20 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
VINHOMES LAUNCHING EVENT
21 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Commercial Properties - Bigger battlefield with more playersEFFECTIVE FROM 1ST JULY, 2015
Lease properties for sub-lease
Existing law From July 2015
Acquire completed buildings for own use
Foreign invested firms not allowed to sub-lease rented properties
Foreign invested firms can sub-lease properties that they are renting
Existing law From July 2015
Foreign invested firms can acquire and own a completed building for own use
Foreign invested firms can only own a building if they are the developer
22 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
100% Foreign Ownership Limit for Listed CompaniesEFFECTIVE FROM 1ST SEPTEMBER, 2015
On 25-June 2015, the Prime Minister of Vietnam gave the final seal of approval to changes in the Law on Securities to allow for a significant relaxation of foreign ownership limits ("FOL") for Vietnam listed-equities.
FOL for public and listed companies (as well as for securities companies and investment funds) will
be increased from 49% to 100% except banks, which will continue to be limited to 30% until further notice from the PM, and except for sensitive sectors or where the state retains a controlling stake.
Among 73 listed companies in real estatesector
42 companies have foreign shares
9 companies have foreign shares greater than 20%
12%
68%
19%
Foreign ownershipgreater than 20%
Foreign ownershipless than 20%
100% local
Source: CBRE Vietnam, June 2015..
4Condominium Market
24 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Optimism ahead of regulation changesCONDOMINIUM FOR SALE
Developers and buyers remain bullish
Absorption Rate
15,715 units launched in 1H 2015
174% y-o-y
10,494 units (of new launches)
sold in 1H 2015
67%
HCMC HANOI
10,187 units launched in 1H 2015
91% y-o-y
50%
5,130 units (of new launches)
sold in 1H 2015
Source: CBRE Vietnam, Q2 2015.
25 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Continued strong interest in new launchesCONDOMINIUM FOR SALE
10 May 2015 - “The most attractiveInvestment opportunity 2015” event in Hanoi,Vinpearl Premium Villas
9 May 2015 – “Masteri Thao Dien, Block T3” launching event in HCMC
19 May 2015 - “Estella Heights” launching event in HCMC
10 June 2015 – “Gateway Thao Dien”launching event in HCMC
21 June 2015 – “Landmark 4”launching event in HCMC
26 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Busy Launches in Q2 2015: 19 projects – 8,528 units launchedCONDOMINIUM FOR SALE
~57% sold
1450
Project(s)Units
1285
1408
1740
1352
1250 2
3,054
1136
1335 6
1,653
1500
1209
1156
Highest number of launches ever for a single quarter
Continued to move to the East!
Source: CBRE Vietnam, Q2 2015.
19% q-o-q126% y-o-y
Implication for districts only, not exact project location
1H 2015: 15,715 unitsWhole year 2010: ~20,000
unitsWhole year 2007: ~10,300
units
HCMC
27 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Busy launchesCONDOMINIUM FOR SALE
Ba Dinh
1 project129 units
2 projects130 units
3 projects470 units
1 project1,198 units
2 projects160 units
4 projects1,911 units
2 projects320 units
4 projects819 units
Q2/2015: 19 new launches – 5,137 units launched(*) Q1/2015: 18 new launches – 5,050 units
More projects in the West – but bigger developments in the East!
HANOI
Source: CBRE Vietnam, Q2 2015.
28 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Optimism ahead of anticipation on regulation changesCONDOMINIUM FOR SALE
Sold Units, HCMC
0
5,000
10,000
15,000
20,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 1H2015
Source: CBRE Vietnam, Q2 2015.
Highest take-up for a single quarter
Q2 2015: ~10,000 units(both new and previous launches)
Sold Units, Hanoi
Highest take-up for a single quarter
Q2 2015: ~4,500 units(both new and previous launches)
0
5,000
10,000
15,000
20,000
200620072008200920102011201220132014 1H2015
29 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Solid RecoveryCONDOMINIUM FOR SALE
Take-up per period, HANOI
Source: CBRE Vietnam, Q2 2015.
Take-up per period, HCMC
0%
20%
40%
60%
80%
100%
2012 2013 2014 1H 2015
High-end Mid-end Affordable
0%
20%
40%
60%
80%
100%
2012 2013 2014 1H 2015
High-end Mid-end Affordable
30 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
District 4 –An Emerging Cluster
CONDOMINIUM FOR SALE
The TresorNovaland459 unitsUS$2,550-$3,050 psm
RiverGateNovaland319 căn hộUS$2,039-$2,512 psm
The Gold ViewTNR Holdings1,760 unitsUS$1,529-$1,609 psm56 units per floor
Icon 56Novaland312 unitsUS$2,617-$3,105 psm
Galaxy 9Novaland~500 unitsUS$1,500-$1,696 psm
District 4
District 1
*Asking prices are quoted exclusive of VAT and maintenance fee
31 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
New vs. Old Products – HCMC CONDOMINIUM FOR SALE
Primary vs. Secondary Price of Typical Condominiums in HCMC
Primary Asking Price
Secondary Asking Price
Source: CBRE Vietnam, Q2 2015.
Absorption Rate67%
HCMC1H 2015
Launched15,715 units
Sold10,494 units(for only new launches in the review period)
$1,400
$1,600
$1,800
$2,000
$2,200
Q4 2014 Q1 2015 Q2 2015
Sel
ling
Pric
e (U
S$
psm
)
The Manor-Phase 1
Saigon Pearl - Sapphire
The Vista An Phu
Thao Dien Pearl
Cantavil Premier
Masteri Thao Dien
Estella Heights
Vinhomes Central Park
Gateway Thao Dien
32 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Primary Prices Increase while Secondary Prices Stay Flat
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Q4 2014 Q1 2015 Q2 2015
Sel
ling
Pric
e (U
S$
psm
)
Royal City
Times City
Golden Land Building
Discovery Complex
Park Hill
Hoa Binh Green City
Imperia Garden
Watermark Tower
Primary Asking Price
Secondary Asking Price
Primary vs. Secondary Price of Typical Condominiums in Hanoi
CONDOMINIUM FOR SALE
Source: CBRE Vietnam, Q2 2015.
33 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Vietnam’s Price CompetitivenessCONDOMINIUM FOR SALE
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Hanoi HCMC Phnom Penh Manila Jakarta Bangkok
Luxury High-end Mid-end Affordable
Source: CBRE Vietnam, Q2 2015.
Primary Asking Price (US$ psm)
5Commercial Properties
35 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
HCMC - Steady Supply Across All Grades – Q2 2015 OFFICE
LIM TOWER 2GFA: 20,467 sm
VIETCOMBANK TOWERGFA: 55,000 sm
Grade B
Grade A
ROBOT TOWERGFA: 3,200 sm
Grade C
Source: CBRE Vietnam, Q2 2015.
36 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
PETROLAND TOWER
GALAXY 9
RIVERGATE TOWER
Broadening Long-term Leases
OFFICE
PRINCE RESIDENCE
2015 onwards….more office space for saleIn 2014 - Occurrence of long term lease/ selling office space
PEARL PLAZA
SAIGON AIRPORT PLAZA SUNRISE CITY – CENTRAL TOWER
LUCKY PALACE
DIAMOND FLOWERTOWER
TNR TOWER
HEI TOWER
PVI TOWER HUD TOWER DISCOVERY COMPLEX
The Rise of Strata Title
Source: CBRE Vietnam, Q2 2015.
37 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Office Yields STRATA TITLED OFFICES
SAIGON AIRPORT PLAZA
• Rent: US$15/month• Long term rent: 1,750
US$/sm/term• Term: 2059
PRINCE RESIDENCE
• Asking price: VND850 million per lot
• Sub-lease rent: VND10mil per month
• Term: 2064
PEARL PLAZA
• Rent: US$15/month• Long term rent: 1,500
US$/sm/term• Term: 2058
Vietnamese government 10-year bond yield
6.8% (*)Office yields
10% - 14% VS.(*) as of end of June 2015
Source: CBRE Vietnam, Q2 2015.
38 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
HCMC - CBRE LEAD AGENCIESOFFICE
LIM TOWER 2GFA: 20,467 sm
PEARL PLAZAGFA: 37,434 sm
Grade B
Grade B
ROBOT TOWERGFA: 3,200 sm
Grade C
Grade A
LIM TOWER 1GFA: 20,467 sm
2013 2015 2015 2015Source: CBRE Vietnam, Q2 2015.
39 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
46%
34%
16%4%
Big office space – HCMC vs. HanoiOFFICE
Tenant preferred size (base on CBRE’s enquiry)
26%
39%
20%
15%
1H 20151H 2015
Currently, lack of big office space
in Grade A and B office buildings in
HCMC
HANOI HCMC
Source: CBRE Vietnam, Q2 2015.
Available space per building (grade A/B)
Number of buildings
HCMC Hanoi
> 3,000 sm 4 18
2,000 - 3,000 sm 2 7
1,000 - 2,000 sm 12 18
500 - 1,000 sm 7 12
40 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Rental Stabilization – but for how long?OFFICE
30-35 US$/sm/month
0 90
70-75 US$/sm/month
0 902008 period
2012 & 2015
2016 & 2017
Upward pressure
0 90
HCMC Hanoi
50-55 US$/sm/month
30-35 US$/sm/month
0 90
Downward Pressure
0 90
0 90
Grade A
Narrower rental Gap btw HCMC & HN – for now, but not for long!
Limited quality supply in HCMC while multiple good quality, fringe
CBD mixed use
developments in HanoiSource: CBRE Vietnam, Q2 2015.
41 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
The flight to quality – Green is a given, Wellness, a must. OFFICE
FPT office building (Da Nang)
President Place (HCMC)
Green one UN house (Hanoi)
Deutsches Haus (HCMC)
42 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
OFFICEUpcoming Supply in 2H 2015
HA
NO
IH
CM
C
HANDICO TOWERSouth Tu Liem Dist. GFA: 29,040 sqm
Grade BHUD TOWERCau Giay Dist.GFA: 56,000 sqm
Grade B
DIAMOND FLOWER Cau Giay Dist.GFA: 20,000 sqm
Grade B
TNR TOWERDong Da Dist.GFA: 56,000 sqm
Grade A
PEARL PLAZAGFA: 37,434 sm
Grade B
HAI NAM OFFICE BUILDINGGFA: ~8,000 sm
Grade C Grade C
PT BUILDINGGFA: 1,000 sm
Source: CBRE Vietnam, Q2 2015.
43 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Grade A buildings are expected to Open in HCMC in next 3 yearsOFFICE
DEUTSCHES HAUSGFA: 40,000 smOpen: 2017
THE ONEGFA: 15,000 smOpen: 2018
SAIGON CENTRE (PHASE 2)GFA: 40,000 smOpen: 2018
Grade A
Grade A
Grade A
Source: CBRE Vietnam, Q2 2015.
44 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
RETAILHCMC – Newly opened/closed in Q2/2015 HANOI – Newly opened in Q2 2015
Union SquareDong Khoi – Nguyen Hue, District 1GFA: 39,454 sm
Closed to re-merchandise and re-layout: October 2015 (for 1 year)
SC VivoCityNguyen Van Linh Street, District 7GFA: 72,000 sm
Opened: May 2015
Times Square36 Nguyen Hue, District 1GFA: 4,000 sm
Opened: June 2015
Saigon Square 2To Duc Thang, District 1GFA: 7,750 sm
Closed for renovation: April 2015
• GFA: 23,800 sqm• Location: Ho Guom Plaza, Ha Dong• Occupancy: 84%
• The 5th hypermarket in Hanoi
• The 31st in Vietnam
Saigon CentreLe Loi, District 1GFA: 6,250 sm
Closed for renovation: June 2015 (for 1 year)
45 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
1 store expected to open in Can
Tho, July
74 storeswithin a year
300 storeswithin 3 years
NEW ENTRY IN HCMC IN 2015
RETAIL
VinDS
46 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
A Breakthrough Retail Format in HCMCRETAIL
47 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Upcoming supply in HCMC in 2H2015RETAIL
Vincom Quang Trung• Quang Trung Str.• 27,000 sm GFA
Vincom Megamall• Hanoi Highway• 120,000 sm GFA
Pearl Plaza• Dien Bien Phu Str.• 20,579 sm GFA
Thasa Plaza• Nguyen Hue Str.• ~6,000 sm
Retail Supply by year, HCMC
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
Existing Future
Source: CBRE Vietnam, Q2 2015.
Retail Supply by year, Regional
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Ba
ngko
k
Sin
gapo
re
Jaka
rta
Ha
noi
HC
MC
48 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Upcoming supply in Hanoi in 2H2015RETAIL
Vincom Nguyen Chi Thanh• Location: Dong Da Dist.• 44,500 sqm GFA
Vincom Exchange City• Location: Tu Liem Dist.• 23,140 sqm GFA
AEON MALL• Location: Long Bien Dist.• 108,000 sqm GFA
Retail Supply by year (sqm)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
Existing Future
Source: CBRE Vietnam, Q2 2015.
49 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Consumers shop online to avoid going to a shopCONSUMER SURVEY – PART 2
Source: CBRE Asia Pacific Consumer Survey, June 2015.
Vietnam: 73% consumers shop online to avoid going to a shop
Vietnam: average online monthly spending USD26-50 /person
50 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Ascott to expand more aggressively in the coming yearsHOSPITALITY
Citadines RegencySaigon
200 units
Ascott WaterfrontSaigon
222 units
2016
Somerset WestCentral
2017/2018
Somerset TDHai Phong132 units
2015
2018
2016
SomersetDa Nang Bay
121 units
NEW BRAND!NEW BRAND!
Source: CBRE Vietnam & The Ascott Ltd., Q2 2015.
51 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
HOSPITALITYVietnam will set up a US$100 million fund to promote tourism
0 10 20 30
Brunei
Myanmar
Lao PDR
Cambodia
Philippines
Vietnam
Indonesia
Singapore
Thailand
Malaysia
Int’l Arrivals (2014) Millions
Visaexempt/free
155
66
158
15
21*
157
19
40
6
58
Source: Tourism Working Group.*Most current data including five European countries.
8.8% 3%HANOI HCMC
1H2015 Int’l arrivals growth y-o-y
52 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
HOSPITALITYCoastal Cities The second tower of The Grand
under construction at Ho Tram
Q3 2013 Q2 2015China China
Da Nang Da Nang40%-50% 65%-70%
Of total international flights per week
Source: CBRE Vietnam, Q2 2015.
53 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
New hotel brands to Da NangHOSPITALITY
“ Hosting APEC 2017 is good news for Da Nang City as this is a chance to promote the city's image to the world, promising greater number of visitors from various countries and positive impacts on the city's hospitality market.
” Hilton and JW Mariott to push up project
construction to meet the APEC 2017.
Market is expected to have totally 13,404 keys till 2017.
Future supply is dominated by beach-front developments.
6Investment -In Search of Right Partner
55 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
INVESTMENT TRANSACTIONS
*All the above articles were retrieved in June 2015.
56 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
MARKET CONSOLIDATION
57 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
Sailing Tower
Market Peak Vietcombank Tower
Saigon Luxury Apartment
20 golden sites introduced
Kumho AsianaCentec Tower
Le Meridien
Vincom Dong Khoi
Bitexco Financial Tower
Union Square
Times Square
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD
13,000 - 58,000 10,000 - 22,000
4,500
2,203
1,010
Value (US$ million) 10.10 524.73 551.36 80.79 167.24 80.90 93.72 741.00 212.04 36.64No. of transactions 1 8 6 7 4 5 4 8 12 2
His
toric
al tr
ansa
ctio
nsS
igni
fican
t tra
nsac
tions
of
deve
lopm
ent s
ites
in D
istr
ict 1
Sig
nific
ant p
roje
cts
open
e
0
100
200
300
400
500
600
700
800
Development sites (Land cost)Ready-built project (Land cost + construction cost)
VIETNAM INVESTMENT MARKET
Source: Real Capital Analytics, retrieved in June 2015.
58 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
LAND VALUES
Price quoted is current asking price.
Source: CBRE Vietnam, Q2 2015
HANOI HCMC
Usage
Mixed-use
Commercial
Residential
Land area
>5,000 sm 1,000 - 5,000 sm <1,000 sm
Cau GiayBaDinh
Hoan Kiem D4D3District 1
Plot ratio: 15
8.7
8
9.5
8.2 811
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Pric
e ps
m o
f la
nd a
rea
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Pric
e ps
m o
f la
nd a
rea
5.2
4.8
6.8
9.2
10.4
4.315.7
5.26.7 1.5
59 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
SECTOR SEGMENTHCMC HANOI
RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION
OFFICENew buildings
Mature buildings
RETAILCBD
Non-CBD
CONDOMINIUM
High-end
Mid-end
Affordable
HOTEL
Inner-city hotels
Beach hotels/resorts
SERVICED APT. Grade A
INDUSTRIALLand
Factory/ warehouse
2015 OUTLOOK
Source: CBRE Vietnam, Q2 2015.
60 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
SECTOR OUTLOOK
CONDOMINIUM Sales continue to be strong. High-end and luxury projects continue to grab the headlines Should we be worried about an over-hyped market?
OFFICE
Rent remains stable thanks to limited supply. Grade B+ office buildings are getting more competitive to Grade A thanks to their more
favourable rental rates. Take-up rates of these buildings are also expected to expand much bigger than these of Grade A.
Tenants no longer switch offices just because of cheaper rent, which has been the main trend in the years from 2012-2014. They will only move office when they need a larger space or looking for places with higher utilities.
The market will welcome many new customers as investors when the revised Law on Real Estate Business takes effect from July 1.
RETAIL Increasing supplies in the next two quarter, especially from non-CBD locations. Rental rate is expected to further improve thanks to good performance of new supplies. Securing anchor tenant is key of differentiation.
HOSPITALITY
The market continues to be dominated by mid-scale segment. Second home market is expected to revive not only in established areas like Da Nang,
Nha Trang but also in emerging destinations like Phu Quoc and Ha Long. Second home market in the North starts to emerge and develop but it might take some
time for the market to be as active as in Da Nang or Nha Trang.
2015 OUTLOOK
61 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
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