BUILDING ON RECOVERY Presented by: Marc Townsend, Managing Director, CBRE Vietnam Date: Friday, January 9, 2015
2 CBRE VIETNAM | BUILDING ON RECOVERY
GOOD NEWS IN 2014
MARKET FUNDAMENTAL
The Government’s
continued commitment to fiscal consolidation and debt reduction.
VN-Index surpassed 640 points in September.
Mobile phone exports support the economy.
Lower lending rate. Oil platform!
INFRASTRUCTURE
Metro Line No. 2 Cat Linh – Ha Dong actively constructed.
More roads, bridges, highways and infrastructure open.
LEGISLATION
Relaxation on Foreign Housing Ownership.
Draft of Law on Real Estate Business: office strata title.
GLOBAL TRENDS
TPP and AEC open new markets for Vietnam.
REAL ESTATE
The Biggest winner is the residential market and not just the affordable sector!
Increasing retail expansion
Marketing revives.
Thu Thiem awakes.
INVESTMENT
Funding, RIETs, Financing get easier and cheaper.
M&A goes mainstream.
CBRE NEWS
An active year for consultancy valuation and research.
Better products for Investors.
3 CBRE VIETNAM | BUILDING ON RECOVERY
REMAINING QUESTIONS NON-PERFORMING LOAN
What is really happening?
VAMC has sold VND3,500 billion (US$164 million),
equivalent to only 3.9% of the VND90,000 billion ($4.2
billion) worth of non-performing loans it has purchased
from banks
VND30,000-BILLION CREDIT PACKAGE
Need more solutions to speed up the credit package.
PROJECT INFRASTRUCTURE
What about project management?
Complexes are more complex, it is just not for beginners anymore.
TWO TIER MARKET RETURNS
Are projects really sold out?
EQUITISATION
2014 – 2015: Plan to equitize 532 enterprises
2014: 143 SOEs were equitized (71% planned but double 2013’s)
1
Vietnam Outlook Remains Positive
5 CBRE VIETNAM | BUILDING ON RECOVERY
APAC Real GDP Growth (2014-2015) vs Long Term Average VIETNAM GDP GROWTH – REGION’S 2ND BEST
0
2
4
6
8
10
12
Vie
tnam
Indo
nesi
a
Indi
a
Thai
land
Sou
th K
orea
Sin
gapo
re
Hon
g K
ong
Japa
n
Chi
na
New
Zea
land
Aus
tralia
Phi
lippi
nes
Taiw
an
Mal
aysi
a
Y-o-
Y R
eal G
DP
Gro
wth
(%)
2014F 2015F Average 2004 - 2013
Improvement in
geopolitical
pressure
China slow down -
knock-on effect
Source: CBRE Research, Oxford Economics, December 2014.
The chart does not tell this Group markets in: Export driven Improvement in geopolitical tension China slowdown – knock-on effect on commodity-export markets like Australia and New Zealand Japan growth is minimal
Recovery in export on the
back of stronger global
demand
Oil price
drops
SLOWING IMPROVING
Election in
2016
6 CBRE VIETNAM | BUILDING ON RECOVERY
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest
rate
(%)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source: Vietnamese General Statistical Office.
Interest Rates and Inflation
Lending rate for the first 12 months: • Techcombank: 9.49% • Vietcombank: 7.99% • ACB: 8.9%
7 CBRE VIETNAM | BUILDING ON RECOVERY
MORE EXCITING STOCK MARKET
Newly listed companies
2013 2014
4 9
11 13
504 : VN-Index
641
603
544
Regional stock markets, y-o-y return in 2014: Thailand (SET): up 21.4%; Indonesia (JCI): up 27.0%; Singapore (SGX): up 11.7%; U.S. S&P 500 (SPX): up 11.24%; VNIndex (VNI): up 8.0%. Source: Bloomberg
Real Estate Holding &
Development Index
Source: Cafef December 2014, Bloomberg January 2015.
8 CBRE VIETNAM | BUILDING ON RECOVERY
OIL PRICES GETTING INCREDIBLY CHEAP
Oil had been getting stronger since 2009, 2010; but then declined significantly since mid-2014
Crude oil price Gold price
Good consequences:
Stronger consumptions due to lower industrial input and logistics costs (-3% approx.)
Lower construction cost
Lower building operating cost
Bad consequences:
Weakening VND/USD.
Falling oil world prices would slash Vietnam’s
state budget by around US$3 billion
But just a minimal impacts against VND (Sufficient USD reserves, surplus trade balance, robust FDI, low inflation)
=> Lower service charge?
Source: Nasdaq, January 2015. Source: www.giavang.com.vn, January 2015
9 CBRE VIETNAM | BUILDING ON RECOVERY
Better Investment and Development Prospects HCMC AMONG ASIA PACIFIC
City Investment Prospects, 2015 City Development Prospects, 2015 HCMC
* The survey is based on personal interviews from almost 400 of the most influential leaders in the real estate industry. Source: Emerging Trends in Real Estate Asia Pacific 2015 Survey.
10 CBRE VIETNAM | BUILDING ON RECOVERY
REVIVING STALLED DEVELOPMENTS
Goldmark City (HN) by Viet Han
Sapphire Palace (HN) by Hanoi Song Hong
Gemek Tower (HN) by Mekong Land + Geleximco
Vista Verde (HCMC) by CapitaLand + Thien Duc
The Park Residence (HCMC) by MIK
Le Meridien (HCMC) by Tien Phuoc + 990
City Gate Tower (HCMC) by Creed + NBB
From CBRE Interns’ Report:
HCMC : 39 stalled projects
Hanoi: 27 stalled projects
11 CBRE VIETNAM | BUILDING ON RECOVERY
BCI NUMBERS
All Future Projects
(2014-2025) HCMC Hanoi Da
Nang
Can Tho
Nha Trang
Vung Tau
Hai Phong
Office 178 271 55 26 11 28 12
Retail 71 149 36 5 14 20 7
Hospitality and SA
30 40 26 2 38 15 7
Residential 215 306 81 7 15 20 10
Total 494 766 198 40 78 83 36
Projects under construction, y-o-y change All future projects (2014 – 2030), y-o-y change
Projects Under
Construction
HCMC Hanoi Da Nang
Can Tho
Nha Trang
Vung Tau
Hai Phong
Office 105 87 14 10 8 12 2
Retail 46 35 11 3 6 10 3
Hospitality and SA
17 7 10 0 11 8 0
Resi 126 121 17 4 5 9 2
Total 294 250 52 17 30 39 7
Source: www.bciasia.com; CBRE Vietnam, December 2014 Source: www.bciasia.com; CBRE Vietnam, December 2014
-100%
0%
100%
200%
300%
HCMC Hanoi DaNang
CanTho
KhanhHoa
VungTau
HaiPhong
Perc
en
tag
e c
han
ge
2013 vs 2012 2014 vs 2013
-60%-50%-40%-30%-20%-10%
0%HCMC Hanoi
DaNang
CanTho
KhanhHoa
VungTau
HaiPhong
Perc
enta
ge c
hang
e
Compared to 2012 Compared to 2013
2 Regulation Changes Create New Opportunities in Property Investment
13 CBRE VIETNAM | BUILDING ON RECOVERY
FREE TRADE AGREEMENT (FTA)
FTA between Vietnam and the Customs
Union of Russia, Belarus and Kazakhstan
(concluded in December 2014)
Asean Economic Community
(expect to conclude in 2015)
Trans-Pacific Partnership
European Union Free Trade
Agreement
(negotiating)
Create opportunity to transform Vietnam
“ Joining the TPP, and positive, robust implementation of the commitments could increase
bilateral trade between Vietnam and the U.S. to about US$61.3 billion by 2020. And Vietnam’s
apparel exports to the U.S. could increase to US$22 billion by 2020.
” Source: Executive Director of Amcham Vietnam
14 CBRE VIETNAM | BUILDING ON RECOVERY
A MORE EQUAL & TRANSPARENT PLAYGROUND
November 2014, Foreign Housing
Ownership July 2014, Condominium
Measurement
Effective from July 08, 2014
Sellable Area
From the INTERIOR of the enclosing walls
INCLUDING: • Private balcony(ies) (if any) • Internal partitions
EXCLUDING: • Internal column(s) (if any); • Utility area (if any) inside the
unit;
Balcony Area
A balcony / logia which shares a solid wall with another condominium will be measured from the internal boundary of the balcony / logia.
Effective from July 1, 2015
Foreign Individual Buyer
YES for all foreigners who are granted a visa to the country
Foreign Organisation
YES to all foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies.
Product Apartments + villas and townhouses
Volume
Total number of dwelling units owned by foreigners must not exceed 30% of the total units in one condominium complex; or 250 villas / townhouses in one particular administrative area
Purpose The properties owned by foreigners can be sub-
leased, traded, inherited and collateralized
Tenure
Unchanged: 50-year leasehold with renewal possibility;
Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.
For Housing
15 CBRE VIETNAM | BUILDING ON RECOVERY
For Commercial Properties SUB-LEASE AND MORE FOR FOREIGN INVESTORS
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
16 CBRE VIETNAM | BUILDING ON RECOVERY
HCMC - GALAXY 9
HN - Mo Market
HCMC - SUNRISE CITY
Broadening and Deepening of the Office Market STRATA TITLED OFFICES
2015 onward….more office
space for long-term lease In 2014 - Occurrence of long term lease office space
HN - Hoang Thanh Tower
HN - Hong Ha Center
HN - CEO Tower &
Vinaconex 9 HN - Hapulico Complex
HN - Diamond Flower
HCMC - SAIGON AIRPORT PLAZA
HCMC - SSG TOWER HCMC - PRINCE RESIDENCE
HCMC - PETROLAND
17 CBRE VIETNAM | BUILDING ON RECOVERY
100% Foreign Invested Retailers Permitted from 2015 RETAIL
Joint venture, foreign investors to own up to 50% of charter
capital
Enterprises with 100% foreign capital in 110/155 sub-sectors: Wholesale, Retail,
Commission agent, Multi-Level Marketing, Franchising
But the Economic Needs Test (ENT) is still a technical barrier to trade: it requires foreign retailers to pass the test if they want to establish more than one retail outlet in Vietnam, unless some of the requirements are met
Impact
Not a significant change in short-term since foreign retailer have already joined the market for a while:
Domestic retailers are still protected thanks to the “final barrier” – ENT, but NOT applied for small size convenience store chains (<500sqm)
After Jan 11, 2015 Jan 11, 2010 – Jan 11,
2015
3
Infrastructure Investment: A Growth Catalyst and a Growth Nuisance
19 CBRE VIETNAM | BUILDING ON RECOVERY
NHAT TAN BRIDGE: A NEW WELCOME TO HANOI
20 CBRE VIETNAM | BUILDING ON RECOVERY
Old route via North
Thang Long – Noi Bai
Travelling time from
the CBD: ~1 hour
New route via Nhat
Tan Brigde – Vo
Nguyen Giap Avenue
Travelling time from
the CBD: ~35 mins
NOI BAI INT’L
AIRPORT
RR.2
RR.2
21 CBRE VIETNAM | BUILDING ON RECOVERY
Hanoi Metro lines boost up construction activities INFRASTRUCTURE
1
Line Cat Linh – Ha Dong
(13.5km)
320/419 piers, 5.4/13.3 km plate girder, 7/12 stations completed Expected completion: 2016.
2
1
2
2
5
4 3
1
2 Lavender
5 Sapphire Palace
4 Diamond Blue
3 Hattoco Tower
1 PCC1 Complex
Active projects along Line Cat Linh – Ha Dong
22 CBRE VIETNAM | BUILDING ON RECOVERY
Noi Bai’s International Airport Terminal T2 completed HANOI INFRASTRUCTURE
Investment capital: US$900 mn
Additional capacity:
• 10 - 15mn passengers/year (2015-2030)
• 200 flights/day
Total = 25mn passengers/year & 370 flights/day
Closing the gap with Bangkok Intl’
Airport (Suvarnabhumi) which served a
total of 51 million passengers in 2013
with over 800 flights/day
Noi Bai Intl’ Airport—Before T2
Year of completion 2001 (Terminal 1 - 90.000 m²) 2014 (Terminal 2 - 140.000 m2 )
Number of passengers
13 mn/year (as of 2013)
Max capacity 9 mn → Overload at T1
Number of flights/day
170 flights (vs. 370 flights/day of Tan Son Nhat Airport)
The advent of Terminal T2
23 CBRE VIETNAM | BUILDING ON RECOVERY
New Era For Downtown Saigon HCMC INFRASTRUCTURE
2015
PIX TAKEN 3 JAN 2015 OLD NGUYEN HUE STREET NEW FACE OF DOWNTOWN
SAIGON
24 CBRE VIETNAM | BUILDING ON RECOVERY
Completions of Renovated Bridges and Flyover HCMC INFRASTRUCTURE
JAN 2014 2015
Flyover at National Highway 1A – Huong lo 2 Binh Tan District - Developer: IDICO-IDI Open to traffic on January 1, 2015
Bong Bridge District 1 & Binh Thanh District Open to traffic on June 7, 2014
Le Van Sy Bridge Phu Nhuan District Open to traffic on April 30, 2014
Hau Giang Bridge District 6 Open to traffic on June 7, 2014
Kinh Thanh Da Bridge Binh Thanh District Open to traffic on July 3, 2014
Kieu Bridge District 1 & Phu Nhuan District Open to traffic on October 25, 2014
25 CBRE VIETNAM | BUILDING ON RECOVERY
METRO LINE NO. 1 AND RESIDENTIAL PROJECTS
Taken in front of Rex Hotel on Jan 7, 2015
Vinhomes Central Park Thao Dien Pearl
The Vista An Phu
Lexington Residence
The Eastern First Home D.9 Masteri Thao Dien
The Emerald
Metro Tower
Cantavil Premier Imperia An Phu
The Estella
First Home Thu Duc
NEW EASTERN BUS STATION
LONG BINH DEPOT
26 CBRE VIETNAM | BUILDING ON RECOVERY
THU THIEM PENINSULA AWAKES/AWAITS
Thu Thiem in the past Thu Thiem today (taken in Dec 2014)
Thu Thiem 2 Bridge in the future Thu Thiem Pedestrian Bridge in the future
4 Something about a liveable city
28 CBRE VIETNAM | BUILDING ON RECOVERY
2014 Launches CONDOMINIUMS FOR SALE
HCMC 37 projects 14,807 units
Hanoi 31 projects
16,200 units ~60% sold ~47% sold
29 CBRE VIETNAM | BUILDING ON RECOVERY
2014 Launches CONDOMINIUMS FOR SALE
Launched Units by Year
Source: CBRE Vietnam, Q4 2014.
01,0002,0003,0004,0005,0006,0007,000
Q12014
Q22014
Q32014
Q42014
Un
it
0
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014
Uni
ts
Luxury High-end Mid-end Affordable
0
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014
Uni
t
Luxury High-end Mid-end Affordable
0
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014
Uni
t
Luxury High-end Mid-end Affordable
0
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014
Uni
t
Luxury High-end Mid-end Affordable
HCMC HN HCMC HN HCMC HN HCMC HN HCMC HN
30 CBRE VIETNAM | BUILDING ON RECOVERY
10,700
units sold
2014 Highest Number of Sold Units in History in HCMC CONDOMINIUMS FOR SALE
Sold Units by Year and City
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2010 2011 2012 2013 2014
Sold
Uni
t
HCMC Hanoi0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2010 2011 2012 2013 2014
Sold
Uni
t
HCMC Hanoi
HCMC HN HCMC HN HCMC HN HCMC HN HCMC HN
Source: CBRE Vietnam, Q4 2014.
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2010 2011 2012 2013 2014
Sol
d U
nit
HCMC Hanoi
~17,000 units sold
31 CBRE VIETNAM | BUILDING ON RECOVERY
Unit Type/ Size Changes CONDOMINIUMS FOR SALE
Condominium Unit Type Change, HCMC
9%
7%
12%
3%
63%
59%
45%
35%
27%
27%
28%
45%
1%
7%
14%
16%
After 2012
Before 2012
After 2012
Before 2012
Sec
ond
tier
Firs
t tie
r
1BR 2BR 3BR 4BR+
45
50
48
65
62
91
78
110
80
110
100
125
120 sm
250 sm
200 sm
300 sm
After 2012
Before 2012
After 2012
Before 2012S
econ
d tie
rFi
rst t
ier
1BR 2BR 3BR 4BR+
Condominium Unit Size Change, HCMC
(*): First tier: Luxury and high-end products; Second tier: Mid-end and affordable products Source: CBRE Vietnam, Q4 2014.
Vinhomes Central Park: • 1BR: 52 sm • 2BR: 73 sm • 3BR: 124 sm
Masteri Thao Dien: • 1BR: 51 sm • 2BR: 59 sm • 3BR: 86 sm
32 CBRE VIETNAM | BUILDING ON RECOVERY
Price Changes CONDOMINIUMS FOR SALE
HCMC, Secondary Prices
Source: CBRE Vietnam, Q4 2014.
Secondary prices in the high-end and mid-end segments increased in both HCMC and Hanoi as stock is diminishing.
Secondary prices in the affordable segment continued to decrease in Hanoi while it remained relatively flat
in HCMC.
$0
$500
$1,000
$1,500
$2,000
2011 2012 2013 2014
Sec
onda
ry p
rice
(US
$/m
2)
High-end Mid-end Affordable
Hanoi, Secondary Prices
$0
$500
$1,000
$1,500
$2,000
2011 2012 2013 2014
Sec
onda
ry p
rice
(US
$/m
2)
High-end Mid-end Affordable
33 CBRE VIETNAM | BUILDING ON RECOVERY
Domination of Local Developers CONDOMINIUMS FOR SALE
HUGE HIGH-END DEVELOPMENTS
Vinhomes Central Park (10,000 units) by VinGroup
OTHERS
Vinhomes Nguyen Chi Thanh (378 units) by VG
483 units by FLC Group 400 units by FLC Group
Orchard Garden
154 units by NovaLand 2,000 units by Nam Long
Ehome 3
HCMC HANOI
FLC Complex FLC Star Tower
Source: CBRE Vietnam, Q4 2014.
34 CBRE VIETNAM | BUILDING ON RECOVERY
CONDOMINIUMS FOR SALE Pre-sales and pre-launch marketing activities very popular
• New project launches are informed early to buyers via aggressive and massive
agent network and pre-launch marketing activities
• Mini-blogs, project information websites created by agents are very popular
• Property sales SMS widely employed by agents to approach buyers
35 CBRE VIETNAM | BUILDING ON RECOVERY
NEW SUPPLY IN 2015 RETAIL
VINCOM THU DUC
Thu Duc District GFA: 27,860 sm
Estimated to open:
Jan. 2015
Shopping Centre
SC VIVOCITY
District 7 GFA: 62,000 sm Expected completion:
Q1 2015
SAIGON SQUARE 3
District 3 GFA: 3,100 sm
Opened: 1 Jan. 2015
HUNG VUONG SQUARE
District 5 GFA: 9,500 sm
Opened: 31 Dec. 2014
Bazaar emerged
Steady demand from F&B
GRAND SAIGON HOTEL
District 1 Leased to Burger King, Popeyes, Dunkin’
Donuts
Expected to open: Jan. 2015
Supermarket
AEON CITIMART
Go Vap District
Opened: Jan. 2015
AEON MALL HANOI
Long Bien District GFA: 108,000 sm Expected completion:
2015
36 CBRE VIETNAM | BUILDING ON RECOVERY
Local Retail Developers Expand RETAIL
VINCOM THAO DIEN
GFA: 61,250 sm
VINCOM
NGUYEN CHI
THANH
GFA: 44,500 sm
VINCOM HA LONG
Completed: 19/12/2014
GFA: 30,800 sm
HANOI, DA NANG, CAN THO, HA LONG VinMart
to open 100 supermarkets and 1,000 convenience stores in the next
3 years. VinMart has
opened 9
supermarkets
and 3 convenience
stores in Vietnam
VINCOM
DA NANG
GFA: 31,266 sm
VINCOM
CAN THO 2
GFA: 14,519 sm
HCMC
37 CBRE VIETNAM | BUILDING ON RECOVERY
And Foreign Developers Too! RETAIL
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
• Bought Pico • Opened Lotte
Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25% share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1/ 2014
11/ 2014
2015
2020
Already successfully partnered with Fivimart and Citimart
Opened first store in HCMC
38 CBRE VIETNAM | BUILDING ON RECOVERY
RETAIL Retail Sales Volume
- 2015 Forecast
Key Drivers/ Issues
Vietnam +9.3% Solid economic growth, rising middle class population Further opening of FDI to spur consumption demand
China +7.7% Growth in economy and private consumption to slightly moderate Growth in Tier 1 cities may slower than national average
Hong Kong +6.3% To ride on economic recovery and rebound from the fall in 2014 Consumption pattern of Mainland Chinese shoppers changed to non-luxury
items
Malaysia +4.5% Growth dampened by the slowing economy A 6% GST to be effective from Apr-2015
Taiwan +4.5% Disposable income to increase on the back of improving job market and economic recovery
New Zealand +2.9% Growth to edge down since the government aimed to slow down the housing
market
Australia +2.2% Discretionary spending improved on the back of prosperous housing and job market
South Korea +2.1% Weak consumer demand with high household debt Some supports from regional traveller spending
Singapore +1.7% Retail sales growth constrained by high household debt (75% of GDP in 2013) Labour crunch is an issue hindering retailer expansion
Japan +0.6% Delay in consumption tax hike (from 8% to 10%) Tourist spending supported by cheaper yen
Source: Oxford Economics (17 Nov 2014)
5 Leasing Trend - Green Building & 360 Workplace
40 CBRE VIETNAM | BUILDING ON RECOVERY
“A green lease is a standard form lease with additional clauses included which provide for the management and improvement of the Environmental Performance of a building by both owner and occupier. Such a document is legally binding and its provisions remain in place for the duration of the term”.
- UK Better Buildings Partnership
Sustainability – Driven by Landlord, Tenant and Investor Demand ENTER GREEN LEASES
Increasing occupier demand
Limiting regulatory exposure
Retaining asset value
Attracting investors
OWNERS OCCUPIERS
Reducing operational costs
Improving staff productivity & retention
Meeting CSR objectives
Supporting corporate reporting
INVESTORS
Limiting regulatory exposure
Reducing investment risk
Future asset protection
41 CBRE VIETNAM | BUILDING ON RECOVERY
LEED CERTIFIED BUILDINGS ACROSS ASIA Major LEED Certificated Office Buildings
NIKKEN
SEKKEI
TAIPEI 101
TWO INTERNATIONAL
FINANCE
PARK VIEW GREEN
ASIA SQUARE
VIETNAM
ZUELLIG
BUILDING
ENERGY COMPLEX
AIA CAPITAL
CENTER
PARK VENTURE
ECOPARK
PIXEL BUILDING
PRESIDENT
PLACE
Source: CBRE Vietnam, Q4 2014.
42 CBRE VIETNAM | BUILDING ON RECOVERY
Evolution From PRESENCE to PERFORMANCE THE MODERN WORKPLACE
CLIENT SITES
SATELLITE OFFICE
SERVICED OFFICE
TAXI
AIRPORT LOUNGES
HOTELS
CAFES
LIBRARIES
55% OF WORKING TIME
45% OF WORKING TIME
+ + PEOPLE PEOPLE SPACE TECH
Source: CBRE Vietnam, Q4 2014.
43 CBRE VIETNAM | BUILDING ON RECOVERY
1
2
3
4
5
Top 5 Active Industries in The Market OFFICE
Top 5 Most Active Industries, 2014
17% Banking/ Finance/
Insurance
6% Pharmaceutical
10% Technology/ Electronic/ IT
10% Manufacturing
5% Sourcing/ Outsourcing
HCMC Hanoi
11% Construction/ Real Estate
12% Banking/ Finance/
Insurance
29% Technology/ Electronic/ IT
6% Education
Source: CBRE Vietnam, Q4 2014 Number based on CBRE’s enquiries only.
9% Manufacturing
44 CBRE VIETNAM | BUILDING ON RECOVERY
Sources of Demand OFFICE
33% Europe
24% USA
8% Vietnam
5% Singapore
6% South Korea
HCMC Hanoi
Source: CBRE Vietnam, Q4 2014 Number based on CBRE’s enquiries only.
52% From Vietnam
9% From USA
7% From Japan
4% From Korea
3% From Germany
45 CBRE VIETNAM | BUILDING ON RECOVERY
OFFICE
Source: CBRE Research, (As of December 2014).
Grade A Demand Rising Selected Markets SLOWING STRENGTHENING FLAT
0100200300400500600700800900
1,000
Sha
ngha
i
Ban
galo
re
New
Del
hi
Mum
bai
She
nzhe
n
Toky
o
Jaka
rta C
BD
Kua
la L
umpu
r
Hon
g K
ong
Mel
bour
ne C
BD
Man
ila C
BD
Syd
ney
CBD
Han
oi
Taip
ei
Ho
Chi
Min
h C
ity
Bei
jing
Ban
gkok
CB
D
Bris
bane
CBD
Gua
ngzh
ou
Seo
ul
Sin
gapo
re
Auc
klan
d C
BD
Net A
bso
rptio
n (
NL
A, ‘0
00
sqm
)
Average (2010-2014) 2015F
46 CBRE VIETNAM | BUILDING ON RECOVERY
Future Supply – HCMC and Hanoi OFFICE
JAN 2015 DEC 2015
APEX TOWER GFA: 21,000 sm
INTRACOM 2 GFA: 18,000 sm
HANDICO TOWER GFA: 40,000 sm
MO MARKET GFA: 46,657 sm
DIAMOND FLOWER
TOWER GFA: 20,000 sm
In H
CM
C
In H
an
oi
SSG TOWER GFA: 37,434 sm
VIETCOMBANK GFA: 55,000 sm
VIETTEL OFFICE &
TRADE CENTRE GFA: 65,971 sm
LIM TOWER 2 GFA: 20,467 sm
Source: CBRE Vietnam, Q4 2014.
6 Chapter II of Coastal Cities Da Nang, Nha Trang, Phu Quoc, Ho Tram, Ha Long
48 CBRE VIETNAM | BUILDING ON RECOVERY
A DYNAMIC YEAR FOR TOURISM
6 new international air routes
opened (from HCMC and Phu Quoc)
PASSPORT
Visa exemption for 7 countries
(Russia, Japan, Korea, Denmark,
Norway, Sweden and Finland)
Coastal provinces improving
image in international tourism
maps
Consistent growth of international
arrivals
International airport terminal T2
opened in Hanoi (138,000 sm;
capacity~10 mil. pax/yr)
49 CBRE VIETNAM | BUILDING ON RECOVERY
HCMC – Busy Construction Activities on Development Sites CITY HOTEL
BEN THANH
SILVERLAND
BAY HOTEL
SINGAPORE
HUONG SEN
HOTEL
2-3 STAR
HOTEL
LE DUY HOTEL
MAJESTIC HOTEL
(EXPANSION)
LE MERIDIEN
HOTEL
MGALLERY
HOTEL
RITZ-CARLTON HOTEL
(THE ONE)
DES ART SAIGON
HOTEL
Source: CBRE Vietnam, Q4 2014.
50 CBRE VIETNAM | BUILDING ON RECOVERY
Coastal Provinces Becoming More Attractive COASTAL HOTEL
New International Airport
115 Flights per week (current capacity)
187 max pax per flight (current capacity)
760,000 max pax per year (current capacity)
2,700,000 max pax per year (expected capacity in 2020)
PHU QUOC - NEW INTERNATIONAL AIRPORT BOOSTS ARRIVALS
MUI NE - BINH THUAN -
Improving infrastructure
Source: CBRE Vietnam, Q4 2014.
Long Thanh – Dau
Giay is approaching
completion
HA LONG – QUANG NINH is luring investors by improving infrastructure, strong support from local government,
and pilot law allowing local gamblers
Halong Star
Vincom Halong
51 CBRE VIETNAM | BUILDING ON RECOVERY
Reu Island Vingroup - 2015
Halong Star Hotel- 2015
IMICO Hotel -future
Halong Star (by Limitless) – future
Marina City – future
COASTAL DEVELOPMENTS Chapter II of Ha Long Bay
Other entertainment/commercial/residential project
Future hotel/resort
Little Vietnam - 2015
Marine Plaza – completed
Ocean Park – future
Vincom Center Hạ Long - completed
Source: CBRE Vietnam, Q4 2014.
52 CBRE VIETNAM | BUILDING ON RECOVERY
Crown Plaza (2nd phase) - 2017
Ibis Hotel Ba Na Hills - Accor –
2015
Fusion Suites Da Nang - 2015
Hilton Da Nang - 2016
Sheraton Da Nang
DHC Marina – DHC Group - 2015
Vincom Da Nang – 2015
Ocean Hotel and Spa - 2015
Tourane Hotel - 2015
Avatar Hotel - 2015
COASTAL HOTEL Chapter II of Da Nang
Under construction projects
New hotel brands
Source: CBRE Vietnam, Q4 2014.
7 M&A Investment & Foreign Direct Investment
54 CBRE VIETNAM | BUILDING ON RECOVERY
Asia Pacific is The Most Preferred Regions Among Investors INVESTMENT
Source: CBRE Research, December 2014.
55 CBRE VIETNAM | BUILDING ON RECOVERY
0 10 20 30 40 50 60
Philippines
Vietnam
Malaysia*
Thailand
Singapore
Hong Kong
Hotel Office
Number of Transactions in the Last 24 months REGIONAL INVESTMENT
* Data for Malaysia is only available from March 2013. Source: RCA, December 2014..
HCMC, Top 5 Most Active Industries, 2014
56 CBRE VIETNAM | BUILDING ON RECOVERY
MAJOR INVESTMENT DEALS IN 2014
Source: RCA and newspapers.
DIAMOND PLAZA
THANG LOI HOTEL MOVENPICK SAIGON INDOCHINE PARK TOWER
• Location: HCMC
• Seller: POSCO
• Buyer: Lotte Shopping
• Property type: Retail
• Amount: n/a
• Location: HCMC
• Seller: Mulpha International Bhd
• Buyer: Lemongrass Master Fund
• Property type: Serviced Apt
• Location: HCMC
• Seller: VinaCapital
• Buyer: Tung Shin
• Property type: Hotel
• Amount: n/a
• Location: Hanoi
• Seller: Hanoi Tourist
• Buyer: BRG
• Property type: Hotel
CORNER STONE GEMADEPT TOWER
• Location: Hanoi
• Seller: VIB
• Buyer: Daibiru
• Property type: Office
• Amount: $60.1 million
• Location: HCMC
• Seller: Gemadept
• Buyer: CJ Group
• Property type: Office
• Amount: $45 million
METRO CASH & CARRY
• Location: Vietnam
• Seller: Metro Cash & Carry Vietnam
• Buyer: Berli Jucker
• Property type: Retail
• Amount: $877 million
OCEAN MART
• Location: Vietnam
• Seller: Ocean Group
• Buyer: Vingroup
• Property type: Retail
57 CBRE VIETNAM | BUILDING ON RECOVERY
High-end Condominium Rental Yield - Vietnam vs Region INVESTMENT YIELD
(*) Selected projects: •CBD: Vincom Park Place, Pacific Place, Hoang Thanh Towwer; •The West: Keangnam Landmark, Indochina Plaza Hanoi, Royal City
Source: CBRE Vietnam.
Rental yield at selected high-end projects in Hanoi
BANGKOK
4-6%
Hanoi 5-6.5%
SINGAPORE
3%
HONGKONG
4%
PHNOMPENH
10%
6.00% 6.100% 6.471%
0%
2.00%
4.00%
6.00%
8.00%
2012 2013 2014
CBD The West
Rental yield at selected high-end projects in HCMC
7.800% 8.00% 8.100%
0%
2%
4%
6%
8%
2012 2013 Q2 2014
District 7 District 2
YTD
(*) Selected projects: •District 7: Sunrise City, Sky Garden, Panorama; •District 2: Xi Riverview Palace, The Estella, The Vista
Source: CBRE Vietnam.
HCMC 6-8%
59 CBRE VIETNAM | BUILDING ON RECOVERY
SECTOR SEGMENT HCMC/ SOUTH HANOI/ NORTH
RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION
OFFICE New buildings
Mature buildings
RETAIL CBD
Non-CBD
CONDOMINIUM
High-end
Mid-end
Affordable
HOTELS Inner-city hotels
Beach hotels/resorts
SERVICED APT. Grade A
INDUSTRIAL Land
Factory/ warehouse
2015 OUTLOOK
Source: CBRE Vietnam, Q4 2014.
60 CBRE VIETNAM | BUILDING ON RECOVERY
Location, Location, Location! Relocation, Relocation, Relocation! Cash, Cash, Cash! Affordability, Affordability, Affordability!
It’s all about risk, compliance, due diligence and governance.
The return of the second (smaller) home market.
It’s all about sizing, small is still beautiful.
Vietnam still has the highest residential and office rental yields in SeA (Singapore 3%, Hong Kong 4%, Vietnam ~7%-8%).
Marketing and Branding matters even more (make better use of technology).
Speculators are back (with a vengeance) and High-Street Brokers take over, again.
Trends CBRE FORECAST 2015
61 CBRE VIETNAM | BUILDING ON RECOVERY
Adapted and survived.
Over the worst, but many global/ regional headwinds remains.
Gentrification (no more conical hats).
HR (People, People, People – even in Real Estate).
Big data and market intelligence.
Winners and Losers.
Thank God for the Korean and Japanese manufacturers.
Misuse of Land.
Tenders and Auctions.
R&D lasts weeks, not years.
Outsourcing.
Trends CBRE FORECAST 2015
Steven Gerrard, Liverpool’s captain, opted to end his 25-year Anfield stay and went to LA Galaxy
62 CBRE VIETNAM | BUILDING ON RECOVERY
Other sub sectors will emerge – Student accommodation, SOHO apartments, retirement accommodation, worker accommodation, built-to-suit, sale & leaseback, and REITs.
Time to reconsider the 3rd and 4th-tier cities.
Either Buy-to-sell or Buy-to-let.
Metro lines and the residential pipeline.
Traffic jams continues as car/bike sales hike while roads do not increase and 2,000 babies are born every week in Hanoi.
Green goes mainstream. It is not a nice but a “MUST HAVE”.
Luxury - Be careful what you wish for!
Fitness and wellness
Valuation, Funding, Transparency, Track Record
Trends CBRE FORECAST 2015
2 CBRE VIETNAM | BUILDING ON RECOVERY
12 Special Reports from CBRE APAC and CBRE Vietnam 12 X’MAS GIFTS
64 CBRE VIETNAM | BUILDING ON RECOVERY
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Every month
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65 CBRE VIETNAM | BUILDING ON RECOVERY
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© 2015 CBRE (Vietnam) Co., Ltd. All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the 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 subscribe for 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 be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.
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