‘be fearless, not foolish’
TRANSCRIPT
‘BE FEARLESS, NOT FOOLISH’ Presented by: Marc Townsend, Managing Director of CBRE Vietnam Date: 6th January, 2015
TODAY
COMMERCIAL
REAL ESTATE
IS DRIVEN BY…
3 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
SIGNIFICANT MARKET EVOLUTION SINCE THE LAST CYCLE
GDP (%) FDI REGISTERED
(US$ Billion)
INFLATION (%)
Condominium
3.6x
Office Retail
3.7x NLA 12.5x
MORTGAGE
RATE (%)
8.5
6.5
2007
2015
21
23
2007
2015
12.4
0.6
2007
2015
11.2
8.4
2007
2015
8
35
properties
79
properties
33
NLA
21,102
sold units
5,634
Sales
HCMC HANOI
Condominium Office Retail
2007 2015
2.2x 4x
17
44
properties
71
properties
23
NLA
36,222
sold units
11,306
Sales 6x NLA
4 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
DASHBOARD – PRODUCED MONTHLY
(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only, However, the back-dated numbers are the average rate
which was 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 of a sample of ten banks in which the rates are announced publicly on their websites and can be tracked
backwards,
ECONOMIC
INDICATORS 2Y 1Y 6M 3M 1M Current
CPI (%) y-o-y 5.9 4.5 1.0 0.9 0.7 0.7
Trade balance
(US$, bil) (0.2) (0.4) 0.1 (0.5) (0.2) (0.1)
Retail & services
Turnover (VND, tril) 227.0 251.2 196.8 204.8 270.6 247.8
BANKING & FINANCE 2Y 1Y 6M 3M 1M Current
VN-Index 500.0 598.4 562.4 621.1 562.6 607.4
USD/VND (inter-bank) 21,036 21,246 21,458 21,890 21,890 21,890
Local gold (VND mil/tael) 37.5 34.9 35.0 33.0 33.8 33.7
Lending Rate (%)* 13.3% 13.1% 8.1% 8.3% 8.4% 8.7%
Deposit rate (%)**
(1-year term) 8.2% 6.5% 6.4% 6.3% 6.3% 6.4%
REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current
Real Estate Holding &
Development Listed
Companies
43.37 60.95 46.80 48.30 48.35 48.50
Real Estate Services
Listed Companies 21.99 54.98 51 46.9 46.42 46.60
Source: Stockbiz, November 2015
Source: GSO, November 2015
Source: GSO, SBV, SJC & HSX, November 2015
NEW LAUNCHES 2Y 1Y 6M 3M 1M Current
HCMC New launches
(unit) 42,095 34,529 24,700 15,350 6,237 4,137
HN New launches (unit) 27,995 20,563 10,466 5,089 1,781 1,139
Source: CBRE, November 2015
5 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
‘GAME-CHANGING’ NEWS
State-controlled companies are forbidden to invest in
banking, stock and real estate
After Uber, Airbnb will officially be in Vietnam
6 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
TPP AND ASEAN ECONOMIC COMMUNITY
TPP could add as much as 8% to Viet Nam’s
GDP, 17% of its real exports, and 12% to its
capital stock over the next 20 years.
Fewer tariffs on its exports especially
garments and textiles. Almost all tariffs and
non-tariffs on industrial and agricultural
products will be eliminated or gradually
reduced
Wider export opportunities. Import activities
will strengthen.
• 4/5 companies see growth
opportunities in ASEAN.
• 2/3 companies have plan to
expand in ASEAN.
2015F 2020F
GDP US$2.5 trillion US$3.2 trillion
Labour Supply 427 million 453 million
Private
Consumption
US$3.6 trillion US$4.6 trillion
7 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
(25)
(20)
(15)
(10)
(5)
0
5
10
15
20
Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec
2013 2014 2015
Pe
rfo
rmn
ace
(%
)
Government Bond VN-Index Local Gold Crude Oil
Gold, oil, stock, currency fluctuations
THE CURRENT MARKET
Perfomance of Different Asset Types
Source: Hanoi Stock Exchange, FPT Securities, SVB
VN-index to recover in 2016,
reached 650-670
Crude oil price continues to
drop, even below $20/barrel
8 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
-
5,000
10,000
15,000
20,000
25,000
30,000
0%
30%
60%
90%
120%
150%
180%
2007 2009 2011 2013 2015 2017F 2019F
VN
D/U
SD
% (
y-o
-y)
FX Consumer price index
Interest rate, central bank policy Interest rate, lending
CURRENCY, INTEREST RATE, INFLATION
Currency, Interest Rate, Inflation Rate
Source: Oxford Economics, ANZ, Dec 2015.
Vietnam Dong to be
devalued by 5-10% in 2016
• 2015:
• Mortgage lending increased 14.59%.
• And contributes only 8% of total bank lending.
• 2016: Expected to grow 15% next year.
Domestic credit is rising at a sustainable rate
Fed Raises Key Interest Rate for
First Time in Almost a Decade
Forecast
9 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Ring Road No.2 expected come into operation before Tet
HANOI INFRASTRUCTURE
Sở Intersection
Vong Intersection
Nhat Tan Brdg.
Bưởi
Royal City
Completed
Under Construction
Land clearing
Elevated highway
(planning)
Times City
Voi Phuc
O Cho Dua
Source: Vnexpress.net, CBRE Vietnam.
Ring Road 2 – Hoang Quoc Viet Intersection
Ring Road 2 – Cau Giay Intersection
10 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Metro lines
HANOI INFRASTRUCTURE
Line 2A - Ha Dong – Cat Linh (66% completed): 9/12 stations to be completed before March 2016
Q3 2016: Trial operation
Line 2 - Nhon – Hanoi Station: Slow Construction Progress
Pillars started being built on Xuan Thuy Street
Q1 2016: Commence constructing underground lines
Line 2: Nhon – Hanoi Station (elevated)
Line 2: Nhon – Hanoi Station (underground)
Line 2A: Cat Linh – Ha Dong
Source: Ministry of Transport, CBRE Vietnam.
Line 3: Ngoc Hoi – Yen Vien (under planning)
11 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
New Key Projects
HANOI INFRASTRUCTURE
Thanh Xuan Tunnel Noi Bai Domestic Terminal to Upgrade
Ring Road 2: Lang - Buoi Intersection Trung Hoa Tunnel
NO
RT
H -
NO
RT
H W
ES
T
WE
ST
AN
D S
OU
TH
WE
ST
Close to completion
Operating from 9 Jan 16
Close to completion
Operating from 9 Jan 16
Under Planning
To be completed in 2018
Close to completion
Operating before Feb 16
12 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Hanoi – Hai Phong Highway inaugurated
HANOI INFRASTRUCTURE
5th December 2015, Hanoi – Hai Phong Expressway (105.5km) officially came into operation
Travelling time: 1.5 hour
US$116,0
00/m
Hanoi
Hai Phong
National Road No. 5
(Travel time: 3 hours)
Hanoi-Hai Phong Expressway
(Travel time: 1 hour)
Source: CBRE Vietnam
1
60 120 Minimum speed limit Maximum speed limit
First stop
Ring-Road No.3
Last stop
Dinh Vu Port
1 Ring Road No.3 - Hanoi 2 Hanoi – Hung Yen 3 Hanoi – Hai Duong
4 Hanoi – Hai Phong 5 Hanoi – Hai Phong 6 Hanoi – Hai Phong
2 3
4
5
6
13 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Major Interchanges
HCMC INFRASTRUCTURE
Ring Road 2 Interchange Tram 2 Interchange
Cat Lai Interchange Dong Tay Boulevard –
National Highway 1A Interchange
14 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
New Key Projects
HCMC INFRASTRUCTURE
An Suong Tunnel project in District 12 Nguyen Van Linh + Nguyen Huu Tho Interchange in District 7
Phuoc Khanh Bridge in Can Gio District Tan Son Nhat airport expansion projects
SO
UT
H E
AS
T
NO
RT
H W
ES
T
Under Planning
To be completed in 2018
Under Planning
To be completed in 2020
Under Construction
To be completed in 2018
Under Construction
To be completed in 2019
NEW RESIDENTIAL
DEVELOPMENTS
16 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Sep 15
Quick Progress, Fast Changes
THU THIEM NEW URBAN AREA
Dec 15
2011 2008
17 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
NEW FACE OF SAIGON IN 2016 – 2018
Vinhomes
Central Park
Thu Thiem Exihibition Centre
Saigon Melinh
Tower
Empire City
Eco Smart City
18 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Launch
Sales
Asking price
(Primary)
2015 Marked A New Height
CONDOMINIUM
42,261 units
launched +126% y-o-y
36,770 units
sold +102% y-o-y
HCMC HANOI
28,200 units
launched
+70% y-o-y
Launch
Sales
Asking price
(Primary)
21,100 units
sold
+90% y-o-y
+4% y-o-y
+1.5% q-o-q
+4.4% y-o-y
+2.5% q-o-q
~55%
Net absorption
Net absorption
+3 ppts
~56%
+12 ppts
19 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
CBD
East 3%
South 31% South West
19%
West 27%
North
Midtown
3% CBD
Fringe
19%
Hot Spots
CONDOMINIUM
North 25%
East 29%
West 10%
South 36%
Central
HCMC HANOI
0
10,000
20,000
30,000
40,000
2011 2012 2013 2014 2015P
So
ld U
nits
Luxury High-end Mid-end Affordable
Sold Units
Clusters of Total Launched Supply in 2015
Source: CBRE Vietnam, Q4 2015
Clusters of Total Launched Supply in 2015
Sold Units
0
5,000
10,000
15,000
20,000
25,000
2007 2009 2011 2013 2015
No.
of units s
old
Luxury
High-end
Mid-end
Affordable
20 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Increase in recent launch price in premium high-end projects
CONDOMINIUM
Hanoi - Asking Price of Premium High-end Projects
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
$2,750
$3,000
$3,250
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Royal City
Times City
Golden Land Building
Discovery Complex
Park Hill
Hoa Binh Green City
D'le Roi D'solei
Watermark Tower
Primary Asking Price
Secondary Asking Price
21 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Premium High-end Properties Increased Week by Week
CONDOMINIUM
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
$2,600
$2,800
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Se
llin
g P
ric
e (
US
$ p
sm
)
Secondary Asking Price
The Manor-Phase 1
Saigon Pearl - Sapphire
The Vista An Phu
Thao Dien Pearl
Cantavil Premier
Primary Asking Price
Masteri Thao Dien
Estella Heights
Vinhomes Central Park
Gateway Thao Dien
The Nassim
HCMC - Asking Price of Premium High-end Projects
Source: CBRE Vietnam, Q4 2015
22 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
The CBD Make-over
CONDOMINIUM
HCMC
HCMC’s new centre is extended to include
part of Binh Thanh District (Ward 22 and Ward 19)
and District 4 (Wards 9, 12, 13 and 18)
CBD
Hai Ba
Trung
District
HANOI
Prime development sites in CBD and CBD-fringe
restarted or transferred
23 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
CONDOMINIUM District 1 Becomes Active Again with Properties @ US$7,500 psm
HC
MC
PEARL PLAZA
Binh Thanh Dist.
GFA: 37,434 sqm
Completion: Q4/2015
Grade B
Grade A Supply:
• Limited supply
Grade B Supply:
• Increased steadily
• Quality of new buildings are improved in order to
enhance competitiveness
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q3 2015 2015F 2016F 2017F 2018F
Fu
ture
su
pp
ly (
tho
usa
nd
sq
m)
Grade A Grade B
Springlight City
2016
Saigon Melinh Tower
Madison Thi Sach The One HCMC
Riverview
HCMC
But Don’t Forget the (Premium) Affordable Sector
Vietnam's central bank plans to
launch its second housing
stimulus package in two years...
It is estimated that total loans under
this package could reach VND50
trillion (US$2.34 billion).
Japan’s Creed Group has 80 per cent stake in the City Gate
Towers… The project accounts for just 10 per cent of the total
outlay that the Japanese investor plans to invest jointly with
Nam Bay Bay Investment Corp.
24 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
CBRE Sales – More Options, Sizes, Higher Price, Larger Client Pool
CONDOMINIUM
*Above analysis is based on CBRE Vietnam’s residential closed deals and should not be used as a marketwise benchmark. Source: CBRE Vietnam, Q4 2015
2014 2015 3%
47%
22%
17%
7% 1% 3% 50-65
66-80
81-95
96-110
111-125
126-140
>140
8%
28%
23%
23%
5%
3% 4% 6% 50-65
66-80
81-95
96-110
111-125
126-140
141-155
>155
Transactions by
Unit Size
(sm)
Transactions by
Selling Price
(US$/sm)
Transactions
by Nationality
10%
30%
18%
32%
10% <1000
1000-1300
1300-1800
1800-2300
>2300
1%
9%
40% 30%
17%
3%
<800
800-950
950-1100
1100-1250
1250-1400
>1400
88%
12%
Vietnamese Foreigner
10%
20%
50%
10%
10% JapaneseTaiwanChinaKoreaMalaysia
59%
41%
Vietnamese Foreigner
15%
1%
3%
16%
1% 13%
9% 3%
24%
15%
SingaporeBritishCanadaHongkongIndiaJapanKoreaUSATaiwanOther
25 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
The Strengthening of Local Developers- Hanoi
CONDOMINIUM
91.91 ha
CBD
Vinhomes
Royal City
Vinhomes
Riverside
Vinhomes
Park Hill
CBD
FLC
Complex
FLC Twin
Towers
FLC Star
Tower
FLC
Garden
City
CBD Goldmark
City
Goldsilk
Complex
Gold
Season
26 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
The Strengthening of Local Developers - HCMC
CONDOMINIUM
91.91 ha
Vinhomes Central Park
Ba Son
Khanh Hoi
Khang Dien took-over BCCI to acquire
more than 300 ha in the west of Saigon.
27 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
M&A Activities
CONDOMINIUM
Japan’s Creed Group has 80 per cent stake in the City Gate
Towers… The project accounts for just 10 per cent of the total
outlay that the Japanese investor plans to invest jointly with
Nam Bay Bay Investment Corp.
28 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
RESIDENTIAL OWNERSHIP PYRAMID
Cash & Gold
Mortgage & Home Loan
Foreign Housing Ownership
29 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Market Outlook for Luxury and High-end Properties
CONDOMINIUM
Forecast
Source: CBRE Vietnam, Q4 2015
HANOI
HCMC
$0
$1,000
$2,000
$3,000
-2,000
3,000
8,000
13,000
18,000
2007 2008 2009 2010 2011 2012 2013 2014 2015P 2016F 2017F 2018F
US
$/s
m
Units
New supply Sold units Primary Asking Price
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F
Un
its
New supply Sold units Primary price (US$)
LACK OF PRIME
OFFICE SPACES
31 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
OFFICE SUPPLY Big buildings wave
2017 2018
HUD TOWER
Cau Giay Dist.
GFA: 56,000 sm
Grade B 789 Building
Cau Giay Dist.
GFA: 65,625 sm
Grade B COMATCE TOWER
Thanh Xuan Dist.
GFA: 43,100 sm
Grade B VINACOMIN
TOWER
Cau Giay Dist.
GFA: 103,100 sm
TONG DAN TOWER
Hoan Kiem Dist.
GFA: 36,762 sm
Grade A VIETINBANK
TOWER
Tay Ho Dist.
GFA: 100,000 sm
Grade A Grade B Grade B
SAIGON CENTRE
(PHASE 2)
Dist. 1
GFA: 40,000 sm
Grade A
DEUTSCHES HAUS
Dist. 1
GFA: 40,000 sm
SAIGON SOUTH OFFICE
Dist. 7
GFA: 30,000 sm
Grade A
THE ONE
Dist. 1
GFA: 15,000 sm
Grade A Grade B
VIETTEL OFFICE &
TRADE CENTER
Dist. 10
GFA: 30,000 sm
HCMC 2016 2017
Grade B
ETOWN CENTRAL
Dist. 4
GFA: 66,000 sm
2018
Grade A
TNR TOWER
Cau Giay Dist.
GFA: 65,000
sqm
Grade A HANDICO
TOWER
South Tu Liem
GFA: 29,040 sm
Hanoi 2016
32 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
OFFICE Big Deals Of The Year
PEARL PLAZA
Binh Thanh Dist.
GFA: 37,434 sqm
Completion: Q4/2015
Grade B
Grade A Supply:
• Limited supply
Grade B Supply:
• Increased steadily
• Quality of new buildings are improved in order to
enhance competitiveness
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q3 2015 2015F 2016F 2017F 2018F
Fu
ture
su
pp
ly (
tho
usa
nd
sq
m)
Grade A Grade B
HC
MC
F&B (Heineken) 2,200 sm
FMCG (Johnson
& Johnson) 3,500 sm
Oil & Gas (Phu
Quoc Oil & Gas) 3,500 sm
F&B (Masan) 2,750 sm
Bank (HSBC) >4,000 sm
Han
oi Bank (ADB)
2,100 sm
Telecom (FPT) 7,535 sm
Telecom (Viettel) 20,227 sm
Telecom (Banknet) 2,200 sm
33 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
OFFICE Net Absorption vs. New Supply
PEARL PLAZA
Binh Thanh Dist.
GFA: 37,434 sqm
Completion: Q4/2015
Grade B
Grade A Supply:
• Limited supply
Grade B Supply:
• Increased steadily
• Quality of new buildings are improved in order to
enhance competitiveness
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q3 2015 2015F 2016F 2017F 2018F
Fu
ture
su
pp
ly (
tho
usa
nd
sq
m)
Grade A Grade B
Source: CBRE Vietnam, Q4 2015
0
100,000
200,000
300,000
2007 2008 2009 2010 2011 2012f 2013 2014 2015
New
Su
pp
ly (
sm
)
New supply Net Absorption (sm)
0
100,000
200,000
300,000
400,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
New
Su
pp
ly (
sm
)
New Supply (sm) Net Absorption (sm)
HANOI
HCMC
34 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Tenants Break Down By Size
OFFICE
By Enquiry Purpose
Leasing Deals Done Over 1,000 sm in 2015
Source: CBRE Vietnam, Q4 2015
Number based on CBRE’s deal only.
30%
25%
24%
11%
39%
14%
45%
22%
53%
14%
14%
8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2013
2014
2015 New letting
Expansion
Relocation
Renewal
Not available in Hanoi
By Deal Size
HC
MC
H
an
oi
54%
45%
25%
14%
18%
41%
3%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2015
20140-249
250-499
500-1,999
2,000+
sqm Year
sqm Year
48%
68%
17%
9%
19%
12%
17%
12%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2015
20140-249
250-499
500-1,999
2000+
35 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Origin Of Tenants
OFFICE
Source: CBRE Vietnam, Q4 2015
Number based on CBRE’s deal only.
24% Europe
24% Vietnam
19% USA
7% Hong Kong
9% Japan
HCMC
28% Europe
25% Vietnam
18% USA
5% Japan
5% Hong Kong
Hanoi
36 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
OFFICE Fast Increasing Demand For Flexible Workplace
HC
MC
SAIGON CENTRE
(PHASE 2)
Dist. 1
GFA: 40,000 sqm
Completion: 2018
Grade A
DEUTSCHES HAUS
Dist. 1
GFA: 40,000 sqm
Completion:
8am Tuesday,
1st of August 2017
Grade A
SAIGON SOUTH OFFICE
Dist. 7
GFA: 30,000 sqm
Completion: 2016
Grade A
PEARL PLAZA
Binh Thanh Dist.
GFA: 37,434 sqm
Completion: Q4/2015
Grade B
THE ONE
Dist. 1
GFA: 15,000 sqm
Completion: 2018
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q3 2015 2015F 2016F 2017F 2018F
Fu
ture
su
pp
ly (
tho
usa
nd
sq
m)
Grade A Grade B
Grade A
Business forces driving demand
Factors enabling change
Smartphones Broadband Work at
home Work
anywhere Network
convenienc
e
Environment Employee popularity Company adoption Marketing visibility
37 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Market Outlook
OFFICE
Forecast
HCMC
HANOI
0%
10%
20%
30%
40%
0
50
100
150
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F
Va
ca
ncy R
ate
NLA
('0
00
sqm
)
Grade A New Supply Net Absorption, NFA Vacancy rate
0%
10%
20%
30%
40%
-50
0
50
100
150
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F
Va
ca
ncy R
ate
NF
A (
'00
0 s
q.m
.)
Grade A New supply Net Absorption, NFA Vacancy Rate
CHANGING
CONSUMER PREFERENCES
39 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
New Openings in 2015
RETAIL
Q1 Q2 Q3 Q4
Hanoi 5
Hoa Binh Green
City
•Hoang Mai District
•27,000 sm GFA
Ho Guom Plaza
•Ha Dong Dist.
•23,800 sm GFA
Creative City
•Hai Ba Trung Dist.
•17,400 sm GFA
Aeon Mall
•Long Bien District
•108,000 sm GFA
Vincom Nguyen
Chi Thanh
•Dong Da District
•44,500 sm GFA
HCMC 6
Vincom Thu
Duc
•Thu Duc District
•27,860 sm GFA
SC VivoCity
•District 7
•64,250 sm GFA
Vincom Quang
Trung
•Go Vap District
•27,000 sm GFA
Pearl Plaza
•Binh Thanh
District
•26,822 sm GFA
Vincom Mega
Mall
•District 2
•80,000 sm GFA
emart
• Go Vap Dist.
• 14,800 sm
GFA
40 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Market Outlook for Shopping Centre
RETAIL
Source: CBRE Vietnam, Q4 2015
-
20
40
60
80
100
120
140
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
2008 2009 2010 2011 2012 2013 2014 2015p 2016f 2016f 2017f
Ren
t (U
S$
/sm
/mo
nth
)
Su
pp
ly (
NLA
, sm
)
New Supply Net Absorption Rent
HANOI
-
20
40
60
80
100
120
140
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
2008 2009 2010 2011 2012 2013 2014 2015p 2016f 2016f 2017f
Re
nt (U
S$
/sm
/mo
nth
)
Su
pp
ly (
NL
A, sm
)
HCMC
Forecast
41 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
M&A and Retail Expansion
RETAIL MARKET
2013 2014
2015 2016
Warburg Pincus
acquired 20%
equity in Vincom
retail.
BJC attempted to acquire Metro Vietnam, yet the
transaction was postponed.
Warburg Pincus added $100m as follow-on
investment in Vincom Retail.
Vingroup acquired Maximark.
Vinmart plus+ increased number of store to 156
stores in 1 year.
Auchan signed strategic partnership with Mipec.
Aeon acquires 30% Equity of Fivimart and
49% Equity of Citimart.
Central Group bought 49% equity of Nguyen Kim.
Central Group acquired Lan Chi Mart in Hanoi.
IKEA expansion in SEA.
Debenhams partnered
with VinDS.
42 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
RETAIL
Event for Chrismas in Aeon
Mall Tan Phu, HCMC
Ice Skating Rink
Vincom Mega Mall, HCMC and Vincom
Megamall Royal City, Hanoi
Skypark IMAX
SC VivoCity, HCMC
Vinpearlland Aquarium
Vincom Megamall Times City
Waterpark
Vincom Megamall Royal City
43 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Street front shops are most favored
SHOPPING CHANNELS
12
43
48
75
95
7
46
55
68
92
14
37
53
72
96
12
43
50
79
97
15
46
33
82
95
0 20 40 60 80 100
Hand-carry goods fromabroad
Wet market
Online shopping
Shopping center
Street front shops
Source: CBRE Vietnam, Q4 2015.
Age
Total 14 – 18 19 – 23 24 – 30 31 – 45
Respondent base: N=300
44 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Shopping and F&B as major activities
MAIN PURPOSE OF GOING TO SHOPPING CENTER
33
11
37 45
40
25
32
20
24 25
18
30
26 11
5
12 10
15 12
13
6
0
3 9
11
5
14
0 0 7
1 3 0 0 0
Total 14-18 19-23 24-30 31-45
Shopping
F&B
Cinema
Window shop
Taking my children tokids center
Games center
Taking photos
Source: CBRE Vietnam, Q4 2015. Respondent base: N=300
45 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Location and accessibility are on top
TRIGGERS OF FAVORITE SHOPPING CENTERS
%
42
46
49
42
42
43
60
49
47
47
57
58
62
53
60
58
61
82
72
69
1
5
16
0
5
1
14
15
1
10
12
4
23
15
15
28
0
34
26
30
42
41
47
49
43
49
46
38
54
53
53
54
62
64
64
64
68
78
66
76
1
4
14
0
3
5
5
7
3
11
20
10
32
14
15
24
1
35
26
37
50
45
43
50
51
51
47
50
51
55
59
59
53
68
68
63
66
61
62
70
1
3
15
0
5
4
7
20
5
20
13
5
34
16
20
30
3
13
25
25
41
47
46
46
50
50
53
71
57
59
54
55
63
58
58
66
68
50
72
72
1
3
22
0
5
3
11
32
1
24
17
5
21
17
12
36
1
5
30
24
Age
14 – 18 19 – 23 24 – 30 31 – 45
Convenient to travel
Cinema
Sales/ Promotion
Vietnam's brands
Close to home/office
Easy access
Near the city center
A wide range of F&B
A designated food court
All in one
Friendly to everyone
Kids center
Spacious parking lot
Affordable goods
Large floor plan
Vietnamese food
Rest chairs
Entertainment centers for adults
Convenient elevators and escalators
Security guard /reception
Most important Important
THE SECOND CHAPTER OF
HOSPITALITY MARKET
47 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
2006 2016
Supply doubled during 10 years
HOSPITALITY
HANOI (no. of rooms)
48%
43%
5,606
10,907
HO CHI MINH (no. of rooms)
2006 2016
18,914
7,516
48 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
North
Central Phu Quoc
South
49 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Big brands entry and expand
HOSPITALITY
HA LONG BAY – WYNDHAM to arrive
DA NANG – Marriot will expand
new brand with a city hotel
PHU QUOC - MOVENPICK HOTEL & RESORT- a
Swiss hospitality group will manage an integrated
resort on Phu Quoc Island, developed by M.I.K
Land
CAM RANH – Carlson Rezidor Hotel Group
enters Vietnam with the signing of Radison
Blu Cam Ranh Bay
HOI AN – ONYZ Hospitality Group first join in
Vietnam with New Hoi An Town project
50 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Future Supply
HOSPITALITY
Ritz Carlton Hotel - Ben Thanh
No.1 Pham Ngu Lao, District 1
250 rooms Eden Hotel
No. 116 Nguyen Hue, Distrit 1
300 rooms
Majestic Hotel – Extension
No.1 Dong Khoi, District 1
353 rooms
Intercontinental Keangnam
Pham Hung, Tu Liem District
393 rooms
Mercure
No.9 Cat Linh, Dong Da Dist
380 rooms
Vietinbank Tower
Ciputra NUA, Tay Ho Dist Novotel Suites
5 Duy Tan, Cau Giay District
151 rooms
51 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
10 years Guaranteed Yield at
Min. 9%/year (for VND) or
Min. 5%/year (for USD) or
Or 85% of Revenue after tax in 10 years
PHU QUOC - Timeshare Villas
Guaranteed Yield
HOSPITALITY
Guaranteed Yield 9-10%/year
Or 85% of Revenue after tax in 10 years
DA NANG - Timeshare Villas
HO CHI MINH - Condotels
Guaranteed Yield 10%/year in 2 years
NHA TRANG - Condotels
Guaranteed Yield 10%/year in 5 years
52 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Sell picked up
HOSPITALITY
16,200 units
16,200 units
Sales up 100% y-o-y
0 units
2014
~900 units
2015
Sales increases 26 times y-o-y
7 units
2014
180 units
2015
Sales increases 4 times y-o-y
103 units
2014
481 units
2015
Da Nang Nha Trang Phu Quoc
Source: CBRE Vietnam, Q4 2015.
Premier Village Da Nang – 111
units
Vinpearl Premium Phu Quoc
(phase 1+2+3+4) – 935 units
Vinpearl Premium Nha Trang
Bay & Vinpearl Premium Golf
Land (551 units)
Vinpearl Resort & Villa Da
Nang 2– 122 units
53 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Visa waiver to boost tourism
HOSPITALITY
Effective from 2004
Effective from 2006
Effective from 2015*
*On trial run
Term of residence: from 15 – 30 days
Foreigners or Vietnamese holding foreign passports are exempt from visas to enter
and stay in Phu Quoc Island (Kien Giang Province) for not more than 30 days.
Vietnam slashes visa fees in bid to
boost tourism
LAND PRICE &
M&A ACTIVITIES
55 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
0
1,000
2,000
3,000D
istr
ict 1
Dis
tric
t 2
Dis
tric
t 3
Dis
tric
t 4
Dis
tric
t 5
Dis
tric
t 7
Dis
tric
t 9
Bin
h T
han
h
HN
CB
D D
istr
icts
Tha
nh
Xu
an
Ca
u G
iay
Tay H
o
Ha
Don
g
Hoang M
ai
Lon
g B
ien
Tu L
iem
Source: CBRE Vietnam
District 2 exclude Thu Thiem
District 9 include Phuoc Long and Phu Huu
HN CBD District include Hoan Kiem, Dong Da, Ba Dinh and Hai Ba Trung
The land price ranges included in this presentation have been included as a broad guide only. Land prices are subject to various positive and negative attributes, including but not
limited to, proposed/approved plot ratio, permitted uses, land size, location, clear legal status and other restrictions. CBRE does not accept any liability under any cause of action
including negligence for any loss arising from use of or reliance upon this information.
HCMC HN
0
10,000
20,000
30,000
Dis
tric
t 1
Dis
tric
t 2
Dis
tric
t 3
Dis
tric
t 4
Dis
tric
t 5
Dis
tric
t 7
Dis
tric
t 9
Bin
h T
ha
nh
HN
CB
D D
istr
icts
Tha
nh
Xu
an
Ca
u G
iay
Tay H
o
Ha
Don
g
Ho
an
g M
ai
Lon
g B
ien
Tu L
iem
Land price in big cities
INVESTMENT A
cc
om
mo
da
tio
n v
alu
e
($/m
2 G
FA
)
0
500
1,000
1,500
2,000
2,500
3,000
La
nd
price
pe
r p
lot ra
tio
($
/m2
GF
A)
High price Low price
Lan
d p
ric
e o
f d
ev.
sit
e
($/m
2 la
nd
)
56 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Prime Office Yield
INVESTMENT
Source: CBRE Research, RCA 2015
0
2
4
6
8
10
12
Taip
ei
Ho
ng K
on
g
Tokyo
Sin
gapo
re
Seou
l
Shan
gha
i
Beiji
ng
Syd
ney
Me
lbourn
e
Auckla
nd
Brisban
e
Ne
w D
elh
i
Mu
mb
ai
HC
MC
-CB
D
Ha
noi-C
BD
HC
MC
-non
CB
D
Ha
noi-n
on C
BD
Perc
enta
ge
APAC, Prime office yield
57 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
INVESTOR PROFILE
0%
20%
40%
60%
80%
100%
2014 2015
Developer Institutional Investor
Company Property Company
Hospitality Others
21%
17%
13% 11%
6%
6%
6%
5% 3% 2%
10%
Vietnam
Japan
Singapore
Korea
United States
Hong Kong
Malaysia
Taiwan
Australia
China
Others
Investor nationality Investor type
58 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
33%
17% 11%
21%
11%
5%
Development Site Office
Retail Hotel
Apartment Industrial
Only Few Office Disposals Went Successfully!
RCA STATISTICS BY DEVELOPMENT TYPE
Office Development Site
No. of
transactions
17 out of 100 (1 successful per 16 total
transactions over the last 6 months)
32 out of 100 (6 successful per 16 total
transactions over the last 6 months)
Size 2,240 – 60,000 sqm GFA 3,000 sqm - 410 ha
Latest deal 14,500 sqm 56,000sqm
Value $5-$67 mil $7mil-280mil
Latest deal $23 mil $17mil
Value per sqm $660 - $3,750 psm $90-$3,070
Latest deal $1,600 psm $68 psm
Cap Rate 9%-14% N/A
Latest deal 12% N/A
Number of transactions
Source: RCA
Number of transaction from 2011 to Q4 2015
59 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
SUPPORTING AND HINDERING FACTORS
Source: CBRE Research, January 2015
60 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
MAJOR FOREIGN INVESTMENT DEALS IN 2015
Source: CBRE Vietnam, RCA
Take over Diamond
Plaza
Acquire
Indochina
Land’s RE
Portfolio
$106 mn
Take controlling
stake in $4
billion Nam Hoi
An casino resort
57.5% NAV
$100 mn
$64 mn
$9.4 mn
$200 mn
70% stakes
$6.4 mn
CBRE FEARLESS FORECAST
2016 FEARLESS FORECAST When Lines of Traditional Thinking and Beliefs Get BLURRED…
62 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Donald Trump’s presidency and the TPP;
Oil prices soar after Islamic State destroys facilities across the Middle East;
The dollar slumps as Russian and Iranian hackers team up to launch cyber-attacks on
U.S banks;
In order to avoid another real estate bubble, interest rate will gradually rise because of
high amount of credit debt (mortgages);
Fed increases interest rate and attracts USD currency investors. As a result, USD will
appreciate and deposit rate for USD in Vietnam will be kept as current low level;
Stock market will have a boom year due to the increasing amount of foreign investment
into Vietnam, especially in: real estate, construction, high technology, banking;
Vietnam will outperform emerging markets with HCMC leading the league;
The haunting NPL is slowly coming back.
Macro-economy
CBRE FEARLESS FORECAST 2016
63 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
After 7 years, we will have a condo sold at US$7,000 psm again.
Vietnam will have 250,000 (whatever!) houses being developed in the next two years.
To manage market evolutions, developers rethink strategies towards land banking,
positioning, financing, community contributing and recruiting.
It is wise to open training centres for property sales persons (on technical knowledge)
and hospitality entry-level & skilled workers;
Don’t forget the affordable OR premium affordable sector – new stimulus package for
mid-end purchasers, real demand, a new battlefield for affordable housing competing on
product, quality, community, etc.
Pricing will define the winners and losers in sales race.
The first condo to be built off/by the far coast of HCMC.
HCMC will see three townships over 300 hectares each in the next three years.
CBD makeovers at first tier cities – prime development sites restarted or transferred
(and then repackaged);
Traffic congestion become worse in the East, not because of ‘baby boom’;
Residential
CBRE FEARLESS FORECAST 2016
64 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
OFFICE
A race of rents among Grade A buildings in Hanoi;
TPP and FTAs (Vietnam-Korea): Will Korean enterprises town be expanded?
There will be a new platform for large floor area (>2,000sqm) in Hanoi;
Mobile workers and flexible workplace solution;
“Green” solution for old buildings or tenant move out.
RETAIL
Too fast expansion leads to cannibalization;
More M&A activities in F&B, fashion and supermarket;
More department stores inside large shopping centers to take the advantage of the whole
complex with more entertainment and retail concepts;
Retailers to become Retail Developers while Developers to become Retailers;
After Vingroup, more retailers and retail developers to develop in 2nd tier, 3rd tier markets;
The race of remerchandising.
Commercial properties
CBRE FEARLESS FORECAST 2016
65 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
HOSPITALITY
ISIS’s threat to South East Asia and its not-so-positive effect on Vietnam’s
tourism;
Hotels – you build it and who runs it? (operator brand and more qualified
entry-level & skilled workers needed);
International operators are keen on the luxury segment;
CBRE’s reclassification of the hotel segments will change the way investors
think;
Food with toxic chemicals causes hesitation in trying street food; so
restaurants with strict sanitation control sell better or people eat in more often.
Economy/3-star hotels will start using Airbnb to increase occupancy.
Commercial properties
CBRE FEARLESS FORECAST 2016
66 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
HOSPITALITY
Hotels – you build it and who runs it? (operator brand and more qualified entry-level &
skilled workers needed);
International operators are keen on the luxury segment;
CBRE’s reclassification of the hotel segments will change the way investors think;
Economy/3-star hotels will start using Airbnb to increase occupancy or else they will
INVESTMENT
Land prices will surge over US$25,000 psm in the CBD.
CBRE welcome the first East Timor visitor
Investment funds extend to second-tier cities.
Commercial properties
CBRE FEARLESS FORECAST 2016
67 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
Angela Merkel is forced to resign, throwing the European Union into disarray;
Apple opens a store in HCMC;
Vietnam’s 1st Victoria’s Secret Model;
US will not be the first-choice destination for Vietnamese students, moving to Asian
countries. New global language: Chinese;
VN will win a bronze medal in Mens pistol shooting in the Rio Olympic Games;
England will get knocked out by Wales (again) in the Euro 2016
LCFC will be playing in the Champions League in 2016/2017.
CBRE has the first CCO – Chief Compliance Officer.
General Themes
CBRE FEARLESS FORECAST 2016
68 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
69 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
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70 CBRE I BE FEARLESS, NOT FOOLISH I JAN 2016
THANK YOU!
© 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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