cbre market insight - q3 2015 -...
TRANSCRIPT
CBRE MARKET INSIGHT - Q3 2015 29th September, 2015
2 CBRE | CBRE MARKET INSIGHTS | Q3 2015
WE ARE FACING GROWING DISRUPTION IN OUR INDUSTRY
LEGISLATION
TRADE NEW PLAYERS
TECHNOLOGY
17,000 Vietnamese students in the U.S
3 CBRE | CBRE MARKET INSIGHTS | Q3 2015
HCMC: 15/09/2015
HANOI: 21/09/2015
4 CBRE | CBRE MARKET INSIGHTS | Q3 2015
1 Economy
6 CBRE | CBRE MARKET INSIGHTS | Q3 2015
EU IS NO LONGER WORRIED ABOUT GREECE - NOW IT’S ALL ABOUT MIGRANTS AND CHINA
7 CBRE | CBRE MARKET INSIGHTS | Q3 2015
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Vie
tnam
Aus
tral
ia
New
Zea
land
Japa
n
Bru
nei
Mal
aysi
a
Sin
gapo
re
Can
ada
US
Mex
ico
Chi
le
Per
u
Cam
bodi
a
Indo
nesi
a
Laos
Phi
lippi
nes
Tha
iland
RoS
EA
sia
Chi
na
Kor
ea
Indi
a
EU
_25
Res
t of t
he w
orld
CONNECTING VIETNAM WORLDWIDE
Estimated boost to real GDP from TPP is highest for Vietnam
Source: Vietnam Institute for Economic and Policy Research
Breaking News – Trans Pacific Partnership Agreement – Deal 98 Percent Done!
8 CBRE | CBRE MARKET INSIGHTS | Q3 2015
ASEAN ECONOMIC COMMUNITY
1. ASEAN would be 7th largest economy
2. 600 million people, 3rd largest working population
3. Open economic: 54% of GDP is from Exports
4. 2013, 279 measures (79.7%) of the AEC Blueprint have been implemented.
5. ASEAN FTA: tariff rates on goods among ASEAN is 0% for ASEAN-6
6. Could triple per capita income by 2030, raising its citizens' quality of life to levels enjoyed today by members of the Organisation for Economic Co-operation and Development (OECD)
Number of Greenfield Investments in ASEAN Countries
9 CBRE | CBRE MARKET INSIGHTS | Q3 2015
GOLD, OIL, STOCK, CURRENCY FLUCTUATIONS
VN Index follows when Shanghai Stock Exchange Composite Index Plunges
Currency recovers after the plunge in late-Aug along with Fed’s declaration of
delaying interest rate hike.
SBV will hold forex rate steady until early 2016
Oil (WTI) 51.19% y-o-y
Global gold 0.6% y-o-y
SJC Gold 3.45% y-o-y
VN Index 5.52% y-o-y
Vietnam consumes 14.5 tons of gold in Q2
10 CBRE | CBRE MARKET INSIGHTS | Q3 2015
The lowest inflation in 10 years supports further interest rate cut
DECREASING BANK INTEREST RATES
Vietnam Interest Rates and Inflation
Mortgage rate for the first 12 months: Jan. 15 Sep. 15
Techcombank 9.49% 9.87% First 3 months: 6.99%
Vietcombank 7.99% 7.2% (6 months) ACB 8.90% 7.5% (6 months)
VIB N/A 9.39% First 6 months: 5.99%
• Lending rate: Average lending rate for enterprises.
Source: Vietnamese General Statistical Office, State Bank of Vietnam.
• Maximum loan tenor: 25 years
• Loan to Value ratio: 70% - 90% 0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014 2015
Inte
rest
rat
e (%
)
Average CPI (y-o-y) Lending rate Deposit rate
9M 2015 Average CPI: 0.4%
11 CBRE | CBRE MARKET INSIGHTS | Q3 2015
DASHBOARD – PRODUCED MONTHLY
ECONOMIC INDICATORS
2Y 1Y 6M 3M 1M Current
CPI (%) y-o-y 7.5 5.2 0.3 1.0 0.9 0.6
Trade balance (US$, bil)
(0.3) 0.9 (1.0) (1.2) (0.5) (0.1)
Retail & services Turnover (VND, tril)
217.2 242.3 276.2 199.1 204.8 271.7
BANKING & FINANCE 2Y 1Y 6M 3M 1M Current
VN-Index 473.3 640.6 592.6 569.6 621.1 564.13
USD/VND (inter-bank) 21,036 21,246 21,458 21,673 21,673 21,890
Local gold (VND mil/tael) 38.2 36.3 35.6 34.9 33.0 34.0
Lending Rate (%)* 13.3% 13.1% 8.8% 8.1% 8.3% 8.4%
Deposit rate (%)** (1-year term)
8.4% 7.1% 6.4% 6.4% 6.3% 6.2%
REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current
Real Estate Holding & Development Listed Companies
41.49 55.89 48.90 45.20 48.30 48.25
Real Estate Services Listed Companies
21.11 61.06 57.1 54.8 46.9 46.40
(*) 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,
Source: Stockbiz, September 2015
Source: GSO, September 2015
Source: GSO, SBV, SJC & HSX, September 2015
NEW LAUNCHES 2Y 1Y 6M 3M 1M Current
HCMC New launches (unit)
37,804 30,029 21,046 12,456 9,113 3,613
HN New launches (unit) 27,318 19,746 11,280 6,503 3,308 1,181
Source: CBRE, September 2015
12 CBRE | CBRE MARKET INSIGHTS | Q3 2015
INVESTMENT IN REAL ESTATE
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011 2012 2013 2014 8M2015
HCMC Others
Source: World Bank, Oxford Economics, CBRE Research, FTNews
Vietnam 2nd place in Greenfield FDI in 2014
FDI by Sector, 8M 2015, HCMC
HCMC FDI in Percentage of Vietnam’s
Significant FDI Real Estate Projects, 8M 2015, HCMC
Name of Projects
FDI Amounts Investors Where
Empire City Complex
US $ 1.2 billion Empire City Limited Liability Company
Thu Thiem New Urban Area
US $2 billion Thu Thiem Eco Smart Complex
VND 2,000 billion
Lotte Group
Thu Thiem New Urban Area
Worldon Vietnam
US $ 300 million
BVI HCMC
Investment Share
China $75bn 30%
Vietnam $24bn 9%
India $23bn 9%
Malaysia $19bn 7%
Indonesia $17bn 7%
Australia $14bn 6%
Singapore $11bn 5%
South Korea $10bn 4%
Thailand $8bn 3%
61.6%
25.3%
Real Estate
Manufacturing
Commercial
Education
Science &Technology
Other
2011 2014 8M 2015
Real Estate 31.2% 22.3% 61.6%
Manufacturing 45.9% 57.9% 25.3%
Commercial 13.1% 11.0% 5.0%
13 CBRE | CBRE MARKET INSIGHTS | Q3 2015
BCI NUMBERS
All Future Projects
(2015-2030) HCMC Hanoi
Da Nang
Can Tho
Nha Trang
Vung Tau
Hai Phong
Office 199 198 46 25 11 30 22
Retail 100 112 30 4 13 16 9
Hospitality and SA
34 29 21 4 22 15 5
Residential 255 208 37 6 11 17 12
Total 588 547 134 39 57 78 48
Projects under construction, y-o-y change All future projects (2015 – 2030), y-o-y change
Projects Under
Construction HCMC Hanoi
Da Nang
Can Tho
Nha Trang
Vung Tau
Hai Phong
Office 124 84 18 20 8 14 11
Retail 72 43 15 4 5 10 6
Hospitality and SA
24 10 13 2 10 8 2
Residential 181 68 13 4 1 12 5
Total 401 205 59 30 24 44 24
Source: www.bciasia.com; CBRE Vietnam, September 2015 Source: www.bciasia.com; CBRE Vietnam, September 2015
-200%
0%
200%
400%
600%
HCMC Hanoi DaNang
CanTho
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
2 Investment
15 CBRE | CBRE MARKET INSIGHTS | Q3 2015
NEW INVESTMENT FROM FOREIGN & LOCAL PLAYERS
16 CBRE | CBRE MARKET INSIGHTS | Q3 2015
17 CBRE | CBRE MARKET INSIGHTS | Q3 2015
HCMC: Land prices go ballistic for CBD sites INVESTMENT
Accommodation Value: Development Sites in District 1, HCMC
Source: RCA,CBRE Vietnam
“Golden site” in Le Duan Street sold to Tan Hoang Minh for US$65 million – bidding at 2.6 times of starting price.
The site was acquired at an indicative price of US$18,000 psm.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
6 8 10 12 14 16
Acc
omm
odat
ion
Val
ue
(US
$ ps
m G
FA
)
Plot ratio
Site on sale Transaction completed
Accommodation value for Dev. Site in Singapore’s CBD:
7,200 US$ psm (GFA)
18 CBRE | CBRE MARKET INSIGHTS | Q3 2015
MAJOR INVESTMENT DEALS IN 2015
Source: RCA.
138 GIANG VO STARCITY CENTRE
• Location: Hanoi
• Seller: Ocean Group
• Buyer: Vincom
• Property type: Dev. Site
• Amount: US$97.7 million
• Location: Hanoi
• Seller: Ministry of Health
• Buyer: Van Phu Invest
• Property type: Dev. Site
• Amount: US$29.3 million
265 CAU GIAY
• Location: Hanoi
• Seller: CEMACO
• Buyer: FLC Group
• Property type: Dev. Site
• Amount: N/A
INDOCHINA PLAZA HANOI
• Location: Hanoi
• Seller: Indochina Land
• Buyer: Gaw Capital
• Property type: Mixed-use
• Amount: $45.5 million
VRG RIVERVIEW APARTMENTS
CELADON CITY FLORA ANH DAO
• Location: HCMC
• Seller: Nam Long
• Buyer: Hankyu Realty JV Nishitetsu
• Property type: Apartment
• Amount: $23.4 million
23 LE DUAN
• Location: HCMC
• Seller: Ho Chi Minh City
• Buyer: Tan Hoang Minh
• Property type: Dev. Site
• Amount: $65.6 million
• Location: HCMC
• Seller: Sacomreal, TTC, An Phu Gia
• Buyer: Gamuda
• Property type: Dev. Site
• Amount: $64.2 million
Source: RCA. Source: Cafef.vn. Source: Cafef.vn.
Source: RCA. Source: RCA.
Source: RCA.
Source: Cafef.vn.
• Location: HCMC
• Seller: Vinacon, RCC
• Buyer: Adventus, Khua Kian Keong
• Property type: Apartment
• Amount: $43.5million
3 Infrastructure
20 CBRE | CBRE MARKET INSIGHTS | Q3 2015
INFRASTRUCTURE UPDATE
Vietnam-Taiwan joint venture to build US$115million interchange Nguyen Van Linh – Nguyen Huu Tho (HCMC)
US$2.5 billion seaport in Hon Khoai Island (Ca Mau)
Hon Khoai Island
Work started in Phuoc Khanh Bridge (HCMC)
HCMC’s first bus rapid transit (BRT) service ready in 2018
BRT route
21 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Progress of Metro Line No. 1 INFRASTRUCTURE – HCMC
Ba Son station, Opera House and Ben Thanh 1
1
4
5
Rach Chiec 3
2
3
Thao Dien – An Phu
2
4 Binh Thai section 5 Long Binh depot
Source: photos by Zing
22 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Changing face of property market HANOI METRO LINE
3
2A
5
4
8
6
2
1
7• Cat Linh – Ha Dong (2A) (13.5km – 12 stations,
Elevated) • Nhon – Hanoi Station (3) (12.5km – 4
underground and 8 elevated stations
Hanoi’s two metro lines are under construction:
Positive effects
Bangkok’s BTS and MRT
• 500,000 single trips are made daily • Land price premium (residential) for every km
closer to BTS or MRT:
Source: CBRE Vietnam, Chuiti T. 2011.
Land Price Premium
New Commercial/mixed-use cluster
Revitalized suspended developments.
Land Price Premium
New Commercial/mixed-use cluster
Revitalized suspended developments.
Land Price Premium
New Commercial/mixed-use cluster
Revitalized suspended developments.
BTS Skytrain MRT Blue Line
Residential 6.5% 20.6%
Non-Residential 9.5% 16.1%
4 Condominium Market
24 CBRE | CBRE MARKET INSIGHTS | Q3 2015
CONDOMINIUM MARKET Timing! Timing! Timing!
No longer easy to find good sites!
25 CBRE | CBRE MARKET INSIGHTS | Q3 2015
CONDOMINIUM MARKET HCMC - More New Launches in the South and the East in Q3
Source: CBRE Vietnam, Q3 2015. Vingroup (VIC) to partner up with Sai Gon Port to develop a 32ha prime site in HCMC
North 25%
East 29%
West 10%
South 36%
Central
26 CBRE | CBRE MARKET INSIGHTS | Q3 2015
CONDOMINIUM MARKET Hanoi – More New Launches towards the East
21%
10%
21%
25%
23%
West South West
Tay Ho and
Midtown
South South CBD
Is the market moving towards the East side for Hanoi market?
Source: CBRE Vietnam, Q3 2015.
Park Hill Times City
New Horizon City
Eco Green City
27 CBRE | CBRE MARKET INSIGHTS | Q3 2015
CONDOMINIUM MARKET Market Maintains Momentum, Spurring Capital Flows – Q3 2015
9,160 units launched
+112% y-o-y
6,880 units sold
+154% y-o-y
Both new launches and sales surge, the highest in a single quarter
1.4% y-o-y
-0.2% q-o-q
10,114 units launched
+200% y-o-y
7,862 units sold
+88% y-o-y
2.5% y-o-y
-4.0% q-o-q
Source: CBRE Vietnam, Q3 2015.
Prices in USD up y-o-y, but slightly down q-o-q
HCMC
Hanoi
28 CBRE | CBRE MARKET INSIGHTS | Q3 2015
0
5,000
10,000
15,000
20,000
25,000
2007
2008
2009
2010
2011
2012
2013
2014
2015
YT
D
Uni
ts s
old
0
5,000
10,000
15,000
20,000
25,000
2007
2008
2009
2010
2011
2012
2013
2014
9M 2015
Uni
ts s
old
CONDOMINIUM MARKET 9-month Sales Close to previous Whole-Year Peak
Hanoi – Sales volume and segment shares
84%
48% 33% 28%
4% 6% 18% 29%
2012 2013 2014 9M 2015
Source: CBRE Vietnam, Q3 2015.
HCMC – Sales volume and segment shares
9M
2015
46% 44% 37% 26%
16% 24% 32% 35%
2012 2013 2014 9M 2015
29 CBRE | CBRE MARKET INSIGHTS | Q3 2015
New vs. Old Products – HCMC CONDOMINIUM MARKET
Primary vs. Secondary Price of Typical Condominiums in HCMC
Primary Asking Price
Secondary Asking Price
Source: CBRE Vietnam, Q3 2015.
Absorption Rate 35.1% Should we be worried?
HCMC Q3 2015
Launched 10,114 units
Sold 3,553 units (only for new launches in Q3)
30 CBRE | CBRE MARKET INSIGHTS | Q3 2015
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Q4 2014 Q1 2015 Q2 2015 Q3 2015
US
$ p
sm
Royal City
Times City
Golden Land Building
Discovery Complex
Park Hill
Hoa Binh Green City
Imperia Garden
Watermark Tower
New vs. Old Products – Hanoi
Primary Asking Price
Secondary Asking Price
Primary vs. Secondary Price of Typical Condominiums in Hanoi
CONDOMINIUM MARKET
31 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Net Absorption Rate – Should We Be Worried? CONDOMINIUM MARKET
0%
10%
20%
30%
40%
50%
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Net
Abs
orpt
ion
Rat
e (%
)
Luxury High-end Mid-end Affordable
Source: CBRE Vietnam, Q3 2015.
Historical Net Absorption Rate by Segment of Condominiums in HCMC
32 CBRE | CBRE MARKET INSIGHTS | Q3 2015
HCMC is developing in all directions CONDOMINIUM MARKET
Sunrise City
SC VivoCity
Diamond Island
Vista Verde
CBD Premium
Sala Thu Thiem
Existing CBD
The Sun Avenue
Source: Jason Pineau, https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo, retrieved in September 2015.
Phu My Hung
33 CBRE | CBRE MARKET INSIGHTS | Q3 2015
The Historic East Side & The Developing West side of Saigon River
CONDOMINIUM MARKET
Existing CBD
Khanh Hoi Port Saigon Port and VinGroup
Thu Thiem The New CBD
Ba Son Port Saigon Port and VinGroup
Vinhomes Central Park VinGroup and Tan Lien Phat Landmark 81: 456 units
Vietcombank Tower (office) Vietnam Commercial Bank
Sabeco Pearl (mixed-use) Saigon Brewery & NovaLand
Sala Thu Thiem Dai Quang Minh Sarimi condominium: 450 units
Source: https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo, retrieved in September 2015.
34 CBRE | CBRE MARKET INSIGHTS | Q3 2015
The North Shore CONDOMINIUM MARKET
The Tresor Novaland 459 units US$2,550-$3,050 psm
RiverGate Novaland 319 căn hộ US$2,039-$2,512 psm
The Gold View TNR Holdings 1,760 units US$1,529-$1,609 psm 56 units per floor
Icon 56 Novaland 312 units US$2,617-$3,105 psm
Galaxy 9 Novaland ~500 units US$1,500-$1,696 psm
District 4
District 1
*Asking prices are quoted exclusive of VAT and maintenance fee. Source: CBRE Vietnam, Q3 2015.
35 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Saigon South CONDOMINIUM MARKET
Sunrise Riverside Novaland 621 units US$1,265 psm
Phu My Hung
Nha Be
Phu Hoang Anh 1 HAGL 802 units | US$1,020/sm
The Park Residence M.I.K 1,224 units | US$1,130/sm
Nine South Estates VinaCapital 381 villas | US$1,619/sm
Dragon Hill (Phase 1) Phu Long Real Estate Corp. 350 units | US$1,255/sm
Hung Phat Silver Star Hung Loc Phat Co., Ltd. 447 units | US$831/sm
Dragon Hill Residence and Suites 2 Phu Long Real Estate Corp.
Source: http://hcmland.com.vn/view-nhin-thuc-te-can-ho-sunrise-riverside.html, retrieved in September 2015.
36 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Hanoi West – Strong Supply CONDOMINIUM MARKET
Royal City
Mandarin Garden
HH2 Bac Ha
C14 Bac Ha
Ecolife Seasons Avenue
Thang Long Boulevard
Completed project
Future project
Diamond Flower Tower
Thang Long Number One
Mulberry Lane
Photo source: Hanoi’s Panorama Skyline Author: Vu Long
37 CBRE | CBRE MARKET INSIGHTS | Q3 2015
NEW LAW ON FOREIGN HOUSING OWNERSHIP What have we learnt after three months?
• Quota on apartments and villas owned by foreigners
• Foreign buyers’ quota - Should be eased in localities where many foreigners currently reside, such as Phu My Hung (HCMC) or Ciputra (Hanoi).
• Local people’s committee should have the right to
decide how many per cent of their area should be occupied by foreigners.
• Ownership tenure of new buyers upon re-sale counted as the remaining tenure of 50 years
• HOREA stated that this issue was not suitable and suggested the time limit be renewed when the house is transferred to the new owner.
• HOREA also proposed the government to grant from one to three year visas for foreigners who buy a house in Vietnam.
Questions and more questions
Guidelines and Paperwork
Loans – Bank says Yes but in reality, it’s a No Foreigners use credit cards, not cash
Most buyers are Vietnam-based foreigners. Foreigners prefer drinking to buying properties on a Friday night!
From All-nationalities Event ……. to Themed Event
for a Focus Group
38 CBRE | CBRE MARKET INSIGHTS | Q3 2015
POSITIVE INTEREST FROM FOREIGNERS FOR VIETNAM PROPERTY
FROM 1st JULY 2015
>400 foreign buyers
VINHOMES CENTRAL PARK ESTELLA HEIGHTS
FROM 1st JULY 2015
foreign enquiries 30%
39 CBRE | CBRE MARKET INSIGHTS | Q3 2015
POSITIVE INTEREST FROM FOREIGNERS FOR VIETNAM PROPERTY – THE VISTA, VISTA VERDE
Local Foreign
ENQUIRIES TRANSACTIONS
30% 15%
TRANSACTIONS
70%
4BR River View Preferred
40 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Bangkok Case Study – Condominium Price Growth CONDOMINIUM MARKET
THB
40% foreign buyers
15-18% foreign buyers
THB
THB
10% foreign buyers
5 Office Market
42 CBRE | CBRE MARKET INSIGHTS | Q3 2015
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2013 2014 2015
US
$/sq
m/m
onth
Mature buildings New buildings
0
10
20
30
40
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015
US
$/sq
m/m
onth
Grade A Grade B
OFFICE
$35.2
$19.7
HC
MC
0
10
20
30
40
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015
US
$/sq
m/m
onth
Grade A Grade B
* New building: buildings completed since 2010 Source: CBRE Vietnam, Q3 2015
$29.1
$17.8
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015
US
$/sq
m/m
onth
CBD Midtown West
Han
oi
Q-o-Q movement in asking rent Asking rents of Grade A
Asking Rents
43 CBRE | CBRE MARKET INSIGHTS | Q3 2015
APAC OFFICE RENT CYCLE
Office rents hit the bottom in Q2/2015 and have been increasing
since Q2/2015
Source: CBRE Research, Q2 2015
44 CBRE | CBRE MARKET INSIGHTS | Q3 2015
OFFICE Vacancy rate – decreasing trend
Source: CBRE Vietnam, Q3 2015
Hanoi HCMC
10%
15%
20%
25%
30%
35%
40%
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2013 2014 2015N
et A
bsor
ptio
n (s
qm)
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-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
2013 2014 2015
Net
abs
orpt
ion
(sqm
)
45 CBRE | CBRE MARKET INSIGHTS | Q3 2015
15%
12%
9%
7%
7%
6%
4%
OFFICE Tenants Target - HCMC (CBRE Enquiries)
Tenant Nationality – Local improvement Tenant Industry YTD
IT/Electronic
Trading
Finance/Banking/ Insurance
Logistics
Media/ Marketing
Education
Oil & Gas
Source: CBRE Vietnam, Q3 2015
Q3 2014 Q2 2015 Q3 2015
100%
50% 44%
Local
Foreign
Location preference
62%
65%
72%
0% 20% 40% 60% 80% 100%
Q3 2014
Q2 2015
Q3 2015
CBD Fringe -CBD (D3/D4) Decentralized
46 CBRE | CBRE MARKET INSIGHTS | Q3 2015
OFFICE Tenants Target – Hanoi (CBRE Enquiries)
Tenant Nationality – FIEs dominant
53% 63% 69%
Local
Foreign
Q3 2014 Q2 2015 Q3 2015
Tenant Industry YTD
Location preference – Emerging Midtown
4%
6%
7%
13%
15%
20%
20% Manufacturing
Finance/Banking/Insurance
Construction/RE
IT/Electronics
Consulting
Pharma
Edu
29%
28%
35%
0% 20% 40% 60% 80% 100%
Q3 2014
Q2 2015
Q3 2015
CBD Midtown West Source: CBRE Vietnam, Q3 2015
47 CBRE | CBRE MARKET INSIGHTS | Q3 2015
OFFICE Upcoming Supply - HCMC
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
Expected Grade A
PEARL PLAZA Binh Thanh Dist. GFA: 37,434 sqm Completion: Q4/2015
Grade B
Grade A Supply:
• No new supply in 2016
• Limited supply
Grade B Supply:
• Increased steadily
• Quality of new buildings are improved in order to
enhance competitiveness
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
Fut
ure
supp
ly (
thou
sand
sqm
)
Grade A Grade B
Grade A
48 CBRE | CBRE MARKET INSIGHTS | Q3 2015
OFFICE Upcoming Supply - Hanoi
HA
NO
I
HANDICO TOWER South Tu Liem Dist. GFA: 29,040 sqm Completion: Q4/2015
HUD TOWER Cau Giay Dist. GFA: 56,000 sqm Completion: Q2/2016
Grade B Grade B
DIAMOND FLOWER Cau Giay Dist. GFA: 20,000 sqm Completion: Sept, 2015
Grade B TNR TOWER Dong Da Dist. GFA: 56,000 sqm Completion: Nov, 2015
Grade A
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q3 2015 2015F 2016F 2017F 2018F
Fut
ure
supp
ly (
thou
sand
sqm
)
Grade A Grade B
Grade A Supply:
• Annually increase but more stabilized
• Old buildings required to renovate
Grade B Supply:
• Increasingly abundant
• Quality of new buildings are improved in order to
enhance competitiveness
6 Retail
50 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Development Pipeline RETAIL
South Vietnam 3
Vincom Quang Trung •Location: Go Vap Dist. •27,000 sm GFA
Vincom Bien Hoa •Location: Bien Hoa •25,000 sm GFA
North Vietnam 5
Vincom Exchange City • Location: Tu Liem • 23,140 sm GFA
AEON MALL • Location: Long Bien • 108,000 sm GFA
Vincom Nguyen Chi Thanh • Location: Dong Da • 44,500 smm GFA
Vincom Plaza Hai Phong • Location: Ngo Quyen
Dist. • 11,864 sm GFA
2H 2015
Vincom Plaza Hai Phong Shophouse • Location: Ngo Quyen Dist. • 6,130 sm GFA
2016 – 2017
The Parc by Gamuda • Location: Hoang Mai Dist., Hanoi • 14,000 sm GFA
Vincom Megamall •Hanoi Highway •80,000 sm GFA
Pearl Plaza •Dien Bien Phu Str. •20,579 sm GFA
Saigon Centre • Le Loi Str. • 55,000 sm GFA (Takashimaya:15,000 sm)
The One •Pham Ngu Lao St •48,000 sm
Berjaya Financial Center • Ba Thang Hai Str. • 156,000 sm
Vincom Hung Vuong •Location: Can Tho •18,000 sm GFA
Tax Center •Le Loi / Nguyen Hue Str. •44,000 sm GFA
51 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Significant Supply in HCMC in next 5 Years RETAIL
Vincom Megamall • Hanoi Highway • 80,000 sm GFA • To open in 2015
Pearl Plaza • Dien Bien Phu Str. • 20,579 sm GFA • To open in Nov. 2015
Saigon Centre • Le Loi Str. • 55,000 sm GFA
(Takashimaya: 15.000 sm)
• To open in mid. 2016
The One • Pham Ngu Lao Str. • 48,000 sm • To open in 2017
Tax Center • Le Loi – Nguyen
Hue Str. • 44,000 sm GFA • To open in 2019
Berjaya Financial Center • Ba Thang Hai Str. • 156,000 sm • To open in 2019
52 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Significant supply in Hanoi RETAIL
Vincom Nguyen Chi Thanh • Location: Dong Da Dist. • 44,500 sqm GFA • Opening: Q4 2015
Vincom Exchange City • Location: Tu Liem Dist. • 23,140 sqm GFA • Opening: Q4 2015
AEON MALL • Location: Long Bien Dist. • 108,000 sqm GFA • Opening: Q4 2015
The Parc by Gamuda • Location: Hoang Mai Dist., Hanoi • 14,000 sm GFA • Opening: 2016
Ciputra Hanoi mall • Location: Tay Ho Dist. • 130,000 sqm GFA • Opening: 2017
Vincom Starbowl • Location: Dong Da Dist. • 51,234 sqm GFA
53 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Development Pipeline RETAIL
-200
0
200
400
600
800
1,000
1,200
1,400
1,600S
eoul
Ban
gkok
Bei
jing
Gua
ngzh
ou
She
nzhe
n
New
Del
hi
Sha
ngha
i
Gre
ater
Man
ila
Tok
yo
Hon
g K
ong
Han
oi
HC
MC
Sin
gapo
re
Jaka
rta
Tai
pei
Syd
ney
CB
D
Mum
bai
Mel
bour
ne C
BD
Bris
bane
CB
D
Ade
laid
e C
BD
Per
th C
BD
Auc
klan
d C
BD
Wel
lingt
on C
BD
Dev
elop
men
t Pip
elin
e (T
hous
and
sm)
2016F2H 2015FQ2 2015 CompletionsQ1 2015 Completions
Source: CBRE Research, July 2015.
54 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Rents by location RETAIL
* Average retail rents exclude VAT and Service charge. Source: CBRE Vietnam, Q3 2015.
HCMC Hanoi
0 50 100 1500204060
2015
Q3
Q2
Q1
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011 Q4
NON-CBD CBD
2015
Q3
Q2
Q1
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011 Q4
NON-CBD CBD
0 50 100 150050100150
55 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Vacancy Rate RETAIL
Source: CBRE Vietnam, Q3 2015.
HCMC Hanoi
0
5
10
15
20
-40,000
0
40,000
80,000
120,000
160,000
2011 2012 2013 2014 2015
Vac
ancy
Rat
e (%
)
Net
Abs
orpt
ion
(sm
)
Net absorption Vacancy rate
0
5
10
15
20
-20,000
0
20,000
40,000
60,000
2011 2012 2013 2014 2015
Vac
ancy
Rat
e (%
)
Net
Abs
orpt
ion
(sm
)
Net absorption Vacancy rate
56 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Newly opened in Hanoi. Will it expand to HCMC? NEW URBAN RETAIL CONCEPTS
• Target youngsters;
• Creative design with graffiti;
• Integrated outdoor and indoor stores: bars, entertainment, art exhibition;
• With parking;
• Positioning mid-end;
• Affordable to young customers.
THE YARD Pho Duc Chinh, Ba Dinh District GFA: 8,000 sm
Opened: July 2015
CREATIVE CITY Luong Yen Street, Hai Ba Trung District GFA: 17,400 sm
Opened: September 2015
X98 Hoang Cau Street, Dong Da District GFA: ~9,000 sm
Opened: October 2014
57 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Expansion of Gymnasium Operator RETAIL
Asia's health-club industry is still in its infancy, with only a tiny number of fashion-conscious city dwellers keenly aware of the benefits of exercise. Only 1% to 3% of the region's urban residents belong to health clubs, as opposed to nearly 10% of U.S.
California Fitness Centers’s expansion plan
California Fitness Centers Expand to
10 more locations in 2016
New expansion
Several international brands are looking for
spaces to Expand
58 CBRE | CBRE MARKET INSIGHTS | Q3 2015
5 retailers on the list 2015 RETAIL ASIA-PACIFIC TOP 500
Retail Company
Ranking in Top
500
Ranking in
Vietnam
No. of outlets
Sales (VND tn)
Sales per sqm (US$)
‘13 ‘14 ‘13 ‘14 ‘13 ‘14
Co.op mart 190 1 323 354 1,100 1,375 5,664 6,180
Mobile World 274 2 229 319 649 721 11,646 12,545
Nguyen Kim Trading
311 3 18 22 488 603 12,163 13,434
Big C 339 4 25 28 511 546 3,991 3,820
Saigon Jewelry 400 5 158 132 484 421 30,769 31,525
Phu Nhuan Jewelry
6 145 172 254 267 10,419 9,245
Vien Thong A 7 92 126 117 164 6,298 6,591
Parkson 8 8 8 133 161 828 1,007
Pico 9 5 4 155 127 7,565 7,698
FPT Corp 10 60 129 77 121 5,162 4,975
The Gioi Di Dong plans to invest VND50 billion to open supermarket
Nguyen Kim partnered with Central Group
59 CBRE | CBRE MARKET INSIGHTS | Q3 2015
RETAIL
LUXURY AND BUSINESS
TOKYO, SINGAPORE, HO CHI MINH
CITY, HANOI, BANGKOK, SYDNEY, MELBOURNE
MID-RANGE FASHION
SHENZHEN, HONG KONG, SINGAPORE, HO CHI MINH CITY, HANOI
SPECIALIST CLOTHING
ATHLEISURE & FOOTWEAR: BEIJING, SHENZHEN, SEOUL, HONG KONG, TAIPEI, SINGAPORE
COFFEE & RESTAURANTS
GREATER CHINA, SEOUL, INDIA, SOUTHEAST ASIA,
AUSTRALIA, HO CHI MINH CITY, HANOI
VALUE & DENIM
GREATER CHINA, TOKYO, MANILA, JAKARTA, INDIA, AUSTRALIA
HOME WARE & DEPARTMENT STORES
HOME WARE: SEOUL, AUSTRALIA DEPT. STORE: EMERGING SOUTHEAST (EX-SINGAPORE)
CONSUMER ELECTRONICS
OTHERS
COSMETICS: BEIJING, GUANGZHOU, SEOUL, SINGAPORE DUTY FREE: SEOUL, TOKYO ENTERTAINMENT/SERVICES: SHANGHAI, GUANGZHOU
SUPERMARKETS
SOUTHEAST ASIA (EX SINGAPORE),
AUSTRALIA, HANOI
DEMAND DRIVERS BY INDUSTRY, APAC NEW RETAIL ENTRY
Source: CBRE Vietnam, Q3 2015.
HO CHI MINH CITY
HANOI
60 CBRE | CBRE MARKET INSIGHTS | Q3 2015
… but China is close to peak ASIA-PACIFIC STILL ON UP-SWING…
H Leasing market is on a slow recovery.
Growth is limited to those top locations or well-designed and managed shopping centres.
Source: CBRE Research, Q3 2015.
H
7 Industrial
62 CBRE | CBRE MARKET INSIGHTS | Q3 2015
INDUSTRIAL LAND RENTAL
HCMCBinh
DuongDongNai
Long An Da NangQuangNgai
Bac Ninh Ha NoiBac
GiangHai
DuongHai
PhongHungYen
Lowest rate $52 $38 $35 $45 $22 $22 $45 $50 $45 $59 $60 $68
Average rate $111 $74 $65 $69 $35 $35 $67 $101 $48 $61 $85 $79
Highest rate $270 $160 $150 $120 $45 $45 $100 $150 $55 $65 $100 $100
$0
$50
$100
$150
$200
$250
$300
Land rental by provinces in Vietnam (2015) – US$ psm, 50-year lease
Southern Provinces Northern Provinces
63 CBRE | CBRE MARKET INSIGHTS | Q3 2015
MARKET TREND New supply – Industrial land
64 CBRE | CBRE MARKET INSIGHTS | Q3 2015
OPPORTUNITIES IN SECOND-TIER CITIES
Hanoi – Hai Phong Expressway (105.5km)
Hai Phong - Hung Yen (75km – Completed 09/2015)
Whole project (105.5km – Expected completion Q4/2015)
Phap Van – Cau Gie Highway will be connected to Hanoi - Hai Phong
Expressway via Ring Road No. 4’s 14km section, which is planed to be
completed by 2017.
Hai Phong – Better connections to Hanoi
Bac Ninh – Samsung’s investment
faciliate Vietnam export and supporting industries
8 Hospitality market
66 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015
-
3
6
9
12
15
18
21
,0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2008 2009 2010 2011 2012 2013 2014 Q32015
Num
ber
of p
roje
cts
Num
ber
of r
oom
s
Number of rooms Number of projects
City hotels – Big names go live HOSPITALITY
Source: CBRE Vietnam, Q3 2015.
HCM, Total 5-star supply in Q3 2015
LE MERIDIEN SAIGON
3CTon Duc Thang, District 1 No. of rooms: 345 rooms Grand opening: Q3/2015
Hanoi, Total 5-star supply in Q3 2015
HOTEL DES ARTS SAIGON - MGALLERY COLLECTION
76-78 NTMK, District 3 No. of rooms: 168 Grand opening: Q3/2015
0246810121416
0
1,000
2,000
3,000
4,000
5,000
6,000
2008 2009 2010 2011 2012 2013 2014 Q32015
Num
ber
of p
roje
cts
Num
ber
of r
oom
s
Number of rooms Number of projects
Source: CBRE Vietnam, Q3 2015.
APRICOT HOTEL
136 Hang Trong, Hoan Kiem District No. of rooms: 123 Grand opening: Q2/2015
67 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Coastal Provinces Becoming More Attractive HOSPITALITY
PHU QUOC - New airport boosts arrivals
MUI NE - BINH THUAN - Improving infrastructure
HO TRAM - Big investments are seeping into the area thanks to pilot law for casino regulation relaxation and improved infrastructure
Long Thanh – Dau Giay is approaching completion
Choi Tai Fook replaces Genting Berhad and take controlling state
1st phase construction is expected to start in 2016
1st phase : mix-used complex includes resorts, amusement park, golf course,
premium villas and apartments, worth a total of some $500 million.
HOI AN – Casino project will resume construction in 2016
68 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Recovery Continues and Second Home Sales Come Back HOSPITALITY
16,200 units
16,200 units
Sales up 100% y-o-y
0 units
2014
264 units
YTD2015
Sales increases 12 times y-o-y
7 units
2014
87 units
YTD 2015
Sales triple y-o-y
103 units
2014
341 units
YTD2015
Da Nang Nha Trang Phu Quoc
Premier Village Da Nang – 111 units Vinpearl Premium Phu Quoc (phase 1) – 264 units
Vinpearl Premium Nha Trang Bay & Vinpearl Premium Golf Land (544 units)
Source: CBRE Vietnam, Q3 2015.
69 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Phu Quoc – dynamic construction site HOSPITALITY
Vinh Dam Project
JW Marriott Hotel
InterContinental Hotel
Novotel Hotel
Sunset Sanato
Grand World
Vinpearl Resort (P2) Vinpearl Safari
202 projects granted Investment Certificate in Phu Quoc
as of Sep 2015
70 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Phu Quoc- second home property sets foot on the island HOSPITALITY
0
150
300
450
600
750
2009 2010 2013 2014 2015Da Nang Nha Trang Phu Quoc
Num
ber
of v
illas
Launched second home villas
Source: CBRE Vietnam, .
010203040506070
0
2,000
4,000
6,000
8,000
2010 2011 2012 2013 2014 1H2015
2015e 2016f 2017f 2018f 2019f 2020f
No.
of h
otel
No.
of r
oom
3 star
4 star
5 star
No. of hotel
Phu Quoc welcomes the first second home villa for sales in 2015 (Vinpearl Premium Villa, Premier Villa by SunGroup).
The next five years expects a huge flux of five-star hotels.
Supply of 3-5 star Hotels in Phu Quoc
71 CBRE | CBRE MARKET INSIGHTS | Q3 2015
European Visitors set to rise due to Visa Waiver HOSPITALITY
Source: VNAT , Q3 2015. .
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
9M2013 9M2014 9M2015
Num
ber
of a
rriv
als
China Korea Japan US Taiwan Cambodia Russia Australia
Top eight guest nationalities to Viet Nam
72 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Northern Asian tourist dominates the market HOSPITALITY
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
9M2012 9M2013 9M2014 9M2015
Domestic International
Num
ber
of a
rriv
als
38.5%
26.7%
8.6%
4.5%
3.8%
17.9%
China
Korea
Japan
America
Australia
Others
Q3/2013 Q2/2015
Da Nang Da Nang 40%-50% 65%-70% Of weekly international flights
China China
Total Arrivals to Da Nang Top five guest nationalities
Da Nang City, 9M 2015
• International: 32% y-o-y
• Domestic: 18% y-o-y • Northern Asian guests accounts for
74% of guest portfolio of Da Nang
73 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Forgotten Sapa – Developers are (still) eyeing sites HOSPITALITY – SECOND HOME MARKET
Recent and upcoming projects…
Victoria Hotels and Resort Mercure Sapa Resort & Spa Indochina International Hotel
Favourite conditions
Hanoi – Lao Cai Highway + other infrastructure development
Tourist arrivals +21.6% 1H2014 vs. 1H2015
2015: 1.2 million tourist arrivals (expected)
Favorite attraction for both domestic and foreign tourists
Hanoi – Lao Cai Highway and Fanxipan cable car
Vietnam Mountain Marathon. 70km trail run around Sapa
74 CBRE | CBRE MARKET INSIGHTS | Q3 2015
Ha Long Bay HOSPITALITY – SECOND HOME MARKET
Real estate market in Ha Long Bay is getting more and more vibrant, fueled by fast developing transportation and tourism infrastructure.
75 CBRE | CBRE MARKET INSIGHTS | Q3 2015
SECTOR SEGMENT HCMC HANOI
RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION
OFFICE New buildings
Mature buildings
RETAIL CBD
Non-CBD
CONDOMINIUM
High-end
Mid-end
Affordable
HOTEL
Inner-city hotels
Beach hotels/resorts
SERVICED APT. Grade A
INDUSTRIAL Land
Factory/ warehouse
2015 OUTLOOK
Source: CBRE Vietnam, Q3 2015.
76 CBRE | CBRE MARKET INSIGHTS | Q3 2015
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77 CBRE | CBRE MARKET INSIGHTS | Q3 2015
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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.