evolution of vietnamese retail

7/29/2019 Evolution of Vietnamese Retail

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Vietnam has a small sharebut large potential

China

Hong Kong

India

IndonesiaKoreaMalaysiaPhillippines

Singapore

Taiwan

Thailand

Vietnam

Japan

Australia

Percentage Share of GDP in Asia Pacific, 2010

Regional GDP share



GDP in Asia is set for strong growth, Vietnam 3rd strongest CAGR 5 Years CAGR of Nominal GDP in Asia Pacific, 2010 – 2015F

Source: Focus Economics, Savills Research & Consultancy

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

India China Vietnam Phillippines Indonesia Thailand Malaysia Korea Singapore Taiwan Hong Kong UnitedStates

Australia Euro Area Japan

GDP CAGR

CountryPrivate

Consumption

as % of GDP

U.S. 71.0

Korea 68.0

Vietnam 66.0

Hong Kong 61.5

Taiwan 60.8

Japan 58.1

Singapore 40.9

China 35.6



4

• The Gini Index measures the extent to which the distribution of income among individuals or households within aneconomy deviates from a perfectly equal distribution.

• Hong Kong and Singapore show a wide gap between the wealthy and the poor. Japan, Taiwan and Korea show the mosteven distribution of income.

Real Economy – Gini Coefficient

Gini Index, 2007-2011

Rank* Gini Coefficiant (%) 2007 2008 2009 2010 2011

108 Philippines 46.10 44.50 44.50 44.00 44.00

104 Hong Kong 43.40 43.40 43.40 43.40 43.40

97 Thailand 43.20 42.00 42.00 42.50 42.50

96 Singapore 42.50 42.50 42.50 42.50 42.50

91 China 44.70 46.90 46.90 41.50 41.50

86 United States 40.80 40.80 40.80 40.80 40.80

71 Malaysia 49.20 49.20 49.20 37.90 37.90

70 Vietnam 37.00 34.40 34.40 37.80 37.80

67 Indonesia 34.30 34.30 34.30 39.40 37.60

58 United Kingdom 36.00 36.00 36.00 36.00 36.00

51 Australia 35.20 35.20 35.20 35.20 35.20

37 Taiwan 32.60 32.60 32.60 32.60 32.60

30 Korea 31.60 31.60 31.60 31.60 31.60

3 Japan 24.90 24.90 24.90 24.90 24.90*Rank out of 151 nations according to the United Nations development Index

Source: Human Development Index, UNDP



5

• With the exception of China and Indonesia, private consumption growth declined among Asian countries during therecession of 2008/09.

• Following the difficulties of 2009, almost all Asian economies rebounded significantly in 2010.

Real Economy – Private Consumption

Private consumption growth, 2005-2012F

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2005 20 06 2007 2008 2009 2010 2011F 2012F

China Malaysia Indonesia Vietnam Philippines Thailand

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2005 2006 2007 2008 2009 2010 2011F 2012F

Hong Kong Singapore Japan Korea Taiwan Australia



6

• With larger percentages of the Asia-Pac population using the internet awareness of international trends, brands andaccess to online stores will increase.

• Compared to the US & UK large numbers of Asia-Pac economies save more of their earnings. This offers opportunities topromote spending and domestic consumption within those markets.

Telecommunications & Savings

Internet & Mobile Phone Penetration 2009

20

40

60

80

100

120

140

160

180

200

0

10

20

30

40

50

60

70

80

90

Per 100 Pop% of Pop

Internet Penetration (LHS) Facebook Penetration (LHS) Mobile Phone Subscribers (RHS)

0

10

20

30

40

50

60

70

80

90

100

0

150

300

450

600

750

900

1050

1200

1350

% of GDPMillions

Population (LHS) Gross Savings 2009 (RHS)

Population & Savings 2009

Note: No Taiwan Data

Source: World Bank national accounts data, and OECD National Accounts data files.Source: Internet World Stats & International Telecommunications Union



Urbanisation is increasingin Southeast Asia

Urbanisation Ratio, 2010 – 2020E

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

C hi na Ho ng

Kong

Taiwan Japan Korea Singapore Malaysia Phi l ippinesIndonesia Thai land Vietnam India Austral ia United

Kingdom

United

States

2010 2015 F 2020 F

Source: United Nations

Urbanization



1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

China

Hong Kong

Japan

Korea

Singapore

Malaysia

Philippines

Indonesia

Thailand

Vietnam

India

Australia

NewZealand

Source: United Nations

Demographic Window in Asia Pacific, 1960 - 2050

Demographic Trends Are Not Always Favorable



• Fast Fashion - Zara is committed very heavily to the markets within which it has a presence. Meanwhile H&M has focusedheavily on China, Hong Kong and Japan.

• Lacoste has a very large presence across the surveyed cities although this mainly due to smaller retail areas withindepartment stores (concessions). Lacoste goods are available in Taiwan through a franchise.

• Luxury Retail – With regard to Gucci and Louis Vuitton, Hong Kong, Tokyo and Seoul have a larger number of storescompared with other cities in the region.

Retail Sales Value

Fast fashion, mid-range and luxury brands –

number of stores by city, 2011



Population

of 6.9

Million

Population

of 6 Million

Bangkok, ThailandKlang Valley

Kuala Lumpur, Malaysia

From 2011 onwards: nearly 824,000 sqm of new supply

planned to enter the market

Retail density

Population

of 7.4

Million

Ho Chi Minh City, Vietnam

Location Sq m/person

HCMC 0.09

Bangkok 0.78

Jakarta 0.38

Kuala Lumpur 0.64



• Rents for prime retail space in Hong Kong outstrip all other surveyed locations. They are now the most expensive in theworld second only to New York’s 5th Avenue.

• Shanghai commands the highest rents amongst the emerging economies.

Prime Retail Benchmark

Savills benchmark data based on top 5 prime retail malls in each city, 2008- 1H 2011

0

100

200

300

400

500

600

700

800

900

1000

1H 2H 1H 2H 1H 2H 1H 2H

2008 2009 2010 2011

US$ sq m gross

Hong Kong Singapore Taipei Tokyo Seoul Sydney

0

100

200

300

400

500

600

700

800

900

1000

1H 2H 1H 2H 1H 2H 1H 2H

2008 2009 2010 2011

US$ sq m gross

Beijing Shanghai Kuala Lumpur Jakarta Hanoi Ho Chi Minh

Note: figures inclusive of management fees and government

taxes

Source: Savills Research & ConsultancySource: Savills Research & Consultancy



Cap Rates Around Asia Pacific

CitiesOffice Retail

1Q/2010 1Q/2011 1Q/2010 1Q/2011

Beijing 5.96% 5.66% NA NA

Shanghai 6.60% 5.50% 7.00% 6.50%

Hong Kong 3.10% 3.36% 3.76% 3.54%

Taipei 3.30% 2.80% 3.90% 3.10%

Tokyo 4.70% 4.80% 5.30% 5.20%

Seoul 5.90% 5.70% 7.00% 6.50%

Singapore 5.25% 3.88% 5.25% 4.75%

Kuala Lumpur 10.05% 10.11% 10.89% 11.61%

Hanoi 12.00% 12.00% 10.00% 10.00%

Ho Chi MinhCity

12.00% 12.00% 10.00% 10.00%

Sydney 7.25% 7.00% 6.50% 6.50%



HCMC Snapshot



Retail supply

Retail podium

2%

Department store

17%

Shopping centre

40%

et

Wholesale centre

8%

CBD

23%

Secondary area

41%

Suburban area

36%

- 1 new retail centre with 5,000 sq m- Total supply: 630,000 sq m (stable q-o-q)

- 8 retail podiums, 7 department stores, 18 shopping centres, 57 supermarkets, 3

wholesale markets



Future supply

•- 73,000 sq m to come in 2H/2011

•- 720,000 sq m to come in 2012- 2015

2012E 2013E 2014E 2015E Potential

Retail space 145,267 357,846 124,428 89,500 453,684

No.of projects 10 13 2 3 19

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

-

2

4

6

8

10

12

14

16

18

20No.of projectssq m

Retai l space No.of projects

District 7,38%

District 2,22%

District 1,12%

Others,28%



Retail performance

•

Department stores had the best performance. •Avg. occupancy: 85% (-5% q-o-q)

•Avg. rent rate: US$65/sq m (-5% q-o-q)

•Only secondary areas had an increase in rent.

-8

-6

-4

-2

0

2

4

Retail podium Department

store

Shopping

centre

Occupancy Rent rate

% q-o-q change

-15

-10

-5

0

5

10

CBD Secondary

area

Suburban

area

Occupancy Rent rate

% q-o-q change



17

District7

District 5

TanBinh

Rental / volume guide

HCMCPeople’s

Committee

US$18 to US$45

US$20 toUS$180

US$18 toUS$50

US$20 to

US$200



The Crescent retail 90% leased

The Mall retail 70 % leased

GF & Upper levels mostly leased

2nd level some challenges

Phu My Hung Corp.

Location: Phu My Hung New City

Centre, Ho Chi Minh City

Retail Area: 45,000 sq. m net



Savills won Asia Pacific Property Awards 2011

evolution of vietnamese retail

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