hcmc cbd market report | aug 2014

AUGUST 2014 | HCMC CENTRAL BUSINESS DISTRICT

CBD MARKET REPORTHO CHI MINH CITY

www.colliers.com/vietnam

TABLE OF CONTENTSHCMC CBD MARKET REPORT | AUGUST 2014

Market Highlights

OFFICE MARKET

• Market Overview

• Market Performance

• Outlook

• Table

RETAIL MARKET

• Market Overview


• Outlook

• Table

HOTEL MARKET

• Market Overview


• Outlook

• Table

SERVICED APARTMENT


• Outlook

• Table

CONTACTS

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HCMC CBD MARKET REPORT

AUGUST 2014 | COMMERCIAL OFFICE MARKET

P.2 | Colliers International

In the near future, District 1 will still be a sought-after destination for tenants who seek for premium office spaces to either set up

or expand their business.

However, we predict a trend of moving out the downtown with the completion of buildings with high specifications including Lim

Tower 2 (District 3), SSG Tower (Binh Thanh District) and Viettel Office and Trade Center (District 10).

Landlords is expected to be more flexible in offers in order to push their leasing activity as well as fulfill vacant spaces before a

pipeline of new buildings in CBD come online next year.

Outlook

CBD OFFICE MARKET PERFORMANCE, AUGUST 2014

Source: Colliers International

CBD OFFICE RENTAL GROWTH, AUGUST 2014



Grade AAR Occupancy rate Supply

A ↔

B ↔

B ↔ ↔ ↔

B ↔

B ↔ ↔

CITY CENTRAL

FINANCIALHUB

NORTHERN CBD

SOUTHERN CBD

Market PerformanceIn July, office market in District 1 experienced flat

performance as previous month.

Grade A buildings witnessed a slight decrease of average

asking rent while occupancy rate lifted up 1% m-o-m.

At the same time, most Grade B developments saw an

upward month with moderate growth in both median

rental and occupied spaces.

During reviewed month, we noticed an increasing gap

between effective and asking rent, especially from

landlords of Grade B office buildings. Though being under

pressure of lease out vacant areas, they also struggle to

retain price strategy on market practices.






* US$/ sq m/ month (on net area)

Office Market OverviewNo Name Address

Com-pletion Year

NLA (sq m)

Service Charges (*)

Occupancy rate

NFA asking rent (*)

1 Saigon Centre 65 Le Loi 1996 11,650 6.5 98% 38.02 Saigon Tower 29 Le Duan 1997 13,950 6.0 99% 37.03 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 91% 43.04 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 94% 41.05 Diamond Plaza 34 Le Duan 1999 15,936 8.0 99% 41.06 Kumho Asiana Plaza 39 Le Duan 2009 26,000 8.0 93% 49.07 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 88% 34.08 President Place 93 Nguyen Du 2012 8,330 6.0 97% 30.0

9 Times Square 22-36 Nguyen Hue 2012 9,000 7.0 60% 50.0

Grade A 158,576 7.0 90.8% 40.5

1 OSIC 8 Nguyen Hue 1993 6,500 6.0 94% 18.02 Yoco Building 41 Nguyen Thi Minh Khai 1995 5,000 4.0 100% 16.03 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai 1996 3,200 5.0 100% 21.04 Central Plaza 17 Le Duan 1997 6,094 5.0 100% 26.05 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 98% 20.06 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.0 96% 23.07 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 98% 22.0

8 MeLinh Point Tower 02 Ngo Duc Ke 1999 17,600 6.0 100% 24.09 Zen Plaza 54-56 Nguyen Trai 2001 11,037 5.0 95% 21.010 Bitexco Office Building 19-25 Nguyen Hue 2003 6,000 5.0 92% 25.011 The Landmark 5B Ton Duc Thang 2005 8,000 5.0 82% 21.012 Opera View 161-167 Dong Khoi 2006 3,100 7.0 87% 27.013 Indochina Park Tower 4Bis Nguyen Dinh Chieu 2006 2,145 3.0 77% 10.014 Petro Tower 1-5 Le Duan 2007 13,304 5.0 99% 30.015 City Light 45 Vo Thi Sau 2007 10,000 5.0 97% 14.016 The Landcaster 22Bis Le Thanh Ton 2007 7,000 5.0 100% 24.017 Gemadept Tower 5 Le Thanh Ton 2008 14,000 7.0 100% 23.018 Fideco Tower 81-85 Ham Nghi 2008 15,000 6.0 100% 20.019 Havana Tower 132 Ham Nghi 2008 7,326 6.0 100% 21.020 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 94% 26.021 Royal Center 235 Nguyen Van Cu 2008 14,320 5.0 100% 23.022 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 23.023 Bao Viet Tower 233 Dong Khoi 2010 10,650 6.0 100% 21.024 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 96% 22.025 Vincom Center 68-70-72 Le Thanh Ton 2010 56,600 5.0 72% 23.026 Saigon Royal 91 Pasteur 2010 5,340 4.0 100% 19.027 A&B Tower 76 Le Lai 2010 17,120 6.0 98% 29.028 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19.596 5.0 90% 23.029 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 93% 26.030 Lim Tower 9-11 Ton Duc Thang 2013 29,265 6.0 98% 28.031 Sunny MB Tower 259 Tran Hung Dao 2013 13,200 5.5 27% 22.0

Grade B 399,596 6.0 90.9% 23.5



AUGUST 2014 | CBD OFFICE MAP



AUGUST 2014 | RETAIL MARKET


AUGUST 2014 | CBD OFFICE MAP




The CBD retail market segment was almost flat during reviewed

month.

All three CBD retail market sectors retained stable average

rental rates since May 2014. Retail podium recorded unchanged

figures of vacancy rate in July.

The department store still enjoyed fully occcupied condition

while shopping center saw a gain in occupancy rate after two

consecutive decreasing month.

SC Vivocity (District 7), Vietttel Complex (District 10), Lim Tower

2 (District 3) and SSG Tower (Binh Thanh) are projects in CBD

fringe areas with retail components expected to complete next

year while Phase 2 of Saigon Centre is the only active retail

developments in CBD.

Market Performance

Outlook

SHOPPING CENTER MARKET PERFORMANCE, AUG 2014

PHASE 2 OF SAIGON CENTRE PROJECT UNDER CONSTRUCTION


Total retail sales of goods and service revenue were estimated

to reach US$2.60 billion in July, 2.7% higher than the previous

month and 14.2% year on year increase.

Although a gain in gasoline price in June and July have raised

transportation fee and prices of several commodities up, CPI

figure of HCMC lightly rise 0.12% over the last month.

In brief, the city authority inform endeavors to control market

prices and curb inflation from now till the year-end.


RETAIL PODIUM MARKET PERFORMANCE, AUG 2014


RETAIL & SERVICE REVENUE GROWTH, AUG 2014

Source: GSO, Colliers International



AUGUST 2014 | CBD RETAIL MAP



AUGUST 2014 | HOTEL MARKET


AUGUST 2014 | CBD RETAIL MAP

KUMHO MONTHLY MARKET REPORTAUGUST 2014 | RETAIL MARKET HCMC CBD MARKET REPORT


AUGUST 2014 | HOTEL MARKET HCMC CBD MARKET REPORT

No Name of Project /Building Address Location Comple-

tion YearNLA

(sq m)Average Rental

(US$/sq m/month) Occupancy Rate

1 Hotel Continental Saigon 132-134 Dong Khoi District 1 2000 200 90 100%2 Caravelle Hotel 19 Lam Son Square District 1 2000 150 90 100%3 New World Hotel 79 Le Lai District 1 2000 1,000 40 100%4 Sheraton Saigon 88 Dong Khoi District 1 2002 750 125 67%5 Opera View Lam Son Square District 1 2006 1,260 85 100%6 Kumho Asiana Plaza 35 Le Duan District 1 2009 6,830 35 100%7 Rex Arcade 141 Nguyen Hue District 1 2010 2,000 120 99%8 ICON 68 45 Ngo Duc Ke District 1 2011 8,000 35 79%9 President Place 93 Nguyen Du District 1 2012 800 70 71%10 Times Square 22-36 Nguyen Hue District 1 2013 9,000 90 72%

Retail Podium 29,990 63 84%

1 Diamond Plaza 34 Le Duan District 1 1999 9,000 83 100%2 Zen Plaza 54-56 Nguyen Trai District 1 2001 6,817 52 100%3 Parkson Saigon Tourist 35 Le Thanh Ton District 1 2002 17,000 90 100%

Department Store 30,200 82.6 100%

1 Saigon Center 65 Le Loi District 1 1996 3,500 75 100%2 City Plaza 230 Nguyen Trai District 1 2000 5,250 25 100%3 Tax Center 135 Nguyen Hue District 1 2003 7,000 75 100%4 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100%5 Nowzone Nguyen Van Cu District 1 2008 9,000 35 95%6 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 90 80%7 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 63 76%

8 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100%

9 Union Square Dong Khoi District 1 2012 38,000 73 60%

Shopping Centre 113,450 66.9 76%

No Name of Hotel Address Location Comple-tion Year Total Room Occupancy ARR(*)

1 Caravelle 19 Lam Son Square District 1 2000 335 60% 1742 New World Saigon 76 Le Lai District 1 2000 533 62% 1183 Sofitel Plaza Saigon 17 Le Duan District 1 2000 290 65% 1394 Rex 141 Nguyen Hue District 1 2000 289 58% 1005 Renaissance Riverside 8-15 Ton Duc Thang District 1 2001 350 68% 1196 Lotte Legend Hotel 2A-4A Ton Duc Thang District 1 2001 283 57% 1557 Sheraton 88 Dong Khoi District 1 2002 480 72% 1868 Park Hyatt Saigon 02 Lam Son Square District 1 2005 259 75% 2349 Majestic Saigon 1 Dong Khoi District 1 2007 175 66% 12610 InterContinental Asiana 39 Le Duan District 1 2009 305 81% 17911 Nikko Saigon 235 Nguyen Van Cu District 1 2011 334 72% 12012 Pullman Hotel 146 Tran Hung Dao District 1 2013 306 57% 108

5 Star 3,633 66% 146

1 Continental Saigon 132-134 Dong Khoi District 1 1990 86 72% 762 Norfolk Hotel 117-119 Le Thanh Ton District 1 1992 104 73% 873 Duxton 63 Nguyen Hue District 1 1996 203 77% 794 Royal City 133 Nguyen Hue District 1 2000 135 69% 595 Palace Saigon 56-66 Nguyen Hue District 1 2000 146 90% 656 Oscar 68A Nguyen Hue District 1 2000 108 74% 407 Liberty Central 179 Le Thanh Ton District 1 2010 140 65% 748 Grand 08 Dong Khoi District 1 2011 107 71% 779 Liberty Central Riverside 17 Ton Duc Thang District 1 2013 170 66% 75

4 Star 1,161 73% 68.9



AUGUST 2014 | CBD HOTEL MAP



AUGUST 2014 | CBD HOTEL MAP




The number of foreign tourists to Vietnam rebounded in July

after two consecutive months of decrease, estimating at

564,736. Tourists visiting Vietnam for travel and recreation

reached nearly 2.93 million, while 816,000 travelers came for

business purposes, and other 836,000 arrivals arrived to visit

relatives.

HCMC welcomed more than 2.3 million visitors in the first

seven months of this year, increasing by 9.1% y-o-y. Total

revenue from tourism activities reached 51,965 billion, up 8.5%

over the same period.

Hotel Market Overview

OutlookBoth 5-star and 4-star hotel sectors witnessed an increase of

median occupancy rate and room rate after three continuous

declining months.

Although the growth rate was lower in compared to same

period last year, it still show a significant improvement as

well as positive market responce regarding recent efforts from

operators.

In the short-term time, HCMC will focus on domestic tourism

stimulus and accelerate tourism promotions in other countries.

Regarding future supply, Lavenue Crown will possibly be the

next 5-star hotel development in city center. Given the premium

location, it is expected to put competitive pressure on existing

top-graded hotels in town.

NUMBER OF INTERNATIONAL VISITORS TO HCMC, AUG 2014

Source: Statistical Office in HCMC, Colliers International

LAVENUE CROWN, A FUTURE LUXURY HOTEL IN DOWNTOWN


Because of the East Sea tension, the growth rate of international tourists to HCMC still weaken. However, the cooperation between

hotel owners, tourism agencies and local government is expected to enhance performance of the city’s tourism industry.

HCMC Tourism Association has launched a domestic tourism promotion program signed with two local carriers, Vietnam Airlines

and VietJet Air. Under the program, the national flag carrier Vietnam Airlines will offer a ticket discount of 32% to 70% while low-

cost VietJet Air will cut down 49% to 90% on all domestic flights from and to the city.

The hotel operators also activated a variety of summer promotions as well as incentives offers to guests.





AUGUST 2014 | SERVICED APARTMENT MARKET

Top-graded hotel developments in HCMC experienced upward

trend during July.

Last month, the 5-star sector saw a growth rate of 2% in both

occupancy rate and average rate.

Likewise, the 4-star hotels also recorded a moderate increase

in occupancy figure and 6% gain of room rate.

Market Performance

PERFORMANCE OF 5-STARS HOTEL, AUGUST 2014



We noticed a new trend of refunction condominium to serviced apartment

development in recent months.

The New Pearl in District 3 is the latest condominium project informed

to be completed by 3Q 2015 with 160 serviced flats after a prolonged

delay in construction.

Outlook

Top-graded serviced apartments in CBD area saw a gain in occupancy rate

in July.

Grade A buildings retained unchanged asking rent while that of Grade B

marginally decline to US$26.7 per sq.m per month.

Market Performance NEW PEARL RESIDENCE @ DISTRICT 3

Source: Public Domain

PERFORMANCE OF 4-STARS HOTEL, AUGUST 2014


HCMC HOTEL FUTURE SUPPLY IN YEAR OF COMPLETION

Source: Statistical Office in HCMC, Colliers International

Some condominium projects in CBD fringe are refunctioned to serviced apartment developments





* US$/sq m/month** Not including VAT*** Buildings are sorted by Year of Completion


Serviced Apartment Overview

AUGUST 2014 | SERVICED APARTMENT MARKET HCMC CBD MARKET REPORT


GRADE A CBD SERVICED APARTMENTS PERFORMANCE


GRADE B CBD SERVICED APARTMENTS PERFORMANCE


No Project Name Address Location Comple-tion Year

Total Room

Average Occupancy ARR(*)

1 The Landmark 5B Ton Duc Thang District 1 1995 66 82% 312 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 93% 343 Sedona Suites 65 Le Loi District 1 1996 89 84% 304 Nguyen Du Park Villas 111 Nguyen Du District 1 2004 41 96% 305 The Landcaster 22 Bis Le Thanh Ton District 1 2007 55 73% 376 InterContinental Asiana Saigon 39 Le Duan District 1 2009 260 99% 36

Grade A 701 92% 34

1 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 85% 262 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 86% 263 Norfolk Mansion 17-21 Ly Tu Trong District 1 1998 126 95% 334 Diamond Plaza 34 Le Duan District 1 1999 42 98% 295 Garden View Court 101 Nguyen Du District 1 2000 76 100% 306 Ben Thanh Luxury 172-174 Ky Con District 1 2010 30 60% 187 Vincom Center 72 Le Thanh Ton District 1 2010 60 36% 25

8 Lafayette De Saigon 08 Phung Khac Khoan District 1 2010 18 100% 30

9 Spring Court 1Bis Phung Khac Khoan District 1 2011 14 80% 16

10 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 62% 27

11 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 100% 30

Grade B 738 82% 27


AUGUST 2014 | CBD SERVICED APARTMENT MAP


HCMC CBD MARKET REPORT | AUGUST 2014

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hcmc cbd market report | aug 2014

Real Estate

market practices

market segmentation

viettel office

commercial office marketp

premium office spaces

colliers internationalsource

grade b developments

experienced flat performance