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COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
Prepared by
Vietnam Overview
Colliers International
Ho Chi Minh City, Vietnam
Vietnam Investment Promotion Day
May 2018
Prepared for
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
01 COLLIERS INTERNATIONAL PROFILE
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
01 COLLIERS INTERNATIONAL PROFILE
SERVICE LINESVIETNAM
Contact Us:Deutsches Haus, 3rd Floor33 Le Duan Street, District 1,Ho Chi Minh City, Vietnam
> Colliers International is one of the longest International Property consulting firms operating in Vietnam.
> Has two major offices located in Hanoi and Ho Chi Minh City.
> Have around 100 real estate professionals operating in a wide variety of service lines.
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
02 VIETNAM OVERVIEW
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
02 VIETNAM OVERVIEW
IN THE REGIONTHE BIGGER PICTURE
Contact Us:Deutsches Haus, 3rd Floor33 Le Duan Street, District 1,Ho Chi Minh City, Vietnam
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
VIETNAM POPULATION (2010–2017)
02 VIETNAM OVERVIEW
86,930 87,860
88,809 89,760
90,729 91,713
92,695
95,415
0%
2%
4%
6%
8%
10%
82,000
84,000
86,000
88,000
90,000
92,000
94,000
96,000
98,000
2010 2011 2012 2013 2014 2015 2016 2017
YO
Y G
row
th
Po
pu
latio
n (
‘000s)
Population ('000) % growth
> Vietnam is the third largest country in terms of population size among the Association of Southeast Asian Nations (ASEAN).
> As of 2017, Vietnam registered a 8.2% year-on-year (“YOY”) growth to a total population of about 95.4 million in 2017. It is expected
to reach close to 97 million by end of 2018.
> The surging growth in population has been supported by increase in fertility rates and marital rates of an age group between 20
and 45, which accounts for about 44% of the total population).
POPULATIONVIETNAM
POPULATION OF ASEAN COUNTRIES (2017)
Rank Country Population
1 INDONESIA 261,890,000
2 THE PHILIPPINES 104,918,000
3 VIETNAM 95,415,000
4 THAILAND 66,189,000
5 MYANMAR 52,920,000
6 MALAYSIA 32,050,000
7 CAMBODIA 16,005,000
8 LAOS 6,858,000
9 SINGAPORE 5,612,000
10 BRUNEI 429,000
Source: CEIC, Oxford Economics Source: CEIC, Oxford Economics, Wordometers
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
POPULATION DISTRIBUTION BY AGE (2010-2017)
02 VIETNAM OVERVIEW
DEMOGRAPHICSVIETNAM
POPULATION PYRAMID (2017)
Source: CEIC, Oxford Economics Source: Oxford Economics
0%
20%
40%
60%
80%
100%
2010 2011 2012 2013 2014 2015 2016 2017
0-15 15-64 65 or above
> Based on the age group, age between 15-64 comprises the highest proportion, which indicate that Vietnam has a growing younger
generation showing a positive outlook for economic growth
> Economically active groups of individuals aged 15-64 composed of 70% of the population and that is forecasted to continue to
grow in the coming years providing a strong labor force at the same time.
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
DISPOSABLE INCOME PER CAPITA OF HO CHI MINH CITY (2013-2017)
02 VIETNAM OVERVIEW
DISPOSABLE INCOME PER CAPITAHO CHI MINH CITY
0
500
1,000
1,500
2,000
2,500
2013 2014 2015 2016 2017
Gro
ss N
atio
nal In
com
e P
er
Cap
ita (
USD
)
HCMC
Source: General Statistics Office of Vietnam
With the growing economy, comes the rising disposal income. More major purchases are made as in housing, cars, travels, tertiary
education and foreign education, going beyond essentials.
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
ECONOMIC OUTLOOKVIETNAM
Driven by rising foreign direct investment, vigorous export growth, robust domestic demand, and the various enactment of trade
treaties, Vietnam’s economic outlook is looking stronger than even/r.. This comes after a series of adverse events in early 2017
that undermined Vietnam’s status as a major exporter but the country achieved over 6% growth YoY for 2017 and the trend
continues. GDP in the first quarter of 2018 achieved an estimated increase of 7.38% compared to the same period last year,
indicating the highest growth rate of the first quarter in the last ten years.
ECONOMY SNAPSHOT
INDUSTRIAL SNAPSHOT
> The economic structure has seen a gradual shift from agriculture to
industry-services in the last five years. With the significant influx of
foreign investment, the proportion of the industry and construction
sector has risen to 35.26% 2018.
> Manufacturing was also a key contributor to growth, rising 13.56%
over the quarter driven by a 9.07% rise in the industry and
construction sector.
> Total international arrivals in first three months reached 4,205,401
arrivals, an increase of 30.9% over the same period last year.
GDP FORECAST BY MAJOR PARTIES
6.5% 6.4% 6.6%
Asian
Development
Bank
IMFWorld Bank
02 VIETNAM OVERVIEW
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
02 VIETNAM OVERVIEW
ASSOCIATION OF SOUTH EAST ASIAN (ASEAN)NATIONAL ACCOUNTSGDP (2017)
GROSS DOMESTIC PRODUCT (USD Mil)
RANK COUNTRY GDP (USD Mn)
1 INDONESIA 1,015,544
2 THAILAND 455,510
3 SINGAPORE 324,017
4 MALAYSIA 314,656
5 THE PHILIPPINES 313,595
6 VIETNAM 223,868
7 MYANMAR 75,745
8 CAMBODIA 20,937
9 LAOS 14,811
10 BRUNEI 12,128
Source: CEIC, Oxford Economics
GDP PER CAPITA (2017) REAL GDP YOY GROWTH (2017)
GDP PER CAPITA (USD)
RANK COUNTRY GDP PER CAPITA
1 SINGAPORE 57,772
2 BRUNEI 28,290
3 MALAYSIA 9,818
4 THAILAND 6,882
5 INDONESIA 3,878
6 THE PHILIPPINES 2,989
7 VIETNAM 2,358
8 LAOS 2,160
9 CAMBODIA 1,308
10 MYANMAR 1,196
REAL GDP YOY GROWTH
RANK COUNTRY YOY GROWTH
1 CAMBODIA 7.0%
2 VIETNAM 6.8%
2 LAOS 6.8%
4 MYANMAR 6.8%
5 THE PHILIPPINES 6.7%
6 MALAYSIA 5.9%
7 INDONESIA 5.1%
8 THAILAND 3.9%
9 SINGAPORE 3.6%
10 BRUNEI 1.3%
Source: CEIC, Oxford EconomicsSource: CEIC, Asia Development Bank
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
IMPORTS AND EXPORTS (2010-2017)
02 VIETNAM OVERVIEW
IMPORTS AND EXPORTSVIETNAM
Source: CEIC
0%
15%
30%
45%
60%
75%
0
50,000
100,000
150,000
200,000
250,000
2010 2011 2012 2013 2014 2015 2016 2017
Fore
ign
Tra
de
(USD
Mil)
Imports (USD mn) Exports (USD mn) Imports YOY Growth Exports YOY Growth
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
CURRENCY EXCHANGE RATES, VIETNAMESE DONG (VND) TO UNITED STATES DOLLAR (USD) (2010-2017)
02 VIETNAM OVERVIEW
IMPORTS AND EXPORTSVIETNAM
Source: Oxford Economics
> Last major depreciation was in August 2015 and the Vietnamese Dong has been stable since. 2018 is slated to be a positive year
for the Vietnamese dong, thanks to Vietnam’s stable macroeconomics and strong capital inflows. The most positive prediction
actually forecasts that the VND will appreciate by 1 per cent against the USD partly attributable to a weakening US.
> The Chinese yuan is forecast to strengthen by 1 per cent as well. If the Dong can match this level, Vietnam’s exports won’t lose
much of their competitiveness.
> Vietnam’s foreign reserves now stand at USD 54.5 billion, the highest level ever recorded.
> Note that Vietnamese Dong is not a tradable currency in the international market
0%
2%
3%
5%
6%
8%
0
5
10
15
20
25
2010 2011 2012 2013 2014 2015 2016 2017
YO
Y C
han
ge
VN
D (
‘000s)
USD to VND % Change of USD to VND
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
02 VIETNAM OVERVIEW
ASSOCIATION OF SOUTH EAST ASIAN (ASEAN)EMPLOYMENT RATE AND GROSS NATIONAL INCOME PER CAPITAEMPLOYMENT RATE (2017)
EMPLOYMENT RATE
RANK COUNTRY EMPLOYMENT RATE
1 CAMBODIA 99.7%
2 LAOS 99.3%
3 MYANMAR 99.2%
4 THAILAND 98.8%
5 SINGAPORE 97.8%
6 VIETNAM 96.8%
7 MALAYSIA 96.5%
8 INDONESIA 94.5%
9 THE PHILIPPINES 94.3%
10 BRUNEI 92.9%
Source: CEIC, Trading Economics
GROSS NATIONAL INCOME PER CAPITA (2017)
GNI PER CAPITA (USD)
RANK COUNTRY GNI PER CAPITA
1 SINGAPORE 51,880
2 BRUNEI 32,860
3 MALAYSIA 9,860
4 THAILAND 5,640
5 THE PHILIPPINES 3,580
6 INDONESIA 3,400
7 LAOS 2,150
8 VIETNAM 2,060
9 MYANMAR 1,190
10 CAMBODIA 1,140
Source: World Bank
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2013 2014 2015 2016 2017
Fo
reig
n D
irect
In
vest
men
t (U
SD
mil)
HCMC Hanoi
FOREIGN DIRECT INVESTMENT OF MAJOR CITIES IN VIETNAM (2013-2017)
02 VIETNAM OVERVIEW
FOREIGN DIRECT INVESTMENTHO CHI MINH CITY / HANOI
Source: General Statistics Office of Vietnam
> FDI has been on the rise and most importantly, the disbursed capital remains strong.
> HCM City was at the top, among 59 localities receiving FDI during the year, followed by the northern province
of Bac Ninh and the central province of Thanh Hoa.
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
TOP 3 FOREIGN DIRECT INVESTMENT COUNTRIES IN VIETNAM (2015-2017)
02 VIETNAM OVERVIEW
FOREIGN DIRECT INVESTMENTHO CHI MINH CITY
Among 115 countries and territories investing in VN in 2017, Japan topped the list with USD 9.11 billion, making up 25.4%of the FDI
pledged to the country. Followed by South Korea with USD 8.49 billion or 23.7% of the FDI, and Singapore with USD 5.3 billion or
14.8%.
HCM City was at the top, among 59 localities receiving FDI during the year, followed by the northern province of Bac Ninh and the
central province of Thanh Hoa.
South Korea USD 2.9 bil (17.2%) South Korea USD7.0 bil (28.8%) Japan USD9.1 bil (25.4%)
Malaysia USD 2.5 bil (15.7%) Japan USD2.6 bil (10.6%) South Korea USD8.4 bil (23.7%)
Japan USD 1.3 bil (8.2%) Singapore USD2.4 bil (9.9%) Singapore USD5.3 bil (14.8%)
TOP 3 FOREIGN DIRECT INVESTMENT RECIPIENT CITIES IN VIETNAM (2015-2017)
HCMC 18.0% HCMC 14.0% HCMC -
Tra Vinh 16.2% Hai Phong 12.3% Bach Ninh -
Binh Duong 15.8% Hanoi 11.4% Thanh Hoa -
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
TOP 3 FOREIGN DIRECT INVESTMENT SEGMENTS IN VIETNAM (2015-2017)
02 VIETNAM OVERVIEW
FOREIGN DIRECT INVESTMENTVIETNAM
Manufacturing &
Processing
USD15.2 bil (67%) Manufacturing &
Processing
USD15.5 bil (63.7%) Manufacturing &
Processing
USD15.9 bil (44.2%)
Production &
Distribution of
Electricity
USD2.8 bil (12.4%) Automobile /
Motorbike Wholesale
USD1.9 bil (7.79%) Production &
Distribution of
Electricity
USD 8.4 bil (23.3%)
Real Estate USD2.4 bil (10.5%) Real Estate USD1.7 bil (6.9%) Real Estate USD3.1 bil (8.5%)
TOP 3 FOREIGN DIRECT INVESTMENT SEGMENTS IN VIETNAM (2017)
Inflow mainly are from manufacturing-processing industries
accounting for over 44% of total registered FDI.
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
02 VIETNAM OVERVIEW
SOCIALIST REPUBLIC OF VIETNAMPOSITIVE ASPECTS
• Positive economic prospects in terms of growth even through the global economic crisis
• A young, low cost, rapidly growing and increasing technologically qualified workforce
• Social and political stability
• A firm commitment to liberalize the economy and to introduce reforms based on free market
• A movement away from a frontier market to emerging market
• Industrialization and urbanization
• Increasing amount of disposable income
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
02 VIETNAM OVERVIEW
SOCIALIST REPUBLIC OF VIETNAMNEGATIVE ASPECTS
• Weak financial and institutional structures.
• Undergoing reformation but financial sector is neither well regulated
nor independent of the Government.
• Unequal allocation of resources between SOE and private sectors
• Lack in guarantees for property rights
• Transparency issues
• Poor legal framework
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
03 DRIVING CHANGES
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
SOCIALIST REPUBLIC OF VIETNAMPRE 2015
• restrictions on foreign ownership
• lack of qualified developers
• speculative bubble from 2006 to 2008
• small size of leasing market
• lack of clear legal framework
• complicated administrative procedures
• regulations complex
• more ...
Slow growth market
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
SOCIALIST REPUBLIC OF VIETNAMPOST 2015
• Streamlined process for acquiring equity in Joint Ventures/
Joint Stock Companies / Property Holding Companies (Vietnamese
version of Special Purchase Vehicles)
• Increase in Foreign ownership Cap from 51% to 100%
• Reduction from 75% to 65% requirement for shareholders voting to
form a super majority
Legal Point to Note – Changes in Valuation VN structure – MOC to MOF
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
SOCIALIST REPUBLIC OF VIETNAMPOST 2015 RESIDENTIAL RIGHT TO BUY
Subjects Conditions Purposes Comments
Vietnamese
entities
No specific conditions All purposes:
• For use
• For lease
• For sale
Having full rights
Vietnamese
Overseas
No specific conditions All purposes:
• For use
• For lease
• For sale
Having full rights (only for
residential houses but not
for Com. Property)
Foreign
individuals
• Permitted to enter into
Vietnam
• Not being a diplomat or
subject to consulate immunities
All purposes (only for
residential houses):
• For use
• For lease
• For sale
Having limited rights
FOEs Depending on circumstances Limited purposes Having limited rights
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
SOCIALIST REPUBLIC OF VIETNAMPOST 2015 SUBLEASE
Investors
Vietnamese entities
Construction of property for sale/lease
FOEs
Construction of property for sale/lease
Traders
Vietnamese entities
Purchase of property for sale/ lease
Lease of property for sub-lease
FOE
Lease of property for sub-lease
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
04 INVESTMENT
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
PROPERTY TITLE AND PROPERTY RIGHTS / OWNERSHIP SYSTEM
> There is no freehold title of land in Vietnam available for foreign investors. A Land Use Right ("LUR") for a term of years (normally
up to 50 years (maximum 70 years in some special circumstances such as power stations) is the main form of property ownership
applicable to investors.
> Under the Land Law 2003, Enterprise Law 2005 and their implementing documents, foreign investors can acquire land directly by
leasing land from the State after establishing a 100 % Foreign Owned Company registered in Vietnam, or by creating a Joint
Venture Company ("JVC") with a Vietnamese partner who contributes the LUR to the JVC as their capital contribution after which
the LUR is transferred into the name of the JVC ( the foreign investor then holds the shares of the JVC which holds the land as its
asset ), or alternatively the foreign investor can acquire the shares or assets of an existing Company holding the land by way of an
LUR.
> A Certificate of LUR and Ownership of House and Other Assets Attached to the Land ("LURC") is issued by competent authorities
as a legal title for the property ownership.
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
Residential – Should I buy? Vietnamese Market
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
OFFICE MARKET
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
RESIDENTIAL MARKET
• Rapid Urbanization needs accommodation
• Quick process of development and fast changes / Have we peaked?
• Vietnamese End User / Investor currently driven by Capital Appreciation
does not typically understand yields
• Investment driven by speculators / short term investors – 70% of buyers
• Market Value Vs Perception of Worth
• Legal System catching up and changing all the time / Financial system
• Red Tape
• Wide variety of variable and not accurate and transparent market information
• Are transactions at an “arms length”? – who is left “holding the baby?”
• Limited planning on developments over construction progress
• Is progress sustainable – Size of developments should limited some growth
• Is new project vs old project worth investing in?
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
ANNUAL MARKET SUPPLY AND FUTURE PIPELINEEXISTING SUPPLY
04 LOGISTICS MARKET OVERVIEW
HCMC INDUSTRIAL PARK OVERVIEW
No Name of Industrial Park LocationKM to
CBD
Total leasable
area (ha)
Asking Rent
(US$/sqm/term)Occupancy
1 Cat Lai Industrial Park (Cluster II) District 2 21 87 90 100.00%
2 Tan Thuan Export Processing Zone District 7 6.4 204 260 99.56%
3 Saigon Hi-tech Park P1 District 9 15 300 180 98.33%
4 Tan Thoi Hiep District 12 16 20 144 100.00%
5 Tan Binh Industrial Park(P1+2) Tan Phu 11 100 235 100.00%
6 Vinh Loc Industrial Park Binh Chanh 15 131 250 99.77%
7 Le Minh Xuan Industrial Park Binh Chanh 20 66 120 100.00%
8 An Ha Industrial Park Binh Chanh 23 124 69 88.46%
9 Le Minh Xuan III Binh Chanh 26 231 141 80.00%
10 Binh Chieu Industrial Park Thu Duc 16 27 150 100.00%
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
04 LOGISTICS MARKET OVERVIEW
ANNUAL MARKET SUPPLY AND FUTURE PIPELINEFUTURE SUPPLY
HCMC INDUSTRIAL PARK FUTURE SUPPLY OVERVIEW
No. Industrial Park Name District GFA (ha) Expected Completion
1. Vinh Loc I - phase 2 Binh Chanh 56 2019
2. Le Minh Xuan Industrial Park - phase 2 Binh Chanh 338 2020
3. Hiep Phuoc Industrial Park - phase 2 Nha Be 597 2020
4. Le Minh Xuan Industrial Park - phase 3 Binh Chanh 242 2021
5. Tay Bac Cu Chi Industrial Park - phase 3 Cu Chi 1,000 2023
6. Vinh Loc Industrial Park III Binh Chanh 210.3 (+20 yrs)
7. Vinh Loc I - phase 3 Binh Chanh 200 (+20 yrs)
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
RETAIL SECTOR
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
RETAIL SECTOR
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
E COMMERCE PENETRATION
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
CONCLUSIONS
• Know the reason you are buying / investing? What is your exit strategy?
• Seek professional consulting – this is still in some respects a frontier market!
• Re-investigate your current legal documents
• Always seek proper legal advise
• Do not listen to the masses try to understand what the proper value is?
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
Contact detailsGet in touch
Address:Deutsches Haus, 3rd Floor 33 Le Duan Street, District 1,Ho Chi Minh City, Vietnam.
Phone: +84 8 3827 5665
E-mail: [email protected]
Web-site: www.colliers.com
Fax: +84 8 3827 5667
Mobile: +84 906 925 935
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