‘BE FEARLESS, NOT FOOLISH’

‘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


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


‘GAME-CHANGING’ NEWS

State-controlled companies are forbidden to invest in

banking, stock and real estate

After Uber, Airbnb will officially be in Vietnam


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


(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


-

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


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


Metro lines


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)


New Key Projects


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


Hanoi – Hai Phong Highway inaugurated


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


Major Interchanges

HCMC INFRASTRUCTURE

Ring Road 2 Interchange Tram 2 Interchange

Cat Lai Interchange Dong Tay Boulevard –

National Highway 1A Interchange


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


Under Planning


Under Construction


Under Construction


NEW RESIDENTIAL

DEVELOPMENTS


Sep 15

Quick Progress, Fast Changes

THU THIEM NEW URBAN AREA

Dec 15

2011 2008


NEW FACE OF SAIGON IN 2016 – 2018

Vinhomes

Central Park

Thu Thiem Exihibition Centre

Saigon Melinh

Tower

Empire City

Eco Smart City


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


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


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


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



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


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.


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


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


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.


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.


RESIDENTIAL OWNERSHIP PYRAMID

Cash & Gold

Mortgage & Home Loan

Foreign Housing Ownership


Market Outlook for Luxury and High-end Properties

CONDOMINIUM

Forecast


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


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

http://2.bp.blogspot.com/-s3tX7tKGJuE/VHSfUqzt_MI/AAAAAAAACWc/CuuHZe0Xcgs/s1600/Deutsches-Haus-HCMC-STADT-1.jpg


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:




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


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:




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


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


Tenants Break Down By Size

OFFICE

By Enquiry Purpose

Leasing Deals Done Over 1,000 sm in 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+

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http://www.google.com.vn/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=0CAgQjRw&url=http://www.indochinaplazahanoi.com/vn/offices/tenants/&ei=JIGqVMbCLcO-uATjkIK4CQ&psig=AFQjCNEQYDRAID_OT8k7PdHzeWKkMcZklg&ust=1420546724862768

http://www.google.com.vn/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=0CAgQjRw&url=http://members.bccthai.com/BCCT/asp/corpdetail.asp?CorpID=499&ei=TIGqVMGPK8OIuASlpILwBQ&psig=AFQjCNEwFul0K1DuPXtM7pfBICUO6RJ-xw&ust=1420546764820253

http://www.google.com.vn/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=0CAgQjRw&url=http://www.dientucogioi.com/ct/sua-chua-dien-co-gioi-7-trung-sua-xe-co-gioi-dien-co-gioi-nghanh-dien-co-gioi-/11/sumitomo-vietnam.html&ei=d4GqVO_jOceIuASb-YDwCQ&psig=AFQjCNEeQgkwskETbBAUGc7zSm8FUAJkbg&ust=1420546808072914


Origin Of Tenants

OFFICE


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


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

http://2.bp.blogspot.com/-s3tX7tKGJuE/VHSfUqzt_MI/AAAAAAAACWc/CuuHZe0Xcgs/s1600/Deutsches-Haus-HCMC-STADT-1.jpg


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


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


Market Outlook for Shopping Centre

RETAIL


-

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


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.


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


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


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


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


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


North

Central Phu Quoc

South


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


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


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


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


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


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

)


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


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


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


SUPPORTING AND HINDERING FACTORS

Source: CBRE Research, January 2015


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…


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


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



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



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.




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.




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




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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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