BUILDING ON RECOVERY - Vietnam Business · 2017-08-29 · 3 CBRE VIETNAM | BUILDING ON RECOVERY REMAINING QUESTIONS NON-PERFORMING LOAN What is really happening? VAMC has sold VND3,500

BUILDING ON RECOVERY Presented by: Marc Townsend, Managing Director, CBRE Vietnam Date: Friday, January 9, 2015

2 CBRE VIETNAM | BUILDING ON RECOVERY

GOOD NEWS IN 2014

MARKET FUNDAMENTAL

The Government’s

continued commitment to fiscal consolidation and debt reduction.

VN-Index surpassed 640 points in September.

Mobile phone exports support the economy.

Lower lending rate. Oil platform!

INFRASTRUCTURE

Metro Line No. 2 Cat Linh – Ha Dong actively constructed.

More roads, bridges, highways and infrastructure open.

LEGISLATION

Relaxation on Foreign Housing Ownership.

Draft of Law on Real Estate Business: office strata title.

GLOBAL TRENDS

TPP and AEC open new markets for Vietnam.

REAL ESTATE

The Biggest winner is the residential market and not just the affordable sector!

Increasing retail expansion

Marketing revives.

Thu Thiem awakes.

INVESTMENT

Funding, RIETs, Financing get easier and cheaper.

M&A goes mainstream.

CBRE NEWS

An active year for consultancy valuation and research.

Better products for Investors.


REMAINING QUESTIONS NON-PERFORMING LOAN

What is really happening?

VAMC has sold VND3,500 billion (US$164 million),

equivalent to only 3.9% of the VND90,000 billion ($4.2

billion) worth of non-performing loans it has purchased

from banks

VND30,000-BILLION CREDIT PACKAGE

Need more solutions to speed up the credit package.

PROJECT INFRASTRUCTURE

What about project management?

Complexes are more complex, it is just not for beginners anymore.

TWO TIER MARKET RETURNS

Are projects really sold out?

EQUITISATION

2014 – 2015: Plan to equitize 532 enterprises

2014: 143 SOEs were equitized (71% planned but double 2013’s)

1

Vietnam Outlook Remains Positive


APAC Real GDP Growth (2014-2015) vs Long Term Average VIETNAM GDP GROWTH – REGION’S 2ND BEST

0

2

4

6

8

10

12

Vie

tnam

Indo

nesi

a

Indi

a

Thai

land

Sou

th K

orea

Sin

gapo

re

Hon

g K

ong

Japa

n

Chi

na

New

Zea

land

Aus

tralia

Phi

lippi

nes

Taiw

an

Mal

aysi

a

Y-o-

Y R

eal G

DP

Gro

wth

(%)

2014F 2015F Average 2004 - 2013

Improvement in

geopolitical

pressure

China slow down -

knock-on effect

Source: CBRE Research, Oxford Economics, December 2014.

The chart does not tell this Group markets in: Export driven Improvement in geopolitical tension China slowdown – knock-on effect on commodity-export markets like Australia and New Zealand Japan growth is minimal

Recovery in export on the

back of stronger global

demand

Oil price

drops

SLOWING IMPROVING

Election in

2016


0

5

10

15

20

25

2007 2008 2009 2010 2011 2012 2013 2014

Inte

rest

rate

(%)

Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate

FUNDING GETTING CHEAPER

Source: Vietnamese General Statistical Office.

Interest Rates and Inflation

Lending rate for the first 12 months: • Techcombank: 9.49% • Vietcombank: 7.99% • ACB: 8.9%


MORE EXCITING STOCK MARKET

Newly listed companies

2013 2014

4 9

11 13

504 : VN-Index

641

603

544

Regional stock markets, y-o-y return in 2014: Thailand (SET): up 21.4%; Indonesia (JCI): up 27.0%; Singapore (SGX): up 11.7%; U.S. S&P 500 (SPX): up 11.24%; VNIndex (VNI): up 8.0%. Source: Bloomberg

Real Estate Holding &

Development Index

Source: Cafef December 2014, Bloomberg January 2015.


OIL PRICES GETTING INCREDIBLY CHEAP

Oil had been getting stronger since 2009, 2010; but then declined significantly since mid-2014

Crude oil price Gold price

Good consequences:

Stronger consumptions due to lower industrial input and logistics costs (-3% approx.)

Lower construction cost

Lower building operating cost

Bad consequences:

Weakening VND/USD.

Falling oil world prices would slash Vietnam’s

state budget by around US$3 billion

But just a minimal impacts against VND (Sufficient USD reserves, surplus trade balance, robust FDI, low inflation)

=> Lower service charge?

Source: Nasdaq, January 2015. Source: www.giavang.com.vn, January 2015

http://www.giavang.com.vn/


Better Investment and Development Prospects HCMC AMONG ASIA PACIFIC

City Investment Prospects, 2015 City Development Prospects, 2015 HCMC

* The survey is based on personal interviews from almost 400 of the most influential leaders in the real estate industry. Source: Emerging Trends in Real Estate Asia Pacific 2015 Survey.


REVIVING STALLED DEVELOPMENTS

Goldmark City (HN) by Viet Han

Sapphire Palace (HN) by Hanoi Song Hong

Gemek Tower (HN) by Mekong Land + Geleximco

Vista Verde (HCMC) by CapitaLand + Thien Duc

The Park Residence (HCMC) by MIK

Le Meridien (HCMC) by Tien Phuoc + 990

City Gate Tower (HCMC) by Creed + NBB

From CBRE Interns’ Report:

HCMC : 39 stalled projects

Hanoi: 27 stalled projects

http://canhovistaverdequan2.com/wp-content/uploads/can-ho-vista-verde1.jpg

http://4.bp.blogspot.com/-yv5BybPNNnY/U-O-hz0DE8I/AAAAAAAAGn8/3mhJTLNQo98/s1600/Tong-the_Ngay.jpg

https://flic.kr/p/pR4iAh


BCI NUMBERS

All Future Projects

(2014-2025) HCMC Hanoi Da

Nang

Can Tho

Nha Trang

Vung Tau

Hai Phong

Office 178 271 55 26 11 28 12

Retail 71 149 36 5 14 20 7

Hospitality and SA

30 40 26 2 38 15 7

Residential 215 306 81 7 15 20 10

Total 494 766 198 40 78 83 36

Projects under construction, y-o-y change All future projects (2014 – 2030), y-o-y change

Projects Under

Construction

HCMC Hanoi Da Nang

Can Tho

Nha Trang

Vung Tau

Hai Phong

Office 105 87 14 10 8 12 2

Retail 46 35 11 3 6 10 3

Hospitality and SA

17 7 10 0 11 8 0

Resi 126 121 17 4 5 9 2

Total 294 250 52 17 30 39 7

Source: www.bciasia.com; CBRE Vietnam, December 2014 Source: www.bciasia.com; CBRE Vietnam, December 2014

-100%

0%

100%

200%

300%

HCMC Hanoi DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Perc

en

tag

e c

han

ge

2013 vs 2012 2014 vs 2013

-60%-50%-40%-30%-20%-10%

0%HCMC Hanoi

DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Perc

enta

ge c

hang

e

Compared to 2012 Compared to 2013

http://www.bciasia.com/

http://www.bciasia.com/

2 Regulation Changes Create New Opportunities in Property Investment


FREE TRADE AGREEMENT (FTA)

FTA between Vietnam and the Customs

Union of Russia, Belarus and Kazakhstan

(concluded in December 2014)

Asean Economic Community

(expect to conclude in 2015)

Trans-Pacific Partnership

European Union Free Trade

Agreement

(negotiating)

Create opportunity to transform Vietnam

“ Joining the TPP, and positive, robust implementation of the commitments could increase

bilateral trade between Vietnam and the U.S. to about US$61.3 billion by 2020. And Vietnam’s

apparel exports to the U.S. could increase to US$22 billion by 2020.

” Source: Executive Director of Amcham Vietnam


A MORE EQUAL & TRANSPARENT PLAYGROUND

November 2014, Foreign Housing

Ownership July 2014, Condominium

Measurement

Effective from July 08, 2014

Sellable Area

From the INTERIOR of the enclosing walls

INCLUDING: • Private balcony(ies) (if any) • Internal partitions

EXCLUDING: • Internal column(s) (if any); • Utility area (if any) inside the

unit;

Balcony Area

A balcony / logia which shares a solid wall with another condominium will be measured from the internal boundary of the balcony / logia.

Effective from July 1, 2015

Foreign Individual Buyer

YES for all foreigners who are granted a visa to the country

Foreign Organisation

YES to all foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies.

Product Apartments + villas and townhouses

Volume

Total number of dwelling units owned by foreigners must not exceed 30% of the total units in one condominium complex; or 250 villas / townhouses in one particular administrative area

Purpose The properties owned by foreigners can be sub-

leased, traded, inherited and collateralized

Tenure

Unchanged: 50-year leasehold with renewal possibility;

Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.

For Housing


For Commercial Properties SUB-LEASE AND MORE FOR FOREIGN INVESTORS

Lease properties for sub-lease

Existing law From July 2015

Acquire completed buildings for own use

Foreign invested firms not allowed to sub-lease rented properties

Foreign invested firms can

sub-lease properties that they

are renting

Existing law From July 2015

Foreign invested firms can

acquire and own a completed

building for own use

Foreign invested firms can only own a building if they are the developer


HCMC - GALAXY 9

HN - Mo Market

HCMC - SUNRISE CITY

Broadening and Deepening of the Office Market STRATA TITLED OFFICES

2015 onward….more office

space for long-term lease In 2014 - Occurrence of long term lease office space

HN - Hoang Thanh Tower

HN - Hong Ha Center

HN - CEO Tower &

Vinaconex 9 HN - Hapulico Complex

HN - Diamond Flower

HCMC - SAIGON AIRPORT PLAZA

HCMC - SSG TOWER HCMC - PRINCE RESIDENCE

HCMC - PETROLAND


100% Foreign Invested Retailers Permitted from 2015 RETAIL

Joint venture, foreign investors to own up to 50% of charter

capital

Enterprises with 100% foreign capital in 110/155 sub-sectors: Wholesale, Retail,

Commission agent, Multi-Level Marketing, Franchising

But the Economic Needs Test (ENT) is still a technical barrier to trade: it requires foreign retailers to pass the test if they want to establish more than one retail outlet in Vietnam, unless some of the requirements are met

Impact

Not a significant change in short-term since foreign retailer have already joined the market for a while:

Domestic retailers are still protected thanks to the “final barrier” – ENT, but NOT applied for small size convenience store chains (<500sqm)

After Jan 11, 2015 Jan 11, 2010 – Jan 11,

2015

3

Infrastructure Investment: A Growth Catalyst and a Growth Nuisance


NHAT TAN BRIDGE: A NEW WELCOME TO HANOI


Old route via North

Thang Long – Noi Bai

Travelling time from

the CBD: ~1 hour

New route via Nhat

Tan Brigde – Vo

Nguyen Giap Avenue

Travelling time from

the CBD: ~35 mins

NOI BAI INT’L

AIRPORT

RR.2

RR.2


Hanoi Metro lines boost up construction activities INFRASTRUCTURE

1

Line Cat Linh – Ha Dong

(13.5km)

320/419 piers, 5.4/13.3 km plate girder, 7/12 stations completed Expected completion: 2016.

2

1

2

2

5

4 3

1

2 Lavender

5 Sapphire Palace

4 Diamond Blue

3 Hattoco Tower

1 PCC1 Complex

Active projects along Line Cat Linh – Ha Dong


Noi Bai’s International Airport Terminal T2 completed HANOI INFRASTRUCTURE

Investment capital: US$900 mn

Additional capacity:

• 10 - 15mn passengers/year (2015-2030)

• 200 flights/day

Total = 25mn passengers/year & 370 flights/day

Closing the gap with Bangkok Intl’

Airport (Suvarnabhumi) which served a

total of 51 million passengers in 2013

with over 800 flights/day

Noi Bai Intl’ Airport—Before T2

Year of completion 2001 (Terminal 1 - 90.000 m²) 2014 (Terminal 2 - 140.000 m2 )

Number of passengers

13 mn/year (as of 2013)

Max capacity 9 mn → Overload at T1

Number of flights/day

170 flights (vs. 370 flights/day of Tan Son Nhat Airport)

The advent of Terminal T2


New Era For Downtown Saigon HCMC INFRASTRUCTURE

2015

PIX TAKEN 3 JAN 2015 OLD NGUYEN HUE STREET NEW FACE OF DOWNTOWN

SAIGON


Completions of Renovated Bridges and Flyover HCMC INFRASTRUCTURE

JAN 2014 2015

Flyover at National Highway 1A – Huong lo 2 Binh Tan District - Developer: IDICO-IDI Open to traffic on January 1, 2015

Bong Bridge District 1 & Binh Thanh District Open to traffic on June 7, 2014

Le Van Sy Bridge Phu Nhuan District Open to traffic on April 30, 2014

Hau Giang Bridge District 6 Open to traffic on June 7, 2014

Kinh Thanh Da Bridge Binh Thanh District Open to traffic on July 3, 2014

Kieu Bridge District 1 & Phu Nhuan District Open to traffic on October 25, 2014


METRO LINE NO. 1 AND RESIDENTIAL PROJECTS

Taken in front of Rex Hotel on Jan 7, 2015

Vinhomes Central Park Thao Dien Pearl

The Vista An Phu

Lexington Residence

The Eastern First Home D.9 Masteri Thao Dien

The Emerald

Metro Tower

Cantavil Premier Imperia An Phu

The Estella

First Home Thu Duc

NEW EASTERN BUS STATION

LONG BINH DEPOT


THU THIEM PENINSULA AWAKES/AWAITS

Thu Thiem in the past Thu Thiem today (taken in Dec 2014)

Thu Thiem 2 Bridge in the future Thu Thiem Pedestrian Bridge in the future

4 Something about a liveable city


2014 Launches CONDOMINIUMS FOR SALE

HCMC 37 projects 14,807 units

Hanoi 31 projects

16,200 units ~60% sold ~47% sold


2014 Launches CONDOMINIUMS FOR SALE

Launched Units by Year

Source: CBRE Vietnam, Q4 2014.

01,0002,0003,0004,0005,0006,0007,000

Q12014

Q22014

Q32014

Q42014

Un

it

0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014

Uni

ts

Luxury High-end Mid-end Affordable

0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014

Uni

t


0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014

Uni

t


0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014

Uni

t


HCMC HN HCMC HN HCMC HN HCMC HN HCMC HN


10,700

units sold

2014 Highest Number of Sold Units in History in HCMC CONDOMINIUMS FOR SALE

Sold Units by Year and City

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2010 2011 2012 2013 2014

Sold

Uni

t

HCMC Hanoi0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2010 2011 2012 2013 2014

Sold

Uni

t

HCMC Hanoi

HCMC HN HCMC HN HCMC HN HCMC HN HCMC HN


0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2010 2011 2012 2013 2014

Sol

d U

nit

HCMC Hanoi

~17,000 units sold


Unit Type/ Size Changes CONDOMINIUMS FOR SALE

Condominium Unit Type Change, HCMC

9%

7%

12%

3%

63%

59%

45%

35%

27%

27%

28%

45%

1%

7%

14%

16%

After 2012

Before 2012

After 2012

Before 2012

Sec

ond

tier

Firs

t tie

r

1BR 2BR 3BR 4BR+

45

50

48

65

62

91

78

110

80

110

100

125

120 sm

250 sm

200 sm

300 sm

After 2012

Before 2012

After 2012

Before 2012S

econ

d tie

rFi

rst t

ier

1BR 2BR 3BR 4BR+

Condominium Unit Size Change, HCMC

(*): First tier: Luxury and high-end products; Second tier: Mid-end and affordable products Source: CBRE Vietnam, Q4 2014.

Vinhomes Central Park: • 1BR: 52 sm • 2BR: 73 sm • 3BR: 124 sm

Masteri Thao Dien: • 1BR: 51 sm • 2BR: 59 sm • 3BR: 86 sm


Price Changes CONDOMINIUMS FOR SALE

HCMC, Secondary Prices


Secondary prices in the high-end and mid-end segments increased in both HCMC and Hanoi as stock is diminishing.

Secondary prices in the affordable segment continued to decrease in Hanoi while it remained relatively flat

in HCMC.

$0

$500

$1,000

$1,500

$2,000

2011 2012 2013 2014

Sec

onda

ry p

rice

(US

$/m

2)

High-end Mid-end Affordable

Hanoi, Secondary Prices

$0

$500

$1,000

$1,500

$2,000

2011 2012 2013 2014

Sec

onda

ry p

rice

(US

$/m

2)

High-end Mid-end Affordable


Domination of Local Developers CONDOMINIUMS FOR SALE

HUGE HIGH-END DEVELOPMENTS

Vinhomes Central Park (10,000 units) by VinGroup

OTHERS

Vinhomes Nguyen Chi Thanh (378 units) by VG

483 units by FLC Group 400 units by FLC Group

Orchard Garden

154 units by NovaLand 2,000 units by Nam Long

Ehome 3

HCMC HANOI

FLC Complex FLC Star Tower



CONDOMINIUMS FOR SALE Pre-sales and pre-launch marketing activities very popular

• New project launches are informed early to buyers via aggressive and massive

agent network and pre-launch marketing activities

• Mini-blogs, project information websites created by agents are very popular

• Property sales SMS widely employed by agents to approach buyers


NEW SUPPLY IN 2015 RETAIL

VINCOM THU DUC

Thu Duc District GFA: 27,860 sm

Estimated to open:

Jan. 2015

Shopping Centre

SC VIVOCITY

District 7 GFA: 62,000 sm Expected completion:

Q1 2015

SAIGON SQUARE 3

District 3 GFA: 3,100 sm

Opened: 1 Jan. 2015

HUNG VUONG SQUARE

District 5 GFA: 9,500 sm

Opened: 31 Dec. 2014

Bazaar emerged

Steady demand from F&B

GRAND SAIGON HOTEL

District 1 Leased to Burger King, Popeyes, Dunkin’

Donuts

Expected to open: Jan. 2015

Supermarket

AEON CITIMART

Go Vap District

Opened: Jan. 2015

AEON MALL HANOI

Long Bien District GFA: 108,000 sm Expected completion:

2015


Local Retail Developers Expand RETAIL

VINCOM THAO DIEN

GFA: 61,250 sm

VINCOM

NGUYEN CHI

THANH

GFA: 44,500 sm

VINCOM HA LONG

Completed: 19/12/2014

GFA: 30,800 sm

HANOI, DA NANG, CAN THO, HA LONG VinMart

to open 100 supermarkets and 1,000 convenience stores in the next

3 years. VinMart has

opened 9

supermarkets

and 3 convenience

stores in Vietnam

VINCOM

DA NANG

GFA: 31,266 sm

VINCOM

CAN THO 2

GFA: 14,519 sm

HCMC


And Foreign Developers Too! RETAIL

Expanded to Dong Nai and Da Nang

Opened Lotte Mart Binh Duong and Phan Thiet

• Bought Pico • Opened Lotte

Department Store in Hanoi

2008

2012

2013

2014 2020

To open

60 super-

markets

in

Vietnam

Ministop Trung Nguyen (25% share)

Aeon Mall HCMC

Aeon Mall Binh Duong

Aeon Mall Hanoi

20 hypermarkets

2011

1/ 2014

11/ 2014

2015

2020

Already successfully partnered with Fivimart and Citimart

Opened first store in HCMC


RETAIL Retail Sales Volume

- 2015 Forecast

Key Drivers/ Issues

Vietnam +9.3% Solid economic growth, rising middle class population Further opening of FDI to spur consumption demand

China +7.7% Growth in economy and private consumption to slightly moderate Growth in Tier 1 cities may slower than national average

Hong Kong +6.3% To ride on economic recovery and rebound from the fall in 2014 Consumption pattern of Mainland Chinese shoppers changed to non-luxury

items

Malaysia +4.5% Growth dampened by the slowing economy A 6% GST to be effective from Apr-2015

Taiwan +4.5% Disposable income to increase on the back of improving job market and economic recovery

New Zealand +2.9% Growth to edge down since the government aimed to slow down the housing

market

Australia +2.2% Discretionary spending improved on the back of prosperous housing and job market

South Korea +2.1% Weak consumer demand with high household debt Some supports from regional traveller spending

Singapore +1.7% Retail sales growth constrained by high household debt (75% of GDP in 2013) Labour crunch is an issue hindering retailer expansion

Japan +0.6% Delay in consumption tax hike (from 8% to 10%) Tourist spending supported by cheaper yen

Source: Oxford Economics (17 Nov 2014)

5 Leasing Trend - Green Building & 360 Workplace


“A green lease is a standard form lease with additional clauses included which provide for the management and improvement of the Environmental Performance of a building by both owner and occupier. Such a document is legally binding and its provisions remain in place for the duration of the term”.

- UK Better Buildings Partnership

Sustainability – Driven by Landlord, Tenant and Investor Demand ENTER GREEN LEASES

Increasing occupier demand

Limiting regulatory exposure

Retaining asset value

Attracting investors

OWNERS OCCUPIERS

Reducing operational costs

Improving staff productivity & retention

Meeting CSR objectives

Supporting corporate reporting

INVESTORS

Limiting regulatory exposure

Reducing investment risk

Future asset protection


LEED CERTIFIED BUILDINGS ACROSS ASIA Major LEED Certificated Office Buildings

NIKKEN

SEKKEI

TAIPEI 101

TWO INTERNATIONAL

FINANCE

PARK VIEW GREEN

ASIA SQUARE

VIETNAM

ZUELLIG

BUILDING

ENERGY COMPLEX

AIA CAPITAL

CENTER

PARK VENTURE

ECOPARK

PIXEL BUILDING

PRESIDENT

PLACE


http://business.inquirer.net/files/2013/02/zuellig.jpg

http://www.prc-magazine.com/pixel-building-leeds-by-example/pixel-building-exterior/


Evolution From PRESENCE to PERFORMANCE THE MODERN WORKPLACE

CLIENT SITES

SATELLITE OFFICE

SERVICED OFFICE

TAXI

AIRPORT LOUNGES

HOTELS

CAFES

LIBRARIES

55% OF WORKING TIME

45% OF WORKING TIME

+ + PEOPLE PEOPLE SPACE TECH



1

2

3

4

5

Top 5 Active Industries in The Market OFFICE

Top 5 Most Active Industries, 2014

17% Banking/ Finance/

Insurance

6% Pharmaceutical

10% Technology/ Electronic/ IT

10% Manufacturing

5% Sourcing/ Outsourcing

HCMC Hanoi

11% Construction/ Real Estate

12% Banking/ Finance/

Insurance

29% Technology/ Electronic/ IT

6% Education

Source: CBRE Vietnam, Q4 2014 Number based on CBRE’s enquiries only.

9% Manufacturing


Sources of Demand OFFICE

33% Europe

24% USA

8% Vietnam

5% Singapore

6% South Korea

HCMC Hanoi

Source: CBRE Vietnam, Q4 2014 Number based on CBRE’s enquiries only.

52% From Vietnam

9% From USA

7% From Japan

4% From Korea

3% From Germany


OFFICE

Source: CBRE Research, (As of December 2014).

Grade A Demand Rising Selected Markets SLOWING STRENGTHENING FLAT

0100200300400500600700800900

1,000

Sha

ngha

i

Ban

galo

re

New

Del

hi

Mum

bai

She

nzhe

n

Toky

o

Jaka

rta C

BD

Kua

la L

umpu

r

Hon

g K

ong

Mel

bour

ne C

BD

Man

ila C

BD

Syd

ney

CBD

Han

oi

Taip

ei

Ho

Chi

Min

h C

ity

Bei

jing

Ban

gkok

CB

D

Bris

bane

CBD

Gua

ngzh

ou

Seo

ul

Sin

gapo

re

Auc

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BD

Net A

bso

rptio

n (

NL

A, ‘0

00

sqm

)

Average (2010-2014) 2015F


Future Supply – HCMC and Hanoi OFFICE

JAN 2015 DEC 2015

APEX TOWER GFA: 21,000 sm

INTRACOM 2 GFA: 18,000 sm

HANDICO TOWER GFA: 40,000 sm

MO MARKET GFA: 46,657 sm

DIAMOND FLOWER

TOWER GFA: 20,000 sm

In H

CM

C

In H

an

oi

SSG TOWER GFA: 37,434 sm

VIETCOMBANK GFA: 55,000 sm

VIETTEL OFFICE &

TRADE CENTRE GFA: 65,971 sm

LIM TOWER 2 GFA: 20,467 sm


https://flic.kr/p/q2Te3v

6 Chapter II of Coastal Cities Da Nang, Nha Trang, Phu Quoc, Ho Tram, Ha Long


A DYNAMIC YEAR FOR TOURISM

6 new international air routes

opened (from HCMC and Phu Quoc)

PASSPORT

Visa exemption for 7 countries

(Russia, Japan, Korea, Denmark,

Norway, Sweden and Finland)

Coastal provinces improving

image in international tourism

maps

Consistent growth of international

arrivals

International airport terminal T2

opened in Hanoi (138,000 sm;

capacity~10 mil. pax/yr)


HCMC – Busy Construction Activities on Development Sites CITY HOTEL

BEN THANH

SILVERLAND

BAY HOTEL

SINGAPORE

HUONG SEN

HOTEL

2-3 STAR

HOTEL

LE DUY HOTEL

MAJESTIC HOTEL

(EXPANSION)

LE MERIDIEN

HOTEL

MGALLERY

HOTEL

RITZ-CARLTON HOTEL

(THE ONE)

DES ART SAIGON

HOTEL


https://flic.kr/p/pR4iAh

http://4.bp.blogspot.com/-wZ9ukN0W9L4/U2O-m_qdGHI/AAAAAAAAc1U/J0cPjktNq7Q/s1600/IDIP-Hotel-76-Nguyen-Thi-Minh-Khai-2.jpg


Coastal Provinces Becoming More Attractive COASTAL HOTEL

New International Airport

115 Flights per week (current capacity)

187 max pax per flight (current capacity)

760,000 max pax per year (current capacity)

2,700,000 max pax per year (expected capacity in 2020)

PHU QUOC - NEW INTERNATIONAL AIRPORT BOOSTS ARRIVALS

MUI NE - BINH THUAN -

Improving infrastructure


Long Thanh – Dau

Giay is approaching

completion

HA LONG – QUANG NINH is luring investors by improving infrastructure, strong support from local government,

and pilot law allowing local gamblers

Halong Star

Vincom Halong


Reu Island Vingroup - 2015

Halong Star Hotel- 2015

IMICO Hotel -future

Halong Star (by Limitless) – future

Marina City – future

COASTAL DEVELOPMENTS Chapter II of Ha Long Bay

Other entertainment/commercial/residential project

Future hotel/resort

Little Vietnam - 2015

Marine Plaza – completed

Ocean Park – future

Vincom Center Hạ Long - completed



Crown Plaza (2nd phase) - 2017

Ibis Hotel Ba Na Hills - Accor –

2015

Fusion Suites Da Nang - 2015

Hilton Da Nang - 2016

Sheraton Da Nang

DHC Marina – DHC Group - 2015

Vincom Da Nang – 2015

Ocean Hotel and Spa - 2015

Tourane Hotel - 2015

Avatar Hotel - 2015

COASTAL HOTEL Chapter II of Da Nang

Under construction projects

New hotel brands


7 M&A Investment & Foreign Direct Investment


Asia Pacific is The Most Preferred Regions Among Investors INVESTMENT

Source: CBRE Research, December 2014.


0 10 20 30 40 50 60

Philippines

Vietnam

Malaysia*

Thailand

Singapore

Hong Kong

Hotel Office

Number of Transactions in the Last 24 months REGIONAL INVESTMENT

* Data for Malaysia is only available from March 2013. Source: RCA, December 2014..

HCMC, Top 5 Most Active Industries, 2014


MAJOR INVESTMENT DEALS IN 2014

Source: RCA and newspapers.

DIAMOND PLAZA

THANG LOI HOTEL MOVENPICK SAIGON INDOCHINE PARK TOWER

• Location: HCMC

• Seller: POSCO

• Buyer: Lotte Shopping

• Property type: Retail

• Amount: n/a

• Location: HCMC

• Seller: Mulpha International Bhd

• Buyer: Lemongrass Master Fund

• Property type: Serviced Apt

• Location: HCMC

• Seller: VinaCapital

• Buyer: Tung Shin

• Property type: Hotel

• Amount: n/a

• Location: Hanoi

• Seller: Hanoi Tourist

• Buyer: BRG

• Property type: Hotel

CORNER STONE GEMADEPT TOWER

• Location: Hanoi

• Seller: VIB

• Buyer: Daibiru

• Property type: Office

• Amount: $60.1 million

• Location: HCMC

• Seller: Gemadept

• Buyer: CJ Group

• Property type: Office

• Amount: $45 million

METRO CASH & CARRY

• Location: Vietnam

• Seller: Metro Cash & Carry Vietnam

• Buyer: Berli Jucker


• Amount: $877 million

OCEAN MART

• Location: Vietnam

• Seller: Ocean Group

• Buyer: Vingroup


http://www.google.com.vn/url?sa=i&source=images&cd=&cad=rja&uact=8&docid=nZGHmSchc3NPWM&tbnid=t8_JxQNs-qOGxM:&ved=0CAgQjRw&url=http://www.vir.com.vn/news/en/property/cornerstone-proves-a-grade-a-business-milestone.html&ei=h_8jVNLrJJTU8gXo7YDIAQ&psig=AFQjCNEnfHgQm92SWgKoqY_FkVZVQfXpRQ&ust=1411731719689797

http://www.google.com.vn/url?sa=i&source=images&cd=&cad=rja&uact=8&docid=LWSN1Uk6i3xj9M&tbnid=EKTeqdk29RPjKM:&ved=0CAgQjRw&url=http://www.vasep.com.vn/Tin-Tuc/53_2865/Metro-Cash-Carry-Viet-Nam-Xay-dung-tieu-chuan-Metro-Requirements-ve-thuc-hanh-nong-nghiep-tot-cho-nganh-thuy-san.htm&ei=xwMpVPJSjuzwBdq1grgH&psig=AFQjCNH8ktltRtQD2c4tGhHgBLch2x5sDg&ust=1412060487116745


High-end Condominium Rental Yield - Vietnam vs Region INVESTMENT YIELD

(*) Selected projects: •CBD: Vincom Park Place, Pacific Place, Hoang Thanh Towwer; •The West: Keangnam Landmark, Indochina Plaza Hanoi, Royal City

Source: CBRE Vietnam.

Rental yield at selected high-end projects in Hanoi

BANGKOK

4-6%

Hanoi 5-6.5%

SINGAPORE

3%

HONGKONG

4%

PHNOMPENH

10%

6.00% 6.100% 6.471%

0%

2.00%

4.00%

6.00%

8.00%

2012 2013 2014

CBD The West

Rental yield at selected high-end projects in HCMC

7.800% 8.00% 8.100%

0%

2%

4%

6%

8%

2012 2013 Q2 2014

District 7 District 2

YTD

(*) Selected projects: •District 7: Sunrise City, Sky Garden, Panorama; •District 2: Xi Riverview Palace, The Estella, The Vista

Source: CBRE Vietnam.

HCMC 6-8%


SECTOR SEGMENT HCMC/ SOUTH HANOI/ NORTH

RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION

OFFICE New buildings

Mature buildings

RETAIL CBD

Non-CBD

CONDOMINIUM

High-end

Mid-end

Affordable

HOTELS Inner-city hotels

Beach hotels/resorts

SERVICED APT. Grade A

INDUSTRIAL Land

Factory/ warehouse

2015 OUTLOOK



Location, Location, Location! Relocation, Relocation, Relocation! Cash, Cash, Cash! Affordability, Affordability, Affordability!

It’s all about risk, compliance, due diligence and governance.

The return of the second (smaller) home market.

It’s all about sizing, small is still beautiful.

Vietnam still has the highest residential and office rental yields in SeA (Singapore 3%, Hong Kong 4%, Vietnam ~7%-8%).

Marketing and Branding matters even more (make better use of technology).

Speculators are back (with a vengeance) and High-Street Brokers take over, again.

Trends CBRE FORECAST 2015


Adapted and survived.

Over the worst, but many global/ regional headwinds remains.

Gentrification (no more conical hats).

HR (People, People, People – even in Real Estate).

Big data and market intelligence.

Winners and Losers.

Thank God for the Korean and Japanese manufacturers.

Misuse of Land.

Tenders and Auctions.

R&D lasts weeks, not years.

Outsourcing.


Steven Gerrard, Liverpool’s captain, opted to end his 25-year Anfield stay and went to LA Galaxy


Other sub sectors will emerge – Student accommodation, SOHO apartments, retirement accommodation, worker accommodation, built-to-suit, sale & leaseback, and REITs.

Time to reconsider the 3rd and 4th-tier cities.

Either Buy-to-sell or Buy-to-let.

Metro lines and the residential pipeline.

Traffic jams continues as car/bike sales hike while roads do not increase and 2,000 babies are born every week in Hanoi.

Green goes mainstream. It is not a nice but a “MUST HAVE”.

Luxury - Be careful what you wish for!

Fitness and wellness

Valuation, Funding, Transparency, Track Record



12 Special Reports from CBRE APAC and CBRE Vietnam 12 X’MAS GIFTS

http://f.tlcollect.com/fr2/614/52881/Asia_Pacific_Special_Report_-_Consumer_Survey_-_How_We_Like_to_Shop_Nov_2014.pdf?cbcachex=814717

http://f.tlcollect.com/fr2/514/39414/Asia_Pacific_Special_Report_-_Investor_Intention_Survey_2014.pdf?cbcachex=425381

http://f.tlcollect.com/fr2/214/94128/Asia_Pacific_Special_Report_-_Shaping_Trends_in_Logistics_May_2014.pdf?cbcachex=570114

http://f.tlcollect.com/fr2/114/45871/Vietnam_Special_Report_-_Phu_Quoc_June_2014.pdf?cbcachex=379109

http://f.tlcollect.com/fr2/614/85440/Asia_Pacific_Special_Report_-_China_Shadow_Banking_and_the_Real_Estate_Market_June_2014.pdf?cbcachex=832283

http://f.tlcollect.com/fr2/014/41704/Asia_Pacific_Special_Report_-_Leasing_Asian_Supertalls_Strategies_for_success_September_2014.pdf?cbcachex=560267

http://f.tlcollect.com/fr2/214/49582/Asia_Pacific_Special_Report_-_The_New_Age_of_the_Asia_Pacific_Retail_Market.pdf?cbcachex=802455

http://f.tlcollect.com/fr2/514/77553/Vietnam_Special_Report_–_Rent_vs_Buy_September_2014.pdf?cbcachex=997215

http://f.tlcollect.com/fr2/014/28438/Asia_Pacific_Special_Report_-_Liberalisation_and_The_Rise_of_Asian_Insurance_Investment_in_Real_Estate.pdf?cbcachex=244033

http://f.tlcollect.com/fr2/714/24809/Asia_Pacific_Special_Report_-_The_Emergence_of_Asian_Supertalls_July_2014.pdf?cbcachex=587853

http://f.tlcollect.com/fr2/014/51258/Asia_Pacific_Special_Report_-_Workplace_Strategy_June_2014.pdf?cbcachex=454451

http://f.tlcollect.com/fr2/514/41647/2014_Global_Prime_Occupancy_Cost_.pdf?cbcachex=896148


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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.

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