Presented by Marc Townsend, Managing Director, CBRE ... · sofitel legend metropole . 2 cbre | hospitality event | august 2016 agenda vietnam hospitality market vietnam in a regional

1 CBRE | HOSPITALITY EVENT | AUGUST 2016

Presented by

Marc Townsend, Managing Director, CBRE Vietnam

Robert McIntosh, Executive Director, CBRE Hotels, Asia Pacific

SOFITEL LEGEND METROPOLE


AGENDA

VIETNAM HOSPITALITY MARKET

VIETNAM IN A REGIONAL CONTEXT

PANEL DISCUSSION

1

2

3

- Mr. Minh Ha, Director of Development - Vietnam, Accor Group

- Mr. Craig Douglas, Head of Hospitality Division, BRG Group, Director

Hospitality Advisor, Vinacapital

- Mr. Robert McIntosh, Executive Director, CBRE Hotels, Asia Pacific

- Mr. Charlie Kelly, Managing Director, DWP

Moderator: Marc Townsend, Managing Director, CBRE Vietnam


Seawater on central coast is now safe

for swimming, fish

farming.


TOURISM GROWS WHILE MORE TRANSPORTATION SERVICES EXPAND

Vietnams budget carrier secures major

deal with Boeing Expansion plan of the 720-ha Noi Bai 2

Pending approval of Sapas 261-ha airport Inauguration of Cam Ranhs international

seaport

May 23, 2016 June 01, 2016

March 09, 2016 May 17, 2016


NORTHERN TOURISM: LET BEAUTY AWAKE

Stunning tourist destinations to

appear in Hollywood blockbuster

Northern localities sign deal to

boost tourism connections

AND NEW PROJECTS ARE ON THE WAY

BETTER IMAGES, BETTER COOPERATION, GREATER POTENTIAL

Impressive increase of tourist

arrivals

LARGE SCALE PROJECTS COME ON STREAM


VIETNAMS AVIATION INDUSTRY TAKES OFF

Source: Newspaper, retrieved on August 22nd 2016

Feb 29, 2016

Jul 28, 2016

Apr 27, 2016


OLD AIRPORTS NEW TERMINALS Old airport

max pax per year

Hai Phong 1,200,000

Hanoi 25,000,000

Da Nang 5,000,000

Long Thanh N/A

HCMC 26,500,000

Hai Phong new terminal

HCMC airport expansion

under construction

Hanoi airport expansion

under planning

Dong Nai Long Thanh

airport under designing

process New airport

max pax per year

Hai Phong 4,000,000

Hanoi 50,000,000

Da Nang 13,000,000

Long Thanh 100,000,000

HCMC 40,000,000

Da Nang airport expansion

under construction


Dec 3, 2014

May 23, 2016

ISSUES NEED TO BE TACKLED

Vietnams Almost Non-Existent

Tourism Marketing Holding Back

Growth

Source: Newspaper, retrieved on August 22nd 2016

Jun 14, 2016

Apr 30, 2016


AND FLAMED CRUISE, SUNK BOAT, MISSING TOURISTS


MONTHLY DASHBOARD AUGUST 2016

(*) Current lending rate is the average lending rate surveyed at ten banks, and only applicable for home loan. However, the back-dated numbers were the average rate

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 from a sample comprised 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 4.9 0.9 0.8 1.4 1.7 1.8

Trade balance

(US$, bil) (0.3) (0.5) (0.2) 0.1 (0.1) 0.1

Retail & services

Turnover (VND, tril) 238.7 204.8 297.7 279.8 295.8 295.7

BANKING & FINANCE 2Y 1Y 6M 3M 1M Current

VN-Index 640.6 570.9 559.4 616.0 652.2 663.8

USD/VND (inter-bank) 21,246 21,890 21,914 21,862 21,862 21,875

Local gold (VND mil/tael) 36.3 34.0 33.4 33.3 36.8 36.4

Lending Rate (%)* 13.1% 8.4% 7.6% 7.3% 7.0% 7.4%

Deposit rate (%)**

(1-year term) 7.1% 6.2% 6.4% 6.7% 6.7% 6.7%

REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current

Real Estate Holding &

Development Listed

Companies

55.89 48.25 44.63 50.29 51.00 48.42

Real Estate Services

Listed Companies 61.06 46.4 35.1 29.48 28.3 27.72

Source: Stockbiz, Aug 22nd , 2016

Source: GSO, July, 2016

Source: GSO, SBV, SJC & HSX, Aug 22nd , 2016

NEW LAUNCHES 2Y 1Y 6M 3M 1M Current

HCMC New launches

(unit) 63,643 37,227 19,875 12,142 5,235 740

HN New launches (unit) 39,918 21,353 10,705 7,225 4,257 1,154

Source: CBRE, Aug 22nd, 2016


BCI NUMBERS

All Future

Projects

(2015-2030)

HCMC Hanoi Da

Nang

Can

Tho

Nha

Trang

Vung

Tau

Hai

Phong

Office 237 234 52 5 9 6 49

Retail 146 115 53 17 11 5 24

Hospitality

and SA 36 25 43 27 19 7 12

Residential 372 159 29 11 14 6 17

Total 791 533 177 60 53 24 102

Projects

Under

Construction

HCMC Hanoi Da

Nang

Can

Tho

Nha

Trang

Vung

Tau

Hai

Phong

Office 144 144 25 4 4 4 16

Retail 96 72 38 10 7 5 1

Hospitality

and SA 21 16 33 17 14 6 3

Residential 275 95 16 7 8 5 3

Total 536 327 112 38 33 20 23

Source: www.bciasia.com; CBRE Vietnam, Aug 2016. Source: www.bciasia.com; CBRE Vietnam, Aug 2016.

Projects under construction, y-o-y change All future projects (2016 2030), y-o-y change

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

HCMC Hanoi DaNang

PhuQuoc

NhaTrang

VungTau

QuangNinh

Perc

en

tag

e c

han

ge

2016 YTD vs 2015 2015 vs 2014

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

HCMC Hanoi DaNang

PhuQuoc

NhaTrang

VungTau

QuangNinh

Perc

en

tag

e c

han

ge

2016 YTD vs 2015 2015 vs 2014

http://www.bciasia.com/http://www.bciasia.com/


BIG BRANDS ENTER AND EXPAND


FROM A&EM TO FLC

FLC_ Luxury Resort Sam Son (37 ha)

FLC _ Quy Nhon Beach & Golf Resort (1.000 ha) VINGROUP _ Vinpearl Resort & Golf

PHU QUOC ISLAND

VINGROUP_Vinpearl Safari

SUN GROUP_

Premier Residence Phu Quoc

Emerald Bay

SUN GROUP_Premier Condotel

Da Nang City

SUN GROUP_

Premier Village Phu Quoc Resort (73 ha)

SUN GROUP_InterContinental Da Nang Sun Peninsula Resort (120 ha)

VINGROUP_Vinpearl Ha Long Bay

VINGROUP_Vinpearl Luxury Da Nang (15 ha)

VINGROUP_Vinpearl Resort & Villas

Nha Trang City

VINGROUP_Vinpearl Golf Land Resort & Villas (16 ha)

Nha Trang City

VINGROUP_Vinpearl Beachfront Condotel

Nha Trang City

VINGROUP_Vinpearl Empire Condotel

Nha Trang City

SUN GROUP_Premier Village (15 ha)

Da Nang City

VINGROUP_Da Nang Vinpearl Premium (15 ha)

SUN GROUP_Ha Long Ocean Park (195 ha)

BIM _Intercontinental (9.2 ha)

BIM_Ha Long Marina Urban Area (248 ha)

North

South

Central Coast


Significant Increase in Second Home Villas and Condos Sales

SECOND HOME MARKET

103 units

2014

481 units

2015

Nha Trang

1H 2016

1,648 units

Phu Quoc

2014 2015 1H 2016

0 units

850 units

636 units

7 units

2014

180 units

2015 1H 2016

Da Nang

1,644 units

Source: CBRE Vietnam. Source: CBRE Vietnam. Source: CBRE Vietnam.


GUARANTEED YIELD & BANK LOAN SUPPORT SALES

Min. 9%/year (for VND) or

Or 85% of revenue after tax in 10 years

F.Home Da Nang

Guaranteed yield 9-10%/year

Or 85% of net income after tax in 10 years

Vinpearl Riverfront Condotel Da Nang

Cocobay Ocean Condotel

Guaranteed Yield 12%/year in 8 years Free 15 nights per year

Loan up to 70% in 20 years

Ariyana Beach Resort & Suite

Guaranteed yield 10%/year in 10 years

Source: Retrieved from the internet, May 2016.

Alphanam Luxury Apartment

Guaranteed leasing price at US$7,466/year for one-

bedroom units and US$11,733/year for two-bedroom units

in 5-10 years.


ITS ONLY A MATTER OF TIME

PHUKET

China (22 cities)

Singapore

Hong Kong

South

Korea

Russia Finland

Indonesia Australia

Philippines

Switzerland

Germany

United Arab

Emirates

Qatar

Malaysia

Thailand

Singapore

Cambodia

International Destination Local Destination Flights per day

(both international and local)

Phuket 30 cities 6 cities 128

Da Nang 20 cities 9 cities 94

Phu Quoc 3 cities 4 cities 23

China (12 cities)

South Korea

(2 cities)

Hong Kong

Laos

(2 cities)

Malaysia

Japan

PHU QUOC

Singapore

HCMC

Cn Th

Hanoi


Phu Quoc Dynamic Construction Site

HOSPITALITY

JW Marriott Hotel

InterContinental

Hotel

Novotel Hotel

Sunset Sanato

Grand World

Vinpearl Resort (P2) Vinpearl Safari

202 projects granted

Investment Certificate in

2015

25 Under construction

projects

54 Future projects

Source: Kien Giang Planning and Investment Department and BCI


INVESTORS BET ON CASINO DECREE

New Vietnam Casino Proposal A

$4 Billion Gamble

$4 billion South Hoi An

casino resort to kick

off in late April

Jun 19, 2016

Jul 21, 2016

Apr 12, 2016


INTEGRATED RESORTS

Open in 2016

Mercure bana hills French village:

494 rooms

Fantansy park

Alpine coaster

Spiritual landmark

Landscape architecture

Open in 2014

Vinpearl resort: 750 rooms

Amusement park: Vinpearl

Land

Vinpearl Safari

27-hole golf course

To open in 2017

Hotel: 300 rooms

Crowne Plaza Phu Quoc Starbay will

be part of the new Star Bay/Green Hill

development, which will also feature a

lagoon, beach village and a range of shops, restaurants and bars.

Open in 2015

Vinpearl Resort: 384

rooms

Kids Club

Meeting venues

Outdoor tennis courts

Natural beaches

Phu Quoc Da Nang Phu Quoc

Ha Long Open in 2015

FLC Luxury Hotel: 480

rooms

FLC Samson Golf Links:

18-hole golf course

Restaurants and spa

Thanh Hoa


GOLF COURSES IN VIETNAM

Source: CBRE Vietnam, Q4 2015

NORTH

13 active golf courses

23 golf courses under planning

CENTRAL:



SOUTH:



Source: General Statistics Office of Vietnam

4 courses currently offer property for-sale

TOTAL NEW GOLF COURSES

BY 2020: 96

23 out of 35 with integrated real estate

component (hospitality/

residential units)


INVESTMENT DEALS IN HOSPITALITY MARKET

Novotel Saigon Centre

Kumho Asiana Plaza

Kumho Asiana

Mapletree

305 rooms

Operation year: 2009

Duxton Hotel Saigon

Low Keng Huat

New Life RE

197 rooms


Que Huong Liberty

SGGV Investment

247 rooms


HCMC HCMC

Investors interest remained robust

Sedona Suite Hanoi

Keppel Land Ltd

BRG Group

175 rooms


HCMC Hanoi


INVESTMENT DEALS IN HOSPITALITY MARKET

0

5

10

15

20

25

30

35

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

Dev Site Hotel Office

Apartment Industrial Retail

Source: RCA, June 2016

Number of transactions, Vietnam Hotel Sales in Vietnam in USD

Source: CBRE Research, Q2 2016. Transactions include hotel deals above US$10 million.


Construction Cost

HOTEL MARKET

1,000

1,250

1,500

1,750

2,000

2011 2012 2013 2014 2015

Co

nstr

uctio

n C

ost (U

S$

/GFA

sm

)

3-Star Budget Hotel, incl. F.F.&E 5-Star Budget Hotel, incl. F.F.&E

Source: Langdon Seah.

F. F & E includes interior decoration and loose furniture etc. but excludes hotel operated equipment costs (e.g. cutlery, crockery, linen, uniform, etc.)

Construction cost (US$/sm GFA)


Serviced Residences

HOSPITALITY MARKET

Elegant Suites Westlake,

Hanoi

The Waterfront

Saigon

Supply, Serviced Apartment (rooms)

Source: CBRE Vietnam.

5 000

10 000

15 000

20 000

Bangkok Hanoi HCMC

Nu

mb

er

of

un

its

2006 2016


NEW CABLE CARS ACROSS THE COUNTRY

SAPA - The worlds LONGEST triplewire cable car system

QUANG NINH: The worlds LARGEST CABIN cable car system

Completed year: 2016

Total length: 6,292.5 m

No. of cabin: 35

Capacity: 35 persons/cabin


Total length: 2,222 m

No. of car: 66


DA NANG - The worlds LONGEST onewire cable car system

PHU QUOC - The worlds LONGEST cable car system when completed

NHA TRANG ONLY sea-crossing cable car in Vietnam Completed year: 2007


No. of cabin: 65




No. of cabin: 94


Expected completed year: 2017

Total length: ~ 8,000 m

No. of cabin: 70



AGENDA

VIETNAM HOSPITALITY MARKET


PANEL DISCUSSION

1

2

3

- Charlie Kelly, Managing Director, DWP

- Le Hoang Vu, Senior Vice President - Hospitality Management, M.I.K Corporation

- Tony Chisholm, Area General Manager Southern Vietnam, Accor Group

- Robert McIntosh, Executive Director, CBRE Hotels, Asia Pacific

Moderator: Marc Townsend, Managing Director, CBRE Vietnam


Robert McIntosh is the Executive Director responsible for advisory and

valuation work in CBRE Hotels in Asia Pacific. Based in Singapore he has

over 30 years property experience, 20 of which are in hotels. The

division services the hotels and leisure industry including resorts, golf

courses, casinos, theme parks, pubs, hotels and motels.

Roberts experience has been wide ranging in terms of geography, property

type and skills. He has been involved in advisory, valuation, operator

selection, consulting and sales assignments throughout the Asia Pacific

region. In addition he has advised on the restructuring of various portfolios,

due diligence assignments and the listing of real estate assets.


HOSPITALITY TRENDS AND OUTLOOK


AUGUST 2016


This presentation has been prepared in good faith based on CBREs current views of the

commercial real-estate market. Although CBRE believes its views reflect market

conditions on the date of this presentation, they are subject to significant uncertainties and

contingencies, many of which are beyond CBREs control. In addition, many of CBREs

views are opinion and/or projections based on CBREs subjective analyses of current

market circumstances. Other firms may have different opinions, projections and analyses,

and actual market conditions in the future may cause CBREs current views to later be

incorrect. CBRE has no obligation to update its views herein if its opinions, projections,

analyses or market circumstances later change.

Nothing in this presentation should be construed as an indicator of the future performance

of CBREs securities or of the performance of any other companys securities. You should

not purchase or sell securities of CBRE or any other company based on the views

herein. CBRE disclaims all liability for securities purchased or sold based on information

herein, and by viewing this presentation, you waive all claims against CBRE and the

presenter as well as against CBREs affiliates, officers, directors, employees, agents,

advisers and representatives arising out of the accuracy, completeness, adequacy or your

use of the information herein.

DISCLAIMERS AND WAIVERS


HOTEL MARKET OUTLOOK AND PROSPECTS 2016

Market Performance

Investment

Opportunities & Challenges

Visitor Arrivals



Market Performance

Investment


Visitor Arrivals


VISITOR ARRIVALS - REGIONAL Thailand, Japan and Indonesia lead in terms of growth

-10%

0%

10%

20%

30%

40%

50%

0

5

10

15

20

25

30

Thailand China Malaysia Japan Singapore Hong Kong* Indonesia Vietnam Australia

Arrivals Growth

International Tourist Arrivals & Growth Comparison 2015 (million)

*Excluding China market

Source: Local Tourism Agency


VISITOR ARRIVALS VIETNAM Increase in arrivals likely to exceed target of 8.5m in 2016

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2015 (YTD

June)

2016 (YTD

June

% Change Visitor Arrivals SINGAPORE Annual Visitor Arrivals

Visitor Arrivals Annual change in Arrivals

Annual Visitor Arrivals & Change

Source : STR, CBRE Hotels

VIETNAM



Market Performance

Investment


Visitor Arrivals


CURRENCY COMPARISON Long term weakness is a benefit


CURRENCY COMPARISON Others are starting to strengthen


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Economy

Midscale

Upscale

Luxury

Source: STR Global, CBRE Hotels

Room Supply by Market Scale - Existing

SUPPLY REGIONAL GRADES OF HOTELS Fewer Upscale hotels in Vietnam


0%

5%

10%

15%

20%

25%

30%

Bali Bangkok Beijing Hanoi Ho Chi Minh

City

Hong Kong Jakarta Kuala Lumpur Singapore Sydney Tokyo

Luxury


Room Supply Proposed

SUPPLY GROWTH REGIONAL (4 YEARS) Supply is good for tourism but occupancy may suffer


0%

5%

10%

15%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Existing Projected Annual change

Room Supply & Annual Change


VIETNAM

SUPPLY - VIETNAM

Strong growth forecast mainly in resort locations


0%

5%

10%

15%

20%

0

2,500

5,000

7,500

10,000

12,500

15,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Existing Proposed Annual change



HANOI

SUPPLY - HANOI

Good occupancy encourages room additions


0%

5%

10%

15%

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

22,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Existing Proposed Annual change



HO CHI MINH CITY

SUPPLY HO CHI MINH CITY Slower additions will aid hotel performance


-20%

-10%

0%

10%

20%

30%

0%

20%

40%

60%

80%

100%

Tokyo Sydney Hong Kong Singapore Hanoi Bangkok Beijing Kuala

Lumpur

Ho Chi Minh

City

Bali Jakarta

Occupancy Annual Change

SINGAPORE Occupancy (Annual) 2015


SINGAPORE Occupancy (Annual) 2015

PERFORMANCE REGIONAL OCCUPANCY Bangkok and Hanoi have had the greatest increases


PERFORMANCE REGIONAL OCCUPANCY Hanoi and Bangkok at record levels

50%

55%

60%

65%

70%

75%

80%

Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16

Ho Chi Minh City Hanoi Bangkok Kuala Lumpur Jakarta Manila

Occupancy (MAT)



0

50

100

150

200

250

Singapore Hong Kong Sydney Tokyo Bali Ho Chi Minh

City

Hanoi Bangkok Kuala

Lumpur

Beijing Jakarta

ADR (USD) RevPAR (USD)

ADR & RevPAR (Annual) 205 Nov USD


ADR & RevPAR (Annual) 2015

PERFORMANCE REGIONAL ROOM RATES AND REVPAR

Two clear leaders


PERFORMANCE REGIONAL ROOM RATES ADR a challenge

60

70

80

90

100

110

120

130

140



U

United States - Dollar Average Daily Rate (MAT)



PERFORMANCE REGIONAL REVPAR Hanoi performing well

40

50

60

70

80

90

100



United States - Dollar RevPAR (MAT)



-20%

-10%

0%

10%

20%

30%

ADR (Local Currency % Change) RevPAR (Local Currency % Change)

Changes in ADR and RevPAR in local currencies 2015

PERFORMANCE - REGIONAL Sustainable growth is important



OCCUPANCY VIETNAM CITIES Hanoi strong growth, HCMC steady

60%

62%

64%

66%

68%

70%

72%

74%

76%

78%

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15

Ho Chi Minh City Hanoi

Occupancy (MAT)



ROOM RATES VIETNAMESE CITIES Both cities improving

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000



V

Vietnam - Dong Average Daily Rate (MAT)



REVPAR - VIETNAMESE CITIES Good growth, especially Hanoi

1,400,000

1,500,000

1,600,000

1,700,000

1,800,000

1,900,000



Vietnam - Dong RevPAR (MAT)



HANOI SUMMARY Occupancy over 68% - 70% should push ADR

60%

66%

72%

78%

84%

90%

1,000,000

1,300,000

1,600,000

1,900,000

2,200,000

2,500,000


ADR RevPAR Occupancy

MAT Figures HANOI



CURRENCY COMPARISON Occupancy needs to improve

60%

62%

64%

66%

68%

70%

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000


ADR RevPAR Occupancy

MAT Figures HO CHI MINH CITY




Market Performance

Investment


Visitor Arrivals


HOTEL INVESTMENT Active markets in Japan and Australia

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2011 2012 2013 2014 2015

Japan

Australia

Hong Kong

Singapore

China

Malaysia

Thailand

Vietnam

Indonesia

SINGAPORE Total Sales Volume (based on properties & portfolios ~$7.5mil or greater ) USD mil

Source: RCAnalytics


HOTEL INVESTMENT



Market Performance

Investment


Visitor Arrivals


Liquidity

Yields

Stability

Growth

Ownership

Supply

Distress

Events

International demand

Safety and security

Infrastructure & connectivity

Legal transparency and framework

Land and construction costs

Training for accommodation personnel

Limited financial pressure

Exchange Rates

Repositioning and upgrading

OPPORTUNITIES & CHALLENGES Issues


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, transqmitted 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.

For more information regarding this presentation please contact: CBRE Vietnam Co., Ltd. Research & Consulting T +84 4 2220 0220

F +84 4 2220 0210

Email: [email protected]

Presented by Marc Townsend, Managing Director, CBRE ... · sofitel legend metropole . 2 cbre | hospitality event | august 2016 agenda vietnam hospitality market vietnam in a regional

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