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April 2014 Colliers HCMC CBD Market Report

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Colliers Vietnam's monthly market report on the Central Business District of Ho Chi Minh City. It covers the Office, Retail, Hotel, and Serviced Apartment markets.

Colliers Vietnam's monthly market report on the Central Business District of Ho Chi Minh City. It covers the Office, Retail, Hotel, and Serviced Apartment markets.

Published in: Real Estate, Travel, Education

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  • 1. APRIL 2014 | HCMC CENTRAL BUSINESS DISTRICT CBD MARKET Report HO CHI MINH CITY www.colliers.com/vietnam
  • 2. TABLE OF CONTENTS HCMC CBD MARKET REPORT | APRIL 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market Highlights OFFICE MARKET • Market Overview • Outlook • Table • Map RETAIL MARKET • Market Performance • Outlook • Map • Table HOTEL MARKET • Map • Table • Market Performance • Outlook SERVICED APARTMENT • Market Performance • Outlook • Table / Map CONTACTS Page 2-4 2 3 3 4 5-7 5 5 6 7 8-10 8 8 9 10 11-12 11 11 12 13
  • 3. HCMC CBD MARKET REPORT APRIL 2014 | COMMERCIAL OFFICE MARKET P.2 | Colliers International The combination of occupiers seeking consolidation and cost containment, with limited availability of large floor plate in CBD, lead to a growing demand for coming CBD developments and current supply in non-core CBD covering Financial Hub, Northern CBD also Southern CBD. In the near future, an incredible gain from inflow of indirect foreign capital (FDI) in the first quarter of 2014 (US$687.7 million) foresee a promising growth for commercial office market. Outlook GRADE A PERFORMANCE Source: Colliers International CBD AVERAGE ASKING RENT, APRIL 2014 Source: Colliers International Source: Colliers International Grade AAR Occupancy rate Supply A ↔  ↔ B ↔  ↔ B ↔  ↔ B  ↔ ↔ B ↔ ↔ ↔ CITY CENTRAL FINANCIAL HUB NORTHERN CBD SOUTHERN CBD Market Performance Current median rental for Grade A remained flat while the occupancy rate saw a steady gain m-o-m, staying at 90.7% in March. Meanwhile, Grade B buildings within CBD areas showed sign of upward tendency given ascending office expansion demand. However, they still get tough encounter to the supply from outer districts at competitive rentals including Blue Sky Office Tower at Saigon Airport Plaza in Tan Binh District; Petroland and IPC Tower in District 7. Under-construction buildings in District 1 covering Vietinbank Tower, Vietcombank Tower, Le Meridien and Times Square still actively exhibit in good progress, expected adding new prime office spaces in the next 6 months.
  • 4. P.3 | Colliers International HCMC CBD MARKET REPORT APRIL 2014 | COMMERCIAL OFFICE MARKET No Name Address Com- pletion Year NLA (sq m) Service Charges (*) Occupancy rate NFA asking rent (*) 1 Saigon Centre 65 Le Loi 1996 11,650 6.5 90% 42.7 2 Saigon Tower 29 Le Duan 1997 13,950 6.0 100% 37.0 3 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 90% 42.5 4 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 95% 41.3 5 Diamond Plaza 34 Le Duan 1999 15,936 8.0 98% 41.0 6 Kumho Asiana Plaza 39 Le Duan 2009 26,000 8.0 98% 49.3 7 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 85% 34.0 8 President Place 93 Nguyen Du 2012 8,330 6.0 87% 32.0 9 Times Square 22-36 Nguyen Hue 2012 9,000 7.0 60% 50.0 Grade A 187,841 7.0 90.7% 39.4 1 OSIC 8 Nguyen Hue 1993 6,500 6.0 98% 20.0 2 Yoco Building 41 Nguyen Thi Minh Khai 1995 5,000 4.0 100% 16.0 3 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai 1996 3,200 5.0 98% 21.0 4 Central Plaza 17 Le Duan 1997 6,094 5.0 100% 26.0 5 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 98% 20.0 6 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.0 96% 23.0 7 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 93% 20.0 8 MeLinh Point Tower 02 Ngo Duc Ke 1999 17,600 6.0 100% 24.0 9 Zen Plaza 54-56 Nguyen Trai 2001 11,037 5.0 97% 21.0 10 Bitexco Office Building 19-25 Nguyen Hue 2003 6,000 5.0 100% 22.0 11 The Landmark 5B Ton Duc Thang 2005 8,000 5.0 82% 21.0 12 Opera View 161-167 Dong Khoi 2006 3,100 7.0 95% 26.0 13 Indochina Park Tower 4Bis Nguyen Dinh Chieu 2006 2,145 3.0 96% 10.0 14 Petro Tower 1-5 Le Duan 2007 13,304 5.0 99% 30.0 15 City Light 45 Vo Thi Sau 2007 10,000 5.0 98% 15.0 16 The Landcaster 22Bis Le Thanh Ton 2007 7,000 5.0 100% 24.0 17 Gemadept Tower 5 Le Thanh Ton 2008 14,000 7.0 100% 23.0 18 Fideco Tower 81-85 Ham Nghi 2008 15,000 6.0 100% 20.0 19 Havana Tower 132 Ham Nghi 2008 7,326 6.0 99% 21.0 20 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 98% 26.0 21 Royal Center 235 Nguyen Van Cu 2008 14,320 5.0 100% 23.0 22 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 23.0 23 Bao Viet Tower 233 Dong Khoi 2010 10,650 6.0 100% 21.0 24 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 96% 22.0 25 Vincom Center 68-70-72 Le Thanh Ton 2010 56,600 5.0 72% 25.0 26 Saigon Royal 91 Pasteur 2010 5,340 4.0 100% 19.0 27 A&B Tower 76 Le Lai 2010 17,120 6.0 99% 28.0 28 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19.596 5.0 89% 23.0 29 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 87% 26.0 30 Lim Tower 9-11 Ton Duc Thang 2013 29,265 6.0 97% 28.0 31 Sunny MB Tower 259 Tran Hung Dao 2013 13,200 5.5 12% 22.0 Grade B 377,596 5.5 89.3% 23.0 * US$/ sq m/ month (on net area) Office Market Overview
  • 5. HCMC CBD MARKET REPORT APRIL 2014 | CBD OFFICE MAP P.4 | Colliers International
  • 6. HCMC CBD MARKET REPORT APRIL 2014 | RETAIL MARKET P.5 | Colliers International We saw unchanged average rental rate from all three segments including retail podium, department store and shopping mall during March. Only department store retained flat occupancy rate while other segments recorded an approximately fall of 2%, a drop for the second consecutive month in 2014. Last month saw another slump period of retail market in downtown areas. Besides low footfall, a moving-out trend negatively influenced current tenants in CBD shopping spaces. While trying to get more visits by recent promotional programs, the tenants expect proper reactions from landlords in this gloomy time. Market Performance Outlook SHOPPING CENTER MARKET PERFORMANCE, APRIL 2014 SALE OFF BANNERS @ UNION SQUARE IN APRIL 2014 Source: Colliers International The General Statistics Office reported that Consumer Price Index (CPI) in HCMC decreased 0.46% in March, an expected periodical drop after holiday season. Local consumer demand shows no sign of recovery while operators of CBD retail places keen on holding high rentals. According to research of Colliers International, closure of store chains is a preferred choice in optimising business from retailers given depressing turnover. They will alternatively opt for brand consolidation and store relocation. As a result of that, we expect a significant lift in vacancy rate of shopping malls within city central in the following months. Source: Colliers International RETAIL PODIUM MARKET PERFORMANCE, APRIL 2014 Source: Colliers International
  • 7. HCMC CBD MARKET REPORT APRIL 2014 | CBD RETAIL MAP P.6 | Colliers International
  • 8. KUMHO MONTHLY MARKET REPORTAPRIL 2014 | RETAIL MARKET HCMC CBD MARKET REPORT P.7 | Colliers International No Name of Project / Building Address Location Comple- tion Year NLA (sq m) Average Rental (US$/sq m/month) Occupancy Rate 1 Hotel Continental Saigon 132-134 Dong Khoi District 1 2000 200 90 100% 2 Caravelle Hotel 19 Lam Son Square District 1 2000 150 90 100% 3 New World Hotel 79 Le Lai District 1 2000 1,000 40 100% 4 Sheraton Saigon 88 Dong Khoi District 1 2002 750 125 100% 5 Opera View Lam Son Square District 1 2006 1,260 85 100% 6 Rex Arcade 141 Nguyen Hue District 1 2010 2,000 120 100% 7 ICON 68 45 Ngo Duc Ke District 1 2011 8,000 30 85% 8 President Place 93 Nguyen Du District 1 2012 800 70 71% 9 Times Square 22-36 Nguyen Hue District 1 2013 9,000 90 72% Retail Podium 23,161 69.9 82.9% 1 Diamond Plaza 34 Le Duan District 1 1999 9,000 83 100% 2 Zen Plaza 54-56 Nguyen Trai District 1 2001 6,817 52 100% 3 Parkson Saigon Tourist 35 Le Thanh Ton District 1 2002 17,000 90 100% 4 Kumho Asiana Plaza 35 Le Duan District 1 2009 6,830 35 100% Department Store 39,647 72.4 100% 1 Saigon Center 65 Le Loi District 1 1996 3,500 75 100% 2 City Plaza 230 Nguyen Trai District 1 2000 5,250 25 100% 3 Tax Center 135 Nguyen Hue District 1 2003 7,000 75 100% 4 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100% 5 Nowzone Nguyen Van Cu District 1 2008 9,000 35 95% 6 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 90 80% 7 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 63 68% 8 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100% 9 Union Square Dong Khoi District 1 2012 38,000 73 77% Shopping Centre 113,450 66.9 78% No Name of Hotel Address Location Comple- tion Year Total Room Occupancy ARR(*) 1 Caravelle 19 Lam Son Square District 1 2000 335 74% 169 2 New World Saigon 76 Le Lai District 1 2000 533 76% 110 3 Sofitel Plaza Saigon 17 Le Duan District 1 2000 290 64% 183 4 Rex 141 Nguyen Hue District 1 2000 289 87% 108 5 Renaissance Riverside 8-15 Ton Duc Thang District 1 2001 350 77% 144 6 Lotte Legend Hotel 2A-4A Ton Duc Thang District 1 2001 283 65% 121 7 Sheraton 88 Dong Khoi District 1 2002 480 85% 222 8 Park Hyatt Saigon 02 Lam Son Square District 1 2005 259 85% 313 9 Majestic Saigon 1 Dong Khoi District 1 2007 175 77% 123 10 InterContinental Asiana 39 Le Duan District 1 2009 305 91% 180 11 Nikko Saigon 235 Nguyen Van Cu District 1 2011 334 77% 120 12 Pullman Hotel 146 Tran Hung Dao District 1 2013 306 69% 101 5 Star 3,633 77% 157 1 Continental Saigon 132-134 Dong Khoi District 1 1990 86 80% 88 2 Norfolk Hotel 117-119 Le Thanh Ton District 1 1992 104 76% 85 3 Duxton 63 Nguyen Hue District 1 1996 203 74% 82 4 Royal City 133 Nguyen Hue District 1 2000 135 77% 65 5 Palace Saigon 56-66 Nguyen Hue District 1 2000 146 93% 62 6 Oscar 68A Nguyen Hue District 1 2000 108 77% 41 7 Liberty Central 179 Le Thanh Ton District 1 2010 140 78% 78 8 Grand 08 Dong Khoi District 1 2011 107 79% 79 9 Liberty Central Riverside 17 Ton Duc Thang District 1 2013 170 78% 79 4 Star 1,161 78% 76.9 APRIL 2014 | HOTEL MARKET HCMC CBD MARKET REPORT
  • 9. HCMC CBD MARKET REPORT APRIL 2014 | CBD HOTEL MAP P.8 | Colliers International
  • 10. P.9 | Colliers International HCMC CBD MARKET REPORT APRIL 2014 | HOTEL MARKET HCMC recorded a sharp increase in the number of international arrivals in the first quarter of 2014, gain as much as 19% y-o-y which mostly contributed by major markets including China (22% y-o-y), Malaysia (20% y-o-y) and followed by Russia, Australia and Japan. In 1Q14, foreign tourists spent more than VND22.5 billion, raised 8% over the same period last year. According to Vietnam National Administration fo Tourism, HCMC targets to achieve a number of 4.4 million international visitors in 2014. Approximately US$4.4 billion revenue, 15% gain y-o-y, is expected from the city tourism sector. Hotel Market Overview Outlook There is no new supply of 4- and 5-star hotel developments within CBD area in the first quarter of 2014. We expect slight fall of occupancy rate from both top-graded hotel segments in HCMC during April before downward tendency as the beginning of rainy season. NUMBER OF INTERNATIONAL VISITORS TO HCMC, APRIL 2014 Source: Statistical Office in HCMC, Colliers International NUMBER OF INTERNATIONAL VISITORS TO VN vs. HCMC Source: Statistical Office in HCMC, Colliers International HCMC VISITOR GROWTH RATE BY COUNTRY, APRIL 2014 Source: Statistical Office in HCMC, Colliers International SHERATON HOTEL UNDER RENOVATION, APRIL 2014 Source: Collliers International
  • 11. P.10 | Colliers International HCMC CBD MARKET REPORT APRIL 2014 | HOTEL MARKET Both top-graded hotel segments experienced an increase in occupancy rate during March 2014 given a jump in the number of international arrivals to HCMC recently. The average room rate of 5-star hotels made a gain of around 1% while that of 4-star segment declined 2% m-o-m last month. Market Performance PERFORMANCE OF 5-STARS HOTEL Source: Colliers International APRIL 2014 | SERVICED APARTMENT MARKET Serviced Apartment Overview CBD SERVICED APARTMENTS PERFORMANCE Source: Colliers International FUTURE SUPPLY BY YEAR, APRIL 2014 Source: Colliers International PERFORMANCE OF 4-STARS HOTEL Source: Colliers International HCMC HOTEL PERFORMANCE BY GRADE, APRIL 2014 Source: Statistical Office in HCMC, Colliers International
  • 12. P.11 | Colliers International HCMC CBD MARKET REPORT No Project Name Address Location Comple- tion Year Total Room Average Occupancy ARR(*) 1 The Landmark 5B Ton Duc Thang District 1 1995 66 93% 31 2 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 95% 36 3 Sedona Suites 65 Le Loi District 1 1996 89 88% 35 4 Nguyen Du Park Villas 111 Nguyen Du District 1 2004 41 90% 30 5 The Landcaster 22 Bis Le Thanh Ton District 1 2007 55 93% 37 6 InterContinental Asiana Saigon 39 Le Duan District 1 2009 260 98% 36 Grade A 701 95% 35 1 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 85% 25 2 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 87% 26 3 Norfolk Mansion 17-21 Ly Tu Trong District 1 1998 126 93% 31 4 Diamond Plaza 34 Le Duan District 1 1999 42 93% 29 5 Garden View Court 101 Nguyen Du 2000 76 91% 31 6 Ben Thanh Luxury 172-174 Ky Con District 1 2010 30 70% 23 7 Vincom Center 72 Le Thanh Ton District 1 2010 60 32% 26 8 Lafayette De Saigon 08 Phung Khac Khoan District 1 2010 18 100% 30 9 Spring Court 1Bis Phung Khac Khoan District 1 2011 14 78% 18 10 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 55% 28 11 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 100% 30 * US$/sq m/month ** Not including VAT and service charge *** Buildings are sorted by Year of Completion APRIL 2014 | SERVICED APARTMENT MARKET Grade A serviced apartment segment showed positive indicators after several downturn months whereas Grade B retained sufficient occupancy rate with slight adjustment in rents. Given prospective forecast on Vietnam economy, especially FDI inflow to hi-tech industry, we expect an increasing demand of foreign expatriates for 2014. That will lift accomodation needs in big cities like HCMC during this year, which stablising residential for lease sector. Outlook Grade A serviced apartments saw a gain in both monthly average rental rate and occupancy rate in March. A 1% increase in occupancy supported recover of asking rents of Grade A segment during last month. The occupancy rate of Grade B serviced apartment buildings remained unchanged while average offered rent dropped almost 2% last month. Market Performance GRADE A SERVICED APARTMENT PERFORMANCE, APRIL 2014 Source: Colliers International
  • 13. HCMC CBD MARKET REPORT APRIL 2014 | CBD SERVICED APARTMENT MAP P.12 | Colliers International
  • 14. HCMC CBD MARKET REPORT | APRIL 2014 With more than 100 professionals in 2 offices in Vietnam, the team is market driven and has proven and successful track record with both international and local experience. From Hanoi to Ho Chi Minh City, we provide a full range of real estate services • Research >> Market research across all sectors >> Market analysis, advisory, and strategy • Valuation & Advisory Services >> Valuation for land, existing property or development sites >> Feasibility studies to determine NPV, IRR and highest & best use • Office Services >> Tenant Representation >> Landlord Representation • Residential Sales & Leasing • Retail Services • Investment Services • Real Estate Management Services • Corporate Services • Industrial Leasing The foundation of our services is the strength and depth of our experience. COLLIERS INTERNATIONAL HO CHI MINH CITY Bitexco Office Building, 7th Floor 19-25 Nguyen Hue Street District 1, HCM City, Vietnam Tel: + 84 8 3827 5665 HANOI Capital Tower, 10th Floor 109 Tran Hung Dao Street, Hoan Kiem District, Hanoi, Vietnam Tel: +84 4 3941 3277 485 offices in 63 countries on 6 continents United States Canada Latin America Asia Pacific EMEA Accelerating success : 140 : 42 : 20 : 195 : 85 QUANG NGUYEN Research Manager quang.nguyen@colliers.com +84 938 056 603 YEN NGUYEN Research Analyst yen.nguyen@colliers.com +84 915 478 778 About Colliers International Colliers International is a leader in global real estate services, defined by our spirit of enterprise. Through a culture of service excellence and a shared sense of initiative, we integrate the resources of real estate specialists worldwide to accelerate the success of our partners. We connect through a shared set of values that shape a collaborative environment throughout our organization that is unsurpassed in the industry. Publication Coverage Frequency Content Availability Investment Report Vietnam Quarterly Capital Markets Publicly available Research & Forecast Report Vietnam Cities Quarterly All market sectors Publicly available CBD Report HCMC CBD Monthly Office, Retail, Hotel and Serviced Apartment Publicly available Asia Pacific Office Report Asia Pacific in- cluding Vietnam Quarterly Office market Publicly available Vietnam Property Market Report Vietnam cities Quarterly All market sectors On subscription Development Recommendation Vietnam cities At request All market sectors On subscription $2 billion in annual revenue 2.5 billion square feet under management 15,700 professionals and staff www.colliers.com/vietnam Please contact, If you would like to recieve our other research reports This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2013. All rights reserved.