Ha Noi & HCMC Real Estate Market Q4 2009




•Presented by Savills Vietnam Co., Ltd.
January 2010
DISCLAIMER
The property market research contained in this presentation is verified to the best of Savills Vietnam ability....
PRESENTATION STRUCTURE

•    I) Vietnam economy overview
•    II) Ha Noi market Q4 2009
•    and III) HCMC market Q4 2009
...
I. VIET NAM ECONOMIC OVERVIEW Q4 2009




Jan 2010
I-VIET NAM ECONOMIC OVERVIEW
National GDP growth rate and FDI
          US$ Billion                                       ...
I-VIET NAM ECONOMIC OVERVIEW
International tourists to Viet Nam (1996 – 2009)
            No. of tourists
4,500,000

4,000...
I-VIET NAM ECONOMIC OVERVIEW
International visitors to Viet                                       Remittance from overseas...
II-1. HA NOI OFFICE Q4 2009
Office take–up:                                            Grade A/ Grade C rent: about double...
II-1. HA NOI OFFICE Q4 2009
Capital Tower        Supply             CEO Tower

                     • 83 buildings: 14 Gra...
II-1. HA NOI OFFICE Q4 2009
Future supply
                                        Future supply
                          ...
II-2. HA NOI RETAIL Q4 2009

                      Supply
                      • Market remains extremely small vs. regio...
II-2. HA NOI RETAIL Q4 2009
Supply by location and type
                                             Shopping centres/Depa...
II-2. HA NOI RETAIL Q4 2009
 Rental rate of Shopping centres and                    Rental rate of Retail podiums
 Departm...
II-2. HA NOI RETAIL Q4 2009
Future supply up to 2012

                                         Future supply
             ...
II-3. HA NOI HOTEL Q4 2009
                          Supply
                          •   5-star: 10 hotels, 3,000 rooms.
...
II-3. HA NOI HOTEL Q4 2009
RevPAR across all grades: up 28% q-o-q
                      RevPAR (US$)
                110
 ...
II-3. HA NOI HOTEL Q4 2009
Future supply
                                                                             Futu...
II-4. HA NOI APARTMENT FOR SALE Q4 2009
Canal Park
                                 Supply
                               ...
II-4. HA NOI APARTMENT FOR SALE Q4 2009
Primary market performance
                        Primary supply   No. of apartme...
II-4. HA NOI APARTMENT FOR SALE Q4 2009
Secondary market performance – asking price
                                  Q1 2...
II-4. HA NOI APARTMENT FOR SALE Q4 2009
Future supply up to 2012 by expected Completion year
                             ...
II-5. HA NOI SERVICED APARTMENT Q4 2009
                                              Supply
  Below 100 sq m        From ...
II-5. HA NOI SERVICED APARTMENT Q4 2009
Market performance by occupancy & rent
                                    Occupan...
II-5. HA NOI SERVICED APARTMENT Q4 2009
Future supply: huge stock by 2011 (more than 1,600 units)
                        ...
II-5. HA NOI SERVICED APART. v.s HOTEL MARKET
 Occupancy - Hotel sector is more
 volatile due to seasonality              ...
HCMC Real Estate Market Q4 2009




                          Photographed by Peter Adams
III-1. HCMC OFFICE Q4 2009
Saigon Centre
                  Supply

                  •   6 Grade A and 31 Grade B building...
III-1. HCMC OFFICE Q4 2009
Supply, occupancy and rent (all grades)                                                        ...
III-2. HCMC RETAIL Q4 2009
                  Supply
                  • About 493,000 sq m for all categories
            ...
III-2. HCMC RETAIL Q4 2009
  Performance of Department stores and retail podiums

                           Approx. Area ...
III-2. HCMC RETAIL Q4 2009
Total value of retail sales in HCMC                                                            ...
III-3. HCMC HOTEL Q4 2009
                   Supply

                   •   5-star: 13 hotels, 4,300 rooms
               ...
III-3. HCMC HOTEL Q4 2009

Performance of 3 to 5 star hotels                                       Future supply of hotel ...
III-4. HCMC APARTMENT FOR SALE Q4 2009
                Supply by Q4 2009
                • Primary market: 41 active proje...
III-4. HCMC APARTMENT FOR SALE Q4 2009
Primary market performance up to Q4 2009
                              Primary supp...
III-4. HCMC APARTMENT FOR SALE Q4 2009
Secondary market performance up to Q4 2009
                                        ...
III-4. HCMC APARTMENT FOR SALE Q4 2009
Future supply by expected Completion year
                                         ...
III-5. HCMC SERVICED APARTMENT Q4 2009

                   Supply by Q4 2009

                   •   48 serviced apartment...
III-5. HCMC SERVICED APARTMENT Q4 2009
Supply, occupancy and rent (all grades)

                                Leased    ...
IV. CONCLUSIONS AND FORECAST
 Vietnam
 • Mysterious residential demand – Don’t try to time the market
 • The second home m...
IV. CONCLUSIONS AND FORECAST
HA NOI MARKET
•Apt. for sale:
• In short term, design and price not meeting end user expectat...
IV. CONCLUSIONS AND FORECAST
HCMC MARKET
•Apartment for sale
• In 2010 and forward, clear trend of the market moving to th...
V. RISK AND OPPORTUNITY

•RISK                           •OPPORTUNITY
• Inflation risk                • Cash is King
• Int...
CONTACT
          Ha Noi Office
          13th Floor, Pacific Place
          83B Ly Thuong Kiet, Hanoi
          Tel: (04...
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Hn & Hcm Market Presentation Q4 2009 Final En

  1. 1. Ha Noi & HCMC Real Estate Market Q4 2009 •Presented by Savills Vietnam Co., Ltd. January 2010
  2. 2. DISCLAIMER The property market research contained in this presentation is verified to the best of Savills Vietnam ability. Savills quarterly report reflects an overview of the current property market and is indicative research only. Savills Vietnam does not guarantee the accuracy of research and forecasts contained herein. Savills Vietnam does not accept any responsibility for losses arising from reliance on the research and forecasting contained within this presentation. Savills recommends that the reader obtain a detailed market study of the specific sector of interest should a deeper understanding of the market be required. Reproduction of this presentation, in any manner whatsoever, in whole or in part, without written prior consent from Savills Vietnam is prohibited. Approval should be obtained from Savills Vietnam before any reference to this presentation can be made in any statement, published document, or circular. Where information is given without reference to another party in this presentation, it shall be taken that this information has been obtained or gathered through Savills’ best efforts and to Savills’ best knowledge. Processed data references there from shall be taken as our opinion and shall not be freely quoted without acknowledgement.
  3. 3. PRESENTATION STRUCTURE • I) Vietnam economy overview • II) Ha Noi market Q4 2009 • and III) HCMC market Q4 2009 1. Office for lease market 2. Retail market 3. Hotel market 4. Apartment for sale market 5. Serviced apartment market • IV) Conclusions and Forecast • V) Risk and Opportunity
  4. 4. I. VIET NAM ECONOMIC OVERVIEW Q4 2009 Jan 2010
  5. 5. I-VIET NAM ECONOMIC OVERVIEW National GDP growth rate and FDI US$ Billion Billion US$ 100 9% 70.0 8% 60.0 80 7% 50.0 6% 60 40.0 5% 4% 30.0 40 3% 20.0 2% 20 10.0 1% 0.0 0 0% 2003 2004 2005 2006 2007 2008 2009 98 99 00 01 02 03 04 05 06 07 08 09 Pledged FDI 3.2 4.5 6.8 10.2 20.3 64.0 21.5 GDP at current price 27.2 28.5 30.6 32.3 33.6 38.7 45.4 53.3 61.0 70.0 88.5 84.1 Disbursed FDI 2.65 2.85 2.45 3.6 8.3 11.5 10.0 GDP grow th rate 5.80% 4.80% 6.00% 6.80% 6.90% 7.24% 7.70% 8.40% 8.17% 8.48% 6.23% 5.32% Source: General Statistic Office, 2009
  6. 6. I-VIET NAM ECONOMIC OVERVIEW International tourists to Viet Nam (1996 – 2009) No. of tourists 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 50.0 % 45.0 CPI Tourism Bussiness Visiting relatives Other CPI - Food & Foodstuff 40.0 CPI - Construction materials 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 01/08 03/08 05/08 07/08 09/08 11/08 01/09 03/09 05/09 07/09 09/09 11/09 Source: General Statistic Office, 2009
  7. 7. I-VIET NAM ECONOMIC OVERVIEW International visitors to Viet Remittance from overseas Nam, HCMC Vietnamese To HCMC (mil) US$ Billion To VN (mil) No. of foreign visitors (million) 9 4.5 8 4.0 7 3.5 6 3.0 5 2.5 4 2.0 3 1.5 2 1.0 1 0.5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Remittance Source: GSO & HCMC Statistics Office, 2009
  8. 8. II-1. HA NOI OFFICE Q4 2009 Office take–up: Grade A/ Grade C rent: about double Significant increase in Q4 activity Occupancy rate Average rent Grade A Grade B sq m US$/sq m/month 40,000 100% 50 30,000 80% 40 60% 30 20,000 40% 20 10,000 20% 10 0 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 0% 0 Grade A Grade B Grade C -10,000 Ha Noi market Source: Savills Research & Consultancy, 2009
  9. 9. II-1. HA NOI OFFICE Q4 2009 Capital Tower Supply CEO Tower • 83 buildings: 14 Grade A, 33 Grade B and 36 Grade C • 605,000 sq m, up 23% q-o-q and up 44% y-o- y • Q4 2009: 9 new buildings, 18% of total supply • 2009: 18 new buildings, 181,000 sq m BIDV Tower Market performance • Occupancy: 84%, -1.5% q-o-q • Rent rate: US$29/ sq m/ month, +5% q-o-q Outlook • Potential 1.5 M additional sq m by 2013 • Mainly in suburban and secondary districts Ha Noi market Source: Savills Research & Consultancy, 2009
  10. 10. II-1. HA NOI OFFICE Q4 2009 Future supply Future supply sq m 600,000 500,000 400,000 300,000 200,000 100,000 0 2010E 2011E 2012E 2013E Ha Noi market Source: Savills Research & Consultancy, 2009
  11. 11. II-2. HA NOI RETAIL Q4 2009 Supply • Market remains extremely small vs. region • 372,000 sq m of all categories, up 4% q-o-q Market performance • Occupancy: 90%, up 2% q-o-q • Prime Rents approx: US$150/ sq m/ month Outlook • Till 2012: A potential doubling of new supply to 777,000 sq m • At least two major shopping malls Ha Noi market Source: Savills Research & Consultancy, 2009
  12. 12. II-2. HA NOI RETAIL Q4 2009 Supply by location and type Shopping centres/Department Stores and Hypermarkets Wholesales Centres Supermarkets CBD Secondary Suburban Retail Podiums 4% 12% 32% 33% 48% 56% 15% Ha Noi market Source: Savills Research & Consultancy, 2009
  13. 13. II-2. HA NOI RETAIL Q4 2009 Rental rate of Shopping centres and Rental rate of Retail podiums Department stores US$/ sq m/ month US$/ sq m/ month 200 100 85 80 160 80 150 70 60 120 50 40 80 60 20 40 40 40 15 6 0 0 CBD Secondary Suburban CBD Secondary Ha Noi market Source: Savills Research & Consultancy, 2009
  14. 14. II-2. HA NOI RETAIL Q4 2009 Future supply up to 2012 Future supply sq m 600,000 500,000 400,000 300,000 200,000 100,000 0 2010E 2011E 2012E Ha Noi market Source: Savills Research & Consultancy, 2009
  15. 15. II-3. HA NOI HOTEL Q4 2009 Supply • 5-star: 10 hotels, 3,000 rooms. • 4-star: 6 hotels, 1,100 rooms. • 3-star: 22 hotels, 1,600 rooms. • No new supply in Q4 2009. 3-star 28% Market performance 5-star 53% • Rent and occupancy increased sharply 4-star • 5-star: US$124 (+8% q-o-q), 61% (+10% q-o-q) 19% • 4-star: US$77 (+2% q-o-q), 67% (+13% q-o-q) • Top rate: US$183 (Sofitel Metropole) Outlook • Nearly 30 future projects with 6,000 rooms • Mainly in the suburban Tu Liem District Ha Noi market Source: Savills Research & Consultancy, 2009
  16. 16. II-3. HA NOI HOTEL Q4 2009 RevPAR across all grades: up 28% q-o-q RevPAR (US$) 110 100 90 80 70 60 50 40 30 20 10 0 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 5-star 4-star 3-star Revenue per available room (RevPAR) = Average Daily Room Rate x Occupancy Rate Ha Noi market Source: Savills Research & Consultancy, 2009
  17. 17. II-3. HA NOI HOTEL Q4 2009 Future supply Future supply Tu Liem Cau Giay Hoan Kiem No. of rooms 3,000 Dong Da Thanh Xuan Hai Ba Trung 2,500 6% 5% 2,000 13% 1,500 5% 61% 1,000 10% 500 0 2010E 2011E 2012E Potential Ha Noi market Source: Savills Research & Consultancy, 2009
  18. 18. II-4. HA NOI APARTMENT FOR SALE Q4 2009 Canal Park Supply • Primary market: 2,200 units, 14 active projects, + 2% q-o-q • New supply in Q4 2009: 6 projects, 1,100 units • Secondary market: very active particularly in Cau Giay, Tu Liem & Hoang Mai districts Market performance • Avg. primary prices: +1.5% q-o-q • Grade A: US$2,600 per sq m Hoa Binh Green • Grade B: US$1,260 per sq m • Grade C: US$635 per sq m • Secondary prices in most districts increased, by up to 15% Outlook • Supply to primary market to increase significantly year on year • Mainly in the suburban districts Ha Noi market Source: Savills Research & Consultancy, 2009
  19. 19. II-4. HA NOI APARTMENT FOR SALE Q4 2009 Primary market performance Primary supply No. of apartments sold in Q4 2009 Average primary asking price excl. VAT Units US$/ sq m 1,400 3,000 1,200 2,500 1,000 2,000 800 1,500 600 1,000 400 500 200 0 0 Grade A Grade B Grade C Ha Noi market Source: Savills Research & Consultancy, 2009
  20. 20. II-4. HA NOI APARTMENT FOR SALE Q4 2009 Secondary market performance – asking price Q1 2009 Q2 2009 Q3 2009 Q4 2009 US$/ sq m 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - Hoan Ba Dinh Tay Ho Dong Hai Ba Tu Liem Cau Thanh Hoang Long Kiem Da Trung Giay Xuan Mai Bien Ha Noi market Source: Savills Research & Consultancy, 2009
  21. 21. II-4. HA NOI APARTMENT FOR SALE Q4 2009 Future supply up to 2012 by expected Completion year No. of units No. of projects Unit Project 12,000 60 10,000 50 8,000 40 6,000 30 4,000 20 2,000 10 0 0 2010E 2011E 2012E Potential Ha Noi market Source: Savills Research & Consultancy, 2009
  22. 22. II-5. HA NOI SERVICED APARTMENT Q4 2009 Supply Below 100 sq m From 100 - 150 sq m • 41 serviced apartment buildings; 220,000 sq m, From 150 - 200 sq m Over 200 sq m 2,200 units • No new projects 4% • Smaller unit sizes dominate market share 10% Market performance • Rent rate: US$26/sq m/month, +3% q-o-q, 23% -6% y-o-y 63% • Occupancy: 90%, +2% q-o-q, +1% y-o-y Outlook • 10 future projects, 2,400 units • Main future supply in west and north west of Ha Noi Ha Noi market Source: Savills Research & Consultancy, 2009
  23. 23. II-5. HA NOI SERVICED APARTMENT Q4 2009 Market performance by occupancy & rent Occupancy Average rent rate % US$/sq m/mth 100% 30 25 80% 20 60% 15 40% 10 20% 5 0% 0 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Ha Noi market Source: Savills Research & Consultancy, 2009
  24. 24. II-5. HA NOI SERVICED APARTMENT Q4 2009 Future supply: huge stock by 2011 (more than 1,600 units) Future supply Units 2,000 1,600 1,200 800 400 0 2010E 2011E 2012E 2013E Potential Ha Noi market Source: Savills Research & Consultancy, 2009
  25. 25. II-5. HA NOI SERVICED APART. v.s HOTEL MARKET Occupancy - Hotel sector is more volatile due to seasonality Rent – Same upward trend in Q4 Serviced Apt. (RHS) Office (RHS) Hotel (LHS) Hotel Serviced Apt. Occupancy (%) US$/ sq m/ month US$/room/night 100 45 150 40 80 120 35 30 60 90 25 20 40 60 15 20 10 30 5 0 0 0 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Ha Noi market Source: Savills Research & Consultancy, 2009
  26. 26. HCMC Real Estate Market Q4 2009 Photographed by Peter Adams
  27. 27. III-1. HCMC OFFICE Q4 2009 Saigon Centre Supply • 6 Grade A and 31 Grade B buildings: 475,000 sq m • Growing market: an increase 38% in 2009 Market performance • Average asking rents dropped slightly. • Grade A: between US$55 – US$60 • Grade B: around US$30 Outlook for 2010: • 240,000 sq m across all grades • New supply still concentrated in District 1, accounting for over 60% of total new supply HCMC market Source: Savills Research & Consultancy, 2009
  28. 28. III-1. HCMC OFFICE Q4 2009 Supply, occupancy and rent (all grades) Future supply Leased Area Vacancy Avg Rent Future supply sq m sq m US$/ sq m/ month 800,000 1,000,000 45 40 800,000 600,000 35 600,000 30 400,000 25 400,000 20 200,000 200,000 15 0 10 0 Q496 Q497 Q498 Q499 Q400 Q401 Q402 Q403 Q404 Q405 Q406 Q407 Q408 Q309 Q409 2010E 2011E Potential HCMC market Source: Savills Research & Consultancy, 2009
  29. 29. III-2. HCMC RETAIL Q4 2009 Supply • About 493,000 sq m for all categories • Remains extremely small vs. region Market performance • Rents up slightly • Top rent: $220 per sq m for kiosks in Diamond Plaza Outlook for 2010 • 127,000 sq m gross area of new retail • Concentrated mainly in District 1, nearly 50% of total new supply HCMC market Source: Savills Research & Consultancy, 2009
  30. 30. III-2. HCMC RETAIL Q4 2009 Performance of Department stores and retail podiums Approx. Area Lower rent Upper rent Approx. Area Upper rent Lower rent sq m US$/sq m/month sq m US$/sq m/month 30,000 250 2,500 160 140 25,000 200 2,000 120 20,000 100 150 1,500 15,000 80 100 1,000 60 10,000 40 5,000 50 500 20 0 0 - 0 H ung Vuong Ze n P la za S a ig o n to u rist P a rkso n C T The Opera New Rex HotelSheraton Caravelle Fle m in g to n D ia m o n d P a rkso n P la za P a rkso n P a rkso n P la za Manor View World Saigon Hotel Hotel HCMC market Source: Savills Research & Consultancy, 2009
  31. 31. III-2. HCMC RETAIL Q4 2009 Total value of retail sales in HCMC Future supply Retail sales value GDP growth rate (%) Future supply sq m % VND Billion 500,000 20 400,000 18 350,000 16 400,000 300,000 14 250,000 12 300,000 10 200,000 8 200,000 150,000 6 100,000 4 100,000 2 50,000 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 2010E 2011E Potential HCMC market Source: HCMC Statistics Office, 2009
  32. 32. III-3. HCMC HOTEL Q4 2009 Supply • 5-star: 13 hotels, 4,300 rooms • 4-star: 8 hotels, 1,300 rooms • 3-star: 32 hotels, 2,800 rooms • No new supply since Q3 2009 Market performance • High season, room rates increased sharply • 5-star: US$126 (up 7% q-o-q) • 4-star: US$82 (up 14% q-o-q) • Top rate: US$243 (Park Hyatt) Outlook for 2010 • About 500 new rooms • Expecting strong rebound in international and domestic visitors HCMC market Source: Savills Research & Consultancy, 2009
  33. 33. III-3. HCMC HOTEL Q4 2009 Performance of 3 to 5 star hotels Future supply of hotel rooms in HCMC (3 to 5-star) Room rate RevPAR Future supply No. of Room Rate ((US$/night) RevPAR rooms 120 120 2,000 100 100 1,600 80 80 1,200 60 60 800 40 40 400 20 20 0 0 0 2010E 2011E Potential Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 HCMC market Source: Savills Research & Consultancy, 2009
  34. 34. III-4. HCMC APARTMENT FOR SALE Q4 2009 Supply by Q4 2009 • Primary market: 41 active projects, 9,600 units available for sale by developers • 145 projects sold to date • New supply: 11 projects, 5,500 units, mainly in suburban districts Market performance • Avg. primary prices: • Grade A: US$2,250 per sq m • Grade B: US$1,880 per sq m • Grade C: US$885 per sq m • Secondary prices down by 4% mainly due to exchange rate adjustment Outlook • 2010-2012: approximately 50,000 units of additional supply HCMC market Source: Savills Research & Consultancy, 2009
  35. 35. III-4. HCMC APARTMENT FOR SALE Q4 2009 Primary market performance up to Q4 2009 Primary supply # of units sold Average Primary Price units US$/ units 12,000 4,000 3,500 10,000 3,000 8,000 2,500 6,000 2,000 1,500 4,000 1,000 2,000 500 0 0 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Note: Exchange rate changed to 18,500 VND/ US$ in Q4 2009 HCMC market Source: Savills Research & Consultancy, 2009
  36. 36. III-4. HCMC APARTMENT FOR SALE Q4 2009 Secondary market performance up to Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2009 US$/ sq m 3,000 2,500 2,000 End-user market 1,500 1,000 500 0 Binh Thanh Phu Nhuan Binh Chanh Thu Duc Tan Phu Binh Tan Tan Binh Nha Be Go Vap Dist. 1 Dist. 5 Dist. 3 Dist. 7 Dist. 11 Dist. 2 Dist. 4 Dist. 6 Dist. 9 Dist. 12 Dist. 8 Note: Exchange rate changed to 18,500 VND/ US$ in Q4 2009 HCMC market Source: Savills Research & Consultancy, 2009
  37. 37. III-4. HCMC APARTMENT FOR SALE Q4 2009 Future supply by expected Completion year # of units # of planned projects Units Projects 70,000 45 40 60,000 35 50,000 30 40,000 25 30,000 20 15 20,000 10 10,000 5 0 0 2010E 2011E 2012E 2013-2016E HCMC market Source: Savills Research & Consultancy, 2009
  38. 38. III-5. HCMC SERVICED APARTMENT Q4 2009 Supply by Q4 2009 • 48 serviced apartment buildings; all grades (2,700 units) • 2009: only one new Grade A serviced apartment – Kumho Asiana Plaza, 260 units Market performance • Average rents went up slightly • Grade A: US$29 (up 5% q-o-q) • Grade B: US$24 (up 1% q-o-q) Outlook for 2010: • 480 additional units, increasing by 17% y-o-y • New supply concentrate mainly in districts 3 & 7 HCMC market Source: Savills Research & Consultancy, 2009
  39. 39. III-5. HCMC SERVICED APARTMENT Q4 2009 Supply, occupancy and rent (all grades) Leased Vacancy Avg Rent Units US$/ sq m/ month 3,500 30 3,000 25 2,500 20 2,000 15 1,500 10 1,000 500 5 - 0 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 HCMC market Source: Savills Research & Consultancy, 2009
  40. 40. IV. CONCLUSIONS AND FORECAST Vietnam • Mysterious residential demand – Don’t try to time the market • The second home market along central coast will be exciting in 2010 and 2011 • Retail development is exploding in Viet Nam • “Hanoi and HCMC urbanization problems” are being repeated in many other provincial cities (traffic, land prices [CBD vs. Suburban]) • Poor infrastructure in HN and HCMC: limiting the speed of urbanization and hampering the real estate market. Keeps land prices high • Capital for property developments is an urgent issue for developers because land price too high so no $$ left for construction • Developers more mature and starting to ask the right questions. Starting to think about “what is the highest and best use” for a certain land parcel rather than copying neighbour
  41. 41. IV. CONCLUSIONS AND FORECAST HA NOI MARKET •Apt. for sale: • In short term, design and price not meeting end user expectations • High pressure on the Grade A segment due to high prices • The market already adjusting to lower grade segment in the next 2 - 3 years •Office for lease: • Rent rate will continue fluctuating in 2010 with a slight downward trend in CBD • In some “planned projects”, ‘gov’t zoning’ not allowing for market dynamics, developers are struggling •Retail market • Supermarkets will continue booming in the next 2 - 3 years • Disappearance of traditional markets in the CBD • Modern retail malls will start to dominate
  42. 42. IV. CONCLUSIONS AND FORECAST HCMC MARKET •Apartment for sale • In 2010 and forward, clear trend of the market moving to the suburban districts, Grade C booming. • Oversupply in short to medium term • Must find niche – Don’t follow the herd – unit size, price to end user •Office • 2010 Grade A rents bottoming out at US$50/ sq m per month • Short term new supply not true Grade A • Tenant’s market •Retail • Quality design = success • Shops will get bigger • Retail will emerge in the suburban districts •
  43. 43. V. RISK AND OPPORTUNITY •RISK •OPPORTUNITY • Inflation risk • Cash is King • Interest rate hikes • Foreign funds looking to Asia • Over supply in some sectors • Retailers interest very high and areas • Infrastructure improving in the mid • Under supply in others term • Competition getting smarter • Focus towards end users • Exchange rate and trade • Favorable demographics and balance concerns nature resources • Knowledge is POWER
  44. 44. CONTACT Ha Noi Office 13th Floor, Pacific Place 83B Ly Thuong Kiet, Hanoi Tel: (04) 3946 1300 Fax: (04) 3946 1302 Hanoi-info@savills.com.vn HCMC Office 18th Floor, Frideco Tower 81 - 85 Ham Nghi street, District 1, HCMC Tel: (08) 3823 9205 Fax: (08) 3823 4571 Hcmc-info@savills.com.vn Saigon South Office 2nd Floor, The Laurence S.Ting Building 801 Nguyen Van Linh Parkway Tan Phu Ward, District 7, HCMC Tel: (08) 3412 0100 Fax: (08) 3412 0199 www.savills.com.vn
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