Vietnam Market Overview 3 Q12

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  • 1. Vietnam Market OverviewEconomic and property market highlightsSubtitle 24pt AriJones Lang LaSalleOctober 12
  • 2. Table of ContentVietnam General OverviewHCMC Market Overview Infrastructure Residential Office RetailHanoi Market Overview Infrastructure Residential Office Retail 2
  • 3. Vietnam General Overview Economic Highlights Property Market Headlines Comparisons: HCMC vs. HanoiCopyright © Jones Lang LaSalle, 2012
  • 4. Economic Highlights• Real GDP growth improved in 3Q12 to 5.4% y-o-y; 10.0 % Real GDP Growth (% y-o-y) expected in the low 5% range for whole of 2012 8.0 6.0• Real retail sales in the first nine months of 2012 grew 4.0 6.7% y-o-y 2.0• Inflation accelerated during September but inflation 0.0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 risks are under control as demand remains modest 2007 2008 2009 2010 2011 2012• Interest rates remained flat in 3Q12 but may probably 30.0 % Inflation vs. Interest Rates continue heading south in the remainder of the year 25.0 20.0• Exchange rate has stabilised throughout 2012 so far 15.0 10.0 as foreign exchange reserves vastly improved 5.0 0.0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3• FDI disbursements at a decent level of USD 8.1 billion 2007 2008 2009 2010 2011 2012 ytd, but still registering a 1.8% y-o-y decline Headline Inflation (% y-o-y) Policy Interest Rate (% p.a.) Note: for a more comprehensive review of economic developments in Vietnam and the impact on real estate, download our latest Vietnam Economic Brief 3Q12 Source: IHS Global Insight, General Statistics Office, Jones Lang LaSalle Research, 3Q12 4
  • 5. Property Market Headlines• HCMC: City Garden hands over the Avenue Tower consisting 113 apartments and 4 penthouses.• HCMC: Kinh Do Corporation decided to indefinitely put on hold a plan to start work on Lavenue Crown, a five- star hotel, commercial centre and serviced apartment project.• Hanoi: The shopping centre Indochina Plaza Hanoi officially opened on 31 August 2012, adding 14,000 sqm office space and 20,000 sqm retail area.• Hanoi: Techcombank transferred Salute Building to Vietbank, Viettel Group became new owner of Crown Plaza office section. Note: for a more comprehensive summary of news and headlines in the Vietnam property market, download our latest Vietnam Property Market Monitor 3Q12 Source: Jones Lang LaSalle Research, 3Q12 5
  • 6. Comparisons: HCMC vs. HanoiFactor Ho Chi Minh City HanoiYear Founded 1698 1010 2,096 km2 3,345 km2Area Urban (24%), Rural (76%) Urban (7%), Rural (93%) 7.4 million 6.6 millionPopulation (official census) Urban (83%), Rural (17%) Urban (43%), Rural (57%)Nominal GDP per Capita (USD) 2,800 2,000GDP Structure * State (27%), Non-state (73%) State (44%), Non-state (56%)Real Estate Outstanding Loans 47% 16%(% of Total Outstanding Loans)Key Differentiating Factor Economic centre Political centre * Non-state includes domestic private sectors and foreign invested sectors Source: Vietnam Statistical Yearbook, Statistical Offices, Ministry of Construction, Jones Lang LaSalle Research, 2010 6
  • 7. HCMC Market Overview Infrastructure Residential Office RetailCopyright © Jones Lang LaSalle, 2011
  • 8. Latest Infrastructure Developments in HCMC Phu Long Bridge (completed Feb 2012) CBD Thu Thiem Tunnel (completed Dec 2011)Source: Ho Chi Minh City Department of Transport, Tuoi Tre News, Thanh Nien News, Jones Lang LaSalle Research, 3Q12 8
  • 9. HCMC Residential: Key Completed Developments Condominiums The Vista Xi River View Canh Vien The Estella An Phu Plaza Terra Rosa Phu Hoang 155 Nguyen Palace Phases 1/2/3 Anh Chi Thanh Year of 2011 2011 2007-12 2012 2012 2012 2012 2012 Completion Main Developer CapitaLand GS E&C Phu My Hung Keppel Land An Phu Corp. Khang Nam HAGL & Phu Dist.5 Housing (Singapore) (South Korea) (Taiwan) (Singapore) RE Co. Long RE Co. Devt. & CII No. of Units 750 270 132+133+116 719 54 366 802 272 Villas / Villa Riviera Riviera Cove The Garland Villa Park Saigon Riverside – Midpoint Villas Townhouses Tuyet Anh Year of 2007 2011 2011 2012 2012 2012 Completion Main Developer Keppel Land Keppel Land VinaCapital (fund Khu Dong Investment Tuyet Anh Construct. An Duong Thao Dien (Singapore) (Singapore) manager) & Trading JSC & Housing Co. JSC No. of Units 101 87 53 213 175 11Source: Jones Lang LaSalle Research, 3Q12 9
  • 10. HCMC Residential: Supply and DemandSupply and Demand Situation Supply / Demand Indicator Condominiums Villas / Townhouses [1] Completed Supply (units) 48,000 3,000 Uncompleted Supply (units) [2] 36,000 1,000 3Q12 Completions (units) 2,000 399 3Q12 Launches (units) 1,900 12 Unsold Inventory (%) [3] 31.8% 60.3% [1] Excludes land plot projects. The same coverage is applied in subsequent slides. [2] Excludes planned projects not launched for sale yet. Also known as total inventory. [3] The percentage of total inventory [2] that remains unsold at quarter-end. Total Stock (Completed Supply) units units• Supply shows tow contrary trends in two main sectors 50,000 5,000 - Condominiums: launches doubled to 2,500 units, mostly in the 40,000 4,000 Affordable segment. 30,000 3,000 - Villas / Townhouses: hardly any new projects launched except for 20,000 2,000 the last phase of Chateau. 10,000 1,000• Demand records encouraging growth but still at low levels 0 2007 2008 2009 2010 2011 2012 0 - Condominiums: take-up rose 37% q-o-q, albeit from a low base. ytd Luxury (LHS) - less than 1% - Villas / Townhouses: sales picked up 21% q-o-q, albeit from a low Premium (LHS) Condominiums base. Mid-end (LHS) Affordable (LHS)Source: Jones Lang LaSalle Research, 3Q12 Villas / Townhouses (RHS) 10
  • 11. HCMC Residential: Asset Performance Pricing Performance Primary Market Secondary Market Market Segment Q-o- Q Y-o-Y Q-o- Q Y-o-Y Condominiums 0.3%  -4.2%  -2.7%  -10.4%  Affordable 0.7%  -3.2%  -1.5%  -10.5%  Mid-end -0.4%  -6.2%  -3.8%  -11.8%  Premium 1.1%  -3.7%  -0.2%  -6.7%  Luxury 2.6%  -2.7%  -10.3%  -13.0%  Villas / Townhouses -3.3%  -3.4%  -1.8%  -10.9%  Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). • Prices decline in almost all segments Average Asking Price by Segment - Primary market: All Condominiums - Condominiums: prices showed a modest increase in all segments Condominiums Affordable except Mid-end. Mid-end - Villas / Townhouses: price falls were seen in most projects. Premium - Secondary market: Luxury - Condominiums: prices were reduced in all segments, especially sharply Villas / Townhouses in the Luxury segment. 0 1,000 2,000 3,000 4,000 5,000 - Villas / Townhouses: price declines were gentle overall but fairly sharp USD/sqm in District 9. Average Primary Price Average Secondary PriceSource: Jones Lang LaSalle Research, 3Q12 11
  • 12. HCMC Residential: Outlook Notable Upcoming Projects Estimated Expected Project Name Developer District Type No. of Units Completion Belleza Sacomreal 7 Condominium 968 2012 Q4 Thanh Da View Thanh Yen JSC Binh Thanh Condominium 104 2012 Q4 Thai An 3, 4 Dat Lanh Co., 12 Condominium 658 2012 Q4 Sunrise City - South Tower Novaland 7 Condominium 752 2012 Q4 Imperia An Phu Prudential / Kien A / Invesco 2 Condominium 700 2012 Q4 Ventura Villas Vinh Phu Co., 2 Villa/Townhouse 92 2012 Q4 Upcoming Completions (2012)• Supply abundant in Condos , limited in Villas / townhouses - 12,400 condos to complete by the end of 2012. Condominiums - Only 260 villas / townhouses to complete till the year-end.• Prices may continue to be sliding in the last quarter Villas / Townhouses - Subdued market is still expected for the next quarter as almost no positive units signs are seen in the economy. 0 5,000 10,000 15,000 20,000 - Consequently, downtrend in prices will likely continue. Luxury Premium Mid-end AffordableSource: Jones Lang LaSalle Research, 3Q12 Condominiums 12
  • 13. HCMC Office: Current Grade A Stock Building Saigon Saigon Sun Wah Metropolitan Diamond Kumho Vincom Bitexco Centre Tower Tower Tower Plaza Asiana Plaza Center Financial Tower Year of Completion 1996 1996 1997 1997 1999 2009 2010 2010 Main Developer Keppel Land Chiaphua Sun Wah Saigon Posco E&C Kumho E&C VinGroup Bitexco (Singapore) Group (Hong Group (Hong Metropolitan (South (South (Vietnam) Group Kong) Kong) Limited Korea) Korea) (Vietnam) (British Virgin Islands) Office NFA (sqm) 10,800 12,000 20,800 15,200 15,500 31,600 65,500 37,700 Key Occupiers Deutsche JPMorgan, Citibank, HSBC, P&G, Korean ANZ, Woori Australian Ernst & Bank, DBS, BNP Paribas, KPMG, ACE Chevron, Airlines, Bank, Shell, Embassy, Young, AIG, GE PwC, Life, Nike, Tetra British CapitaLand Eximbank MasterCard, Money, Singapore VinaCapital Pak American Adidas, Keppel Land Airlines Tobacco SamsungGrade B buildings: Saigon Trade Center, Centec Tower, Sailing Tower, A&B Tower, Me Linh Point Tower, Maritime Bank Tower, PetroVietnam Tower, Green Power, Gemadept Building, RoyalCenter, Fideco Tower, Saigon Riverside Office Centre, HD Building, Harbour View Tower, The Landmark, Saigon Finance Center, Master Building, Bao Viet Building, Osic Building, CentralPlaza, Bitexco Building, Sacombank Building, Saigon Royal, Somerset Chancellor Court, Opera View BuildingSource: Jones Lang LaSalle Research, 3Q12 13
  • 14. HCMC Office: Grade A Office MapSources: Google Earth, Jones Lang LaSalle Research, 3Q12 14
  • 15. HCMC Office: Supply and Demand Supply and Demand Situation Supply / Demand Indicator Grade A Grade B Grade C Suburban Total Number of Properties 8 25 156 57 246 Total Stock (sqm) 209,000 283,000 506,000 429,000 1,427,000 Total Vacancy (sqm) 47,000 20,000 40,000 55,000 162,000 Occupancy Rate (%) 77.3% 93.1% 92.2% 87.1% 88.7% Q-o-Q Change (pp) 1.3%  0.4%  1.9%  -1.9%  0.4%  Y-o-Y Change (pp) 7.1%  3.5%  3.4%  0.7%  3.2%  Notes: Total stock is measured in terms of net floor area (NFA). Figures may not add up due to rounding.• Total supply increases by 2.2% but construction continues to slow 000 sqm Total Stock 1,600 - Four buildings came on stream in 3Q12, adding over 31,000 sqm to total 1,400 office stock 1,200 - Construction progress remained sluggish in many projects 1,000 800• Demand remains modest despite an increase of around 60% q-o-q 600 400 - Net absorption reached over 33,000 sqm in 3Q12, around two-thirds of 200 total was contributed by four new buildings 0 2007 2008 2009 2010 2011 2012 - Vacancy rate dropped marginally by 40 bps, to 11.3% in 3Q12 ytd Grade A Grade B Grade C SuburbanSource: Jones Lang LaSalle Research, 3Q12 15
  • 16. HCMC Office: Asset Performance Rental Performance Key Performance Indicator Grade A Grade B Grade C Suburban Overall Average Gross Rent (USD/sqm/mth) 44.0 29.9 19.6 17.6 25.2 Average Net Rent (USD/sqm/mth) 37.1 24.1 17.1 13.8 20.8 Q-o-Q Change (%) -0.5%  -1.8%  -2.2%  0.2%  -1.1%  Y-o-Y Change (%) -10.6%  -8.7%  -7.2%  -3.2%  -6.8%  Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). Rents are based on net lettable area (NLA). USD/sqm/ • Rents downtrend continues in 3Q12 mth Average Net Rents by Grade 50 - Rents continued to fall slightly after slumping in the previous quarter 40 - Compared with the same period of last year, average rents of Grade A 30 and B properties fell sharply, by 10.6% and 8.7% respectively 20 • Investment market calm in 3Q12 10 - No office investment transaction was recorded in 3Q12 0 - However, there were some residential investment transactions observed 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 in 3Q12 Grade A Grade B Grade C SuburbanSource: Jones Lang LaSalle Research, 3Q12 16
  • 17. HCMC Office: Outlook Notable Upcoming Projects Project Name Developer District Grade Estimated Office Expected GFA (sqm) Completion Times Square Times Square Company 1 A 11,000 2012 Q4 R.C Real Estate Development and Financial Corp. President Place 1 B 11,500 2012Q4 (REFICO) HMTC - Hai Ba Trung HCMC Housing Management & Trading Co 1 B 26,000 2013Q1 Le Meridien Saigon Tien Phuoc & 990 Ltd 1 A 14,000 2013 Q1 LIM Tower Mai Thanh Ltd., Co. 1 B 33,300 2013 Q2 Supply Under Construction (NFA) by Expected • Supply continues to outstrip demand in the short term 000 sqm Completion Year 250 - Office stock expected to increase by about 74,000 sqm by end-2012 200 - Demand likely to remain modest in 4Q12 150 • Rents are expected to fall further but only moderately 100 - Subdued office leasing condition could continue to drive rental downtrend going further in the short term 50 - However, a slight recovering in rents may come in 2013 if local and 0 2012 2013 2014 2015 global economies pick up pace by then Grade A Grade B Grade C SuburbanSource: Jones Lang LaSalle Research, 3Q12 17
  • 18. HCMC Retail: Key Shopping Centres Diamond Plaza Zen Plaza NowZone Vincom Center CBD Year of Completion 1999 1999 2008 2010 Main Developer Posco E&C (South Korea) Hasegawa Co. Ltd (Japan) Fu Tsu Const. (Taiwan) VinGroup (Vietnam) Retail NFA (sqm) 12,000 5,800 11,900 57,700 Anchor Tenant Type Department store Department store Department store Specialty retailers Parkson C.T Plaza Lotte Mart Parkson Saigon Paragon Crescent Mall Non-CBD Year of Completion 2008 2008 2009 2011 Main Developer C.T Group (Vietnam) Lotte Group (South Korea) Khaisilk Corporation (Vietnam) Phu My Hung (Taiwan) Retail NFA (sqm) 12,200 33,400 15,000 47,000 Anchor Tenant Type Department store Hypermarket Department store Hypermarket / specialty retailersSource: Jones Lang LaSalle Research, 3Q12. 18
  • 19. HCMC Retail: Supply and Demand Supply and Demand Situation Supply / Demand Indicator Investment Grade Non-Investment Grade CBD Non-CBD Total Number of Properties 9 9 18 70 Total Stock (sqm) 137,000 219,000 356,000 386,000 Total Vacancy (sqm) 14,000 22,000 36,000 N.A. Occupancy Rate (%) 89.5% 90.1% 89.8% N.A. Q-o-Q Change (pp) -0.1%  0.1%  0.0%  N.A. Y-o-Y Change (pp) 7.5%  -4.3%  1.0%  N.A. Notes: Total stock is measured in terms of gross leasable area (GLA). Figures may not add up due to rounding. Total Stock – Investment Grade• Supply remains constant in 3Q12 400 000 sqm - The market recorded no new completions or commencements in 3Q12 300 - For developers, one of the high barriers to entry in the retail market were the difficulties in accessing prime locations in the CBD 200• Demand declines marginally in 3Q12 100 - Weak retail demand continued to cause net absorption to decline 0 2007 2008 2009 2010 2011 2012 - The subdued leasing performance of properties in the CBD drove the ytd CBD Non-CBD overall vacancy to drop by only 1 basis pointSource: Jones Lang LaSalle Research, 3Q12 19
  • 20. HCMC Retail: Asset Performance Rental Performance Key Performance Indicator – Investment Grade CBD Non-CBD Overall Average Gross Rent (USD/sqm/mth) 92.7 48.1 65.3 Average Net Rent (USD/sqm/mth) 84.1 40.1 57.0 Q-o-Q Change (%) -1.7%  0.0%  -1.0%  Y-o-Y Change (%) -2.2%  -0.5%  -1.5%  Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). Rents are based on net lettable area (NLA). USD/sqm/ Average Net Rents by Segment – Investment Grade • Investment Grade rents dropped slightly in 3Q12 120 mth - The average rents of properties in the CBD decreased slightly 100 - Rents in Investment Grade properties outside the CBD have 80 fallen 16.5% over the past two years, twice as quick as those in 60 the CBD 40 - According to the latest MasterCard Worldwide Index of 20 Consumer Confidence, Vietnam still ranks third in Asian, giving 0 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 hope to a resilient consumer market in the near term CBD Non-CBDSource: Jones Lang LaSalle Research, 3Q12 20
  • 21. HCMC Retail: Outlook Notable Upcoming Projects Project Name Developer District Estimated Retail Expected GFA (sqm) Completion Vincom Center 2 Vincom Group 1 39,000 2012 Sunrise City Novaland 7 30,000 2012 Times Square Times Square Company 1 9,000 2012 Saigon One Tower Saigon M&C Joint Stock Company 1 23,000 2013 Thao Dien Pearl SSG Group 2 18,000 2013 • Retail stock could increase twice by 2015 Supply Under Construction (GLA) by - The total under-construction supply, half of which is Investment Grade, Expected Completion Year – Investment 000 sqm Grade stood at around 424,000 sqm 120 - The slow progress seen recently is likely to delay many projects under 100 construction 80 - Modest demand is likely to be seen in the short term 60 40 • Rents not expected to change significantly by end-2012 20 - Rents may fluctuate slightly in the next few quarters 0 2012 2013 2014 2015 - However, rents could begin to recover during 2013 if local and global CBD Non-CBD economies managed to pick up pace by thenSource: Jones Lang LaSalle Research, 3Q12 21
  • 22. Hanoi Market Overview Infrastructure Residential Office RetailCopyright © Jones Lang LaSalle, 2012
  • 23. Latest Infrastructure Developments in Hanoi A Lang Ha – Thai Ha Overpass (completed Apr 2012) Thang Long Highway (completed Oct 2010) B Chua Boc – Tay Son Overpass CBD (completed Apr 2012) A BSource: Hanoi Department of Transport, Tuoi Tre News, Thanh Nien News, Jones Lang LaSalle Research, 3Q12 23
  • 24. Hanoi Residential: Key Completed Developments Condominiums Ciputra The Manor Golden VinCom Park Sky City Tower Keangnam N05 Tran Duy Indochina Plaza Phase 1 Westlake Place Hanoi Hung Hanoi Year of 2003-07 2007 2008 2009 2010 2011 2012 2012 Completion Main Developer Ciputra Group Bitexco Group Tung Sing Group VinGroup Hanotex Co. Ltd. Keangnam Bac Ha JSC Indochina Capital (Indonesia) (Vietnam) (Hong Kong) (Vietnam) (Vietnam) Enterprises (Vietnam) (fund manager) (South Korea) No. of Units 318 449 370 200 481 922 600 385 Villas / Townhouses Ciputra The Manor Van Quan New Urban Area Hyundai Hillstate Palm Garden Phase 1/2 Phase 1 (picture) (picture) (picture) Year of Completion 2003-2007 2007 2007 2011 2012 Main Developer Ciputra Group (Indonesia) Bitexco Group (Vietnam) HUD Group (Vietnam) Hyundai E&C (South Korea) HUD Group (Vietnam) No. of Units 389+252 55 1,236 62 94Source: Jones Lang LaSalle Research, 3Q12 24
  • 25. Hanoi Residential: Supply and DemandSupply and Demand Situation Supply / Demand Indicator Condominiums Completed Supply (units) 33,000 Uncompleted Supply (units) [1] 52,000 1Q12 Completions (units) 2,700 1Q12 Launches (units) 1,460 Unsold Inventory (%) [2] 17.8% [1] Excludes planned projects not launched for sale yet. Also known as total inventory. [2] The percentage of total inventory [2] that remains unsold at quarter-end. Total Stock (Completed Supply) • Supply still grew despite market downturn units 35,000 - Approximately 1,460 units were launched in 3Q12, the vast of 30,000 majority which came from Dai Thanh CT10 and Tay Ho 25,000 Residence project. 20,000 - More than 2,700 units completed in 3Q12. 15,000 10,000 • Demand remains centred around Affordable segment 5,000 - Sales in high-end projects remained low. 0 - Affordable projects remained the focus of customer transactions 2007 2008 2009 2010 2011 2012 ytd Luxury Premium Mid-end AffordableSource: Jones Lang LaSalle Research, 3Q12 25
  • 26. Hanoi Residential: Asset Performance Pricing Performance Primary Market Secondary Market Market Segment Q-o- Q Y-o-Y Q-o- Q Y-o-Y Condominiums -0.4%  -9.4%  -2.7%  -13.0%  Affordable -2.2%  -8.1%  -2.0%  -9.8%  Mid-end -0.2%  -9.3%  -3.8%  -14.3%  Premium 0.0%  -8.2%  -1.8%  -13.3%  Luxury 0.0%  N.A -0.4%  -11.7%  Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). • Prices are becoming more and more competitive. Average Asking Price by Segment - Primary market - Prices have decreased continuously since Q4.11. All Condominiums - Developers launched more competitive offers through promotions, direct Affordable discounts and preferential interest rates. Mid-end - Secondary market Premium - Secondary prices followed the same trend seen in the primary prices, albeit Luxury falling at greater rates in 3Q12 0 1,000 2,000 3,000 4,000 5,000 - ‘Wait and see’ attitude from home buyers continued to be seen USD/sqm Average Primary Price Average Secondary PriceSource: Jones Lang LaSalle Research, 3Q12 26
  • 27. Hanoi Residential: Outlook Notable Upcoming Projects Estimated No. Expected Project Name Developer District Type of Units Completion Big Tower Ba Dinh Investment Group Tu Liem Condominium 120 2012 Q4 The Viet Nam National General Export – Import 310 Minh Khai Hoang Mai Condominium 360 2012 Q4 JSC No.1 (Generalexim) Urban Infrastructure Development Investment Trung Yen Plaza Cau Giay Condominium 210 2012 Q4 Corporation (UDIC) Green Park Constrexim Holdings Cau Giay Condominium 400 2012 Q4 Van Khe CT6 Ha Chau OSC JSC Ha Dong Condominium 332 2012 Q4 • New supply to lead to increased competition on pricing and Upcoming Completions (2012) quality - About 9,700 units are planned to completed in 4Q12 Condominiums - Buyers are expected to have many choices as the supply continues to increase 0 5,000 10,000 • Prices to continue on a downward trend units - Prices are expected to continued to falling due to unimproved economic Luxury Premium Mid-end Affordable conditions. - Customers will likely continue to make pricing their top priority when buying an apartment.Source: Jones Lang LaSalle Research, 3Q12 27
  • 28. Hanoi Office: Current Grade A Stock Building Central Building International Daeha Centre Hanoi Somerset 63 Ly Thai To Sun Red River Vietcombank Centre Grand Tower Year of Completion 1995 1995 1996 1997 1998 1999 2000 Main Developer Hongkong Land Keppel Land Daewoo E&C (South Somerset Holdings Hongkong Land Sun Red River Co., Joint Stock (Hong Kong) (Singapore) Korea) (Singapore) (Hong Kong) Ltd (Japan) Commercial Bank for Foreign Trade of Vietnam - Vietcombank (Vietnam) Office NFA (sqm) 3,653 7,200 19,800 9,000 6,753 13,459 16,000 Key Occupiers Hong Leong Bank, Citibank, Singapore Ernst & Young, Standard Chartered World Bank / HSBC, Vietcombank, Baker British Embassy, Airlines, YKVN, Toto, Koica, Bank, Chartis International Vietcombank, Ford, & McKenzie, Phu My Embassy of Finland Bangkok Bank Hyundai Amco Insurance, Embassy Financial Motorola, Jones Hung Corporation of Belgium Corporation, Lang LaSalle Deutsche Bank, Mizuho, MaybankSource: Jones Lang LaSalle Research, 3Q12 28
  • 29. Hanoi Office: Current Grade A Stock (cont’d)Building Opera Business Pacific Place Sun City BIDV Tower Capital Tower Charmvit Tower Keangnam Hanoi Indochina Plaza Centre Landmark Tower HanoiYear of 2007 2007 2008 2009 2010 2010 2011 2012CompletionMain North Asia Jaccar Capital Sun Group Joint Stock Thu Do Joint CharmVit Group Keangnam IndochinaDeveloper Commercial Joint (fund manager) Vietnam (Vietnam) Commercial Bank Stock Tourism (South Korea) Enterprises (South Land(USA) Stock Bank for Investment and Trading and Korea) (Vietnam) Development of Investment Vietnam - Company BIDV (Vietnam) (Vietnam)Office NFA 2,220 16,600 5,500 20,000 20,628 45,000 95,000 14,152(sqm)Key Occupiers Indochina Capital, HSBC, Hongkong ANZ, MSIG BIDV, Piaggo, Microsoft, GP IDJ, Net Link, Standard Indochina Land, VinaSecurities, airlines, IBM, The Insurance, Prudential, Dell Bank, Lien Viet Samsung Vina Chartered Bank, AIA, Baker & Wells Fargo, Bank of Tokyo VinaCapital, Global B.V Post Bank, Electronics LG, Ericsson, McKenzie China Airlines Mitsubishi UFJ Ltd Polysius Vietnam KPMG, PWCGrade B buildings: Mipec Tower - Pico Mall, GP Building, Handi Resco Tower, Ocean Park, Plaschem Tower, VIT Tower, The Manor, TTC Tower, Crown Plaza, Han Viet Tower, North AsiaTower, Hoa Binh International Towers, Viet Tower, CEO Tower, Tan Hoang Cau, CMC Building, Viet A Tower, Vinaconex Tower, Sky City Tower, HITC, etcSource: Jones Lang LaSalle Research, 3Q12 29
  • 30. Hanoi Office: Supply and Demand Supply and Demand Situation Supply / Demand Indicator Grade A Grade B Grade C Total Number of Properties 16 61 60 137 Total Stock (sqm) 301,000 617,000 252,000 1,170,000 Total Vacancy (sqm) 84,000 115,000 34,000 233,000 Occupancy Rate (%) 72.1% 81.3% 86.6% 80.1% Q-o-Q Change (pp) -2.2% -0.5% 4.1% 0.0% Y-o-Y Change (pp) -18.1% 1.5% -0.5% -3.8% Notes: Total stock is measured in terms of net floor area (NFA). Figures may not add up due to rounding.• Supply is added by two new buildings in 3Q12 Total Stock 000 sqm - Indochina Plaza Hanoi officially opened on 31 August 2012, adding more 1,400 than 14,000 sqm of Grade A office space to the Hanoi market 1,200 1,000 - A Grade B office building in Hai Ba Trung District added 19,000 sqm 800• Demand growth slows but does not affect overall occupancy rate 600 400 - Market-wide net absorption dropped to 28,000 sqm but the overall 200 occupancy rate is not affected as supply only increased slightly 0 - Grade A in the West of the city and newly-completed Grade B office 2007 2008 2009 2010 2011 2012 ytd buildings continued to attract tenants to expand or upgrade their offices Grade A Grade B Grade C Source: Jones Lang LaSalle Research, 3Q12 30
  • 31. Hanoi Office: Asset Performance Rental Performance Key Performance Indicator Grade A Grade B Grade C Overall Average Gross Rent (USD/sqm/mth) 33.3 23.0 16.4 24.2 Average Net Rent (USD/sqm/mth) 27.2 18.3 12.2 19.3 Q-o-Q Change (%) -0.6% -0.9% -0.4% -0.7% Y-o-Y Change (%) -5.6% -11.1% -8.2% -9.0% Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). Rents are based on net lettable area (NLA). USD/sqm/ Average Net Rents by Grade • Rents continue falling slightly across all segments 40 mth - Rents continued falling slightly across all segments, causing the 35 30 average net rents of the Hanoi market to decrease 0.7% q-o-q. 25 - Indochina Plaza Hanoi completed and helped the West of the 20 15 city become more attractive to tenants by offering competitive 10 rents and modern facilities. 5 0 • Investment market sees some transactions 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 - 72 Ba Trieu and Crown Plaza changed hands, according to news reported in the media Grade A Grade B Grade CSource: Jones Lang LaSalle Research, 3Q12 31
  • 32. Hanoi Office: OutlookNotable Upcoming Projects Project Name Developer District Grade Estimated Office Expected GFA (sqm) Completion EVN Towers EVN Corporation Ba Dinh A 73,000 2012 Q4 Hapro Hanoi Trade Corporation Dong Da B 18,000 2012 Q4 VIB – NGT Tower VIBank-NGT Co., Ltd Hoan Kiem A 35,000 2013 Q1 APEX Tower Canvico Vietnam JSC Tu Liem A 44,000 2013 Q2 Lotte Centre Hanoi Lotte Group Ba Dinh A 40,000 2014• The expected supply will continue to increase for next several years Supply Under Construction (NFA) by Expected 000 sqm Completion Year - The market is expected to receive about 110,000 sqm of office space in 500 4Q12. 400 - Newly completed and upcoming office buildings in the West of the city are expected to continue driving demand for office upgrades. 300 200• Rents are expected to remain on a downtrend 100 - Strong supply is likely to continue putting pressures on rents. 0 - Competitive rents in Grade A offices in the West of the city may lead to the 2012 2013 2014 lowering of Grade B rents in the CBD. Grade A Grade B Grade CSource: Jones Lang LaSalle Research, 3Q12 32
  • 33. Hanoi Retail: Key Shopping Centres Hanoi Tower Pacific Place Opera Business Centre Sentinel Place CBD Year of Completion 1997 2007 2007 2010 Main Developer Somerset Holdings (Singapore) Jaccar Capital (fund manager) North Asia Commerical Joint Stock Viet Bac Real Estate Joint Stock Bank (Vietnam) Company (Vietnam) Retail NFA (sqm) 2,056 2,000 1,070 550 Anchor Tenant Type Specialty retailers Specialty retailers Specialty retailers Specialty retailers Vincom City Towers Savico MegaMall Parkson Keangnam Hanoi Vincom Center Long Bien Indochina Plaza Hanoi Landmark Tower Non-CBD Year of Completion 2004 2011 2011 2012 2012 Main Developer VinGroup (Vietnam) Saigon General Service Keangnam Enterprises VinGroup (Vietnam) Indochina Land (USA Corporation - SAVICO (Vietnam) (South Korea) Retail NFA (sqm) 17,000 54,900 35,600 45,000 19,929 Anchor Tenant Type Specialty retailers Hypermarket / specialty Department store Supermarket / specialty Department store retailers retailersSource: Jones Lang LaSalle Research, 3Q12. 33
  • 34. Hanoi Retail: Supply and Demand Supply and Demand Situation Supply / Demand Indicator Investment Grade Non-Investment Grade CBD Non-CBD Total Number of Properties 7 13 20 35 Total Stock (sqm) 15,000 302,000 317,000 169,000 Total Vacancy (sqm) 1,000 28,000 29,000 N.A. Occupancy Rate (%) 91.7% 90.7% 90.7% N.A. Q-o-Q Change (pp) 0.0% 0.5% 0.5% N.A. Y-o-Y Change (pp) 3.0% -9.3% -8.2% N.A. Notes: Total stock is measured in terms of gross leasable area (GLA). Figures may not add up due to rounding.• Indochina Plaza Hanoi officially opens Total Stock – Investment Grade 000 sqm - Indochina Plaza Hanoi officially opened on 31 August 2012, adding nearly 20,000 350 sqm of retail space to the market. 300 250 - On entering the market, Indochina Plaza Hanoi made Cau Giay the city’s second- 200 largest district in terms of retail area. 150• Demand remains moderate but net absorption is still in positive territory 100 50 - Investment Grade occupancy increased slightly, achieving over 90% 0 - Indochina Plaza Hanoi achieved high occupancy rates despite the short time in 2007 2008 2009 2010 2011 2012 operation. ytd CBD Non-CBD Source: Jones Lang LaSalle Research, 3Q12 34
  • 35. Hanoi Retail: Asset Performance Rental Performance Key Performance Indicator CBD Non-CBD Overall Average Gross Rent (USD/sqm/mth) 62.8 39.1 40.2 Average Net Rent (USD/sqm/mth) 55.0 33.9 34.9 Q-o-Q Change (%) 0.0% -3.2% -3.1% Y-o-Y Change (%) 0.0% -17.6% -16.8% Note: Q-o-Q and Y-o-Y changes are adjusted to remove effects from supply additions / removals (i.e. changes are on a like-for-like basis). Rents are based on net lettable area (NLA). USD/sqm/ Average Net Rents by Segment – Investment • Rents decline slightly in non-CBD areas mth Grade 100 - Average rents for Investment Grade in CBD areas were stable, 80 while those in non-CBD areas declined slightly due to increased 60 competition. 40 - The gap in rents for Investment Grade space between the CBD and non-CBD areas remained significant. 20 0 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 CBD Non-CBDSource: Jones Lang LaSalle Research, 3Q12 35
  • 36. Hanoi Retail: Outlook Notable Upcoming Projects Project Name Developer District Estimated Retail Expected GFA (sqm) Completion Eurowindow Multicomplex Eurowindow Holdings Cau Giay 10,000 2013 Royal City VinGroup Thanh Xuan 200,000 2013 Times City VinGroup Hai Ba Trung 230,000 2013 Lotte Centre Hanoi Lotte Group Ba Dinh 35,000 2014 Ho Guom Plaza Ho Guom Garment JSC Ha Dong 23,000 2013 Supply Under Construction (GLA) by• Supply looks set to continue to increase over the next several years 000 sqm Expected Completion Year – Investment Grade - Some 12,000 sqm of Investment Grade retail space will complete in 4Q12. 500 - Demand for retail space is forecast to decrease as the weak economy 400 reduces purchasing power, limiting demand for expansion among brands. 300• Rents are likely to continue to decrease, especially in non-CBD areas 200 - As the economy still faces many difficulties with no sign of recovery, demand 100 for retail space is forecast to decrease, while supply continues to increase 0 significantly, putting pressure on rents, especially in non-CBD areas. 2012 2013 2014 CBD Non-CBD Source: Jones Lang LaSalle Research, 3Q12 36
  • 37. Best Research, Global Best Research, AsiaPartner With the Best Property Research HouseSubscription-based packages offer:• Time series data • Maps• Transactions data • Charts• Project-level data • In-depth analysis• Forecasts … and more 4pt AriFor subscription details and other enquiries, please contact:Joseph Yee Trung ThaiHead of Valuation and Advisory Services Manager, Research & ConsultingLevel 26, Saigon Trade Center Level 26, Saigon Trade Center37 Ton Duc Thang, D1, HCMC, Vietnam 37 Ton Duc Thang, D1, HCMC, Vietnam+848 3910 3968 ext 911 +848 3910 3968 ext 927joseph.yee@ap.jll.com trung.thai@ap.jll.com 37
  • 38. DisclaimerThe views expressed in this publication represent the opinions of thepersons responsible for it as at its date, and should not be construed asguarantees of performance with respect to any investment.The items in this publication have been compiled from the various sourcesacknowledged. The information is from sources we deem reliable. However,no representation or warranty is made to the accuracy thereof.This publication may not be reproduced in any form or in any manner, inpart or as a whole without the written permission of the publisher, JonesLang LaSalle Vietnam, Ltd. 38