Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
4Q 2013 | VIETNAM OVERVIEW

vietnam

KNOWLEDGE Report

www.colliers.com/vietnam
Vie tnam Propert y Marke t At a Gl ance

Table of Contents
Economy of Vietnam
•	 Vietnam’s economy shows signs of recover
...
VIETNAM | 4Q 2013 | ECONOMIC UPDATE

Vietnam’s economy shows signs of recovery
Forecast

VIETNAM

2013

Y-o-Y

2014F

GDP ...
HO CHI MINH & HA NOI | 4Q 2013 | ECONOMIC UPDATE

HCMC economy is stable with bright prospect in 2014
Forecast

HO CHI MIN...
HO CHI MINH CITY | 4Q 2013 | INFRASTRUCTURE

Convenient access and fluent traffic flow
SAIGON BRIDGE 2 PARALLELED WITH EXI...
HO CHI MINH CITY & HANOI | 4Q 2013 | INFRASTRUCTURE
MASTER PLAN OF INTERNAL ROADS @ THU THIEM

> > E x p e c t e d t o re ...
HO CHI MINH CITY | 4Q 2013 | PROPERTY MARKET

HCMC Property Market Overview
HO CHI MINH CITY | 4Q 2013 | OFFICE MARKET
2013 2014F*

Stability in top-tier buildings
>> The median rentals of Grade A o...
HO CHI MINH CITY | 4Q 2013 | OFFICE MARKET

HCMC Office Market Overview
1

Saigon Centre

65 Le Loi

Completion
Year
1996
...
HO CHI MINH CITY | 4Q 2013 | RETAIL MARKET
MARKET PERFORMANCE, 4Q 2013

Hesitation from new supply as of idle period
Domes...
HO CHI MINH CITY | 4Q 2013 | RETAIL MARKET

HCMC Retail Market Overview
No

Name of Project /
Building

Address

Location
...
HO CHI MINH CITY | 4Q 2013 | RESIDENTIAL MARKET

Market is stable from gain of buyer’s confidence
2013 2014F*

Primary mar...
HO CHI MINH CITY | 4Q 2013 | RESIDENTIAL MARKET

Aggressive inventory sales tactics to cope with pipeline of new projects
...
SOUTHERN AREAS | 4Q 2013 | INDUSTRIAL MARKET

South-East Region is preferred location of Industrial Parks in Southern area...
HANOI | 4Q 2013 | PROPERTY MARKET

Hanoi Property Market Overview
HANOI | 4Q 2013 | OFFICE MARKET

Hanoi Office market is driven by tenant powers
CURRENT SUPPLY BY GRADE, 4Q 2013

During 4...
HANOI | 4Q 2013 | RETAIL MARKET

Market plunged in Old CBD areas
SUPPLY BY TYPE, 4Q 2013

The launching of Vincom Mega Mal...
HANOI | 4Q 2013 | RESIDENTIAL MARKET

The Trillion stimulus package getting effective
MARKET PERFORMANCE, 4Q 2013

Accordi...
HANOI | 4Q 2013 | PROPERTY MARKET

Hanoi Office Market Overview
No

Name of Project

Developer

Location

Completed
Year

...
KNOWLEDGE REPORT | 4Q 2013 | VIETNAM

About Colliers International
Colliers International is a leader in global real estat...
Upcoming SlideShare
Loading in …5
×

Vietnam Research & Forecast Report | Q42013 (EN)

1,052 views

Published on

Read this Knowledge Research & Forecast Report for Vietnam. It covers macro economic environment as well as the commercial real estate industry with a focus on Hanoi and Ho Chi Minh City.

Published in: Real Estate
  • Be the first to comment

Vietnam Research & Forecast Report | Q42013 (EN)

  1. 1. 4Q 2013 | VIETNAM OVERVIEW vietnam KNOWLEDGE Report www.colliers.com/vietnam
  2. 2. Vie tnam Propert y Marke t At a Gl ance Table of Contents Economy of Vietnam • Vietnam’s economy shows signs of recover • Positive changes in real estate market regulations • Increase foreign shares in local banks Ho Chi Minh City’ s Economic Update Ho Chi Minh City Infrastructure Update Hanoi’ s Economic AND INFRASTRUCTURE Update Ho Chi Minh City Property Market Office • Market Overview • Market Insight • Forecast Retail • Market Overview • Market Insight • Forecast Residential • Market Overview • Market Insight • Forecast SOUTHERN INDUSTRIAL Market Hanoi Property Market Office • Market Overview • Market Insight • Forecast Retail • Market Overview • Market Insight • Forecast Residential • Market Overview • Market Insight • Forecast ............................................... 1 ............................................... 2 ............................................... 3 ............................................... 5 .............................................. 6 .............................................. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
  3. 3. VIETNAM | 4Q 2013 | ECONOMIC UPDATE Vietnam’s economy shows signs of recovery Forecast VIETNAM 2013 Y-o-Y 2014F GDP Growth 5.42% 0.39%  Registered FDI (US$ billion) 21.6 54.5%  Exports (US$ billion) 132.2 15.4%  Imports (US$ billion) 131.3 15.4%  CPI 6.6% -2.6%  Total retail sales (VND billion) 2,618 12.6%  International Visitors (million) 7.57 10.6%  Base Rate 9% 1.56%  Exchange Rate 21,070 1.1%  VN-Index 504.63 22%  Positive changes in real estate market regulations Gold Price (VND million/ tael) 34,780 -24.4%  > > In 2013, the new Land Law was officially approved by the Source: Colliers International VIETNAM’ S CPI MONTH-ON-MONTH > > The inflation rate is expected to reach around 7% in 2014 given higher targeted growth rate of 5.8% and loosen of public investments. > > It is necessary to keep increasing the growth rate at an appropriate inflation rate. > > Restructure of banking system and state-owned groups remain hot spots of the economy in 2014. National Assembly. > > Condominium inventory has decreased more than 26% to that in the first quarter of 2013, mainly in the small- and medium-sized at affordable apartment segment. > > The average price of all sectors throughout 2013 slightly rose but still are 10% - 30% lower than the peaks gained in 2008 - 2010. >> Throughout 2013, the total investment capital of the real estate projects continued increasing to US$951 million in 2013. Source: GSO, Colliers International REGISTERED & DISBURSED FDI Increase foreign shares in local banks > > The Government issued Decree 01/2014 on lifting foreign ownership cap in local credit institutions. > > A single foreign strategic investor can hold up to 20% of stake in local banks, up from the current 15%. > > Total ownership of foreign investors cannot exceed 30% of chartered capital of a commercial bank in Vietnam. Source: GSO, Colliers International > > The new Land Law is expected to have a practical impact on land ownership, land recovery, compensation for site clearance, resettlement and the establishment of independent agencies for land appraisal. > > One of the main causes of the economic turmoil is local banking system with major issues in bad debt and liquidity. And the increase in foreign shares is expected to support recapitalization and restructure of local commercial banks. > > However, 20% of stake does not provide efficient control for foreign investors to get involved in the restructure process. Then the local banking system will not experience big impacts from merger and acquisition activities during this year. P.1 | Colliers International
  4. 4. HO CHI MINH & HA NOI | 4Q 2013 | ECONOMIC UPDATE HCMC economy is stable with bright prospect in 2014 Forecast HO CHI MINH CITY 2013 Y-o-Y 2014F GDP Growth 9.3% 0.1%  >> In 2014, HCMC will shift FDI attraction to green Registered FDI (US$ billion) 1.55 28.6%  technology, hi-technology, and capital-intensive Exports (US$ million) 26.5 -6.0%  sectors, while discourage polluted FDI projects and Imports (US$ million) 25.8 14.9%  firms employing obsolete technologies regarding CPI 3.7% -0.37%  improvements of the Investment Law and Enterprise Total retail sales (VND billion) 606.9 12.6%  Law. International Visitors (million) 4.1 8.1%  Source: GSO, Colliers International Ha Noi City set lowest FDI target in the past 2 years HA NOI 2013 Y-o-Y 2014F GDP Growth 8.25% 0.15%  of almost US$1.02 billion, or about 87.2% of the Registered FDI (US$ billion) 1.02 -7%  annual target. Exports (US$ million) 10.3 0.2%  >> Hanoi city also set a goal of attracting US$1.3 Imports (US$ million) 23.6 -3.7%  billion in FDI in 2014, despite failing to meet its 6.37% 0.08%  annual FDI targets over the past two years. 1.8 15.2%  CPI International Visitors (million) >> Last year, Ha Noi city attracted registered FDI Source: GSO, Colliers International HCMC - HANOI CPI GROWTH BY MONTH HCMC - HANOI GDP GROWTH RATE Source: GSO, Colliers International Source: GSO, Colliers International P.2 | Colliers International
  5. 5. HO CHI MINH CITY | 4Q 2013 | INFRASTRUCTURE Convenient access and fluent traffic flow SAIGON BRIDGE 2 PARALLELED WITH EXISTING ONE Despite gloomy economic condition in Vietnam and tighten policies in public investment, there has been n o t a b l e i n f r a s t r u c t u r e i m p r o v e m e n t s i n 2 0 1 3 i n H CMC . > > Finishing of 6 flyover bridges at major traffic nodes scattered all over the city. >> Saigon Bridge 2 completed after 18 months of construction, 3 months earlier than schedule. Source: Public Domain, Colliers International FLYOVER BRIDGES COMPLETED IN HCMC IN 2013 >> The opening of the 1st phase of Tan Son Nhat - Binh Loi - Outer Ring Road. >> HCMC-Long Thanh-Dau Giay expressway also finally opened since commencement in 2009. The open of vital infrastructure projects is expected to improve traffic connectivity between the city and its fringe. Future infrastructure developments Tunnels at An Suong (District 12) and Thu Duc (Thu Duc District) crossroads are being processed to enhance infrastructure at the city entrance. Besides, the city agencies also boost development of the Source: Public Domain, Colliers International HCMC - LONG THANH - DAU GIAY EXPRESSWAY Urban Drainage System (sponsored by World Bank). This historically is one of the biggest issues facing. Regarding priority projects of the city, construction on the proposed Metro Rail and Bus Rapid Transit has resumed after prolonged delay due to obstacles in site clearance and compensation. Meanwhile, Thu Thiem new urban area re-starts construction of 4 internal roads which are scheduled to complete in 2016. Source: Public Domain, Colliers International Market Insight PHASE 1 OF TSN - BINH LOI - OUTER RING ROAD > > Though the effectiveness of flyover projects is controversial, the endeavour of local officials is undoubted. Six more bridges are planned to be built in 2014 are hoped to provide more visible results in reducing traffic congestions beside short construction time and low capital investment advantage. >> HCMC Authority is encouraging private investment to infrastructure in PPP scheme. >> Phu My Bridge connecting District 2 and District 7 is an example Source: Public Domain, Colliers International of a PPP developments. P.3 | Colliers International
  6. 6. HO CHI MINH CITY & HANOI | 4Q 2013 | INFRASTRUCTURE MASTER PLAN OF INTERNAL ROADS @ THU THIEM > > E x p e c t e d t o re p l a c e ex i s t i n g B u i l d - O p e ra t i o n -Tra n s f e r ( B OT ) a n d B u i l d -Tra n s f e r ( BT ) fo r m s , t h e PPP s c h e m e re q u i re s i n c re a s i n g re s p o n s i b i l i t y a n d i n vo l ve m e n t o f t h e g ove r nm e n t i n s h a r i n g d i ff i c u l t i e s i n s i t e c l e a ra n c e , co m p e n s a t i o n a n d m a i n t e n a n c e o f t h e p ro j e c t s i n o rd e r t o e n h a n c e co n s t r u c t i o n p rog re ss a n d q u a l i t y. > > The government has approved the “Master plan of Economic and Society development of HCMC to 2020, vision to 2025” that administratively subdivide the city into 6 areas including city center, Thu Thiem new urban area and 4 other suburbans. Regarding economic sections, there will be urban and suburban zones, industrial zones, ecological tourism zones, agricultural zones and reservation zones. >> This is expected to encourage development of current investors and attract interest of potential developers with identified master Source: Public Domain plan and apparent investment policies. Hanoi speed up most of its under-construction or pending projects NEW MASTER PLAN OF TU LIEM DISTRICT The highlight points in the old CBD are Ring Roads 1 and 2. The construction of O Cho Dua – Hoang Cau path has been boost in order to open before Lunar New Year, whereas the clearance plan for O Dong Mac – Nguyen Khoai path has been approved. The resettlement payment was expected to finish in Q4/2013 so that the clearance would start at the beginning of 2014. Besides, the Song Lu – Ton That Tung path connecting Nga Tu So and Nga Tu Vong was also under construction whistle the site clearance was hastened. In the new expansion area of Hanoi, the National Road No.5 Prolong is one of the focusing projects with numerous support from Hanoi’s People Committee. In December 2013, Hall E, the expansion of T1 terminal at Noi Bai International Airport, was inaugurated to catch up with the rapid increasing of travelers during Tet holiday while the construction of T2 terminal was also speed up. Source: Public Domain >> In December 2013, Hanoi’s People Committee has approved the establishment of the two districts named Bac Tu Liem and Nam Tu Liem which are divided from Tu Liem district. >> From a suburban one, Tu Liem has been split into two urban districts. The Bac Tu Liem is the North of the current Tu Liem, covering an area of 4,355 ha with a population of approx. 320,000 people. It contains nine current communes of Tu Liem and a part of Cau Dien town which would be reassigned into 13 wards. The Nam Tu Liem is the South of current Tu Liem, covering 3,227 ha and having a population of 233,000 people. The current communes (of Tu Liem) now belonging to Nam Tu Liem would be divided into 10 wards. P.4 | Colliers International
  7. 7. HO CHI MINH CITY | 4Q 2013 | PROPERTY MARKET HCMC Property Market Overview
  8. 8. HO CHI MINH CITY | 4Q 2013 | OFFICE MARKET 2013 2014F* Stability in top-tier buildings >> The median rentals of Grade A office buildings in HCMC gained 3% Average asking rent   while occupancy rate also rised 3% q-o-q. >> After a reduction in rents offered of 2.3%, Grade B developments Occupancy rate   experienced similar growth rate in occupancy. >> In 2014, the market will receive gradual supply. Around 75,000 net sq m. of commercial office space will enter the market, from Grade Supply  GRADE A PERFORMANCE, 4Q 2013  A and top-tier Grade B projects. Market Insight > > L a n d l o rd s o f G ra d e B d e ve l o p m e n t s w i l l n e e d t o a pp l y v a r i e t y o f s t ra t e g i e s i n c l u d i n g p r i c i n g a n d re n ov a t i o n i n o rd e r t o re t a i n ex i s t i n g t e n a n t s . T h o s e b u i l d i n g s a re u n d e r p re s s u re i n d i s t i n g u i s h t h e m s e l ve s f ro m h u g e G ra d e C s u p p l y w i t h a gg re s s i ve p r i c i n g s t ra t e g i e s . >> Office developments will need to continue offering distincted incentives Source: Colliers International GRADE B PERFORMANCE, 4Q 2013 such as prestigious location and provide added values to their buildings as competitive advantages. International management, iconic design and special building features and effective rentals are needed in building owners strategies. >> An example can be seen in President Place being the first LEED (Leadership in Energy and Environmental Design) Gold building in town. Green building is actually not a new concept but still get low aweness from local market. Source: Colliers International PRESIDENT PLACE: LEED GOLD BUILDING > > Although most of the current green certificate application is for sales and marketing strategies, actual energy efficiency and cost savings will soon be demand drivers allowing for long term savings to building owners and their tenants. Forecast >> It is expected that Grade A developments will maintain and increase rental rates; with a steady gain of 2% to 3% quarterly. >> Meanwhile, occupancy rate is expected to fluctuate moderately. >> The 8% increase in total floor areas from future supply in 2014 is expected to get efficient take-up from current market demand. Premium location and extensive floor plan are preferable elements of these new buildings. Source: USGC P.6 | Colliers International
  9. 9. HO CHI MINH CITY | 4Q 2013 | OFFICE MARKET HCMC Office Market Overview 1 Saigon Centre 65 Le Loi Completion Year 1996 2 3 4 5 6 7 8 Saigon Tower Sunwah Tower The Metropolitan Diamond Plaza Kumho Asiana Plaza Bitexco Financial Tower President Place 29 Le Duan 115 Nguyen Hue 235 Dong Khoi 34 Le Duan 39 Le Duan 45 Ngo Duc Ke 93 Nguyen Du 1997 1997 1997 1999 2009 2010 2012 13,950 20,800 15,200 15,936 26,000 37,710 8,330 6.0 6.0 6.0 8.0 8.0 8.0 6.0 100% 90% 95% 98% 98% 85% 92% 37.0 42.5 41.3 41.0 51.3 34.0 33.0 9 10 Times Square Lim Tower 22-36 Nguyen Hue 9-11 Ton Duc Thang 2012 2013 9,000 29,265 7.0 6.0 60% 88% 50.0 28.0 187,841 6.9 91% 38.9 No Name Address Grade A NLA (sq m) Service Charges (*) Occupancy rate NFA asking rent (*) 11,650 6.5 92% 40.0 1 2 3 4 5 6 7 OSIC Yoco Building Somerset Chancellor Court Central Plaza Saigon Riverside Office Saigon Trade Center Harbour View Tower 8 Nguyen Hue 41 Nguyen Thi Minh Khai 21-23 Nguyen Thi Minh Khai 17 Le Duan 2A-4A Ton Duc Thang 37 Ton Duc Thang 35 Nguyen Hue 1993 1995 1996 1997 1997 1997 1997 6,500 5,000 3,200 6,094 10,000 31,416 8,000 6.0 5.0 5.0 5.0 5.0 6.0 6.0 99% 100% 98% 100% 98% 97% 93% 20.0 16.0 21.0 26.0 20.0 23.0 20.0 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 MeLinh Point Tower Zen Plaza Bitexco Office Building The Landmark Opera View Indochina Park Tower Petro Tower City Light The Landcaster Gemadept Tower Fideco Tower Havana Tower Sailing Tower Royal Center TMS Bao Viet Tower Green Power Tower Vincom Center Saigon Royal A&B Tower Maritime Bank Tower Empress Tower 02 Ngo Duc Ke 54-56 Nguyen Trai 19-25 Nguyen Hue 5B Ton Duc Thang 161-167 Dong Khoi 4Bis Nguyen Dinh Chieu 1-5 Le Duan 45 Vo Thi Sau 22Bis Le Thanh Ton 5 Le Thanh Ton 81-85 Ham Nghi 132 Ham Nghi 51 Nguyen Thi Minh Khai 235 Nguyen Van Cu 172 Hai Ba Trung 233 Dong Khoi 35 Ton Duc Thang 68-70-72 Le Thanh Ton 91 Pasteur 76 Le Lai 192 Nguyen Cong Tru 138 Hai Ba Trung 1999 2001 2003 2005 2006 2006 2007 2007 2007 2008 2008 2008 2008 2008 2009 2010 2010 2010 2010 2010 2010 2012 17,600 11,037 6,000 8,000 3,100 2,145 13,304 10,000 7,000 14,000 15,000 7,326 16,910 14,320 4,000 10,650 15,600 56,600 5,340 17,120 19.596 19,538 6.5 6.0 5.5 6.0 7.0 4.0 5.0 5.0 5.0 6.5 6.0 6.0 5.0 5.0 4.0 6.0 6.0 5.0 4.0 6.0 5.0 5.0 100% 98% 100% 82% 95% 96% 99% 98% 100% 100% 99% 99% 99% 100% 100% 100% 96% 72% 100% 99% 98% 87% 24.0 20.0 22.0 16.0 26.0 10.0 30.0 15.0 24.0 23.0 20.0 21.0 25.0 19.0 23.0 21.0 22.0 25.0 19.0 28.0 19.0 26.0 364,396 5.5 93.5% 22.6 Grade B * US$/ sq m/ month (on net area) P.7 | Colliers International
  10. 10. HO CHI MINH CITY | 4Q 2013 | RETAIL MARKET MARKET PERFORMANCE, 4Q 2013 Hesitation from new supply as of idle period Domestic consumer demand slump because of uncertainty of the economic condition and unpromising figures. All three retail segments including retail podium, department store and shopping mall witnessed drop in rentals and occupancy rate during last quarter. The average rent of retail podium decreased 5% while that of department store also Source: Colliers International MARKET PERFORMANCE BY SECTOR, 4Q 2013 slided 4% q-o-q. Occupancy rate of retail podium and shopping centers fall to 81%. Owners of shopping centers also kept soften asking rents to prevent downward tendency in occupancy, which staying at 86%. Market Insight > > New spaces at Thao Dien Pearl, Imperia An Phu and City Garden will be available during first quarter of 2014. In fact, owners of Source: Colliers International MARKET SUPPLY, 4Q 2013 the completing developments have to delay opening until obtaining sufficient take-up spaces. Suffered sales revenue put pressure on rentals >> Retail sales revenue suffers throughout the year except daily consumption goods with strong expansion of F&B and convenient store chains regardless overall downturn of the market. > > Landlords of CBD retail developments stay strong to current high asking rentals while witness increase of vacant rate over Source: Colliers International time. The pricing strategy is supported by limited number of PARKSON CANTAVIL PREMIER OPEN IN DECEMBER 2013 new projects in coming quarters, especially in CBD areas. In contrast, owners of non-CBD are getting pressure in rents adjustment to soften increasing vacancy rate. Forecast >> The market is expected to be back in lull period after Lunar New Year although Year End Promotion Programs has gained significant foot traffics and boost sales of retail places recently. > > In 2014, retail segment is expected to grow at a slow pace upon moderate recover of the economy. Operators of shopping malls and department stores need to adjust pricing strategy Source: Public Domain to anticipate tenants from moving out to shophouses on high streets at affordable rates. P.8 | Colliers International
  11. 11. HO CHI MINH CITY | 4Q 2013 | RETAIL MARKET HCMC Retail Market Overview No Name of Project / Building Address Location Completion 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 90% 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 The Manor 1 91 Nguyen Huu Canh Binh Thanh 2006 2,000 22 100% 7 Saigon Pearl 92 Nguyen Huu Canh Binh Thanh 2009 5,000 20 60% District 1 2010 2,000 120 90% Binh Thanh 2010 2,500 20 80% 8 Rex Arcade 141 Nguyen Hue 9 The Manor 2 91 Nguyen Huu Canh 10 Bitexco Financial Tower 45 Ngo Duc Ke District 1 2011 8,000 40 96% 11 The Vista Walk Ha Noi Highway District 2 2012 5,000 18 55% 12 President Place 93 Nguyen Du District 1 2012 800 45 67% 13 Times Square 22-36 Nguyen Hue District 1 2013 9,000 90 72% 14 Saigon Airport Plaza 1 Bach Dang Tan Binh 2013 7,623 14 80% 50,323 59 81% Retail Podium 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 Parkson Hung Vuong 126 Hung Vuong District 5 2007 24,000 60 70% 5 Kumho Asiana Plaza 35 Le Duan District 1 2009 6,830 35 100% 6 Parkson Flemington Le Dai Hanh District 11 2009 26,000 40 85% 7 Parkson Paragon Nguyen Luong Bang District 7 2011 7,500 40 65% 8 Parkson C.T Plaza Truong Son Tan Binh 2012 12,235 40 99% 9 Parkson Cantavil Premier Ha Noi Highway District 2 2013 17,815 40 80% 127,198 57.8 86% Department Store 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 Superbowl Vietnam - TSN Truong Son Tan Binh 2002 5,500 22 55% 4 Tax Center 135 Nguyen Hue District 1 2003 7,000 75 100% 5 An Dong Plaza 18 An Duong Vuong District 5 2004 18,000 40 99% 6 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100% 7 Nowzone Nguyen Van Cu District 1 2008 9,000 35 95% 8 Lotte Mart Saigon South Nguyen Huu Tho District 7 2008 24,000 35 100% 9 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 75 75% 10 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 62.5 80% 11 Maximark 3/2 Extension 3/2 Street District 10 2010 25,000 40 85% 12 Lotte Mart Phu Tho Le Dai Hanh District 11 2010 24,500 30 85% 13 Crescent Mall Nguyen Van Linh District 7 2011 45,000 30 80% 14 Satra Pham Hung Pham Hung District 8 2011 11,528 15 55% 15 CMC Plaza 79B Ly Thuong Kiet Tan Binh 2011 18,000 10 60% 16 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100% 17 Union Square Dong Khoi District 1 2012 38,000 72.5 85% 349,062 44.8 81% Shopping Centre P.9 | Colliers International
  12. 12. HO CHI MINH CITY | 4Q 2013 | RESIDENTIAL MARKET Market is stable from gain of buyer’s confidence 2013 2014F* Primary market   Secondary market    than that in 4Q 2012.  Supply >> Average price of High-end projects gained 11% q-o-q though it is still 2% lower >> Mid-end apartment’s median price went flat during last quarter while increasing 5% y-o-y. Affordable condominiums remained active at average asking price of US$740 per sq m. >> Asking price of secondary market slightly dropped 2.5% q-o-q. During last quarter, construction resumed at some projects in CBD Sold rate   PRIMARY MARKET PERFORMANCE BY SEGMENT, 4Q13 fringe like New Pearl and Leman CT Plaza (D3) while Petroland Apartment (D2) and Cong Hoa Garden (Tan Binh) stand mute. A stream of Mid-end developments were also launched including Him Lam Cho Lon (D6), Sunny Plaza (Go Vap), Him Lam Riverside (D7) and Lexington Residence (D2). There was no new High-end supply in 4Q. Last quarter witnessed approximately 2,800 apartments being handed-over, mostly from Mid-end segment in suburban areas Source: Colliers International as well. SECONDARY MARKET PERFORMANCE BY DISTRICT Generally, end-user buyers were major demands of the market with selective criteria in construction progress, project’s facilities and amenities. Market Insight > > Primary market experienced stability at all three segments including High-end, Mid-end and Affordable in last quarter of 2013. Source: Colliers International LEXINGTON RESIDENCE LAUNCHED IN 4Q 2013 > > In 4Q, Affordable projects dominated either supply and demand numbers with new-phase releases of four projects; mostly located in suburban areas; after achieving good take-up rate from initial launch. > > Asking price of secondary market slightly dropped as individual investors received strong pressure from promotion programmes of primary developers. However market confidence is gaining steadily with increase in enquiries and actual transactions. >> Local officials are expected to apply new measures to support the recovery of the property market in 2014 including suggestion of 50% VAT (Value Added Tax) reduction for property transactions. Source: Colliers International P.10 | Colliers International
  13. 13. HO CHI MINH CITY | 4Q 2013 | RESIDENTIAL MARKET Aggressive inventory sales tactics to cope with pipeline of new projects >> Given high remaining stocks, the developers aggressively focus on monthly tactics to boost sales in more professional and convinced methodologies but not daily spamming emails and cold calls. Discount, Flexible payment term, Move-in Condition (paying 30%-50% upfront), Financial support, Free of Management and Parking Fee are common sale strategies although pricing remains a decisive factor. > > The disbursement rate of 1.56% after six months reflects moderate effect of the VND30 trillion capital package in motivating the property market. >> Stakeholders in the market expect more specific instructions from local authorities in effectively implement any monetary. Forecast Strong market segmentation driven by supply - demand impacts in 2014 >> The market is expected to be driven by supply and demand effects under tight management of the government. It is reflected that local officials is trying to support with improved measures instead of driving the market. >> Major issues of the market next year will be fulfil accommodation needs of local buyers and encourage distinctive segmentation of the market. Recently released Affordable Housing Schemes is expected to enhance financial supports for this segment as well as set a price cap to match local average income. Detailed guidance on apartment’s size, price and eligible purchasers will also be instructed for better application of the 30 trillion package. HCMC Residential Market Overview No 1 Name of Project Address Location Launched Year Grade Total units Average asking price (*) High-end 270 2,000 Xi Riverview Palace 190 Nguyen Van Huong District 2 2008 2 Cantavil Premier Ha Noi Highway District 2 2010 High-end 200 1,690 3 Canh Vien 3 Nam Vien Area, PMH District 7 2011 High-end 116 1,905 4 C.T Leman Plaza 117 Nguyen Dinh Chieu District 3 2011 High-end 200 4,200 5 Star Hill Commercial Area, PMH District 7 2012 High-end 351 1,950 6 The Vista (Tower 4) Ha Noi Highway District 7 2013 High-end 141 1,525 7 The Prince Residence Nguyen Van Troi Phu Nhuan 2013 High-end 282 2,100 422 Dao Tri District 7 2010 Mid-end 3,125 1,450 High-end developments 1 Everrich 2 2 Thao Dien Pearl 12 Quoc Huong District 2 2010 Mid-end 450 1,200 3 Saigon Airport Plaza 1 Bach Dang Tan Binh 2011 Mid-end 242 1,300 4 Tropic Garden Nguyen Van Huong District 2 2012 Mid-end 388 1,000 5 Happy Valley Nguyen Van Linh, PMH District 7 2012 Mid-end 818 1,400 6 Sunrise City (Central + North) Nguyen Huu Tho District 7 2013 Mid-end 1,500 1,350 Mid-end developments * US$/ sq m. P.11 | Colliers International
  14. 14. SOUTHERN AREAS | 4Q 2013 | INDUSTRIAL MARKET South-East Region is preferred location of Industrial Parks in Southern area LOCATION MAP OF IPS/EPZS IN SOUTHERN AREAS > > The Southern Key Economic Region (SKER) including South-East and South-West Region >> Total numbers of Industrial Parks (IPs) and Export Processing Zones (EPZs) in Southeast Region is 147 >> Total numbers of IPs/EPZs in Mekong Delta is 43 >> Most of the IPs/EPZs in the SKER is located in Ho Chi Minh City, Dong Nai, Binh Duong, Ba Ria-Vung Tau, Tay Ninh and Long An provinces Market Insight >> Developers of the IPs/EPZs in the SKER are attracting investors in service sectors such as education, healthcare, sports, housing for low-income people and resorts > > Infrastructure (bridges, roads, harbor, clean water supply, and environment treatment); high-technology industries and environmental-friendly technology are also preferred tenants of the developments. > > Many foreign investors are facing many challenges including administrative procedures, poor infrastructure and lack of skilled workforces. >> Government agencies and business associations therefore need to coordinate to provide more effective policies and practices in order to attract more investors. Source: Public Domain, Colliers International Southern Industrial Market Overview No Name of Development Location Area (hecta) Warehouse Rental Occupancy Rate 1 Tan Binh Tan Binh + Tan Phu District 128 3-4 100% 2 Linh Trung 1 Thu Duc District 62 3-4 100% 3 Tan Tao Binh Chanh District 380 3 87.7% 4 Tan Thuan District 7 300 4 81% 5 Le Minh Xuan Binh Chanh District 100 3 100% 6 Vinh Loc Binh Chanh District 203 3-4 100% 7 Cu Chi Western North Cu Chi District 208 2-3 100% 8 Hien Phuoc 1 Nha Be District 311 3-4 92% 9 Cat Lai 2 District 2 124 3.5 89% 10 Dong Nam Cu Chi District 287 2-3 27% * US$/ sq m. P.12 | Colliers International
  15. 15. HANOI | 4Q 2013 | PROPERTY MARKET Hanoi Property Market Overview
  16. 16. HANOI | 4Q 2013 | OFFICE MARKET Hanoi Office market is driven by tenant powers CURRENT SUPPLY BY GRADE, 4Q 2013 During 4Q 2013, pipeline of new projects kept average rentals in downward tendency. There is not yet any sign of the market hitting rock bottom as price keep falling for the last 2 years. In Q4 2013, Grade A office sector show some signs of recovery. The average occupancy of the Grade A offices was about 75%, slight increase than that of the previous quarter. Year-on-year rent rate reduced 17% maintained stable occupancy rate despites the steady Source: Colliers International GRADE A OFFICE PERFORMANCE increase in supply. Given high occupancy rate of 90%, landlords of Grade A building in current CBD held high rent rates. >> In Q1 2014, the market supply would be increase by approximately 124,000 sq m. in NLA of which 73,000 sq m. from B-graded EVN Tower and 51,000 sq m. from A-graded PVI Tower. >> In the middle of 2014, Lotte Centre Hanoi will be available, adding another 45,000 sq m. to Grade A office segment. This shall put more pressure on those in both the existing and new CBD. Source: Colliers International FUTURE SUPPLY BY DISTRICT >> Because of that huge increasing number of supply, the office market would still belong to tenant. Forecast >> The rental gap between current and new CBD areas outweight the fitting out and relocating costs. Hence tenants will continue to move out of buildings within the existing CBD areas to higher quality and less expensive options in outlying districts which is considered as new CBD including Cau Giay and Tu Liem District. FUTURE SUPPLY BY STATUS > > During this year, landlords of office buildings in existing CBD areas still face difficulties in retaining current tenants as well as attracting new ones. > > Office buildings are at piercing competition to be cheaper yet maintain good quality and services. >> Although current pricing strategy of Grade A buildings is supported by sufficient take-up rate, it is flexible in negotiation that achievable rentals are deducted from “rent-free period” and longer fitting out time. Source: Colliers International P.13 | Colliers International
  17. 17. HANOI | 4Q 2013 | RETAIL MARKET Market plunged in Old CBD areas SUPPLY BY TYPE, 4Q 2013 The launching of Vincom Mega Mall Times City made both average occupancy and rental of retail market plunged in Q4 2013. The decline in price mainly comes from the mass launching of new space and the re-launching of retail space within the existing CBD. Both of them have offered much more competitive rentals to attract tenants. Retail space within CBD was grey as high asking rates even though the luxury and mid-end retailers were suffering slump period. Early termination or closure of tenants occured at all malls. Source: Colliers International MARKET PERFORMANCE However, in the outer CBD, the retail market was at booming as developers trying to cover up their presence within low- and middle-income segment. >> The average market rent was recorded at approximately US $53/ sq m., a decrease of 10% q-o-q or approximately 20% y-o-y. >> The occupancy rate was about 83%, declining by 7.1 percentage point q-o-q. Source: Colliers International MARKET SUPPLY > > The average monthly rent of shopping centre is higher than that of department store; i.e. US $53.2 and US $46.4 per sqm. respectively. >> Average rent of retail podium reached US $80.7 per sqm per month. >> Regarding occupancy rate, the highest number belongs to department store (88.7%), whereas retail podium and shopping centre were occupied by around 82.6% and 80.8% accordingly. Source: Colliers International Forecast >> We expect a market influence from re-launch of MIPEC tower in 1Q 2014 and open Lotte Center Hanoi in 2Q 2014 by Lotte Mart that provide strong retail spaces between the Old and New CBD areas. >> Regardless difficulties from low market demand, we could expect that retail market segment will recover faster than any other real estate sector as International retailers are targeting Vietnamese large population and new trendy lifestyle. >> As Vietnam’s agreement to join WTO, the regulations are getting loosen gradually to welcome FDI firms coming to join the market with less restrictions and more incentives M&A across all sectors are opening door for more hypermarket, food chain to make their presence one way or another. P.14 | Colliers International
  18. 18. HANOI | 4Q 2013 | RESIDENTIAL MARKET The Trillion stimulus package getting effective MARKET PERFORMANCE, 4Q 2013 According to Colliers’ recent survey, 30% of projects in the market are under construction, others 31% on planning and vacant land status and remaining 39% delayed. Most of the future supply are in Tu Liem, Cau Giay and Ha Dong District. The major primary supply in this quarter comes from Hai Ba Trung district, with considerable price and quantity from Minh Khai Street. Hoang Thanh Tower, a luxury project pushed up the asking price in the area. Source: Colliers International PRIMARY MARKET PERFORMANCE, 4Q 2013 During the crisis, many projects have ceased construction leading to demoralize market trust and confidence. However, projects with banks’ support in debt restructuring and finance management have resumed construction and obtained increase in sales. >> Average asking price of the primary market dropped from US$752 to 728 per sq m., a slight decrease of 3% from last quarter. >> Affordable apartments are priced in range of US$650 - 700 per sq m. while the Mid-end segment reached US$1,100 per sq m. Source: Colliers International SECONDARY MARKET PERFORMANCE, 4Q 2013 >> The secondary market also dropped 1.1% in asking price. > > Ha Dong and Tu Liem areas with affordable projects pricing at US$ 868 per sq m. on average are leading in supply number of apartments. > > In Q4 2013, the VND 30,000 Billions stimulus package seems to be more active with over 1,700 approved cases valued total of VND 1,881.4 billions. > > Overall, the asking price in both Primary and Secondary markets show slight decrease but there are sign of hitting rock bottom and Source: Colliers International MARKET SUPPLY, 4Q 2013 bouncing back. Forecast > > In December 2013, the banks actually lend out 758.7 billion, an increase of 61% from November. The number is not only impressive in volume but also showed a significant break through in the whole process that expected to get a boost in buyer’s confidence. We expect positive impacts on both developers and buyers from disbursement of the 30-trillion package this year. >> In 2014 more postponed projects are expected to be restarted. Source: Colliers International P.15 | Colliers International
  19. 19. HANOI | 4Q 2013 | PROPERTY MARKET Hanoi Office Market Overview No Name of Project Developer Location Completed Year NLA (sq m.) Average asking price (*) 2008 20,000 18 1 Viet Tower Hoa Binh Trading & Investment JSC 2 EVN Tower EVN 11 Cua Bac, Ba Dinh 2012 45,621 30 2 Dai Co Viet, Hai Ba Trung 2013 4,279 17 1 Thai Ha, Dong Da 3 Pacific Building NCX 4 VID Tower 30/4 Tourism & Trading JSC 115 Tran Hung Dao, Hoan Kiem 2013 4,136 21 5 63 Le Van Luong 319 Group 63 Le Van Luong, Trung Hoa, Cau Giay 2013 12,254 18 Location Completed Year NLA (sq m.) Average asking price (*) 11 Cua Bac, Ba Dinh 2012 4,385 45 2 Tran Hung Dao, Hoan Kiem 2012 2,300 35 * US$/ sq m/ month (on net area) Hanoi Retail Market Overview No Name of Project Developer 1 EVN Tower EVN 2 Hong River Tower Thien Duc Services JSC 3 63 Le Van Luong 319 Group 63 Le Van Luong, Trung Hoa, Cau Giay 2013 20,728 45 4 Mo Market Shopping Mall Vinaconex 459C Bach Mai, Truong Dinh, Hai Ba Trung 2013 24,223 45 5 CTM Building CTM 139 Cau Giay 2014 5,000 45 Hand-over Period Total units Average asking price (*) 2Q 2014 324 600 * US$/ sq m/ month (on net area) Hanoi Residential Market Overview No Name of Project Developer Location Xa La, Phuc La, Ha Dong Urban Area 1 Nam Xa La (Phuc Ha Tower) IPACO 2 Hyundai Hillstate Hyundai RNC Ha Tay To Hieu, Ha Cau, Ha Dong 1Q 2014 928 1,200 3 HEI Tower Ha Noi Electric Investment JV Nguy Nhu, Kontum, Thanh Xuan 1Q 2014 300 1,300 4 136 Ho Tung Mau Vinaconex 7 Ho Tung Mau, Cau Dien, Tu Liem 4Q 2014 360 730 5 Berriver Long Bien Hanco 9 Nguyen Van Cu, Long Bien 2Q 2014 324 1,270 P.16 | Colliers International
  20. 20. KNOWLEDGE REPORT | 4Q 2013 | VIETNAM 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. 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 482 offices in 62 countries on 6 continents $2 billion in annual revenue 13,500 professionals and staff 2.5 billion square feet under management • Valuation & Advisory Services COLLIERS INTERNATIONAL >>Valuation for land, existing property or development sites >>Feasibility studies to determine NPV, IRR and highest & best use HO CHI MINH CITY Bitexco Office Building, 7th Floor 19-25 Nguyen Hue Street District 1, HCM City, Vietnam Tel: + 84 8 3827 5665 • Office Services >>Tenant Representation >>Landlord Representation • Residential Sales & Leasing • Retail Services HANOI Capital Tower, 10th Floor 109 Tran Hung Dao Street, Hoan Kiem District, Hanoi, Vietnam Tel: +84 4 3941 3277 • Investment Services • Real Estate Management Services • Corporate Services • Industrial Leasing The foundation of our services is the strength and depth of our experience. QUANG NGUYEN Research Manager Please contact, If you would like to recieve our other research reports Publication Coverage Frequency Content Availability quang.nguyen@colliers.com +84 938 056 603 Research & Forecast Report Vietnam Cities Quarterly All market sectors Publicly available LINH PHAM CBD Report HCMC CBD Monthly Office, Retail, Hotel and Serviced Apartment Publicly available Asia Pacific Office Report Asia Pacific including 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 Research Manager linh.pham@colliers.com +84 912 013 536 YEN NGUYEN Research Analyst yen.nguyen@colliers.com +84 915 478 778 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. www.colliers.com/vietnam Accelerating success

×