The Vietnam economy continued to grow strongly in the third quarter of 2015, with GDP increasing 6.5% year-over-year for the first nine months and reaching 6.81% growth in Q3, the highest level in five years. In the Hanoi office market, overall vacancy rates decreased while net absorption increased, leading to stable or slightly lower asking rental rates compared to previous quarters. Two new office buildings are expected to enter the market by the end of 2015, adding approximately 230,000 square meters of new supply. The retail market saw an increase in occupancy rates and a small rise in average asking rents, while two major new retail centers are scheduled to open later in 2015.
1. Office Snapshot Q3 2015
Hanoi,Vietnam
MARKETBEAT
Economic Indicators
Market Indicators – Grade A
Grade A - Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Grade A - Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at
a low level, up just 2.15% y-o-y. For the first 9 months of 2015,
total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
No new supply of both grades was recorded in Q3 2015.
Currently, there are 21 Grade A and 64 Grade B office buildings,
providing a total of nearly 1,122,000 sq.m to the market, one-
third of which are grade A buildings. Buildings in the CBD
account for 21% of total supply.
Average asking rents in Q3 2015 for both grades remained
stable on a quarterly basis but decreased by some 2% y-o-y,
to reach VND659,000/sq.m./mo. (US$29.8/sq.m./mo.) for grade
A, and VND402,000/sq.m./mo. (US$18.2/sq.m./mo.) for Grade B.
Both grades witnessed significant improvement in market
performance year-on-year, with average occupancy rate of
Grade A increasing by 13 ppts y-o-y and 2 ppts q-o-q, reaching
83%; while Grade B’s stood at 87%, an increase of 3 ppts q-o-q
and 16 ppts y-o-y. The increase in occupancies were mainly due
to several significant transactions recorded in some office
buildings such as Lotte Center Ha Noi, Song Hong Parkview and
VIT Tower.
Outlook
In the last quarter of 2015, one grade A and six grade B office
buildings are expected to enter the market, providing circa
180,000 sq.m of new office space. Notably, TNR Tower – a
Grade A building on Nguyen Chi Thanh Street with
approximately 50,500 sq.m of NLA – will enter the market by the
end of this year. The office market will continue to face an
oversupply situation over the year predominantly in the west of
the city. Rental declines are expected to continue.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6,81%
Inward FDI (billion US$) 11.18 17.15
Unemployment Rate 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Overall Vacancy 29.6% 16.5%
Net Absorption 5,907 8,166
Under Construction 0 0
Overall Average Asking
Rent
$30.46 $29.75
0%
5%
10%
15%
20%
25%
30%
35%
40%
2010 2011 2012 2013 2014 2015 Q3
2015
HANOI OFFICE
Historical Average = 21%
$10
$20
$30
$40
$50
0
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014 Q3 2015
Net Absorption, SQ.M Asking Rent, US$ PSQ.M
3. Retail Snapshot Q3 2015
Hanoi,Vietnam
MARKETBEAT
Economic Indicators
Market Indicators
Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for 9 months 2015 was estimated to increase by 6.5% y-o-y,
with the growth rate in Q3 reaching 6.81%, the highest level in the
past 5 years. Inflation continued to remain at low level and just
increased by 2.15% y-o-y. In 9 months 2015, Vietnam had the total
inward FDI of US$17.15 billion, rising by 53.4% y-o-y. Real estate
ranked third among sectors that attracted the largest proportion of
total FDI with 19 newly invested projects. Up to Q3 2015, 68,347
enterprises with the total capital of 420,900 billion VND were newly
registered, and 608,900 billion VND was additionally introduced. Total
labor force increased to 54.32 million people, 52.72 million were with
employment. The unemployment rate continued to be kept at low
level of 2.36% on average for 9 months 2015.
Market Overview
Two new retail centres were completed in Q3 2015, adding 21,200
sqm of retail space to the market. However, some projects were also
restructured into offices due to poor performance. Total supply
reached nearly 716,000 square meters (sq.m), an increase by 2% q-
o-q and 13% y-o-y. Non-CBD supply dominated the market,
accounting for nearly 96% of the market due to limited land bank in
the CBD.
Some positive signs were recorded in Q3/2015. The improving
performance of shopping centres and retail podiums offset the
ineffective operation of department stores, leading to a 4-ppts growth
q-o-q in the average market occupancy rate to 85%. Better conditions
in both CBD and Non-CBD regions also saw occupancy increase by
1% and 4% q-o-q respectively.
The overall average asking rent increased slightly by 2% q-o-q but
was down significantly by 8% y-o-y to VND845,000 per square meter
per month (/sq.m./mo) (US$38/sq.m/mo.). The average rent in the
CBD remained stable over the quarter, reaching
VND2,220,000sqm/mo. (US$100/sqm/mo.) as the majority of retail
centres are fully occupied; Non-CBD areas showed a small increase
of 2.2% q-o-q to VND786,000/sqm/mo. (US$35.5sqm/mo.)
Outlook
Two notable projects – Vincom Nguyen Chi Thanh and Aeon Mall
Long Bien are – are expected to enter the market this year, providing
more than 165,000 sqm of new retail space to the market.
Easing tariffs under the Trans-Pacific Partnership together with the
further liberalization of the retail sector under the provisions of the
WTO is expected to enhance Vietnam's potential to international
retailers.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil.US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Overall Vacancy 17.8% 15.1%
Net Absorption (5,288) 37,283
Overall Average Asking
Rent
VND 837K VND 845K
0%
10%
20%
30%
2010 2011 2012 2013 2014 Q3
2015
HANOI OFFICE
Historical Average = 15%
600
800
1000
1200
-10,000
10,000
30,000
50,000
70,000
90,000
110,000
130,000
2010 2011 2012 2013 2014 Q3 2015
Net Absorption, SQ.M Asking Rent, thousand VND PSQ.M
(*) Average rent on the ground level is used as a benchmark to represent the rent of each
retail centre. All rents include Service charge and exclude VAT
5. Industrial Snapshot Q3 2015
Hanoi,Vietnam
MARKETBEAT
Economic Indicators
Market Indicators
Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y. GDP in Q3 reached 6.81%, 3.12 ppts
of which was contributed by industry and construction sector.
Inflation continued to remain at a low level, up just 2.15% y-o-y.
For the first 9 months of 2015, total inward FDI reached
US$17.15 billion, rising by 53.4% y-o-y; disbursement is
estimated to have reached US$9.65. Real estate ranked third
among sectors that attracted the largest proportion of total FDI
with 19 newly invested projects. Through Q3 2015, 68,347
enterprises with a total capital of VND420,900 billion were newly
registered while VND608,900 billion was additionally introduced
by current enterprises.
Market Overview
Q3 2015 witnessed no change in the supply of industrial
parks (IPs). Total net leasable area of eleven IPs in Hanoi
remained the same at more than 1,420 hectares. Total available
land for lease at the end of Q3 was 400 hectares, accounting for
28% of the total supply.
The average occupancy has experienced gradual
improvement recently, reached 72% in Q3 2015 and recording
an increase by nearly 4 ppts y-o-y. Among remaining IPs that still
had vacant area at the end of this quarter, Hoa Lac Hi-tech Park
had the highest vacancy rate (70%) with 346 hectares land
available for lease.
The average asking rent of IPs in Hanoi continued to be the
highest compared to all other cities/provinces in the northern
region of Vietnam (about 50% higher than that of Hai Phong and
Bac Ninh), standing at VND2,470,000 per square meter per term
(/sq.m./term) (over US$111/sq.m/term) in Q3 2015, increasing by
1% q-o-q and 9.4% y-o-y. Nam Thang Long Industrial Park
offered the highest rent at nearly VND4,140,000/sq.m/term
(US$187/sq.m/term).
* ALL RENTS ARE ASKING RENTS AND VAT EXCLUDED
Outlook
An additional supply of about 6,100 hectares from 14 identified
IP projects is expected to enter the market through 2020, which
is equivalent to 400% of current supply. By 2030 with vision to
2050, Hanoi will have 33 IPs with an area of 8,000 hectares in
total. With labor costs increasing in China, foreign investment in
IPs is expected to grow continually in the medium to long-term as
manufacturing companies shift their operations to other
countries, including Vietnam and in particular, Hanoi.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Overall Vacancy 31.9% 28.2%
Net Absorption 1.8 ha 7.5 ha
Under Construction 0 0
Overall Average Asking
Rent (mil. VND/sq.m/term)
2.16 2.47
20%
25%
30%
35%
40%
2012 2013 2014 2015 Q3
2015
HANOI OFFICE
Historical Average = 31%
VND 1.00
VND 1.50
VND 2.00
VND 2.50
VND 3.00
0
2
4
6
8
10
12
14
16
18
20
2012 2013 2014 2015 Q3 2015
Millions
Net Absorption, ha Asking Rent, mil. VND PSQ.M
7. Residential Snapshot Q3 2015
Hanoi,Vietnam
MARKETBEAT
Economic Indicators
Market Indicators
Primary Market Performance
Asking Prices of All Segments
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at a
low level, up just 2.15% y-o-y. For the first 9 months of 2015, total
inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
Q3 2015 witnessed positive market momentum reflected by strong
launch activities across all grades, especially grades B and C.
Approximately 8,700 units from 23 projects were launched of
which two were new grade B projects; the rest was from active
grade B and grade C projects. Grade B accounted for the greatest
market share of nearly half the total primary supply, followed by
Grade C (48.6%) and Grade A (1.4%). The total primary supply in
this quarter was more than 16,600 units.
Transaction volume rose 16% q-o-q and 263% y-o-y in Q3 3015 of
which Grade C accounted for over 56%, followed by Grade B with
43%. Several grade B projects registered impressive sales rate
including Time City Phase II, Imperia Garden and Goldmark City.
Hoang Mai District contributed the highest share of over 30% to
total sale volume this quarter.
Price levels of all grades recorded a downward trend in Q3 2015.
Average asking price of Grade A continued to experience a slight
decrease, down nearly 2% q-o-q, to VND51,000,000/sq.m
(US$2,300/sq.m), whilst Grade B’ stood at VND32,4000,000/sq.m
(US$1,460/sq.m), down 4% q-o-q; Grade C fell 6% q-o-q to
VND15,8000,000/sq.m (US$711/sq.m).
* ALL PRICES ARE VAT EXCLUDED
Outlook
Low-end apartments will continue to be the most sought-after and
this market sector is expected to be the most active going forward.
The New Housing Law is expected to strengthen demand,
especially for mid to high-end projects. New guarantees required
by developers from banks for new developments will add more
confidence to the market. The Ha Noi residential market will likely
continue to improve in the short to medium term.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Sold units 1,967 7,145
Net Absorption 16% 43%
Overall Average Asking
Price (mil. VND/sq.m)
N/A 24.56
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
Grade A Grade B Grade C
Lowest Asking price (VND/SQ.M) Highest Asking price (VND/SQ.M)
HANOI OFFICE
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Grade A Grade B Grade C
Primary Stock - UNITS Est. Sold units in Q3 2015 - UNITS
9. Serviced Apartment Snapshot
Q3 2015
Hanoi,Viet Nam
MARKETBEAT
Economic Indicators
Market Indicators
Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at
a low level, up just 2.15% y-o-y. For the first 9 months of 2015,
total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
Q3 2015 saw the completion of 50 additional units from an
existing project, Royal City, which increased total stock by 1.4%
q-o-q and 3.6% y-o-y. Currently, there are 12 grade-A projects
and 21 grade-B projects, supplying a total of more than 3,500
units to the market. Ba Dinh and Tay Ho Districts make up more
than 50% of the total supply.
The overall occupancy of both grades saw an improvement, up 2
percentage-points (ppts) q-o-q and 7 ppts y-o-y, to reach 85.3%.
However, the performance of grade A and grade B ran counter to
each other. While occupancy of grade A rose by 4 ppts q-o-q and
10.6 ppts y-o-y to 87.6%, that of grade B stood at 82.3%, down
1.6 ppts q-o-q and up 5.2 ppts y-o-y.
The average asking rent of grade A was largely stable on both a
quarterly and yearly basis, up 1% q-o-q but down 1% y-o-y to
VND740,000 per square meter per month (/sq.m/mo.) or
US$33.4/sq.m/mo. Grade B, however, recorded a marked fall in
price on both a quarterly and yearly basis, by 5.7% and 9.2%
respectively. This was attributed to the decrease in two projects
– Pan Horizon and Oriental Place. The average asking rent of
grade B was recorded at VND443,000/sq.m/mo., equivalent to
US$20/sq.m/mo.
* ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED
Outlook
No new projects are expected to be delivered in the last quarter
of 2015. In 2016, only one project with 200 units is expected to
enter the market. Despite limited supply, the serviced apartment
sector is still expected to experience intense competition from
future Grade A buy-to-let apartments.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Grade A Vacancy 23.0% 12.4%
Grade A Net Absorption 64 units 82 units
Grade A Average Rent VND718k VND740k
Grade B Vacancy 22.9% 17.7%
Grade B Net Absorption 47 Units 21 Units
Grade B Average Rent VND469k VND443k
5%
10%
15%
20%
25%
2011 2012 2013 2014 2015Q3 2015
HANOI SERVICED APARTMENT
Historical Average = 17%
0
200
400
600
800
-60
-40
-20
0
20
40
60
80
100
120
140
2011 2012 2013 2014 2015Q3 2015
Net Absorption, SQ.M Asking Rent, thousand VND PSQ.M
11. Office Snapshot Q3 2015
Ho ChiMinh City, Viet Nam
MARKETBEAT
Economic Indicators
Market Indicators
Grade A Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Grade A Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at
a low level, up just 2.15% y-o-y. For the first 9 months of 2015,
total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
No new office buildings for either Grade entered the market in
Q3 2015. However, significant leasing activity was recorded in
three yet-to-be inaugurated buildings – Vietcombank Tower, Lim
Tower 2, and Pearl Plaza. Currently, there are 9 Grade A and 46
Grade B office buildings, providing 156,700 sq.m. and 660,700
sq.m. of space respectively to the market.
Occupancy of both Grades continued to increase this quarter,
with Grade A up by 1% on both a quarterly and yearly basis to
93%. Grade B reached 95%, up by some 2 ppts year-on-year,
enjoying an unbroken upward trend in the last nine quarters.
Non-CBD Grade B achieved a higher average occupancy growth
of 6 ppts y-o-y to reach 97%, with those in the CBD stable at
94%. The average occupancy in the non-CBD remained slightly
higher than those in the CBD over the last five quarters, as
tenants remained attracted to the area's affordability.
Average rents of Grades B saw a moderate increase of 1% q-o-q
and nearly 2.5% y-o-y, to about VND610,000 per square meter
per month (/sq.m/mo), or US$27.6/sq.m/mo. Grade A rent, in
contrast, softened by 1% on both a quarterly and yearly basis, to
VND1,026,000/sq.m/mo (US$46.3/sq.m/mo)
The total net absorption of both Grades reached 5,800 sq.m this
quarter (372% quarter-on-quarter and -17% year-on-year).
Grade A net absorption reached 2,000 sq.m while Grade B
reported 3,800 sq.m, all from buildings in the non-CBD area.
Outlook
About 80,000 sq.m of new supply from three projects is expect to
be completed in Q4 2015 however stong pre-leasing levels will
soften the actual amount of leasable space entering the market.
A restriction of supply, in particular large spaces, will keep rents
stable with increases likely by the end of the year.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Grade A Overall Vacancy 7.3% 5.5%
Grade A Net Absorption 1.52k 2.0k
Under Construction 253k 208k
Grade A Average Asking
Rent
$46.7 $46.3
5%
10%
15%
20%
25%
30%
35%
2010 2011 2012 2013 2014 Q3 2015
HCMC OFFICE
Historical Average = 15%
$10
$20
$30
$40
$50
$60
-2,500
-500
1,500
3,500
5,500
7,500
9,500
2010 2011 2012 2013 2014 Q3 2015
Net Absorption, SQM Asking Rent, $ PSQM
13. MARKETBEAT
Retail Snapshot Q3 2015
Ho ChiMinh City, Viet Nam
Economic Indicators
Market Indicators
Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at
a low level, up just 2.15% y-o-y. For the first 9 months of 2015,
total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
Two retail centres were completed in Q3 2015, increasing
total stock by 2% q-o-q and 13% y-o-y. The renovation of Tan An
Dong (the former Hung Vuong Square) was also completed in
the same quarter. Currently, there are 119 retail centres in the
city with a total area of approximately 960,500 sq.m. District 1
remains the most concentrated retail market in the city,
accounting for nearly 20% of the total supply.
Conditions continue to improve with average occupancy up by
1 ppt q-o-q and 2 ppts y-o-y, to 93%. The two aforementioned
new completions were reportedly fully occupied. The recent trend
of high profile investments from foreign retailing giants into the
Non-CBD area, establishing large shopping centres and offering
aggressive rents, raised occupancy rate by 2ppts q-o-q and
3ppts y-o-y, to 93%; the CBD remained stable at 90%.
Average rents continued to trend downwards on a yearly
basis, by 5% to VND1,320,000/sq.m/mo (US$59.6/sq.m./mo.).,
due to lower rents in new projects and the closing of some retail
properties, where rents were higher. Rents in the CBD remained
largely stable, at VND2,320,000/sq.m./mo (US$104.7/sq.m./mo.).
This is more than twice the level in the non-CBD area.
Outlook
Over 200,000 sq m of new supply is expected to add 20% to total
stock by 2016. Demand for CBD space is expected to remain
high, however, due to limited land, large scale future stock will
mainly be located in non-CBD areas, mostly in the south and
east where much of the infrastructure and residential
developments have been established.
Easing tariffs under the Trans-Pacific Partnership together with
the further liberalization of the retail sector under the provisions
of the WTO is expected to enhance Vietnam's potential to
international retailers.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Overall Vacancy 9% 7%
Net Absorption 5.86k sq.m 31.5k sq.m.
Average Asking Rent
(per sq.m. per month)
VND1,335k VND1,320k
0%
5%
10%
15%
20%
2010 2011 2012 2013 2014 Q3 2015
HCMC OFFICE
Historical Average = 13%
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
(10,000)
0
10,000
20,000
30,000
40,000
50,000
60,000
2010 2011 2012 2013 2014 Q3 2015
Net Absorption, SQM Asking Rent, VND PSQM
(*) Average rent on the ground level is used as a benchmark to represent the rent of each
retail centre. All rents include Service charge and exclude VAT
15. Industrial Snapshot Q3 2015
Ho ChiMinh City, Viet Nam
MARKETBEAT
Economic Indicators
Market Indicators
Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain
low, up just 2.15% y-o-y. Total inward FDI reached US$17.15
billion in the first 9 months of 2015, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
No new supply was delivered during the quarter. Currently,
there are 18 operating IPs providing a total area of nearly 3,630
hectares. The leasable area is estimated to be about 62% of the
total industrial land scale, or more than 2,260 hectares. The
remaining LUR years range from 26 – 43 years, with the average
being 35.
The IP market in HCMC was stable on a quarterly basis, with
both occupancy and rents unchanged. However, on a yearly
basis, the average occupancy increased by nearly 3 percentage
points year-on-year, to reach 71%. The majority of IPs reported
occupancy rates of above 90%, being well-established and thus,
have already been operating for several years. Three IPs in Nha
Be, Cu Chi and Binh Chanh Districts, which have just started
operations recently, reported occupancy rates of under 50%.
Average asking rents in this quarter stood at approximately VND
2,780,000 per square meter per term (/sq.m./term), equivalent to
US$125.6/sq.m./term*. The rental rate in HCMC is about two
times higher than that of Long An, Binh Duong, and Dong Nai.
Currently, developers are turning from long-term land leases to
factory construction for short-term occupation with areas of about
2,000 – 3,000 sq.m., and rents ranging from VND53,800 – VND
75,400/sq.m./mo, equivalent to US$2.50 – US$3.50/sq.m./mo.
* ALL RENTS ARE ASKING RENTS AND VAT EXCLUDED
Outlook
The total increase in industrial land in HCMC up to 2030 is
projected at approximately 3,000 hectares, up some 85% from
the current stock. In terms of the number of IPs, it is expected
that 12 new IPs will be added to the 18 that are currently in
operation by 2020. However, the majority of future projects are
still in the clearance and compensation stage; construction
progress is expected to be protracted.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Overall Vacancy 31% 28.9%
Net Absorption 10 ha 4 ha
Under Construction 3,067 ha 3,067 ha
Overall Average Asking
Rent
VND2,657k VND2,780k
24%
26%
28%
30%
32%
34%
36%
38%
40%
2012 2013 2014 Q3
2015
HCMC OFFICE
Historical Average = 34%
2,500,000
2,600,000
2,700,000
2,800,000
2,900,000
0
10
20
30
40
50
60
70
80
2012 2013 2014 Q3 2015
Net Absorption, ha Asking Rent, VND PSQM
17. Residential For Sale Snapshot
Q3 2015
Ho ChiMinh City, Viet Nam
MARKETBEAT
Economic Indicators
Market Indicators
Overall Primary supply/Asking Prices Q3 2015
Primary Stock/Price Range by Grade Q3 2015
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Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at
a low level, up just 2.15% y-o-y. For the first 9 months of 2015,
total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
Substantial new supply across all grades was launched during
the quarter, totaling 4,600 units (nearly 70% is concentrated in
the East and South regions) from 14 new projects and a further
4,000 units from 12 active projects. As of Q3 2015, there were
nearly 20,100 available units for sale across all grades in the
primary market. More than 50% of total primary stock is located
in Districts 2, 7, and Binh Thanh District.
The residential market continued to see consecutive increases in
transaction volume in the quarter, registering an increase of 13%
q-o-q and up sharply 185% y-o-y. The increase was spread
equally across all grades. Districts 2, 4, 7 and Binh Thanh
accounted for 60% of total transaction volume.
Price levels of all grades recorded an upward trend in Q3 2015.
Grade C enjoyed the highest increase on both a quarterly and
yearly basis, by 6% q-o-q and 19% y-o-y, reaching VND19
million/sq.m, equivalent to US$860/sq.m; Grade A prices grew
2% q-o-q but was down 2% y-o-y to VND47.2 million/sq.m
(US$2,130/sq.m). Grade B grew 4% y-o-y but decreased 3% q-
o-q due to the lower prices at new projects, which if excluded,
would be stable at about VND29.4 million/sq.m (US$1,330/sq.m).
Outlook
Apartments with small sizes is expected to be the most sought-
after. Future supply will largely be in strategic locations which
offer easy access to the CBD such as Districts 2, 4, 7 and Binh
Thanh. Projects located along the first metro line are attracting
more interest. The New Housing Law is expected to strengthen
demand, especially for mid to high-end projects. New guarantees
required by developers from banks for new developments will
add more confidence to the market. The city’s residential market
is expected to continue improving in the short to medium term.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Overall Absorption Rate 27% 51%
Overall Average Price VND22,200k VND31,900k
Overall Sold Units 3,600 10,260
5,400
5,600
5,800
6,000
6,200
6,400
6,600
6,800
7,000
7,200
7,400
0
20
40
60
80
100
Grade A Grade B Grade C
Primary Stock, UNITS Lowest Price (MIL VND/SQM)
Highest Price (MIL VND/SQM)
HCMC OFFICE
15
20
25
30
35
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2011 2012 2013 2014 Q3 2015
Primary Stock, UNITS Aksing Price, MIL VND/SQM
* ALL PRICES ARE VAT EXCLUDED
19. Serviced Apartment Snapshot
Q3 2015
Ho ChiMinh City, Viet Nam
MARKETBEAT
Economic Indicators
Market Indicators
Net Absorption/Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
www.cushmanwakefield.com
Economy
GDP for the first 9 months of 2015 was estimated to have
increased by 6.5% y-o-y, with growth in Q3 reaching 6.81%, the
highest level in the past 5 years. Inflation continued to remain at
a low level, up just 2.15% y-o-y. For the first 9 months of 2015,
total inward FDI reached US$17.15 billion, rising by 53.4% y-o-y;
disbursement is estimated to have reached US$9.65 billion. Real
estate ranked third among sectors that attracted the largest
proportion of total FDI with 19 newly invested projects. Through
Q3 2015, 68,347 enterprises with a total capital of VND420,900
billion were newly registered while VND608,900 billion was
additionally introduced by current enterprises.
Market Overview
No new projects for either Grade entered the market in Q3
2015. However, two projects in the CBD have been completed
and are awaiting inauguration – Ascott Waterfront Saigon and
The Reverie Residence. Currently, the market comprises 670
units from 7 Grade A projects and 2,260 units from 23 Grade B
projects. Those in District 1 make up 44% of the total supply.
Q3 2015 continued to see gradual improvement with average
occupancy across both grades rising on a yearly basis, by 6
percentage-points (ppts) for Grade A and 8 ppts for Grade B, to
97% and 90% respectively. This increase is largely due to the
rise in short term tenants as developers become more flexible in
their lease periods to avoid vacancies.
Average rents of both grades remained stable q-o-q but
increased on a yearly basis, by some 1.4% to VND647,000 per
square meter per month (/sq.m./mo)., equivalent to
US$29.2/sq.m./mo* and 3.7% for Grade B, at VND470,600
/sq.m./mo (US$21.3/sq.m./mo). However, the increase was
mainly due to a weakened VND against the US Dollar.
Serviced apartments in District 1 have traditionally performed
well with a high occupancy rate of 97%, up 9 ppts y-o-y, and
approximately 10 ppts higher than the non-CBD areas, despite
average rent being 37% higher, at VND601,500/sq.m./mo,
equivalent to US$27/sq.m./mo.
* ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED
Outlook
Over 900 units are expected to enter the market by 2016, of
which 30% will be in District 1 as the CBD continues to be the
preferred location of developers. Hotels continue to be a
competitor to serviced apartments for short-term stays while
serviced apartments compete with buy-to-let apartments and
villas for longer term stays.
Q3 14 Q3 15
12-Month
Forecast
GDP Growth Rate 6.07% 6.81%
Inward FDI (Bil. US$) 11.18 17.15
Unemployment 2.17% 2.24%
Q3 14 Q3 15
12-Month
Forecast
Grade A Vacancy 8.7% 3.2%
Grade A Net Absorption 17 units 12 units
Grade A Average Rent VND638k VND647k
Grade B Vacancy 18% 10.3%
Grade B Net Absorption (3) Units (13) units
Grade B Average Rent VND454k VND471k
5%
10%
15%
20%
25%
2010 2011 2012 2013 2014 Q3 2015
HCMC SERVICED APARTMENT
Historical Average = 15%
450,000
500,000
550,000
600,000
-40
0
40
80
120
160
200
2010 2011 2012 2013 2014 Q3 2015
Net Absorption, units Asking Rent, VND PSQM