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Vietnam MB Q2 2015 English
- 1. Cushman & Wakefield Vietnam
Unit 602, Asia Tower
6 Nha Tho Str., Hoan Kiem Dist
Hanoi
www.cushmanwakefield.com/knowledge
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
ECONOMY
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last
year, which is the highest level since 2008
(with 2013 at 4.9% and 2014 at 5.18% by way
of comparison). Inflation remains under
control, with the Consumer Price Index (CPI) increasing just 0.86%
year-on-year. Inward FDI to Vietnam in the 1H of 2015, including
both newly registered and additional FDI capital, reached US$5.49
billion, down 19.8% year-on-year. However, disbursed FDI
increased by 9.6% year-on-year to US$6.3 billion. Among the
provinces, Dong Nai attracted the largest share totaling US$900.8
million (23.5%), followed by HCMC with US$765.8 million (19.9%)
and Tay Ninh with US$282.7 million (7.4%). A total of 46 nations
and territories registered new FDI in the first six months, with
Korea, Turkey, Virgin Islands (UK), Hongkong and Japan accounting
for 75% of the total in the 1H of 2015. Sector-wise, the
manufacturing and processing industry accounted for 76.2% of total
registered capital, followed by real estate (8.5%)
OFFICE MARKET OVERVIEW
There were no new office buildings entering the market
for either Grade in the second quarter of 2015. Currently,
there are 21 Grade A and 64 Grade B office buildings (*), providing
nearly 375,000 square meters (sq.m.) and 747,000 sq.m. to the
market respectively.
The average asking rents for both Grades remained stable
compared to the previous quarter. However, whilst Grade A
rents were stable on a year-on-year basis, standing at VND654,000
per square meter per month (/sq.m./mo), equivalent to
US$30/sq.m./mo., Grade B’s rent decreased by 4.7% year-on-year
to VND392,400/sq.m./mo., equivalent to US$18/sq.m./mo.
The occupancy rate of both Grades improved significantly
this quarter on both a quarter-on-quarter and year-on-
year basis. Grade A’s increased by 3 percentage points on both a
quarter-on-quarter and year-on-year basis, reaching 81%;
occupancy rate of Grade B stood at 84%, an increase by 2
percentage points quarter-on-quarter and 12 percentage points
year-on-year. The significant increase in Grade B’s occupancy year-
on-year were mainly from Hapulico Complex and Viet A Tower.
(*)Service charge included, VAT excluded
OUTLOOK
No new Grade A offices are due to come online in 2015, but a lot
of Grade B supply is expected to enter the market in 2015. The
office market will continue to face an oversupply over the year due
to a significant number of office projects currently in the fitting-out
stage, especially in the western part of the city (such as Diamond
Flower Tower, 789 Building and Discovery Complex). Therefore,
rental declines are expected to continue and will be of considerable
concern for landlords. Tenants, however, can look forward to
more flexible leasing terms in addition to falling rents.
There is expected to be around 715,000 sq.m. of office space
across all Grades coming onto the market in the next two years,
thus more opportunities for tenants when choosing office space
with a reasonable rental rate.
STATS ON THE GO
Q2 2015 Q-O-Q CHANGE Y-O-Y
CHANGE
12 MONTH
FORECAST
Grade A Overall Vacancy 18.7% -2.9% -3.1%
Grade A Overall Rents US$30 -0.5% 0.5%
Grade A Absorption (sq.m.) 10,831 -0.1% 202%
ECONOMIC INDICATORS
VIETNAM 2013 2014 2015F
GDP Growth 5.42% 5.98% 6.20%
CPI Growth 6.6% 4.09% 5.0%
Unemployment 2.2% 2.08% 2.06%
SOURCE: GSO
DIRECT RENTAL VS. VACANCY RATES
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
5
10
15
20
25
30
35
40
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2011 2012 2013 2014 2015
US$/sq.m/mo.
Grade A overall rent Vacancy
Q2 2015HANOI, VIETNAM
OFFICE SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
- 2. Cushman & Wakefield Vietnam
Unit 602, Asia Tower
6 Nha Tho Str., Hoan Kiem Dist
Hanoi
www.cushmanwakefield.com/knowledge
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
HANOI, VIETNAM
SUBMARKET INVENTORY
(SQ.M)
OVERALL
VACANCY
RATE
UNDER
CONSTRUCTION (SQ.M)
YTD
CONSTRUCTION
COMPLETIONS (SQ.M)
OVERALL
NET ABSORPTION
(SQ.M)
AVERAGE GROSS RENT
(US$/SQ.M/MTH)
US$
SF/YR
EURO SF/YR
Q1 2015 Q2 2015 Q2 2015 Q2 2015
CBD Grade-A 168,580 14% 0 0 -2,337 35.8 33.6 37.4 33.3
CBD Grade-B 65,600 15.4% 16,000 0 1223 24.7 26.7 29.8 26.5
CBD
TOTALS
234,200 14.3% 16,000 0 -1,114 31.8 31.7 35.3 31.4
Non- CBD
Grade-A
206,200 22.6% 160,000 0 13,168 28.2 27.2 30.3 26.9
Non-CBD
Grade-B
681,300 16.6% 319,500 5,500 12,853 17.5 17.2 19.1 17
NON-CBD
TOTALS
887,500 18% 479,500 5,500 26,021 18.4 19.5 21.7 19.3
* RENEWAL NOT INCLUDED IN LEASING ACTIVITY STATISTICS
MARKET HIGHLIGHTS
SIGNIFICANT Q1 2015 LEASE TRANSACTIONS
BUILDING NAME SUBMARKET TENANT BUILDING CLASS SQUARE METER
Hong Ha Center Hoan Kiem BSH
A 800
Lotte Center Hanoi Dong Da Worldquantz
A 600
Hanoi Toserco Cau Giay ILA
B 600
PV Oil Cau Giay Vietcombank
B 2100
SIGNIFICANT PROJECTS UNDER CONSTRUCTION
PROJECT NAME SUBMARKET AREA (SQM) COMPLETION DATE STATUS
Handico Tower Tu Liem 27,000 2015 Fitting Out
HUD Tower
MD Complex Tower
Cau Giay
Tu Liem
42,000
24,700
2015
2015
Fitting Out
Under construction
789 Tower Cau GIay 60,400 2015 Under construction
Thang Long Garden Hai Ba Trung 16,150 2015 Under construction
Diamond Flower Tower
Mo Market Trade Center
Cau Giay
Hai Ba Trung
20,000
35,200
2015
2016
Under construction
Fitting Out
Discovery Complex Cau Giay 45,000 2016 Under construction
- 3. Cushman & Wakefield Viet Nam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
Jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
ECONOMY
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last year,
which is the highest level since 2008 (with 2013
at 4.9% and 2014 at 5.18% by way of
comparison). Inflation remains under control,
with the Consumer Price Index (CPI) increasing just 0.86% year-on-
year. Inward FDI to Vietnam in the 1H of 2015, including both newly
registered and additional FDI capital, reached US$5.49 billion, down
19.8% year-on-year. However, disbursed FDI increased by 9.6% year-
on-year to US$6.3 billion. Among the provinces, Dong Nai attracted
the largest share totaling US$900.8 million (23.5%), followed by
HCMC with US$765.8 million (19.9%) and Tay Ninh with US$282.7
million (7.4%). A total of 46 nations and territories registered new
FDI in the first six months, with Korea, Turkey, Virgin Islands (UK),
Hongkong and Japan accounting for 75% of the total in the 1H of
2015. Sector-wise, the manufacturing and processing industry
accounted for 76.2% of total registered capital, followed by real estate
(8.5%)
MARKET OVERVIEW
There was no new supply in Q2 2015. The retail component of
Keangnam Landmark 74 is currently under reconstruction and likely
to stay inactive at least until the end of 2015. The total retail supply as
of Q2 2015 was recorded at 722,609 square meters (sq.m) from 20
shopping centres, 2 department store, and 23 retail podiums.
The average asking rents for ground floor shopping centres and
department stores fell by 1% quarter-on-quarter, to circa US$36.90
per square meter per month (/sq.m./mo), whilst retail podiums
showed an increase of 3% quarter-on-quarter, to US$46.60/sq.m/mo.
Overall rents remained stable at US$37.70/sq.m/mo., However, this is
projected to trend downwards in the long run due to supply
overhang as well as incoming supply, especially from retail podiums in
condominium complexes; vacancies are expected to rise in tandem.
The occupancy rates of shopping centres and department stores
remained stable quarter-on-quarter, standing at 81%, whilst retail
podium rose by nearly 3 ppts to reach 88.7%.
(*)ALL RENTS ARE ASKING RENTS, SERVICE CHARGE INCLUDED AND VAT EXCLUDED
OUTLOOK
Both the total supply of shopping centre and retail podium will
increase in coming time, and it is noted that a significant retail
podiums will cluster in the suburban districts (Cau Giay, Tu Liem and
Thanh Xuan districts)
Under the Trans-Pacific Partnership (TPP), a majority of the import
duties on goods will be removed. Once the agreement is signed,
together with further liberalization of the retail sector under the
provisions of the WTO starting in January 2015 where many taxed
goods’ tariffs will be lifted, Vietnam’s retail market should become a
more attractive destination for international retailers.
ECONOMIC INDICATORS
NATIONAL 2013 2014 Q2 2015
GDP Growth 5.42% 5.98% 6.28%
CPI Growth 6.6% 4.09% 0.86%
Retail Turnover 12.6% 11.1% 9.80%
SOURCE: GSO, World Bank
PRIME RETAIL RENTS – Q2 2015
MAINSTREETS MIL VND
SQM/MTH
EURO SF/MTH US$ SF/MTH Q-O-Q
CHANGE
Y-O-Y
CHANGE
Ba Trieu 0.8 – 1.6 3.2 – 6.3 3.5 – 6.9 0% -
Pho Hue 0.8 - 1.6 3.2 - 6.3 3.5 - 6.9 0% -
Thai Ha 0.5 - 1.2 2.0 - 4.7 2.2 - 5.2 0% -
Lang Ha 0.6 – 1.2 2.3 - 4.7 2.6 - 5.2 0% -
MALLS MIL VND
SQM/MTH
EURO SF/YR US$ SF/YR Q-O-Q
CHANGE
Y-O-Y
CHANGE
Vincom Center
Towers A&B
2.2 99 111 0% -4.8%
Trang Tien
Plaza
3.3 148 167 0% -21%
Parkson Viet
Tower
1.6 74 84 0% -11.8%
Vincom Mega
Mall – Royal
City
0.8 35 39 0% -6.7%
Vincom Mega
Mall – Times
City
0.7 30 33 0% -14.3%
SIGNIFICANT PROJECTS UNDER CONSTRUCTION
PROPERTY LOCATION SQUARE METERS COMPLETION DATE
Thang Long Mall Tu Liem 11,246 2015
Aeon Mall Long Bien 108,000 2016
Mipec Long Bien Long Bien 17,550 2016
Vincom NCT Dong Da 65,400 Q1 2016
HANOI, VIETNAM
RETAIL SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
Q2 2015
- 4. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
ECONOMIC OVERVIEW
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last
year, which is the highest level since 2008
(with 2013 at 4.9% and 2014 at 5.18% by way
of comparison). Inflation remains under
control, with the Consumer Price Index (CPI) increasing just 0.86%
year-on-year. Inward FDI to Vietnam in the 1H of 2015, including
both newly registered and additional FDI capital, reached US$5.49
billion, down 19.8% year-on-year. However, disbursed FDI
increased by 9.6% year-on-year to US$6.3 billion. Among the
provinces, Dong Nai attracted the largest share totaling US$900.8
million (23.5%), followed by HCMC with US$765.8 million (19.9%)
and Tay Ninh with US$282.7 million (7.4%). A total of 46 nations
and territories registered new FDI in the first six months, with
Korea, Turkey, Virgin Islands (UK), Hongkong and Japan accounting
for 75% of the total in the 1H of 2015. Sector-wise, the
manufacturing and processing industry accounted for 76.2% of total
registered capital, followed by real estate (8.5%)
MARKET OVERVIEW
The total supply of industrial parks (IPs) in the Hanoi market in Q2
2015 remained stable with total leasable area of ten IPs standing at
1,423 hectares. The land available for lease recorded a decrease of
3% percentage points compared to the same period last year, but
remained stable quarter-on-quarter, standing at 30% of total supply.
Five out of ten operating IPs are fully occupied in Q2 2015. The
remaining IPs having land for lease are Hoa Lac Hi-tech Park, Phu
Nghia IP, Noi Bai IP (Phase II), Quang Minh I and HANSSIP I, of
which Hoa Lac Hi-tech Park still has the highest vacancy rate (70%)
with approximately 346 hectares available for lease.
The average quoting rent of Hanoi IPs in Q2 2015 remained stable
quarter on quarter, but decreased slightly by 1% year-on-year,
standing at around VND2,289,000 per square meter per term(*)
(equivalent to over US$105/sq m/term). Management fees in these
IPs range from US$0.40 to US$1/sq m/month. The average asking
rent of IPs in Hanoi continued to be the highest compared to all
the cities/provinces in the northern region of Vietnam.
There are currently 21 countries and territories investing in Hanoi
IPs with projects mainly focused in the field of supporting
industries, mechanical engineering and electronics. Japan, China,
Hong Kong are still the leading investors.
OUTLOOK
An additional supply of about 6,100 hectares from 14 identified IP
projects is expected to enter the market through 2020, which is
equivalent to 400% of current supply. By 2030 with vision to 2050
Hanoi will have 33 IPs with an area of 8,000 hectares. With labor
costs increasing in China, foreign investments in IPs is expected to
grow continually in the medium to long-term as manufacturing
companies shift their operations to other countries, including
Vietnam and in particular, Hanoi.
MARKET STATISTICS
SUBMARKET TOTAL AREA (HA) LEASABLE AREA (HA) NO. OF IPS
Gia Lam 97 78 1
Long Bien 40 32 1
Soc Son 163 114 2
Me Linh 344 240 1
Tu Liem 30 24 1
Chuong My 170 111 1
Dong Anh 274 206 1
Thach That & Quoc Oai 705 619 2=
SIGNIFICANT FUTURE PROJECTS
IP NAME DISTRICT AREA (HA) STATUS
Phung Hiep Chuong My 200 Site clearance
North Thuong Tin Thuong Tin 430 Site clearance
Quang Minh II Me Linh 266 Site clearance
Soc Son Clean IP
Thanh My- Xuan Son
Soc Son
Son Tay
340
100
Site clearance
Planning
PERFORMANCE BY DISTRICT
* ALL RENTS ARE ASKING RENTS, VAT EXCLUDED
Q2 2015HANOI, VIETNAM
INDUSTRIAL SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
0%
20%
40%
60%
80%
100%
0
50
100
150
200
US$/sq.m/period
Rent Occupancy
- 5. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
Q2 2015
HANOI, VIETNAM
RESIDENTIAL FOR SALE
MARKETBEAT
A Cushman & Wakefield Research Publication
ECONOMIC OVERVIEW
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last
year, which is the highest level since 2008
(with 2013 at 4.9% and 2014 at 5.18% by
way of comparison). Inflation remains under
control, with the Consumer Price Index (CPI) increasing just 0.86%
year-on-year. Inward FDI to Vietnam in the 1H of 2015, including
both newly registered and additional FDI capital, reached US$5.49
billion, down 19.8% year-on-year. However, disbursed FDI
increased by 9.6% year-on-year to US$6.3 billion. Among the
provinces, Dong Nai attracted the largest share totaling US$900.8
million (23.5%), followed by HCMC with US$765.8 million (19.9%)
and Tay Ninh with US$282.7 million (7.4%). A total of 46 nations
and territories registered new FDI in the first six months, with
Korea, Turkey, Virgin Islands (UK), Hongkong and Japan accounting
for 75% of the total in the 1H of 2015. Sector-wise, the
manufacturing and processing industry accounted for 76.2% of total
registered capital, followed by real estate (8.5%)
RESIDENTIAL FOR SALE MARKET OVERVIEW
Q2 2015 witnessed moderate launch activities across all
grades with one grade A and four grade B and C projects yielding
nearly 1,200 units in total. In addition, several active grade B and C
projects also launched a total of 3,681 new units (in which 2,487
from grade B and 1,194 from grade C). The total primary supply in
this quarter was more than 15,000 units.
Grade C accounted for the greatest market share (56% of total
primary supply), followed by Grade B (42%) and Grade A (2%).
Q2 2015 also recorded better sale performances across all
grades. This can be attributed to the improvement in customers’
rapidly improving confidence in the market in addition to the
punctual construction progress, promotions, flexible payment
terms from developers and a rent guarantee program applied at
mid and high-end projects.
Good sales at Vinhomes Nguyen Chi Thanh project and relatively
optimistic sales of newly launched grade A project D’le Pont D’or
contributed to the high absorption rate of 58.5% of grade A
projects during the quarter. Both grade B and C sectors also
showed positive absorption rates of 47.2% and 42.1% respectively.
However, grade A average asking prices fell significantly by 17.4% as
a result of a new project that was launched at below average price
levels (VND44.6 million/sq.m) and the limited remaining supply of
active grade A priced at an average of VND 51.8 million/sq.m
(equivalent to US$ 2,378/sq.m). The asking price for grade B stood
at VND33.6 million/sq.m (equivalent to US$1,543/sq.m), with
Grade C remaining affordable at VND16.8million/sq.m (equivalent
to US$770/sq.m)
(*): ALL PRICES ARE VAT EXCLUDED
OUTLOOK
Low-end apartments will continue to be the most sought-after and
most liquid going forward. However, the demand for mid and high-
end apartment is expected to grow as more investors are entering
the market. With the new Housing Law and downward interest
rates encouraging buyers, the apartment market will continue to
improve in 2H 2015. While looser foreign ownership restrictions,
which will take effect from July 2015, might not have an immediate
impact, the effect is overall positive as foreign interest in Vietnam
should help improve market liquidity. In addition, the amended law
on real estate, to take effect from July 1 and which guarantees off
plan residential sales by banks, an immediate increase in prices is
expected to be passed on by the developer to consumers.
ECONOMIC INDICATORS
VIETNAM 2013 2014 1H 2015F
GDP Growth 5.42% 5.98% 6.28%
CPI Growth 6.6% 4.09% 0.86%
Source: GSO
ASKING PRICES OF ALL SEGMENTS Q2 2015
PRIMARY MARKET PERFORMANCE Q2 2015
0
20
40
60
80
Grade A Grade B Grade C
milVND
Lowest asking price Highest asking price
0
2,000
4,000
6,000
8,000
10,000
Grade A Grade B Grade C
units
Primary supply No. of units sold
- 6. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
Q2 2015
HANOI, VIETNAM
RESIDENTIAL FOR SALE
MARKETBEAT
A Cushman & Wakefield Research Publication
MARKET HIGHLIGHTS
Significant Residential Projects Launched in Q2 2015 LOCATION EXPECTED COMPLETION UNITS LAUNCHED SALE PRICE
(VND/SQ.M.)
D’Le Pont D’or
Park Hill (Times city phase 2) 2, 5
Trang An Complex
Eco Green City
The Crown
Season avenue
219 Trung Kinh
Hateco Hoang Mai
Goldsilk Complex
Thang Long Victory (T2)
Parkview Residence (H, J, K)
New Horizon City
A1CT2 Linh Dam
The Sparks Le Van Luong HH2
Dong Da
Hai Ba Trung
Cau Giay
Ha Dong
Ha Dong
Ha Dong
Cau Giay
Hoang Mai
Ha Dong
Tu Liem
Ha Dong
Hoang Mai
Hoang Mai
Ha Dong
2017
2016
2017
2017
2015
2017
2017
2017
2017
2017
2016
2017
2016
2017
178
561
175
300
400
88
55
145
80
100
250
152
140
360
44,600,000
35,500,000
29,000,000
22,700,000
28,700,000
29,400,000
29,600,000
15,000,000
21,300,000
12,400,000
16,400,000
19,500,000
19,700,000
16,000000
Significant Projects Under Construction LOCATION DEVELOPER EST. NUMBER OF UNITS EXPECTED COMPLETION
Mipec Riverside
Hoa Binh Green City (Tower B)
Green Star (B4, B5)
Sun square
Discovery Complex
Vinhomes 56 Nguyen Chi Thanh
Long Bien
Hai Ba Trung
Pham Van Dong
Tu Liem
Cau Giay
Dong Da
Mipec
Hoa Binh Corp.
Geleximco
Thang Long
Kinh DoTCI Group
Viettronics -
Vingroup
435
560
520
392
500
378
Q3 2015
Q3 2015
Q4 2015
Q1 2016
Q1 2016
Q1 2016
- 7. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
ECONOMIC OVERVIEW
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last
year, which is the highest level since 2008
(with 2013 at 4.9% and 2014 at 5.18% by
way of comparison). Inflation remains under control, with the
Consumer Price Index (CPI) increasing just 0.86% year-on-year.
Inward FDI to Vietnam in the 1H of 2015, including both newly
registered and additional FDI capital, reached US$5.49 billion,
down 19.8% year-on-year. However, disbursed FDI increased by
9.6% year-on-year to US$6.3 billion. Among the provinces, Dong
Nai attracted the largest share totaling US$900.8 million (23.5%),
followed by HCMC with US$765.8 million (19.9%) and Tay Ninh
with US$282.7 million (7.4%). A total of 46 nations and territories
registered new FDI in the first six months, with Korea, Turkey,
Virgin Islands (UK), Hongkong and Japan accounting for 75% of the
total in the 1H of 2015. Sector-wise, the manufacturing and
processing industry accounted for 76.2% of total registered
capital, followed by real estate (8.5%)
SERVICED APARTMENT MARKET OVERVIEW
Supply remained unchanged in Q2 2015 for both grades. Overall,
there are 12 grade-A projects and 21 grade-B projects, supplying
1,950 and 1,500 units to the market, respectively.
In Q2 2015, the average asking rent of grade A rose more than
6% q-o-q but declined 2% y-o-y, to VND722,473 per square meter
per month (/sq.m/mo.) or US$33.14/sq.m/mo. This fluctuation is
attributed to the increase in rents of Fraser Suites Hanoi and
Somerset Grand Hanoi over the period. Grade B asking rents
remained stable quarter-on-quarter but recorded a slight fall on a
year-on-year basis by nearly 5%. The average asking rent of grade
B was VND462,972 (/sq.m/mo.) or US$21.24(/sq.m/mo.)
In terms of occupancies, both grades witnessed an improvement
in occupancy rates when compared to the previous quarter.
Specifically, grade A projects increased by 2ppts q-o-q to 83%, but
down 2 ppts y-o-y. Grade B showed an upward trend of nearly 5
ppts q-o-q and 9 ppts y-o-y, to 94%, mainly due to the DMC Lake
view and Coco village projects becoming more affordable due to
the decline in rental rates.
OUTLOOK
Additional supply from new projects, especially from the
conversion of condominium-for-sale into serviced apartments is
expected to place downward pressure for the HN serviced
apartment market.
There will be no new projects launching in the next two quarters
of 2015, however, approximately 100 new units from existing
projects will be added to the current stock, and circa 250 units
from two projects are set to launch in 2016. As such, compared
to the current level of supply, the total supply across both grades
will grow by 4% and 11% by the end of 2015 and 2016,
respectively.
* ALL RENTS ARE ASKING RENTS, SERVICE CHARGE INCLUDED AND VAT EXCLUDED
RENTAL VALUES AS OF Q2 2015
SUBMARKET AVERAGE RENT
VND/SQ.M./MTH
% CHANGE SHORT TERM
OUTLOOKQ-O-Q Y-O-Y
GRADE A
CBD 753,453 10% 5.5%
Non – CBD 718,285 5.6% -2%
GRADE B
CBD 516,227 -0.2% -8.5%
Non - CBD 442,348 -4.2% -9.5%
Grade A & B Overall Rental Vs. Occupancy Rate Q2 2015
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
VND/sq.m/mo.
Grade A - Rent Grade B - Rent
Grade A - Occupancy Grade B - Occupancy
Q2 2015HANOI, VIETNAM
SERVICED APARTMENT
SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
- 8. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
STATS ON THE GO
CURRENT SUPPLY BY GRADE IN Q2 2015
GRADE NO. OF BUILDINGS NO. OF UNITS
A 12 1,948
B 21 1,507
SIGNIFICANT PROJECTS UNDER CONSTRUCTION/PLANNING
BUILDING LOCATION DEVELOPER EST. NUMBER OF UNITS EXPECTED COMPLETION
Hoang Thanh Tower Hoan Kiem Tran Hung Dao Jsc 50 2015
West Point Tay Ho Golden Villa Ltd. 200 2016
27 Thai Thinh Street Dong Da Handico 52 50 2016
Somerset West Central
Le Roi du Soleil
Cau Giay
Tay Ho
Handico - Thuy Duong Jsc
Tan Hoang Minh Corp.
50
N/A
2016
Onwards
- 9. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or representation,
express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted
subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals. © 2014 Cushman & Wakefield, Inc. All rights reserved.
ECONOMY
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last year,
which is the highest level since 2008 (with
2013 at 4.9% and 2014 at 5.18% by way of
comparison). Inflation remains under control,
with the Consumer Price Index (CPI) increasing just 0.86% year-on-
year. Inward FDI to Vietnam in the 1H of 2015, including both newly
registered and additional FDI capital, reached US$5.49 billion, down
19.8% year-on-year. However, disbursed FDI increased by 9.6%
year-on-year to US$6.3 billion. Among the provinces, Dong Nai
attracted the largest share totaling US$900.8 million (23.5%),
followed by HCMC with US$765.8 million (19.9%) and Tay Ninh
with US$282.7 million (7.4%). A total of 46 nations and territories
registered new FDI in the first six months, with Korea, Turkey,
Virgin Islands (UK), Hongkong and Japan accounting for 75% of the
total in the 1H of 2015. Sector-wise, the manufacturing and
processing industry accounted for 76.2% of total registered capital,
followed by real estate (8.5%)
OFFICE MARKET OVERVIEW
VTP, a Grade B office building in District 1 was removed
this quarter due to the conversion to internal use, thus
decreasing the total stock of Grade B spaces marginally by 6,500
square meters (sq.m.) to reach 660,700 sq.m. from 46 buildings.
This marked a 1% decrease quarter-on-quarter but an increase of
1% year-on-year. Grade A stock remains unchanged pending the
delivery of Vietcombank Tower in the third quarter. Currently,
there are nine Grade A office buildings, providing 156,700 sq.m. of
space to the market.
Occupancy of both Grades continued to increase this
quarter, with the occupancy rate of Grade A increasing by 1% on
both a quarterly and yearly basis to 92%, whilst Grade B’s average
occupancy has trended upward during the last eight quarters,
increasing by some 2% year-on-year to 94%. The Grade B buildings
in the CBD achieved a high average occupancy of 94%.
Approximately 35% of Grade B buildings in this area had seen
occupancy increase. On the other hand, the average occupancy in
the non-CBD remained slightly higher than those in the CBD over
the last four quarters at 95%, showing that tenants remained
attracted due to the area's affordability.
In terms of rents, the average rents(*) of both Grades
remained stable on both a quarterly and yearly basis at around
VND1,000,000 per square meter per month (/sq.m./mo), equivalent
to US$46.60/sq.m./mo for Grade A; and VND595,000/sq.m./mo
(US$27.30/sq.m./mo) for Grade B.
* ALL RENTS ARE ASKING RENTS, SERVICE CHARGE INCLUDED AND VAT EXCLUDED The
total net absorption of both Grades stood at 1,230 sq.m. in the
second quarter (-91% quarter-on-quarter and -93% year-on-year).
Grade A’s net absorption reached 1,360 sq.m. while Grade B
reported a negative absorption of 126 sq.m (-100.8% year-on-year),
mainly from buildings in the non-CBD area.
OUTLOOK
In the second half of 2015, the HCMC market is expected to
welcome more than 100,000 sq.m. of office space from one Grade
A and three Grade B projects, providing more options for
occupiers. New leases inked could have more flexible leasing terms
and more incentives as landlords compete for tenants.
Competitive deals remain available for the best and largest tenants
as new supply gets delivered with Vietcombank, Lim Tower 2, and
Pearl Plaza, being the most prominent. A lack of quality Grade A
leasable space may mean rents will stabilize in the fourth quarter of
2015.
STATS ON THE GO
2Q15 Q-O-Q
CHANGE
Y-O-Y
CHANGE
12 MONTH
OUTLOOK
Overall Vacancy 7.8% 0.87% 0.9%
Grade A Overall Rents $46.6 -0.34% -0.31%
Absorption (sq.m.) 1,359 -162% 302%
ECONOMIC INDICATORS
VIETNAM 2013 2014 2015F
GDP Growth 5.42% 5.98% 6.20%
CPI Growth 6.6% 4.09% 5.0%
Unemployment 2.2% 2.08% 2.06%
SOURCE: GSO
GRADE A OVERALL RENTAL VS. VACANCY RATES
0%
5%
10%
15%
20%
25%
30%
35%
0
10
20
30
40
50
60
70
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3QQ41Q2Q3Q4Q1Q2Q3Q4Q1Q2Q
2010 2011 2012 2013 2014 2015
US$/sq.m/mth
Grade A overall rent Vacancy
Q2 2015HO CHI MINH CITY, VIETNAM
OFFICE SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
- 10. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or representation,
express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted
subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals. © 2014 Cushman & Wakefield, Inc. All rights reserved.
HO CHI MINH CITY, VIETNAM
SUBMARKET INVENTORY OVERALL
VACANCY RATE
UNDER
CONSTRUCTION
YTD
CONSTRUCTION
COMPLETIONS
OVERALL
DIRECT NET ABSORPTION
GRADE A & B AVERAGE GROSS
(SERVICE CHARGED INCL., VAT
EXCLUDED)
(US/SQM/MTH)
US$
SF/YR
EURO
SF/YR
CBD A - Grade 156,700 7.8% 208000 0 1,359 $46.6 $52.0 €45.8
CBD B - Grade 424,990 6.1% 99,320 0 2,644 $31.3 $34.9 €30.8
Non - CBD
B - Grade
235,700 5.4% 200,300 0 -2,770 $20.1 $22.4 €19.8
TOTALS 817,400 6.2% 507,620 0 1,232 $31 $34.5 €30.4
* RENTAL RATES REFLECT ASKING $PSQM/MONTH
MARKET HIGHLIGHTS
Significant Q2 2015 Lease Transactions SUBMARKET TENANT BUILDING CLASS SQUARE METER
Bitexco Financial Tower CBD Hogan Lovell A 500
Vietcombank Tower CBD Russin & Vecchi A 330
Kumho Asiana Plaza CBD Masan A 2,750
Maritime Bank Tower CBD Ben Lines B 580
Vincom Center CBD Gia Hoa Advertising B 300
Vincom Center CBD Landon & Seah B 200
Vincom Center CBD OCB B 1,057
Significant Projects Under Construction SUBMARKET MAJOR TENANT COMPLETION DATE SQUARE METER
Vietcombank Tower CBD Vietcombank Q3 2015 55,000
Pearl Plaza Non-CBD N/A Q3 2015 30,000
Saigon Centre 2 CBD N/A Q2 2016 40,000
SC Vivo City (Phase 1) Non-CBD N/A Q2 2016 30,000
Viettel Tower Non-CBD N/A On Hold 66,000
- 11. Cushman & Wakefield Viet Nam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
Jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
ECONOMY
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last year,
which is the highest level since 2008 (with 2013
at 4.9% and 2014 at 5.18% by way of
comparison). Inflation remains under control,
with the Consumer Price Index (CPI) increasing just 0.86% year-on-
year. Inward FDI to Vietnam in the 1H of 2015, including both newly
registered and additional FDI capital, reached US$5.49 billion, down
19.8% year-on-year. However, disbursed FDI increased by 9.6% year-
on-year to US$6.3 billion. Among the provinces, Dong Nai attracted
the largest share totaling US$900.8 million (23.5%), followed by
HCMC with US$765.8 million (19.9%) and Tay Ninh with US$282.7
million (7.4%). A total of 46 nations and territories registered new
FDI in the first six months, with Korea, Turkey, Virgin Islands (UK),
Hongkong and Japan accounting for 75% of the total in the 1H of
2015. Sector-wise, the manufacturing and processing industry
accounted for 76.2% of total registered capital, followed by real estate
(8.5%)
RETAIL MARKET OVERVIEW
New stock was added in Q2 2015, as one shopping centre and
one bazaar, namely SC Vivo City (District 7) and Taka Plaza 2
(District 3) entered the market, adding 42,600 sq.m. of retail space to
the market. However, one bazaar (1,400 sq.m, District 1) ceased
operations due to weak performance, while one shopping centre
(District 1) and another bazaar (District 5) were closed temporarily
for renovations. The total stock in Q2 2015 grew by 5% quarter-on-
quarter (q-on-q) and 10% year-on-year (y-on-y). Currently, there are
eight retail podiums, eight department stores, 20 shopping centres,
seven bazaars, 70 supermarkets and three wholesale centres in the
city with a total area of approximately 937,100 sq.m.
District 1 remains the most concentrated retail market in the city,
currently accounting for 19% of the total supply, followed by district 7
with 15%.
The retail market continued to see gradual improvement
with average occupancy in all areas rising on a yearly basis, up by 4
percentage points (ppts), to 92%. The two new completions in this
quarter enjoyed relatively high occupancy rates of over 80%. Retail
properties in the CBD area generally perform better than those in
the other areas, reaching 91% (up 2 ppts y-on-y). However, both the
secondary and suburban areas have recently enjoyed new investment
trends with some giant foreign retailers establishing large shopping
centres and offering aggressive rents as compared to those in the
CBD. Hence, occupancy rates in secondary and suburban areas have
improved, increasing by 5ppts and 4ppts on a yearly basis, to 87% and
98%, respectively.
Average rents continued to trend downwards, down 1% q-on-q
and 5% y-on-y to VND1,300,000 per square meter per month
(/sq.m/mo.). The main reasons for the decrease are the lower rents in
new projects and the closing of three retail properties, where rents
are higher.
Rents in all areas remained stable q-on-q, but the secondary and
suburban areas experienced a slight decrease y-on-y, down 2% and
7%, to VND1,119,000/sq.m./mo (US$51.4/sq.m./mo.) and
VND729,000/sq.m./mo (US$33.4/sq.m./mo), respectively. Rents in the
CBD area remained the highest, at VND2,320,000/sq.m./mo or
US$106/sq.m/mo. on average. This is twice the level of the secondary
areas and three times higher than those in the suburban areas.
(*)ALL RENTS ARE ASKING RENTS, SERVICE CHARGE INCLUDED AND VAT EXCLUDED
OUTLOOK
Over a million square meters of new supply will enter the market
through 2020, which represents a 200% increase in retail supply from
current levels. Demand for retail space in the CBD is expected to
remain high in the short to medium term. However, due to limited
land, the majority of large scale future stock will be located in non-
CBD areas, mostly in the south and east, where most of the city’s
infrastructure and residential developments have been established.
Under the Trans-Pacific Partnership (TPP), a majority of the import
duties on goods will be removed. Once the agreement is signed,
together with the further liberalization of the retail sector under the
provisions of the WTO starting in January 2015, where many taxed
goods’ tariffs will be lifted, Vietnam’s retail market is expected to be
more attractive to international retailers.
ECONOMIC INDICATORS
NATIONAL 2013 2014 Q2 2015
GDP Growth 5.42% 5.98% 6.28%
CPI Growth 6.6% 4.09% 0.86%
Retail Turnover 12.6% 11.1% 9.80%
SOURCE: GSO, World Bank
PRIME RETAIL RENTS – Q2 2015
MAINSTREETS MIL VND SQM/MTH EURO SF/MTH US$ SF/MTH Q-O-Q CHANGE
Y-O-Y CHANGE
Dong Khoi 2.2 8.3 9.4 0.0% -
Nguyen Hue 2 7.6 8.5 0.0% -
Le Loi 1.6 6.1 6.8 0.0% -
MALLS MIL VND SQM/MTH EURO
SF/YR
US$
SF/YR
Q-O-Q CHANGE
Y-O-Y CHANGE
Union Square
Parkson Saigon
Tourist
3.6
2.0
163
91
184
102
0.0%
0.0%
0.0%
-9.5%
Diamond Plaza
Rex Arcade
2.8
2.2
127
100
143
113
0.0%
0.0%
0.0%
0.0%
SIGNIFICANT PROJECTS UNDER CONSTRUCTION
PROPERTY LOCATION SQUARE METERS COMPLETION DATE
SSG Tower Secondary 21,000 2015
Vincom Mega Mall Thao Dien Secondary 120,000 2015
Saigon Centre 2 CBD 55,000 2016
HO CHI MINH CITY, VIETNAM
RETAIL SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
Q2 2015
- 12. Cushman & Wakefield Viet Nam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
Q2 2015
HO CHI MINH CITY, VIETNAM
INDUSTRIAL SNAPSHOT
MARKETBEAT
A Cushman & Wakefield Research Publication
ECONOMY
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last
year, which is the highest level since 2008
(with 2013 at 4.9% and 2014 at 5.18% by
way of comparison). Inflation remains under control, with the
Consumer Price Index (CPI) increasing just 0.86% year-on-year.
Inward FDI to Vietnam in the 1H of 2015, including both newly
registered and additional FDI capital, reached US$5.49 billion, down
19.8% year-on-year. However, disbursed FDI increased by 9.6%
year-on-year to US$6.3 billion. Among the provinces, Dong Nai
attracted the largest share totaling US$900.8 million (23.5%),
followed by HCMC with US$765.8 million (19.9%) and Tay Ninh
with US$282.7 million (7.4%). A total of 46 nations and territories
registered new FDI in the first six months, with Korea, Turkey,
Virgin Islands (UK), Hongkong and Japan accounting for 75% of the
total in the 1H of 2015. Sector-wise, the manufacturing and
processing industry accounted for 76.2% of total registered capital,
followed by real estate (8.5%)
INDUSTRIAL MARKET OVERVIEW
No new supply was delivered in this quarter. Currently, there
are 18 operating IPs providing a total area of approximately 3,625
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 during Q2 2015 was stable when
compared to the previous quarter, with both occupancy
and rents unchanged. However, on a yearly basis, the average
occupancy increase by more than 5 percentage points year-on-year,
to reach 73%. The majority of IPs in HCMC reported occupancy
rates of above 90% as they are established and have been operating
for many years. Three IPs in the Nha Be, Cu Chi and Binh Chanh
Districts, which have just started operations recently, reported
occupancy rates under 50%.
Average asking rents in this quarter stood at approximately
VND2,750,000 per square meter per term (/sq.m./term), equivalent
to US$126.20/sq.m./term*. The rental rate in HCMC is about two
times higher than 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–
VND75,400/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 2020 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.
The majority of future projects are in the clearance and
compensation stage and awaiting government approval.
MARKET STATISTICS
SUBMARKET TOTAL AREA (HA) LEASABLE AREA (HA) NUMBER OF IPS
District 2 112 79 1
District 7 300 195 1
District 12 29 22 1
Binh Tan District 584 321 2
Tan Phu District 134 92 2
Thu Duc District 151 110 3
Nha Be District 908 506 2
Binh Chanh District 260 190 2
Cu Chi District 1,137 719 4
SIGNIFICANT FUTURE PROJECTS
IPS AREA (HA) STATUS
Le Minh Xuan 2 338 Under construction
Vinh Loc 3 200 Under construction
Vinh Loc 1- Phase 2 56 Under construction
PERFORMANCE BY DISTRICT
0%
20%
40%
60%
80%
100%
0
50,000
100,000
150,000
200,000
250,000
VND/sq.m/year
Rent Occupancy
- 13. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or representation,
express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted
subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals. © 2014 Cushman & Wakefield, Inc. All rights reserved.
Q2 2015
HO CHI MINH CITY, VIETNAM
RESIDENTIAL FOR SALE
MARKETBEAT
A Cushman & Wakefield Research Publication
ECONOMY
1H 2015 witnessed an increase in GDP of 6.28%
compared to the same period last year, which is
the highest level since 2008 (with 2013 at 4.9% and
2014 at 5.18% by way of comparison). Inflation
remains under control, with the Consumer Price
Index (CPI) increasing just 0.86% year-on-year. Inward FDI to Vietnam in
the 1H of 2015, including both newly registered and additional FDI
capital, reached US$5.49 billion, down 19.8% year-on-year. However,
disbursed FDI increased by 9.6% year-on-year to US$6.3 billion. Among
the provinces, Dong Nai attracted the largest share totaling US$900.8
million (23.5%), followed by HCMC with US$765.8 million (19.9%) and
Tay Ninh with US$282.7 million (7.4%). A total of 46 nations and
territories registered new FDI in the first six months, with Korea,
Turkey, Virgin Islands (UK), Hongkong and Japan accounting for 75% of
the total in the 1H of 2015. Sector-wise, the manufacturing and
processing industry accounted for 76.2% of total registered capital,
followed by real estate (8.5%)
RESIDENTIAL MARKET OVERVIEW
Q2 2015 witnessed the launch of a large amount of new supply
across all grades, with 516 grade A units, 840 grade B units and 3,253
grade C units from 12 new projects; and a further 2,152 grade A units,
616 grade B units and 995 grade C units from 14 active projects were
also launched. As of Q2 2015, there were nearly 25,300 available units for
sale across all grades in the primary market, up significantly 121% year-
on-year in terms of primary supply. Grade C remained the core product,
accounting for more than 50% of the total stock. More than 50% of total
primary stock is located in Districts 2, 7, and Binh Thanh District.
The residential market, which had been depressed for several
years, is experiencing strong signs of recovery, with transaction
volumes across all grades in Q2 registering a moderate increase of 1%
quarter-on-quarter but up 236% year-on-year. As usual, Grade C
remained the most active sector, accounting for slightly over 40% of total
transaction volumes, followed by Grade B with 37%. Districts 2, 7, Binh
Thanh and Tan Phu achieved the highest sales volume among all districts,
accounting for 66% of total units sold in the quarter.
There was an upward trend in average prices(*) across all grades.
Grade C enjoyed the highest increase on both a quarterly and yearly
basis, by 8.5% quarter-on-quarter and 12% year-on-year, reaching VND
17,878,000 per square meter (/sq.m), equivalent to US$820/sq.m.; whilst
Grade B’s remained unchanged by quarter but increased 6.5% y-on-y,
reaching around VND29,926,000/ sq.m or US$1,373/sq.m. Grade A
average prices increased by 1.3% q-on-q but were down 4% y-on-y, stood
at VND46,100,000 per square meter (sq.m) or US$2,115/sq.m. The
increase in average prices was due to the higher prices now being offered
by new projects that launched recently, combined with some projects
with lower than average prices becoming 100% sold out. (*): ALL PRICES ARE
VAT EXCLUDED
OUTLOOK
Affordable apartments with small sizes should continue to be the most
sought-after. Notably, there is no future supply located in the city center
due to limited supply of development sites; permission to build residential
is also difficult to obtain. Therefore, future supply will be in non-CDB
areas but which offer easy access to the city center such as District 7,
District 2, District 4 and Binh Thanh District. Particularly, projects
located along the first metro line will attract more buyers and investors.
Some suburban Districts, such as Districts 8, 9,12 and Binh Tan with an
abundant stock of affordable apartments, sufficient land fund for project
developments and improving infrastructure are also attracting developers
and low income earners. The New Housing Law, which will be effected in
July 2015, which allows foreigners to own commercial properties in VN
will help to strengthen demand, especially for mid to high-end projects. In
addition, the new guarantees required by developers from banks for new
developments will add more confidence to the market. However, the
cost of these guarantees is expected to be passed on to the consumer.
The residential market in Ho Chi Minh City continues to improve and we
expect this to continue throughout 2015 and beyond.
ECONOMIC INDICATORS
VIETNAM 2013 2014 1H 2015F
GDP Growth 5.42% 5.98% 6.28%
CPI Growth 6.6% 4.09% 0.86%
Source: GSO
ASKING PRICES OF ALL SEGMENTS Q2 2015
PRIMARY MARKET PERFORMANCE Q2 2015
0
20
40
60
80
100
Grade A Grade B Grade C
mil VND/sq.m.
Lower asking price Upper asking price
1,500
4,000
6,500
9,000
11,500
14,000
Grade A Grade B Grade C
Accumulated Primary supply Unit sold
Units
- 14. Cushman & Wakefield Vietnam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or representation,
express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted
subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals. © 2014 Cushman & Wakefield, Inc. All rights reserved.
MARKET HIGHLIGHTS
Significant Residential Projects Launched in Q2 2015 LOCATION EXPECTED COMPLETION UNITS LAUNCHED SALE PRICE
(VND/SQ.M.)
Sarimi District 2 2016 368 50,500,000
Citi Home District 2 2016 176 14,200,000
Gateway Thao Dien District 2 2017 148 41,200,000
The Sun Avenue District 2 2017 84 32,800,000
Vista Verde District 2 2017 800 28,800,000
Vinhomes Central Park Binh Thanh 2017 2,152 43,120,000
Saigonres Plaza Binh Thanh 2017 202 23,000,000
Scenic Valley District 7 2017 352 31,300,000
An Gia Riverside District 7 2017 246 25,340,000
Sunrise City View District 7 2018 392 29,100,000,
Him Lam Cho Lon District 6 2015 150 21,000,000
Him Lam Cho Lon Phase 2 District 6 2016 264 21,400,000
Flora Anh Dao District 9 2016 212 18,600,000
City Gate Tower District 8 2016 267 16,800,000
An Gia Star Binh Tan 2016 96 15,800,000
Oriental Plaza Tan Phu 2016 1,136 21,500,000
Melody Residences Tan Phu 2017 550 21,700,000
8X Rainbow Tan Phu 2017 408 15,670,000
Linh Trung Apartment Thu Duc 2016 259 14,560,000
Dream Home 2 Go Vap 2017 424 17,500,000
Significant Projects Under Construction LOCATION DEVELOPER EST. NUMBER OF UNITS EXPECTED COMPLETION
Sunrise City North District 7 Novaland Group 631 2016
Sarimi District 2 Dai Quang Minh Corp 368 2016
Vinhome Central Park Binh Thanh VinGroup 10,000 2017
Scenic Valley District 7 Phu My Hung 1,200 2017
Gateway Thao Dien District 2 Son Kim Land 441 2017
- 15. Cushman & Wakefield Viet Nam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
Q2 2015
HO CHI MINH CITY, VIETNAM
SERVICED APARTMENT
MARKETBEAT
A Cushman & Wakefield Research Publication
ECONOMY
1H 2015 witnessed an increase in GDP of
6.28% compared to the same period last year,
which is the highest level since 2008 (with
2013 at 4.9% and 2014 at 5.18% by way of
comparison). Inflation remains under control,
with the Consumer Price Index (CPI) increasing just 0.86% year-on-
year. Inward FDI to Vietnam in the 1H of 2015, including both newly
registered and additional FDI capital, reached US$5.49 billion, down
19.8% year-on-year. However, disbursed FDI increased by 9.6%
year-on-year to US$6.3 billion. Among the provinces, Dong Nai
attracted the largest share totaling US$900.8 million (23.5%),
followed by HCMC with US$765.8 million (19.9%) and Tay Ninh
with US$282.7 million (7.4%). A total of 46 nations and territories
registered new FDI in the first six months, with Korea, Turkey,
Virgin Islands (UK), Hongkong and Japan accounting for 75% of the
total in the 1H of 2015. Sector-wise, the manufacturing and
processing industry accounted for 76.2% of total registered capital,
followed by real estate (8.5%)
SERVICED APARTMENT MARKET OVERVIEW
No new supply was completed this quarter. Currently, the
total supply of Grade A and Grade B stock is approximately 2,930
apartments from 30 buildings. There are 670 Grade A units and
nearly 2,260 Grade B units. District 1 makes up 44% of the total
supply. There are a few international operators in HCMC, such as
Ascott, Norfolk, Nikko, InterContinental, Capri and Sedona.
Tenants, especially single tenants, prefer to lease in the CBD, while
families are attracted to District 2 and 7 due to the presence of
international schools, a wide range of amenities and modern
infrastructure systems.
Q1 2015 continued to see gradual improvement with
average occupancy across both grades rising on a yearly
basis, by 6 percentage-points year-on-year (y-on-y) for Grade A and
9 percentage-points y-on-y for Grade B, to 95% and 90%
respectively. C&W believes that this increase was due to the rise in
short term tenants who opt for a home-stay experience in serviced
apartments with larger spaces and competitive rents when compared
to hotels.
In terms of rents, the average level of both grades remained
stable quarter-on-quarter. However, average rents for Grade B
units increase by some 4% y-on-y to VND468,400 per square meter
per month (/sq.m./mo), equivalent to US$21.5/sq.m./mo*. This was
mainly due to the increase in rents of the Somerset chain after
renovation; rents of Grade A remained stable on a yearly basis, at
VND643,000/sq.m./mo., equivalent to US$29.5/ sq.m./mo*.
Serviced apartments in District 1 have traditionally performed well;
and this continued into Q2 2015 with a high occupancy rate of 96%,
up 10 ppts y-on-y, and approximately 8 - 10 percentage points higher
than the non-CBD areas, despite average rent being 37% higher, at
VND599,000/sq.m./mo, equivalent to US$27.5/sq.m./mo*. Average
rents in the non-CBD areas was at VND 438,400/sq.m./mo,
equivalent to US$20/sq.m./mo*.
OUTLOOK
Four serviced apartment projects with over 900 units are expected
to enter the market by 2016, of which 30% will be in District 1. Due
to lackluster economic performance, many multi-national companies
have cut staff accommodation allowances. Hence, modestly-sized
apartments are expected to be more popular in the short to
medium-term due to the more affordable quantum.
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 long-term stays. The CBD continues to be
preferred by developers and has the highest number of future
projects. However, the scale of projects in the CBD is smaller when
compared to other districts due to limited land.
RENTAL VALUES AS OF 2Q 2015
LOCATION AVERAGE RENT
SQ.M./MTH
%CHANGE SHORT TERM
OUTLOOKMTH AGO YEAR AGO
GRADE A
CBD 660,000 0.6% 0.5%
Non - CBD 461,000 0.0% 0.6%
GRADE B
CBD 543,000 -0.2% 8.6%
Non - CBD 437,600 0.6% 1.1%
* ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED
GRADE A & B OVERALL RENTAL VS. OCCUPANCY
RATE Q2 2015
0
20
40
60
80
100
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015
%VND/sq.m/mo.
Grade A- Avrg. Asking Rent Grade B- Avrg. Asking Rent
Grade A- Avrg. Occupancy Grade B- Avrg. Occupancy
- 16. Cushman & Wakefield Viet Nam
Level 14, Vincom Center Building
72 Le Thanh Ton, District 1, HCMC
www.cushmanwakefield.com
For more information, contact:
Jonathan Tizzard, Director
+(84) 93 986 4192
jonathan.tizzard@ap.cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No warranty or
representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
STATES ON THE GO
Significant Projects Under Construction LOCATION DEVELOPER EST. NUMBER
OF UNITS
EXPECTED
COMPLETION
Times Square 22-36 Nguyen Hue, District 1 Quang Truong Thoi Dai JSC 78 2015
SC Vivo City Nguyen Van Linh Boulevard, District 7 VCCD-Saigon Co.op-
Mapletree
480 2016
Ascott Waterfront Saigon 1 Ton Duc Thang, District 1 M.I.K Corporation 222 2016
Saigon Centre Phase 2 65 Le Loi, District 1 Keppel Land 89 2016