Colliers Vietnam's monthly market report on the Central Business District of Ho Chi Minh City. It covers the Office, Retail, Hotel, and Serviced Apartment markets.

1. DECEMBER 2013 | HCMC CENTRAL BUSINESS DISTRICT
HO CHI MINH CITY
CBD MARKET Report
www.colliers.com/vietnam

2. TABLE OF CONTENTS
HCMC CBD MARKET REPORT | DECEMBER 2013
Market Highlights
OFFICE MARKET
................................................................
2-4
...............................................................
2
...............................................................
3
...............................................................
3
...............................................................
4
...............................................................
4-5
Market Overview
...............................................................
4
Market Performance
...............................................................
4
Outlook
...............................................................
5
Table
...............................................................
6
...............................................................
8-10
Market Overview
...............................................................
7
Market Performance
...............................................................
7
Outlook
...............................................................
8
Table
...............................................................
6
...............................................................
8-9
Market Performance
...............................................................
8
Outlook
...............................................................
9
Table
...............................................................
9
...............................................................
10
• Market Overview
• Market Performance
• Outlook
• Table
RETAIL MARKET
•
•
•
•
HOTEL MARKET
•
•
•
•
SERVICED APARTMENT
•
•
•
Page
CONTACTS

3. HCMC CBD MARKET REPORT
DECEMBER 2013
Economic Overview
FDI IN HCMC BY MONTH, NOVEMBER 2013
Foreign direct investment (FDI) registered in HCM City in
the first 11 months of the year amounted to US$1.6 billion, a
year-on-year increase of 30%. By November 20, the city had
412 FDI projects licensed and 120 others approved for capital
expansion.
Regarding domestic investment, the city also granted 23,675
business licenses, an increase of 7% adding up to the total
investment of VND107.6 trillion (equivalent to US$5.12 billion).
A significant decline of 39% y-o-y for domestic investment
reflects that local firms are still suffered from tough economic
Source: Statistical Office in HCMC, Colliers International
FDI IN HCMC BY SECTORS, NOVEMBER 2013
condition. Approximately 2,200 businesses (equaling 9.3%
of the newly established businesses in the city) have been
dissolved in the same period.
It can be seen from the FDI by business sector chart a notable
increase in the Science - Technology sector as its capital
contribution rate to total investment to HCMC jumped from 4%
in 2012 to 31% in this review term.
The portion of real estate in total FDI capital in the first 11
months decreased over the same period in 2012, the actual
investing amount for HCMC property market from the foreign
investors increased by 25% to reach US$147 million.
Source: Statistical Office in HCMC, Colliers International
FDI BY COUNTRY HCMC NOVEMBER 2013
Source: Statistical Office in HCMC, Colliers International
P.1 | Colliers International

4. HCMC CBD MARKET REPORT
DECEMBER 2013 | COMMERCIAL OFFICE MARKET
Market Performance
LIM TOWER
There is no new supply in Central Business District (CBD)
in November. More than half of the city’s office supply is
located in the CBD, including all Grade A and the majority
of Grade B buildings.
By the end of last month, the monthly average Grade A
asking rent decreased slightly to US$38.3/sqm. However,
this rental rate was 10.7% higher than the same period last
year.
Given the limited new supply entering the market and
growing demand of international companies in centralizing
their workplaces, the vacancy rates of Grade A properties
Source: Public Domain
Outlook
decreased 6% m-o-m. Lim Tower on Ton Duc Thang and
With limited commercial space available in the future and
Times Square on Nguyen Hue Street leased the most area.
a slight increase in demand growing from tenants due to
In November, the average asking rent of Grade B segment
reached US$22.3/ sqm. per month but the occupancy rate
was unchanged, staying at 93%.
economic recovery and healthy FDI flows, it is expected
that landlords in the CBD will start to push back on rental
offerings and predict to increase rental prices offered and
decrease incentives.
New Grade B projects will enter the market in 2014 creating some
downward pressure on asking rental prices but it is thought that
premier Grade A developments will not be significantly influenced
by this.
MARKET PERFORMANCE BY GRADE
GRADE A PERFORMANCE
Source: Colliers International
Source: Colliers International
RECENT TRANSACTIONS
BUILDING
President Place
Empress Tower
Lim Tower
LEASE (L) / SALE (S)
L
L
L
TENANT / PURCHASER
NHN Vietnam
Hansea
Puma
AREA (sq m)
500
400
2,500
P.2 | Colliers International

5. HCMC CBD MARKET REPORT
DECEMBER 2013 | COMMERCIAL OFFICE MARKET
Office Market Overview
1
2
3
4
5
6
7
8
Saigon Centre
Saigon Tower
Sunwah Tower
The Metropolitan
Diamond Plaza
Kumho Asiana Plaza
Bitexco Financial Tower
President Place
65 Le Loi
29 Le Duan
115 Nguyen Hue
235 Dong Khoi
34 Le Duan
39 Le Duan
45 Ngo Duc Ke
93 Nguyen Du
11,650
13,950
20,800
15,200
15,936
26,000
37,710
8,330
Service
Charges
(*)
6.0
6.0
6.0
6.0
8.0
8.0
8.0
6.0
9
10
Times Square
Lim Tower
22-36 Nguyen Hue
9-11 Ton Duc Thang
9,000
29,265
7.0
6.0
67%
86%
55.0
28.0
187,841
6.9
90%
38.3
No
Name
Address
Grade A
NLA
(sq m)
Occupancy
rate
NFA asking rent
(*)
90%
100%
90%
95%
98%
98%
85%
92%
38.8
37.0
42.5
41.3
41.0
51.3
30.0
33.0
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
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%
94%
98%
100%
98%
97%
93%
20.0
16.0
21.0
26.0
20.0
21.0
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
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%
89%
100%
82%
95%
80%
99%
96%
100%
100%
99%
99%
99%
100%
100%
98%
97%
77%
100%
99%
94%
85%
24.0
20.0
22.0
16.0
26.0
11.0
30.0
15.0
24.0
23.0
20.0
21.0
25.0
19.0
23.0
21.0
22.0
24.0
19.0
28.0
19.0
25.0
364,396
5.5
93%
22.3
Grade B
* US$/ sq m/ month (on net area)
** buildings are sorted by Year of Completion
P.3 | Colliers International

6. HCMC CBD MARKET REPORT
DECEMBER 2013 | RETAIL MARKET
Retail Market Overview
In
November,
of
Ho
the
Chi
previous
the
Minh
month
Consumer
City
and
Price
increased
by
improved
Index
(CPI)
0.17%
CPI RETAIL & SERVICES REVENUE
from
4.97%
y-o-y.
Data from the municipal Statistics Office shows that the highest
price increase was recorded in the group of housing-powerwater-fuel and construction materials at 0.58%.
According to report from Statistical Office, HCMC’s total retail
sales and service revenue in the first 11 months of this year
reached VND548,499.1 million, the figure represented a 12.3%
Source: Statistical Office in HCMC, Colliers International
y-o-y rise.
The revenue from trade sector, which accounted for 81.2% of the
RETAIL SALES REVENUE BY SECTORS
total, rose 12.2% over the same period of last year while that of
hotel, restaurant services and tourism industry grew 19% y-o-y.
Market Performance
The average rents of shopping centers and department stores
within CBD went flat during last month while that of non-CBD
commercial places decreased steadily under pressure of retain
existing tenants.
Unlike office market, mismatch in rentals between retail landlords
Source: Statistical Office in HCMC, Colliers International
and tenants remained a major obstacle for this segment. Given
stable supply in November, the decline in net absorption of retail
spaces also indicated response of tenants to the current high
RETAIL PODIUM @ TIMES SQUARE UNDER-CONSTRUCTION
asking rents.
It is reflected that landlords of department stores in CBD area
are trying to maintain the rentals while the occupancy rate of
these places is still fluctuated.
RETAIL SALE REVENUE GROWTH RATE
Source: Colliers International
Source: Colliers International
P.4 | Colliers International

7. HCMC CBD MARKET REPORT
DECEMBER 2013 | RETAIL MARKET
RETAIL MARKET
DEPARTMENT STORE
Source: Colliers International
Source: Colliers International
RETAIL PODIUM
SHOPPING CENTRE
Source: Colliers International
Source: Colliers International
Outlook
In general, shopping malls in downtown city benefit from
Generally, retail tenants are expecting a pick up in sales
prime location advantage with good foot traffic of shoppers. In
throughout the festive seasons from Christmas, New Year to
contrast, non-CBD retail places face difficulties in improving
Lunar New Year holiday.
take-ups of vacant spaces that leads to building renovation or
Regarding future supply, it looks like both Saigon Airport
functional conversion beside typical pricing strategy.
Plaza (Tan Binh) and Times Square (District 1) will not be
For example, Thien Son Plaza in District 7 has been renovating
open this year but during first quarter of 2014. The other retail
since late of 2Q13 to alter retail area to office space. Similarly,
podiums in District 2 (Thao Dien Pearl and Cantavil Premier)
Zen Plaza also reduced retail floor areas by transfer Hoang
are showing good construction progress and expected to
Yen Buffet and Sushi Bar to the first two floors while leaving
commence operation in the second half of 2014.
3F to 5F available for office lease.
P.5 | Colliers International

8. DECEMBER 2013 RETAIL MARKET
KUMHO MONTHLY |MARKET REPORT
Name of Project /
Building
No
HCMC CBD MARKET REPORT
Address
Location
NLA
(sq m)
750
Average Rental (US$/sq
m/month)
Occupancy Rate
125
100%
1
Sheraton Saigon
88 Dong Khoi
District 1
2
Caravelle Hotel
19 Lam Son Square
District 1
150
95
94%
3
Rex Arcade
141 Nguyen Hue
District 1
2,000
120
100%
4
New World Hotel
79 Le Lai
District 1
1,000
50
95%
5
Hotel Continental Saigon
132-134 Dong Khoi
District 1
200
90
100%
6
Opera View
Lam Son Square
District 1
1,260
85
100%
7
Bitexco Financial Tower
45 Ngo Duc Ke
District 1
8,000
42
95%
8
Times Square
22-36 Nguyen Hue
District 1
9,000
90
70%
9
President Place
93 Nguyen Du
District 1
1
Diamond Plaza
34 Le Duan
District 1
800
30
100%
23,161
Retail Podium
73.1
86%
9,000
83
100%
2
Zen Plaza
54-56 Nguyen Trai
District 1
6,817
52
100%
3
Parkson Saigon Tourist
35 Le Thanh Ton
District 1
17,000
90
100%
4
Kumho Asiana Plaza
35 Le Duan
District 1
6,830
35
100%
39,647
72.4
100%
Department Store
1
Saigon Center
65 Le Loi
District 1
3,500
75
100%
2
Tax Center
135 Nguyen Hue
District 1
7,000
75
100%
3
Saigon Square 1
77-89 Nam Ky Khoi Nghia
District 1
1,300
167
100%
4
Nowzone
Nguyen Van Cu
District 1
9,000
48
88%
5
Saigon Square 2
7-9 Ton Duc Thang
District 1
1,400
75
75%
6
Vincom Center B
72 Le Thanh Ton
District 1
45,000
55
90%
7
City Plaza
230 Nguyen Trai
District 1
5,250
25
100%
8
Taka Plaza
102 Nam Ky Khoi Nghia
District 1
1,000
90
100%
9
Vincom Center A
Dong Khoi
District 1
38,000
70
85%
111,450
61.9
90%
Shopping Centre
DECEMBER 2013 | HOTEL MARKET
No
1
Name of Hotel
Caravelle
HCMC CBD MARKET REPORT
Address
19 Lam Son Square
Location
Total Room
Occupancy
ARR(*)
District 1
335
75%
150
2
New World Saigon
76 Le Lai
District 1
533
71%
148
3
Sofitel Plaza Saigon
17 Le Duan
District 1
290
75%
144
4
Rex
141 Nguyen Hue
District 1
289
80%
136
5
Renaissance Riverside
8-15 Ton Duc Thang
District 1
350
70%
140
6
Legend
2A-4A Ton Duc Thang
District 1
283
68%
142
7
Sheraton
88 Dong Khoi
District 1
480
81%
205
8
Park Hyatt Saigon
02 Lam Son Square
District 1
259
80%
333
9
Majestic Saigon
1 Dong Khoi
District 1
175
72%
148
10
InterContinental Asiana
39 Le Duan
District 1
305
79%
206
11
Nikko Saigon
235 Nguyen Van Cu
District 1
334
64%
140
12
Pullman Hotel
146 Tran Hung Dao
District 1
306
10%
128
3,633
69%
167
86
74%
85
5 Star
1
Continental Saigon
132-134 Dong Khoi
District 1
2
Norfolk Hotel
117-119 Le Thanh Ton
District 1
104
71%
92
3
Duxton
63 Nguyen Hue
District 1
203
72%
103
4
Kim Do Royal City
133 Nguyen Hue
District 1
135
70%
48
5
Palace Saigon
56-66 Nguyen Hue
District 1
146
88%
54
6
Oscar
68A Nguyen Hue
District 1
108
62%
41
7
Liberty Central
179 Le Thanh Ton
District 1
140
72%
104
8
Golden Central Saigon
140 Ly Tu Trong
District 1
132
70%
78
9
Grand
08 Dong Khoi
District 1
107
65%
89
1,161
70%
84.6
4 Star
P.6 | Colliers International

9. HCMC CBD MARKET REPORT
DECEMBER 2013 | HOTEL MARKET
Hotel Market Overview
INTERNATIONAL VISITORS TO HCMC
The number of foreign travelers to Vietnam in November
showed an increase after negative performance in the last few
months. According to the General Statistics Office, Viet Nam
welcomed around 731,000 international tourists in November,
an increase of 8.8% compared to the same period last year,
of which, Russian holiday makers comprised a large element.
HCMC
agencies
estimates
that
approximately
419,750
international tourists came to the city in November, up 15%
Source: Statistical Office in HCMC, Colliers International
y-o-y; while the figure of the first 11 months of the year is 3.64
million visitors.
The tourism sector made a revenue of VND76,024 billion over
INTERNATIONAL ARRIVALS
the past 11 months, rising by 19% y-o-y.
Outlook
Vietnam tourism and relevant agencies are working to join
tourist single visa with counterparts from Thailand and
Cambodia. As these two countries have already had a single
visa agreement, we expect to attract a large number of tourists
Source: Statistical Office in HCMC, Colliers International
to Vietnam due to this convenience. This joint also shows
an improvement in policy of Vietnam government on ASEAN
common visa system which was rejected in 2010.
There would be no new supply for the 4- and 5-star hotel
FUTURE SUPPLY BY STATUS
market in the first month of 2014. Le Meridien Saigon Hotel
is still being delayed due to capital shortage though it reached
an exterior finishing phase. Meanwhile, 231 rooms of Reverie
Times Square Hotel are being fitted out and is expected to
open in late of 2Q 2014.
Regarding the Meetings, Incentives, Conference, Exhibitions
(MICE) segment, in November Ibis Saigon South hosts
participants of four international exhibitions given its favor
location nextby Saigon Exhibition and Convention Center in
District 7. These events probably make hoteliers pay more
Source: Colliers International
attention on potential of MICE market.
P.7 | Colliers International

10. HCMC CBD MARKET REPORT
DECEMBER 2013 | HOTEL MARKET
Market Performance
November witnessed an improvement in both average room
rate (ARR) and occupancy rate of 4-star hotels with an
increase of 14.98% and 10.92% respectively. Besides, despite
the performance in occupancy rate of 5-star segment reflected
positive figures of 1.29% gain , the ARR dropped 4.16% m-o-m
during this peak tourism season. The two newly opened hotels
in District 1 Pullman Saigon Centre on Tran Hung Dao Street and
Liberty Central Saigon Riverside catch up well in their segments
with occupancy rate reached 30% and 70% respectively in last
month.
China had the highest number of tourists travelling to Vietnam in
November while European countries like England, Holland, Spain
and Belgium were top sources of foreign visitors of the month.
PERFORMANCE OF 4 & 5 STARS HOTEL
Source: Colliers International
PERFORMANCE OF 5 STARS HOTEL
PERFORMANCE OF 4 STARS HOTEL
Source: Colliers International
Source: Colliers International
DECEMBER 2013 | SERVICED APARTMENT MARKET
Serviced Apartment Overview
GRADE A SERVICED APARTMENTS
GRADE B SERVICED APARTMENTS
Source: Colliers International
Source: Colliers International
P.8 | Colliers International

11. HCMC CBD MARKET REPORT
DECEMBER 2013 | SERVICED APARTMENT MARKET
Market Performance
Serviced apartment segment received no new supply in November. District 1 accounts for about 42% of total supply in the
serviced apartment segment of HCMC.
In the review month, both top grades experienced a low performance in terms of rents and vacancy. Monthly average rate of Grade
A declined to US$34.5/ sq m., down by 4.1% m-o-m. At the same time, Grade B average rents remained unchanged from last
month at US$24.6/ sqm. per month. Grade A occupancy rate averaged at 92.9%, showing increase of 2.91% m-o-m as a reaction
to falling price; Grade B occupancy rose to 83% from 80% in November.
PERFORMANCE OF GRADE A & B
Outlook
Serviced apartment sector are being competed from new rivals
of large numbers of buy-to-let apartments and tighten housing
budget of tenants.
During this year end period, expat tenants are busy with business
as well as travelling schedule. Hence the occupancy rate is not
expected to change considerably. However, landlords are getting
pressure in accept flexible rentals in order to maintain their
Source: Colliers International
occupancy rates.
No
1
2
3
4
5
6
7
Address
Location
Total
Room
Average
Occupancy
ARR(*)
5B Ton Duc Thang
21-23 Nguyen Thi Minh Khai
65 Le Loi
111 Nguyen Du
22 Bis Le Thanh Ton
39 Le Duan
08 Phung Khac Khoan
District 1
District 1
District 1
District 1
District 1
District 1
District 1
66
172
89
41
55
260
18
88%
94%
88%
90%
98%
97%
40%
30
36
35
30
36
36
34
855
90%
36.0
165
154
126
42
76
30
60
54
14
17
83%
90%
91%
93%
76%
72%
60%
50%
85%
94%
26
29
28
26
24
20
24
25
19
20
738
92%
28.9
Project Name
The Landmark
Somerset Chancellor Court
Sedona Suites
Nguyen Du Park Villas
The Landcaster
InterContinental Asiana Saigon
Lafayette De Saigon
Grade A
1
2
3
4
5
6
7
8
9
10
Somerset HCM
Saigon Sky Garden
Norfolk Mansion
Diamond Plaza
Garden View Court
Ben Thanh Luxury
Vincom Center
Nikko Saigon
Spring Court
Saigon City Residence
8A Nguyen Binh Khiem
20 Le Thanh Ton
17-21 Ly Tu Trong
34 Le Duan
101 Nguyen Du
172-174 Ky Con
72 Le Thanh Ton
235 Nguyen Van Cu
1Bis Phung Khac Khoan
8A/3D2 Thai Van Lung
Grade B
District 1
District 1
District 1
District 1
District 1
District 1
District 1
District 1
District 1
District 1
* US$/sq m/month
** Not including VAT and service charge
*** Buildings are sorted by Year of Completion
P.9 | Colliers International

12. HCMC CBD MARKET REPORT | DECEMBER 2013
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