CBRE VIETNAM, HCMC MARKET OVERVIEW Q4/2013 · 2013-11-21 · Vietin Bank Tower 24,315 sm GFA CBD...
Transcript of CBRE VIETNAM, HCMC MARKET OVERVIEW Q4/2013 · 2013-11-21 · Vietin Bank Tower 24,315 sm GFA CBD...
CBRE VIETNAM, HCMC MARKET OVERVIEW Q4/2013
PRESENTED BY:
GREG OHAN, DIRECTOR, VIETNAM
NOVEMBER 19TH
2013
CONTENTS
2
1. Know The Market
Overview of Vietnam Office Market
2. Know Your Business
Key Considerations When Making an Office Relocation / Renewal
Decision
3. Know the Future
Outlook
CBRE Predictions
4. Lim Tower & Hoa Lam Corporation
Overview of Lim Tower
Hoa Lam Corporation and Lim Tower 2
HOW TO MAKE THE RIGHT DECISION ?
3
Increase 66% y-o-y ($19 billion) in FDI exceed the 2013
target ($18.13 billion), led by Japan (25%)
VN ranks 99th on business-friendly list (90th in 2012,
78th in 2011)
Gold price decreased to VND 36.6 mil/tael. Global
gold down to US$1,286/ounce
VN highest car sales @ 9m/2013, increasing 18%
y-o-y, led by Toyota, Ford and GM
Credit growth is expected to reach 11% - 12% in 2013
Haiyan Typhoon ravaged through the Philippines
causing floods, storms and damage in central VN
…. … Is the worst behind us?
RECENT HEADLINES
1 KNOW THE MARKET
MARKET OVERVIEW - HCMC
5
Q3 SNAPSHOT
OFFICE GRADE A GRADE B GRADE C TOTAL
Number of properties 11 54 266 330
Total supply (GFA, sm) 329,931 881,718 911,437 2,123,086
New supply (properties) 1 1 2 4
Net absorption (NLA,sm) – Q3/2013 12,000 20,802 27,720
Q-o-q change (%) 207.2% 10.1% 31.1%
Y-o-y change (%) 104.1% 220.1% 180.3%
Vacancy rate (%) 11.8%(*) 11.3% 11.5%
Q-o-q change (pp) -0.3 -0.2 -0.2
Y-o-y change (pp) -3.5 -0.3 -1.2
Average asking rents (US$ psm per
month) 32.47 18.73 22.49
Q-o-q change (%) 3.0% 3.2% 2.9%
Y-o-y change (%) 6.2% 8.2% 7.0%
6
AVERAGE ASKING RENTS
GRADE A GRADE B
Number of buildings 11 54
GFA (sm) 329,931 881,718
MARKET OVERVIEW - HCMC
RENT
Average asking
rent increases.
Asking rent in the
Grade A and
Grade B segment
risen by 3.0% q-o-
q and 3.2% q-o-q.
Mature buildings
are already raising
rents whilst those
in the next tier
down, be A- or
B+, are
maintaining their
rents.
$0
$20
$40
$60
$80
2007 2008 2009 2010 2011 2012 2013
Grade A Grade B
7
GRADE B VACANT SPACE AND AVERAGE ASKING RENTS
GRADE A VACANT SPACE AND AVERAGE ASKING RENTS
RENT & VACANCY
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
0
20,000
40,000
60,000
80,000
100,000
120,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013
Average
Askin
g Rent
(US$
psm
per m
onth
)
Vacant
Space (s
m)
GRADE B VACANT SPACE AND AVERAGE ASKING RENT
Vacant Space Asking Rent
$0
$20
$40
$60
$80
$100
0
20,000
40,000
60,000
80,000
100,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013
Average
Askin
g Rent
(US$
psm
per m
onth
)
Vacant
Space (s
m)
GRADE A VACANT SPACE AND AVERAGE ASKING RENT
Vacant Space Asking Rent
MARKET OVERVIEW - HCMC
RENTS CONTINUE AN
UPWARD TREND
Increased slightly by
2.5% q-o-q to US$21.8
psm, p/mth
Vacancy rate in Grade A
market declining
Vacancy rate in Grade B
market rising slightly
owing to new buildings
launched over the last
quarter
8
HCMC Office Market Performance – Grade A & B
GRADE A VS. GRADE B PERFORMANCE
$15
$17
$19
$21
$23
$25
0
200,000
400,000
600,000
800,000
1,000,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013Ask
ing rent (U
S$/s
m/m
onth
)
Are
a (sm
, N
LA)
Leased Area Vacant Area Asking Rent
MARKET OVERVIEW - HCMC
9
MARKET OVERVIEW - HANOI
RISING NEW SUPPLY AND DECREASING OCCUPANCY RATES
0%
10%
20%
30%
40%
50%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2009 2010 2011 2012 2013
Grade A Grade B
ASKING RENT
Grade A average asking rents decreased by 2.8% q-o-q while Grade B improved by
1.5%
Grade A - downward pressure as Landlords are more competitive
Grade B asking rents decreased by 14% and projected to continue
VACANCY
Grade A vacancy rate continued to decrease 2to 26.31%
Grade B vacancy increased up to 34.7% due to the new supply of 4 grade B buildings
Y-O-Y Grade A vacancy decreased 1.16 pp while Grade B increased sharply 15.5 pp
$0
$10
$20
$30
$40
$50
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2010 2011 2012 2013
Grade A Grade B
Office Asking Rents Office Vacancy
2 KNOW YOUR BUSINESS
TENANT PROFILING - HCMC
Strong occupier interest (26%) remains Vietnamese / local companies
expanding and consolidating
US continues to remain the largest foreign occupier group by country
dominating enquiry levels followed by Japan and Korean based organization's
respectively
ENQUIRIES BY ORIGIN - YTD
Source: CBRE
26%
19%
8%7%
7%
6%
26%
Vietnam
US
Japan
UK
Korea
China
Other
Demand driven by office occupiers seeking expansion / relocation
Fringe / New CBD buildings have given occupiers flexibility to upgrade and
consolidate.
The focus 2H 2013 has been consolidation and taking advantage of limited /
remaining cost effective opportunities in NEW buildings offering attractive
packages to raise occupancy levels
ENQUIRY – BY TRANSACTION YTD ENQUIRY – BY INDUSTRY YTD
Source: CBRE
84%
16%
Relocation or extension New entrant
20%
17%
13%6%
5%4%
35%
Technology
Manufacturing
Finance
Education
Retail
Pharmaceutical
Others
TENANT PROFILING - HCMC
TENANT PROFILING
13
1. TYPE OF BUSINESS • Industry type can define location
• E.g. Banking / Finance D1. Call centre non CBD
2. LENGTH OF TENANCY • Current lease term length
3. REASON FOR MOVING • Expansion? Consolidation? Cost
4. CURRENT REQUIREMENTS
• Understanding current needs and whether
existing size / accommodation suitable.
• Current location, space, head count, expiry etc
5. FUTURE REQUIREMENTS
• Headcount, location, space sqm, building grade
desired, operational date, operational hours, IT
provider etc
6. PARKING • No. of car and motorbike
7. BUDGET • Monthly / p/sqm
8. OTHER OPERATIONAL FACTORS • Security, Back Up Power, IT. Fire & Safety,
Signage
KEY FACTORS TO UNDERSTAND BEFORE MOVING
TENANT PROFILING
14
1. FIT OUT • Fit out : US$350 – US$450 p/sqm
KEY FACTORS TO CONSIDER WHEN MOVING
2. RE INSTATMENT • Reinstatement : US$25 – US$35
3. SERVICE CHARGE
• Grade A : US$6 - US$8
• Grade B : US$5 - US$6
• Grade C : US$3+
4. FLOOR MEASUREMENT
(Net or Gross)
• Gross: most common areas contained within the
external walls
• Net: within a tenancy at each floor level
measured from finishes
5. SECURITY DEPOSITS • 3 months rent +SC in cash held for the duration
of lease, returned at expiry
6. PAYMENTS TERMS • Quarterly in advance for rent +SC.
• Longer payment terms = lower rent
7. LEASE TERMS • 2 – 5 years + (Negotiable)
8. PARKING COSTS • Cars: US$150 - US$250/lot/month
• Motorbikes: US$6 - US$20/lot/month
9. STANDARD OPERATING HOURS • Monday - Friday : 8.30am to 6.00pm
• Saturday : 8.30am to 1.00pm
10. LEASE DENOMINATION • By law denominated in VND
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RELOCATIONS / NEW OFFICES IN Q4/2013
MAJOR TENANTS WHO HAVE MADE THE MOVE YTD
IT Pharma Consumer goods Pharma
Insurance Pharma Finance Pharma
Securities Sourcing operation Conglomerate
Construction Electronics Banking
Banking
Assurance
Construction
3 KNOW THE FUTURE
ABSORPTION YTD – HCMC REVIEW
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Net Absorption
2009 2010 2011 2012 2013 YTD
Grade A 27,535 34,016 33,917 24,209 26,250
Grade B 48,140 97,744 85,367 39,921 55,058
Total 75,675 131,760 119,284 64,130 81,308
Total supply
2009 2010 2011 2012 2013 YTD
Grade A 134,279 232,728 232,728 232,728 241,853
Grade B 356,728 477,777 593,919 601,296 644,553
Total 491,007 710,505 826,647 834,024 886,406
Net absorption in 2013 to increase by 25+ Vs. 2012
Net absorption dominated by increased activity in Grade B
0
200,000
400,000
600,000
800,000
1,000,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011 2012 2013
Gro
ss F
loor
Are
a (
sm)
GRADE B OFFICE STOCK
Existing supply New supply Total GFA
0
100,000
200,000
300,000
400,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011 2012 2013
Gro
ss F
loor
Are
a (
sm)
GRADE A OFFICE STOCK
Exisitng space New supply Total GFA
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SUPPLY YTD - HCMC
CURRENT & FUTURE SUPPLY
19
SGGP Building
21,700 sm GFA
NTMK, D3
Vietcombank Tower
55,000 sm GFA
CBD
Vietin Bank Tower
24,315 sm GFA
CBD
HCMC UPCOMING COMPLETED 2014 SUPPLY
Viettel Tower
65,971 sm GFA
CMT8, D3
OPPORTUNITIES FOR TENANTS
Q4 2013
MB Sunny Tower
16,000 sm GFA
CBD
2013 AND THE FIRST HALF OF 2014 WILL END WITH STABILITY FOR OFFICE SEGMENT.
2014 will require a strategic approach with major occupiers NOW planning and negotiating for expiries
in mid to late 2014.
Asking rents in mature buildings with quality asset management services will maintain good performance
even though there will be additional new supply in the next few quarters as demand for high quality and
good location office space continues.
Flexible leasing terms and high quality services are still the keys to attracting or retaining tenants.
HCMC Office Supply Forecast (Grade A & B), GFA sm – 2013 to 2015
Source: CBRE
0
400,000
800,000
1,200,000
1,600,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
Existing Space - GFA (sm) New Space Come Online
Limited supply
175,346 sm8 quarters
OUTLOOK
SUPPLY PIPELINE - HCMC
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Occupancy Area Occupancy Area
Q4 2012 (approx m2) Q4 2013 (approx m2)
Lim Tower D1 00.00% 00.00 74.00% 5,118.00
President Place D1 00.00% 00.00 85.00% 1,350.00
Bitexco Financial Tower D1 68.00% 10,000.00 85.00% 6,000.00
Kumho Asiana Plaza D1 99.00% 867.00 100.00% 00.00
Metropolitan D1 98.00% 500.00 97.00% 700.00
Sun Wah Tower D1 96.00% 1,028.00 95.00% 1,500.00
Diamond Plaza D1 100.00% 00.00 100.00% 0.00
Saigon Centre D1 93.00% 600.00 93.00% 600.00
Saigon Tower D1 97.00% 187.00 97.00% 227.00
Me Linh Point Tower D1 100.00% 00.00 100.00% 00.00
A&B Tower D1 98.30% 308.20 100.00% 00.00
Green Power D1 95.00% 300.00 92.00% 950.00
Vincom Center D1 74.69% 19,488.00 83.60% 13,156.00
Centec Tower D3 98.00% 300.00 97.00% 1,078.00
An Phu Plaza D3 00.00% 00.00 95.00% 1,147.00
Saigon Trade Center D1 91.00% 3,500.00 83.00% 12,116.00
Maritime Bank Tower D1 87.00% 2,499.00 88.00% 4,500.00
CentrePoint PN 99.70% 87.00 96.00% 900.00
E town TB 98.00% 1,073.00 96.00% 2,984.00
Ree Tower D4 97.00% 494.00 99.00% 107.00
TOTAL Q4 2012 41,231 Q4 2013 52,433
OPPORTUNITIES FOR TENANTS
OCCUPANCY IN KEY OFFICE BUILDINGS
22
OPPORTUNITIES FOR TENANTS
OCCUPANCY IN KEY OFFICE BUILDINGS
Occupancy%
Q4 2012 vs Q4 2013
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Q4 2012
Q4 2013
23
SMALL – MEDIUM SIZED BUILDING PIPELINE - HCMC
CBRE is tracking 175 new mixed use office developments in key
and fringe CBD Districts e.g. 1,3, Tan Binh and Phu Nuan
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In the HCMC CBD, Only 8 buildings (A and B Grade) can
provide over 1,000 sqm contiguous space today. 5 of them
are Grade A – Lim Tower one of them.
Only 4 buildings (A and B Grade) combined in the HCMC
CBD have a floor plate over 1,000 sqm
This means, VERY limited options for MNCs looking for
seeking international standard, quality larger commercial
buildings
50% of the 175+ NEW Small-Medium sized buildings are
being built by SOEs and 50% are for owner occupation
For any major occupier planning an occupancy solution, the
opportunity is tightening with timing and planning early the
key to achieving your occupancy solution
PLANNING FOR RELOCATION – MAKING THE RIGHT MOVE
4 LIM TOWER & HOA LAM
CORPORATION
26
LIM TOWER - OVERVIEW
27
Positioned at the corner of Le Thanh Ton and Ton Duc Thang street, the Building positioned at the gateway to District 1,
is the largest Grade A office building to be completed in 2013 with a total area of over 34,000sqm, 34 floors, 550
parking spots within the building and additional parking also available in close proximity.
LIM TOWER – PRIME LOCATION
28
The building design incorporates the latest architecture to
create an environmentally and operationally efficient office
building for Tenants
Over 80% of the Building façade is covered by the latest Euro
window double glazed UV protection glass
Each levels features floor to ceiling glass, maximizes the best
view in HCMC along with allowing additional natural light.
The curtain wall glazing system at LIM reflects over 90% of
external sound and heat.
Saving operation cost and providing efficient and comfortable
working environment.
LIM TOWER – MODERN & EFFICIENT
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LIM TOWER – PROJECT OVERVIEW
Developer Mai Thanh Service Company Limited
Height 34 levels (123m) & 2 basements; 30 floors for office
Total Net leasable area 20,466 sqm
Typical Net plate Approx. 700 sqm
Ceiling height 2.55 m (finishing to finishing)
Total Parking
6 levels for car and motorbike parking:
2 basements: car parking (150 lots),
3rd – 6th floor: motorbike parking (950 lots)
Lift
9 high speed Thyssen Krupp lifts:
Low zone: 4 passenger lifts (up to 20th floor),
High Zone: 4 passenger lifts (21st floor – 34th floor)
1 service lift; 1600kg/lift
Air-conditioning Centralized chiller AC system. 10-12 FCU/floor
Security system 24 hour security and CCTV throughout
Back-up power Provide 100% back-up power (2,000 KVA)
Asking rent Please call +84 936 299 699
Service charge $6 p/sqm
Completion Q3 /2013
30
LIM TOWER – PROJECT OVERVIEW
Technique floor & Rooftop
2 basements: car parking
21st – 34th floors: Leasable area
7th – 20th floors: Techcombank
3rd - 6th floor: Motorbike parking
1st - 2nd floors: leased by Techcombank
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LIM TOWER 2 , 158 VO VAN TAN – Q1 2015 COMPLETION
32
LIM TOWER 2 , 158 VO VAN TAN – Q1 2015 COMPLETION
THANK YOU
© 2013, CBRE, Group Inc. CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not
doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and
completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior
written permission of CBRE.
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CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011
revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices
(excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management;
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