HANOI MARKET INSIGHTS Q1 2015 - CBRE Vietnam · HANOI MARKET INSIGHTS ... 17 CBRE | HANOI MARKET...

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HANOI MARKET INSIGHTS Q1 2015 Presented by: Marc Townsend, Managing Director of CBRE Vietnam Friday, April 3, 2015

Transcript of HANOI MARKET INSIGHTS Q1 2015 - CBRE Vietnam · HANOI MARKET INSIGHTS ... 17 CBRE | HANOI MARKET...

HANOI MARKET INSIGHTS – Q1 2015 Presented by: Marc Townsend, Managing Director of CBRE Vietnam

Friday, April 3, 2015

2 CBRE | HANOI MARKET INSIGHTS | Q1 2015

IF IT’S TOO GOOD TO BE TRUE, IT’S TOO GOOD TO BE TRUE!

3 CBRE | HANOI MARKET INSIGHTS | Q1 2015

7.8%

8.4% 8.2% 8.5%

6.3%

5.3%

6.8%

5.9%

5.0% 5.4%

6.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

VIETNAM ECONOMIC OVERVIEW

Source: Vietnamese General Statistical Office.

Vietnam GDP Growth Rate

Quarterly

“ ANZ has revised its GDP

growth forecast for

Vietnam in 2015 and 2016

upwards, to 6.5% for both

years from the previous

6.2% and 6.4%,

respectively.

5.0% 5.3% 6.1%

7.0% 6.0%

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

4 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Vietnam among Top Fastest Growing Economies

POSITIVE OUTLOOK FOR VIETNAM ECONOMY

Breakdown of components of average annual real GDP growth (2014 – 2050)

Source: PwC Analysis, The World in 2050: Will the shift in global economic power continue, February 2015.

5 CBRE | HANOI MARKET INSIGHTS | Q1 2015

CAPTURING A GREATER SHARE OF GLOBAL FLOWS Vietnam and Myanmar have fast growth middle and affluent class

Source: McKinsey&Company, November 2014.

Source: Boston Consulting Group, December 2013.

ASEAN Economic Community integration plan to create a single market of 600 mil. consumers,

which could create some $280 bil. to $615 bil. in annual economic value by 2030.

1 Vietnam

Business Process Outsourcing Locaion Index Map

Source: Cushman & Wakefield, March 2015.

6 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Vietnam Retail Sales

Vietnam Car Sales

-30%

20%

70%

120%

170%

-

40,000

80,000

120,000

160,000

2008 2009 2010 2011 2012 2013 2014 2M2015

Gro

wth

ra

te (

%)

No. o

f ca

r

No. of cars selling % change YoY

Registration fee reduced from 10% -

20% to 10% - 15% in April.

Import duty on cars from ASEAN countries

will decrease from 50% to 0% by 2018.

Target credit growth

2M: 0.68%

2015: 13-15%

2014: 14%

Source: Vietnamese General Statistical Office, Q1 2015.

Source: Vietnam Automobile Manufacturer’s Association, March 2015.

0%

7%

14%

21%

28%

35%

42%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4P

Q1 2

01

5

Gro

wth

Ra

te (

%)

Tu

rno

ve

r (T

rilli

on

do

ng)

Retails and Services Turnover Retails and Services Turnover Growth

Annual Car Sales:

Vietnam: 150,000 units

Thailand: 850,000 units

Indonesia: 1,250,000 units

7 CBRE | HANOI MARKET INSIGHTS | Q1 2015

FALLING OIL PRICE TRIGGERS TRADE DEFICIT? Dollar, Gold and Oil Chart - Last Ten Years

Compares the movement in the dollar index (major trading partners) with gold and oil prices over the last ten

years. The three series are compared using standard deviation.

Source: Macrotrends, April 1, 2015.

+20% y-o-y vs. EUR

and Yen

US$1,186/oz

-8% y-o-y

US$47.4/barrel

-47% y-o-y

Dec-1

0

Mar-

11

Jun

-11

Se

p-1

1

Dec-1

1

Ma

r-12

Jun

-12

Se

p-1

2

Dec-1

2

Ma

r-13

Jun

-13

Se

p-1

3

Dec-1

3

Ma

r-14

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-15

18,932

20,703 21,036 21,246

21,458

20,803

Vietnam Interbank Exchange Rate

Vietnam Trade Balance

-200

-150

-100

-50

0

50

100

150

200

2010 2011 2012 2013 2014 3M2015

US

$ b

illio

n

Export

Import

PMI VN-Index

8 CBRE | HANOI MARKET INSIGHTS | Q1 2015

VND AMONG TOP STRONGEST CURRENCIES IN APAC

Exchange Rate

Source: CBRE Research, Q1 2015.

80

90

100

110

120

130

140

150

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

2011 2012 2013 2014 2015

Lo

ca

l cu

rre

ncy p

er

US

D

JPY

INR

AUD

MYR

THB

SGD-TWD

PHP

VND

KRW-HKD

NZD

CNY

Vietnam Government Bond Yield Movement

9 CBRE | HANOI MARKET INSIGHTS | Q1 2015

BANK CUT RATES ON THE BACK OF LOW INFLATION

• Lending rate: Average lending rate for enterprises.

Source: Vietnamese General Statistical Office, State Bank of Vietnam.

Vietnam Interest Rates and Inflation

HSBC Bank has predicted that the central bank would mull another cut of

the open market operations (OMO) rate to beef up domestic demand and

growth thanks to low inflation this year.

0

5

10

15

20

25

2007 2008 2009 2010 2011 2012 2013 2014 2015

Inte

rest ra

te (

%)

Average CPI (y-o-y) Lending rate Deposit rate

Mortgage rate for the first 12 months:

Jan. 15 Mar. 15

• Techcombank 9.49% 7.99%

• Vietcombank 7.99% 7.5%

• ACB 8.90% 7.5%

10 CBRE | HANOI MARKET INSIGHTS | Q1 2015

NEW REAL ESTATE FIRMS ON SHARP RISE

Source: Vietnamese General Statistical Office.

* All the above articles were retrieved in March 2015.

Restructuring banking system:

• Some large banks will have to merge

with smaller banks, while the central

bank will directly handle other

lenders.

1. Newly registered Real Estate companies +49% y-o-y;

2. Newly registered Art, Entertainment and Recreation

companies +127% y-o-y.

Novaland to go public end of 2015

19,000 newly registered 4% y-o-y

2,055 firms were resolved 9% y-o-y

16,175 suspended operation 14% y-o-y

4,376 resumed operation 20% y-o-y

11 CBRE | HANOI MARKET INSIGHTS | Q1 2015

SOUTH KOREA & JAPAN – VIETNAM’S BIGGEST FOREIGN DIRECT INVESTORS

Vietnam Foreign Direct Investment, 3M 2015

Source: Ministry of Planning and Investment.

Pelosi, Bipartisan Delegation Conclude

Two-Day Visit to Vietnam 76%

11%

7% 6% Manufacturing

Real estate

Wholesale, retail sale andrepair industries

Others

Vietnam overseas remittance hit US$12

billion in 2014, accounting for 8% of

Vietnam’s GDP, up 13% y-o-y.

12 CBRE | HANOI MARKET INSIGHTS | Q1 2015

INFRASTRUCTURE

Hanoi HCMC

Inauguration of Terminal 2 – Noi

Bai Int’l Airport

04 January 2015

Several sections of Ring Road

No. 1 & 2 to be completed by

Q4/2015.

Q4/2015

Inauguration of

Nhat Tan Bridge and

Vo Nguyen Giap Boulevard 04 January 2015

Ground breaking of

Trung Hoa – Ring Road No. 3

interchange tunnel 18 January 2015

Q4/15

Ground breaking of Thu Thiem 2

Bridge

Estimated investment cost for

Long Thanh International

Airport project to reduce by 15%

Construction started on Metro

Line No. 2 at Tham Luong depot

Full opening of Long Thanh - Dau

Giay Highway.

16 January 2015

04 February 2015

08 February 2015

25 February 2015

13 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Roads widening: highly appreciated, especially by real estate

developers

INFRASTRUCTURE - HANOI

Extended Tran Phu, Ba Dinh Dist. (450m)

Inauguration: Feb 2015

Investment capital: VND225 bil

Extended Nguyen Van Huyen, CG Dist. (566m)

Inauguration: Feb, 2015

Investment capital: VND 969 bil

Extended Tran Phu (Ba Dinh District)

Length 450m

Inauguration Feb 2015

Investment capital VND225 billion (US$10.5 million)

Extended Nguyen Van Huyen (Cau Giay District)

Length 566m

Inauguration Feb 2015

Investment capita VND969 billion (US$45 million)

Source: Vnexpress.net.

14 CBRE | HANOI MARKET INSIGHTS | Q1 2015 Line Ha Dong – Cat Linh Expected completion: 2016

Line Nhon – Hanoi Station Expected completion: 2018

Cat Linh Depot

HANOI METRO LINES

15 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Hai Phong and Quang Ninh: infrastructure developments

improved thanks to increasing FDI

COASTAL CITIES

Hanoi – Hai Phong highway (105km)

Construction is very active even during Tet

Expected completion Q4/2015

Cai Bi Int’l Airport

New terminal: ground breaking in January 2015

Capacity 4 million pax per year

Expected completion Q2/2016

46 hectares - campus settles in Trang Due IP,

Hai Phong

“Wages are one factor... but the main one is

to ensure quality, as well as logistics"

16 CBRE | HANOI MARKET INSIGHTS | Q1 2015

DA NANG FOREIGN DIRECT INVESTMENT Slight decreased FDI to real estate

Accumulative FDI structure as of 2014

“ Real estate accounted for about

56% of the total new capital

in Da Nang in 2014, a 0.7%

decrease y-o-y.

” Ipc.danang.gov.com 56% 34%

5% 3% 2%

Vacation Real Estate

Manufacturing

Education

Construction

Accomodationservices, F&B

Nation No. of project Capital ($US) %

Korea 6 29,541,700 92.8%

Japan 3 2,146,816 6.7%

Italy 1 84,309 0.3%

UK 1 47,259 0.1%

Singapore 1 10,000 0.0%

USA 1 10,000 0.0%

New FDI Projects in 2015 (23/3/2015) 92.8% of the total FDI capital

invested in 2015 from Korea

Tri Dragon Ltd – Transportation

Lotte Viet Nam - Retail

Sun Kim Ltd – Real Estate

17 CBRE | HANOI MARKET INSIGHTS | Q1 2015

BCI NUMBERS

All Future

Projects

(2015-2030)

HCMC Hanoi Da

Nang

Can

Tho

Nha

Trang

Vung

Tau

Hai

Phong

Office 202 269 58 28 11 35 17

Retail 98 140 37 7 14 20 11

Hospitality

and SA 33 35 29 4 27 19 5

Residential 249 287 79 6 14 21 10

Total 582 731 203 45 66 95 43

Projects under construction, y-o-y change All future projects (2015 – 2030), y-o-y change

Projects

Under

Construction

HCMC Hanoi Da

Nang

Can

Tho

Nha

Trang

Vung

Tau

Hai

Phong

Office 137 103 21 16 8 18 8

Retail 61 43 17 5 6 13 7

Hospitality

and SA 20 9 15 1 12 10 0

Residential 163 91 18 4 2 13 2

Total 381 246 71 26 28 54 17

Source: www.bciasia.com; CBRE Vietnam, March 2015 Source: www.bciasia.com; CBRE Vietnam, March 2015

-100%

0%

100%

200%

300%

HCMC Hanoi DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Perc

enta

ge c

hange

2015 YTD vs 2014 2014 vs 2013

-100%

0%

100%

200%

300%

HCMC Hanoi DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Perc

enta

ge c

hange

2015 YTD vs 2014 2014 vs 2013

18 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Recovery Continues and High-end Apartment Sales Come Back

CONDOMINIUM FOR SALE

16,200 units

16,200 units

Q1 2015 Q1 2014

1,959 units

5,150 units

New launches up 163% y-o-y

Sales up 138% y-o-y

2,724 units

Q1 2014

6,484 units

Q1 2015

HCMC

Q1 2015 Q1 2014

2,600 units

4,880 units

New launches up 82% y-o-y

Sales doubled y-o-y

1,500 units

Q1 2014

3,080 units

Q1 2015

Hanoi

19 CBRE | HANOI MARKET INSIGHTS | Q1 2015

CONDOMINIUM FOR SALE 2015 Q1 New Launches – The Expansion of High-end & Affordable

2 projects

223units

2 projects

678 units

31% 37% 40%

31% 31% 27%

37% 31% 32%

1% 2% 1%

Before 2010 Mid-2010 After 2015

Luxury

High-end

Mid-end

Affordable

6 projects

1360 units

2 projects

230 units

2 projects

473 units

1 project

282 units

1 project

700 units

1 project

495 units

2 projects

508 units

2 projects

424 units

HCMC

~5,150 units

17 projects

Source: CBRE Vietnam, Q1 2015.

1 project

198 units

2 project

223 units

1 project

50 units

2 projects 270 units

2 projects

275 units

Hoai Duc

5 projects

3,297 units 2 projects

337 units

3 projects

229 units

Cau Giay

Dong Da

Ha Dong

Hoang Mai

Tu Liem

20% 17% 26%

63% 63% 57%

15% 18% 15% 3% 2% 2%

2009 2011 2015

Luxury

High-end

Mid-end

Affordable

Hanoi

4,880 units

18 projects

20 CBRE | HANOI MARKET INSIGHTS | Q1 2015

CONDOMINIUM FOR SALE Sales Momentum Remains Strong Despite A Long Tet Break

Sold Units

Source: CBRE Vietnam, Q1 2015.

02,0004,0006,0008,000

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

20

12

20

13

20

14

20

15

Luxury High-end Mid-end Low-end

0 2,000 4,000 6,000 8,000

Luxury High-end Mid-end Affordable

Hanoi

103% y-o-y

HCMC

138% y-o-y

21 CBRE | HANOI MARKET INSIGHTS | Q1 2015

$800

$1,200

$1,600

$2,000

$2,400

2004 2006 2008 2010 2012 2014

CONDOMINIUM FOR SALE In Some Developments, Developers Are Increasing Prices

• Primary prices for high-end and affordable projects witnessed a slight increase

• Seen in projects in good locations, reputable developers, showing good

construction progress; not across the board!

High-end primary prices, HCMC High-end primary prices, Hanoi

Asking Price (US$ psm)

$0

$500

$1,000

$1,500

$2,000

2006 2008 2010 2012 2014

Source: CBRE Vietnam, Q1 2015.

150–250 units/launch 250–350 units/launch 350–450 units/launch

>500 units/launch

22 CBRE | HANOI MARKET INSIGHTS | Q1 2015

TRACKING PRICE – UNDER-CONSTRUCTION PROJECTS

HOA BINH GREEN CITY Asking price: US$ 1,783

Achieved price: US$ 1,783

Unit size: 68,9-140 sqm

Total unit: 700

DISCOVERY COMPLEX Asking price: US$ 1,636

Achieved price: US$ 1,519

Unit size: 87-185 sqm

Total unit: 500

GOLDEN WESTLAKE Asking price: US$ 1,650

Achieved price: US$ 1,650

Unit size: 64-472 sqm

Total unit: 370

WATERMARK TOWER Asking price: US$ 2,600

Achieved price: US$ 2,600

Unit size: 54-129 sqm

Total unit: 178

HONG KONG TOWER Asking price: US$ 1,487

Achieved price: US$ 1,487

Unit size: 151-500 sqm

Total unit: 260

GOLDMARK CITY Asking price: US$ 1,061

Achieved price: US$ 1,061

Unit size: 68-152 sqm

Total unit: 5,000

FLC COMPLEX Asking price: US$ 1,190

Achieved price: US$ 1,190

Unit size: 58-144 sqm

Total unit: 483

GOLDEN WEST RESIDENCE Asking price: US$1,317

Achieved price: US$ 1,317

Unit size: 75-107.5

Total unit: 600

DIAMOND FLOWER TOWER Asking price: US$ 1,727

Achieved price: US$ 1,637

Unit size: 118-173 sqm

Total unit: 228

THE ARTEMIS Under planning

AVENUE PARK Under planning

MULBERRY LANE 2 Under planning

BOOYOUNG Under planning Note: Prices exclude VAT

23 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Buyers in the Affordable Segment

CONDOMINIUM FOR SALE

Breakdown of Monthly Household Income

Surveyed from more than 2,000 Ehome customers

Source: Nam Long, Q3 2014.

28%

40%

19%

6% 7%

BelowUS$500

US$500 -$1,000

US$1,000 -$1,500

US$1,500 -$2,000

AboveUS$2,000

63% long-term employees

with stable income

>3/4 from 25 to 45

years old

64% want to buy two-

bedroom units

Price Living environment Key Factors to Choose a New House

24 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Buyers in the Affordable Segment

CONDOMINIUM FOR SALE

Bank Loan Support

Surveyed from more than 2,000 Ehome customers

Source: Nam Long, Q3 2014.

81% want to apply bank loan for

new home purchase

56% expect a stable interest rate

29% prefer a 20-year loan payment

Expected Promotion in a New House Purchase

34% prefer a direct discount on the price

31% prefer a longer payment term

25 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Foreign Investors Come for JV. High-end Oversupply??

HCMC CONDOMINIUM FOR SALE

“Premium Affordable Housing”

Launch event, December 2014

3 months later, March 2015

26 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Expected Strong Supply in 2015

CONDOMINIUM FOR SALE

The

West –

43%

Midtown –

8%

The

East/

South

East –

28%

HCMC: The East and the South continue to accommodate most developments.

Hanoi: The West still has the most supply in pipeline – but the East and South

East is becoming an attractive cluster

South

West –

21%

NO

RT

H

16%

HCMC ~22,000 units

Source: CBRE Vietnam, Q1 2015.

The West

– 43% Midtown

– 8%

The

East/

South

East –

28%

Hanoi ~13,000 units

South

West –

21%

27 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Increasing demand from upper-middle

class lures more brands

RETAIL – VIETNAM NEW ENTRY/EXPANSION

• To add an image, click

on the picture

placeholder icon

• Windows Explorer will

open, find your

required image and

click ‘Insert’.

HANOI 5 HCMC 5

MOST ACTIVE RETAIL

SECTOR IN APAC

28 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Asian retailers are expanding by cooperating with local retailers

INTERNATIONAL RETAILERS EXPANSION

AEON

BJC

BJC’s B's Mart bought 94 Family marts in Vietnam

aim to expand to 300 stores by 2018

Vietnam as a 2nd

most important market in SEA

29 CBRE | HANOI MARKET INSIGHTS | Q1 2015

TPP, AEC are coming, how do local retailers prepare?

RETAILERS RESPONSE TO INT’L INTEGRATION

Local expansion 1

New shopping malls

Local retailer improves

brand identity 2

New brands

VinDS

International style 3

30 CBRE | HANOI MARKET INSIGHTS | Q1 2015

NEW SUPPLY AND RE-OPENING IN Q1 2015

RETAIL

VINCOM THU DUC

Thu Duc District

GFA: 27,860 sm

Opened Jan. 2015

SAIGON SQUARE 3

District 3

GFA: 3,100 sm

Opened: Jan. 2015

HCMC 2

SENTINEL PLACE

Hoan Kiem District

GFA: 700 sm

Re-opened: Jan. 2015

HANOI 3

HOA BINH GREEN CITY

Hoang Mai District

NLA: 25,000 sm

Opened: Jan. 2015

63 LY THAI TO

Hoan Kiem District

NLA: 561 sm

Re-opened: Feb. 2015

31 CBRE | HANOI MARKET INSIGHTS | Q1 2015

RETAIL RENTS PASSED THE BOTTOM

Source: CBRE Vietnam, Q1 2015.

2015 Q1

2014

Q4

Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

2012

Q4

Q3

Q2

Q1

2011

Q4

Q3

Q2

Q1

NON-CBD CBD

2015 Q1

2014

Q4

Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

2012

Q4

Q3

Q2

Q1

2011

Q4

Q3

Q2

Q1

NON-CBD CBD

Hanoi

0 50 100 150050100150

HCMC

0 50 100 150050100150

32 CBRE | HANOI MARKET INSIGHTS | Q1 2015

RETAIL - HEALTHY OCCUPANCY RATES

Source: CBRE Vietnam, Q1 2015.

HCMC

-5

0

5

10

15

20

-20,000

20,000

60,000

100,000

140,000

180,000

2011 2012 2013 2014 2015

Va

ca

ncy R

ate

(%

)

Hanoi

-5%

0%

5%

10%

15%

20%

-20,000

20,000

60,000

100,000

140,000

180,000

2011 2012 2013 2014 2015

Ab

sorp

tion

(sq

m)

33 CBRE | HANOI MARKET INSIGHTS | Q1 2015

DISTRICT 2 EMERGES AS A NEW RETAIL CLUSTER

Vinhomes Central Park

59,000 GFA sm

Open in 2018

Estella Heights

37,290 GFA sm

Open in 2018

Thao Dien Pearl

20,400 GFA sm

Open in 2016

Pearl Plaza

20,579 GFA sm

Open in 2015

Lexington Residence

Open in 2016

T

The Sun Avenue

Open in 2016

Vincom Megamall Thao Dien

120,000 GFA sm

Open in 2016

Survey online

11,000 consumers in

11 major cities

Include 1,000 consumers in

Vietnam

• Pre-purchase

• Purchase

Separate the process of

shopping into two phases

APAC CONSUMER SURVEY

VIETNAM

35 CBRE | HANOI MARKET INSIGHTS | Q1 2015

HOW DO CUSTOMERS VALUE THE IMPROVEMENTS OF SHOPPING CENTRES?

Source: CBRE Asia Pacific Consumer Survey, 2014.

60%

54%

54%

57%

62%

60%

51%

59%

55%

43%

43%

50%

62%

52%

38%

55%

66%

64%

56%

63%

58%

42%

46%

52%

47%

45%

33%

44%

32%

21%

24%

28%

5%

9%

18%

9%

Large mall

Small mall

High street

Total

More/better catering facilities Renovation of the centre

Bigger in size with more shops open Addition of new international brands

More/better loyalty program More entertainment facilities

Introduction of free parking More events

None of these

Ongoing improvements of shopping centres noticed by consumer

36 CBRE | HANOI MARKET INSIGHTS | Q1 2015

WHAT MAKES A SHOPPING CENTRE/HIGH STREET ATTRACTIVE?

Overall

Low household income (<VND

4,000,000/month)

Mid household income (VND

4,000,000 – 20,000,000/month)

High household income

(>VND20,000,000/month)

Source: CBRE Asia Pacific Consumer Survey, 2014.

Important Factors in a Non-Food Shopping Trip

37 CBRE | HANOI MARKET INSIGHTS | Q1 2015

HOW DO SHOPPERS REACH THEIR DESTINATION?

How do You Travel to Your Preferred

Shopping Destination?

Private (Car + Motorcycle)

Public (Bus, MRT, BTS)

Walk/Bicycle

Source: CBRE Asia Pacific Consumer Survey, 2014.

38 CBRE | HANOI MARKET INSIGHTS | Q1 2015

JOURNEY TIME

How Long does Your Journey to the Mall Take on Average?

1 to 5 mins

6 to 15 mins

16 to 30 mins

Over 30 mins

Source: CBRE Asia Pacific Consumer Survey, 2014.

39 CBRE | HANOI MARKET INSIGHTS | Q1 2015

INTERACTION BETWEEN ONLINE AND IN-STORE

Over the next two years:

25% of respondents expect to shop less often in a

store;

45% - 50% of respondents said that they would

shop online more often;

Even greater proportion of consumers (69%) aged

from 55 to 64 actually think that they would use

their smartphone/tablet more frequently to shop.

Adapt strategies to boost both e-commerce and

offline business activities by

1. Leverage big data

2. Implement Online to Offline (O2O) strategies

3. Create simple and useful apps

Do less often

No change

Do more often

40 CBRE | HANOI MARKET INSIGHTS | Q1 2015

$0 $5 $10 $15 $20 $25 $30 $35 $40$0$5$10$15$20$25$30$35

HCMC

$34.2 $19.1

Asking Rent – Pretty Flat

OFFICE

Note: Hanoi’s asking rents include service charge and exclude VAT, HCMC asking rent exclude VAT and service charge

Source: CBRE Vietnam, Q1 2015.

2015 Q1

2014

Q4

Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

GRADE B GRADE A

2015 Q1

2014

Q4

Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

GRADE B GRADE A

$0$5$10$15$20$25$30$35 $0 $5 $10 $15 $20 $25 $30 $35

Hanoi

$30 $18

41 CBRE | HANOI MARKET INSIGHTS | Q1 2015

OFFICE Positive Net Absorption and Decreasing Vacancy Rate

Hanoi

0%

6%

12%

18%

24%

30%

36%

42%

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015

Ne

t a

bso

rptio

n (

sm

)

HCMC

1%

3%

5%

7%

9%

11%

13%

15%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015N

et a

bso

rptio

n (

sm

)

Source: CBRE Vietnam, Q1 2015.

42 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Tenants Breakdown (based on CBRE’s enquiries in Q1 2015)

OFFICE

Source: CBRE Vietnam, Q1 2015

Tenants’ Origin, Hanoi Tenant Preference, Hanoi

32%

32%

36%

39%

45%

34%

26%

18%

20%

3%

5%

9%

14Q1

14Q4

15Q1

<100 100-300 300-1000 >1000

60%

43%

52%

40%

57%

48%

Local Foreign

Tenants’ Origin, HCMC Tenant Preference, HCMC

11%

27%

33%

33%

33%

56%

44%

27%

11%

11%

13%

0%

14Q1

14Q4

15Q1

<100 100-300 300-1000 >1000

20%

11%

33%

80%

89%

67%

Local Foreign

43 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Future Supply

OFFICE

HUD TOWER

Le Van Luong Str,

Cau Giay Dist.

GFA: 56,000 sm

Estimated

completion: 2015

HANDICO TOWER

Me Tri NUA, Tu Liem

Dist.

GFA: 29,040 sm

Expected

completion: 2015

DIAMOND FLOWER

TOWER

4 Le Van Luong, Cau

Giay Dist.

GFA: 20,000 sm

Estimated launch:

2015

789 TOWER

147 Hoang Quoc

Viet, Cau Giay

Dist.

GFA: 39,419 sm

Estimated

completion:

2015

Hanoi

GOLD VIEW

TOWER

54 Nguyen Chi

Thanh Str, Ba Dinh

Dist.

GFA: 39,348 sm

Estimated

completion: 2015

PEARL PLAZA

561A Dien Bien

Phu St, Ward

25, Binh Thanh.

GFA: 37,434

sm

Estimated

completion:

Q3/2015

VIETCOMBANK

TOWER

5 Melinh Square, D1

GFA: 55,000 sm

Estimated

completion: Q2/2015

VIETTEL OFFICE &

TRADE CENTER

285 CMT8, D10

GFA: 65,971 sm

Estimated

completion: Q1/2016

LIM 2

158 Vo Van Tan, D3

GFA: 20,467 sm

Estimated

completion: Q3/2015

HCMC

DEUTSCHES

HAUS

Le Duan - Le

Van Huu, D1

GFA: 40,000

sm

Estimated

completion:

Q3/2017

44 CBRE | HANOI MARKET INSIGHTS | Q1 2015

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2012 2013 2014 2015

Arr

iva

ls

International Domestic

HOSPITALITY

Higher occupancy rates in late Q1 2015

• To move between

headings and bullet

levels, use the ‘Indent

List Level’ buttons

found on the ‘Home’

tab

NOT the bullet button

• Use the drawing guides

(Alt+F9 to turn them on

and off), to position the

key message in the

middle or top of the

content area

The occupancy rates of many three- to five-star

hotels have stayed high, at no less than 80%

and even 90% or 100% on several days.

Travelling for business and leisure together with

fairs and exhibitions has pull visitors to HCMC.

Source: GSO, CBRE Vietnam, Q1 2015.

HCMC HANOI

Hanoi among top 10 World’s best destinations

TripAdvisor: Hanoi

ranked 4th in the top

10 Travelers' Choice

Destinations.

Q1 2015 vs. Q1 2014 :

Domestic arrivals: +7.1%

International arrivals: -14.3%

45 CBRE | HANOI MARKET INSIGHTS | Q1 2015

HOSPITALITY New and future supply

• To move between

headings and bullet

levels, use the ‘Indent

List Level’ buttons

found on the ‘Home’

tab

NOT the bullet button

• Use the drawing guides

(Alt+F9 to turn them on

and off), to position the

key message in the

middle or top of the

content area Source: CBRE Vietnam, Q1 2015.

APRICOT HOTEL (5-star)

136 Hang Trong,

Hoan Kiem District

No. of rooms: 123

Operating

INTERCONTINENTAL HANOI

LANDMARK 72 HOTEL (5-star)

Pham Hung, Cau Giay District

No. of rooms: 393

Estimated: 2015

Hanoi, Total 5-star supply in Q1 2015

0

3

6

9

12

15

18

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 2011 2012 2013 2014 Q12015

Num

be

r o

f p

roje

cts

Num

be

r o

f ro

om

s

Number of rooms Number of projects

Source: CBRE Vietnam, Q1 2015.

THE REVERIE

SAIGON HOTEL

22-36 Nguyen Hue,

District 1

No. of rooms: 286

Soft opening

0

3

6

9

12

15

18

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 2011 2012 2013 2014 Q12015

Num

be

r o

f p

roje

cts

Num

be

r o

f ro

om

s

Number of rooms Number of projects

Le MERIDIEN HOTEL

3C Ton Duc Thang,

District 1

No. of rooms: 345

Estimated: Q2/2015

HCMC, Total 5-star supply in Q1 2015

M GALLERY HOTEL

76-78 Nguyen Thi

Minh Khai, District 3

No. of rooms: 168

Estimated: Q3/2015

46 CBRE | HANOI MARKET INSIGHTS | Q1 2015

HOSPITALITY

Source: CBRE Vietnam, Q1 2015.

0

150,000

300,000

450,000

600,000

Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015

Domestic arrivals International arrivals

No Nationality 2014 Compared

to 2013

1 Chinese 152,359 +44%

2 Korean 107,008 +93%

3 Japan 52,671 +28%

4 U.S 21,440 +29%

5 Australian 17.471 +39%

Da Nang Q1 2015

Y-o-y change:

↑ 17% in total arrivals

↑ 19% in International sector

↑ 15% in domestic sector

Q2 is expected a dramatically increase in

domestic arrivals thanks to DIFC event and

summer holidays

TOP FIVE GUEST NATIONALITY

North Asian visitors to Da Nang increase

Chinese visitors continued leading

the top 5 guest nationality.

Significant improvement in Korean tourists,

up 93% y-o-y.

47 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Da Nang: More flights, more new routes

HOSPITALITY

Source: CBRE Vietnam, Q1 2015.

20 out of 29 international routes are to/from China.

8 more charter routes from China opened in Q1

Incheon – Da Nang routes operated by Vietnam Airlines and Asiana Airlines increased to 6 and 4

flights per week, respectively.

New routes to open:

Hong Kong – Da Nang operated by Hong Kong Express

Busan – Da Nang served by Busan Air

0

20

40

60

80

100

Asia

na

Air

Ch

ina

Ea

ste

rn

Ch

ina

So

uth

ern

Kore

an

Air

Silk

Air

Vie

tnam

Air

line

Dra

gon A

ir

Ma

ca

u A

ir

Shan

gdo

ng A

ir

Asia

na

Air

Ch

ina

Ea

ste

rn

Ch

ina

So

uth

ern

Kore

an

Air

Silk

Air

Vie

tnam

Air

line

Dra

gon A

ir

Ma

ca

u A

ir

Shan

gdo

ng A

ir

Asia

na

Air

Ch

ina

Ea

ste

rn

Ch

ina

So

uth

ern

Kore

an

Air

Silk

Air

Vie

tnam

Air

line

Dra

gon A

ir

Ma

ca

u A

ir

Shan

gdo

ng A

ir

1-25/3/2014 Q4 2014 1- 25/3/2015

472 flights 485 flights 546 flights

1/10/2014 – 31/12/2014

48 CBRE | HANOI MARKET INSIGHTS | Q1 2015

A MORE EQUAL & TRANSPARENT PLAYGROUND

November 2014, Foreign Housing

Ownership July 2014, Condominium

Measurement

Effective from July 08, 2014

Sellable

Area

From the INTERIOR of the

enclosing walls

INCLUDING:

• Private balcony(ies) (if any)

• Internal partitions

EXCLUDING:

• Internal column(s) (if any);

• Utility area (if any) inside the

unit;

Balcony

Area

A balcony / logia which shares a

solid wall with another condominium

will be measured from the internal

boundary of the balcony / logia.

Effective from July 1, 2015

Foreign

Individual Buyer

YES for all foreigners who are granted a visa to the

country

Foreign

Organisation

YES to all foreign investment funds, banks,

Vietnamese branches and representative offices of

overseas companies.

Product Apartments + villas and townhouses

Volume

Total number of dwelling units owned by foreigners

must not exceed 30% of the total units in one

condominium complex; or 250 villas / townhouses in

one particular administrative area

Purpose The properties owned by foreigners can be sub-

leased, traded, inherited and collateralized

Tenure

Unchanged: 50-year leasehold with renewal

possibility;

Foreign individuals married to Vietnamese citizens

are entitled to freehold tenure.

For Housing

49 CBRE | HANOI MARKET INSIGHTS | Q1 2015

For Commercial Properties

SUB-LEASE AND MORE FOR FOREIGN INVESTORS

Lease properties for sub-lease

Existing law From July 2015

Acquire completed buildings for own use

Foreign invested firms not

allowed to sub-lease

rented properties

Foreign invested firms can

sub-lease properties that they

are renting

Existing law From July 2015

Foreign invested firms can

acquire and own a completed

building for own use

Foreign invested firms can

only own a building if they

are the developer

50 CBRE | HANOI MARKET INSIGHTS | Q1 2015

INVESTMENT ACTIVITIES IN Q1 2015

51 CBRE | HANOI MARKET INSIGHTS | Q1 2015

INVESTORS – SOURCE AND TASTE

Data recorded during the period of 2011- 2015 YTD.

Source: RCA, retrieved Mar 2015.

Sellers Origin in terms of Number of Deals

VALUATION TRANSPARENCY STRUCTURING TRACK RECORD

Buyers Origin in terms of Number of Deals

Investment Sectors in terms of Transaction Value Investment Sectors in terms of Number of Deals

37%

20%

17%

13%

10% 3% Development Site

Office

Hotel

Apartment

Retail

Industrial

32%

30%

28%

7%

4% 1% Retail

Hotel

Office

Dev Site

Apartment

Industrial

63% 14%

8%

6% 4% 4% 2%

Domestic

Korea

Singapore

Japan

Offshore

Thailand

Taiwan

54%

15%

13%

8%

5% 3% 3%

Domestic

Hong Kong

Korea

Offshore

Netherlands

Japan

Malaysia

52 CBRE | HANOI MARKET INSIGHTS | Q1 2015

Track Record

Still four remaining questions

53 CBRE | HANOI MARKET INSIGHTS | Q1 2015

INVESTMENT TRENDS Foreign Shares in Listed Companies

Among 73 listed companies in real estate sector

61 companies have foreign

shares

Source: CBRE Vietnam, August 2014.

15 companies have foreign

shares greater than 20%

21%

63%

16% Foreign ownershipgreater than 20%

Foreign ownershipless than 20%

100% localReal estate holding

& development index

Source: Stockbiz, April 1, 2015.

54 CBRE | HANOI MARKET INSIGHTS | Q1 2015

SECTOR SEGMENT HANOI/ NORTH HCMC/ SOUTH

RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION

OFFICE New buildings

Mature buildings

RETAIL CBD

Non-CBD

CONDOMINIUM

High-end

Mid-end

Affordable

HOTELS Inner-city hotels

Beach hotels/resorts

SERVICED APT. Grade A

INDUSTRIAL Land

Factory/ warehouse

2015 OUTLOOK

Source: CBRE Vietnam, Q412015.

55 CBRE | HANOI MARKET INSIGHTS | Q1 2015

SECTOR OUTLOOK

CONDOMINIUM

Sales expected to remain strong.

The resurgence of top-tier projects and developers

Should we be worried about an over-hyped market?

OFFICE

Economic recovery and expansion of international companies will positively

raise office market in all key indicators. Rent is a deciding factor rather than

location.

Green office buildings save energy, enhance workforce health and improve

quality of tenants.

RETAIL

Rent of inline stores starts to increase

Shopping centres with weak performance will need to re-merchandise while

adding more anchor tenants. Turnover share scheme become more

popular.

HOSPITALITY

The market continues to be dominated by mid-scale segment.

Second home market is expected to revive not only in established areas like

Da Nang, Nha Trang but also in emerging destinations like Phu Quoc and

Ha Long, especially when the recent policy allowing foreigners to purchase

houses in Vietnam takes effect in July 2015

2015 OUTLOOK

56 CBRE | HANOI MARKET INSIGHTS | Q1 2015

2014

57 CBRE | HANOI MARKET INSIGHTS | Q1 2015

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© 2015 CBRE (Vietnam) Co., Ltd. All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.