QUARTERLY MARKET REVIEW - AusCham Vietnam ... QUARTERLY MARKET REVIEW HANOI Q4/2016 QUARTERLY MARKET

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  • QUARTERLY MARKET REVIEW HANOI Q4/2016

    QUARTERLY MARKET REVIEW HCMC Q1/2017

  • 2

    $1.9Bil In Q1’17

    ~5% Highest in 3 years

    ~26,480 Increased 11% YoY

    $40.4bil growth 6% YoY

    5.1% (0.4) ppts

    }

    11% 1ppt YoY

    Exchange rate

    22,800 4% YoY

    ~3.2mil Increased 29% YoY

    ECONOMIC OVERVIEW

    GDP: lowest Q1 rate in 3 years Retail Sales: lowest Q1 real growth in 3 years Exchange rate

    FDI: impressive growth of registered capitalTrade deficit CPI

    International visitors Mortgage rate

    73% YoY registered

    capital

    3% YoY FDI

    disbursement

    Newly established businesses

    3.7% Real Estate

    Korea 48% contribution

  • Supply

     Opened: 1 shopping centre and 3 supermarkets

     One supermarket closed.

     Total stock: ~1.1 million m2, stable QoQ, 10% YoY

    Market performance

     Avg. occupancy: 94%, stable QoQ, YoY

     Avg. gross rent: US$53/m2/mth, 1% QoQ, stable YoY

    • Shopping centre: US$51/m2/mth, 2% QoQ, 1% YoY

    • Department store: US$63/m2/mth, 2% QoQ, 7% YoY

    • Retail podium: US$37/m2/mth, 1% QoQ, 7% YoY

    Outlook

     2017: ~170,000 m2

     2018-2020: ~610,000 m2

    3

    RETAIL

    Crescent MallSaigon CentreCrescent MallSaigon Centre Saigon Centre

  • Supply

     1 new Grade C project (~4,400 m2)

     2 Grade C buildings closed (~7,300 m2)

     Total stock: ~1.6 million m2, stable QoQ, 1% YoY

    Market performance

     Avg. occupancy: 97%, stable QoQ, 2 ppts YoY

     Avg. gross rent:

    • Grade A: US$49/m2/mth, 2% QoQ, 7% YoY

    • Grade B: US$28/m2/mth, stable QoQ and YoY

    • Grade C: US$19/m2/mth, stable QoQ, 2% YoY

     Office Index: 87, 1 ppt QoQ, 3 ppts YoY

    Outlook

     9M/2017: ~123,000 m2

     Q2/2017 – 2019: ~390,000 m2

    4

    OFFICE

    Saigon Centre

  • Supply

     One new Grade C project (65 units)

     Two existing Grade B projects adjusted supply

     Total stock: >4,600 units, 2% QoQ, 6% YoY

     Grade A (7), Grade B (25) and Grade C (52)

    Market performance

     Avg. occupancy: 87%, stable QoQ, 5 ppts YoY

     Avg. gross rent:

    • Grade A: US$32/m2/mth, stable QoQ, 4% YoY

    • Grade B: US$26/m2/mth, 1% QoQ, 3% YoY

    • Grade C: US$17/m2/mth, 1% QoQ, 7% YoY

    Outlook

     9M/2017: >540 units

     Q2/2017-2019: ~ 1,800 units

    5

    SERVICED APARTMENT

    Ibis Saigon Airport

  • Supply

     Opening: one 3-star and one 4-star (303 rooms)

     Closure of one 3-star (50 rooms)

     Total stock: ~16,200 units, 2% QoQ, 8% YoY

     5-star (20), 4-star (24), 3-star (87)

    Market performance

     Average occupancy: 68%, 1ppt QoQ, stable YoY

     Average room rate by grade:

    • 5-star: US$121/room/night, 3% QoQ and YoY

    • 4-star: US$69/room/night, stable QoQ and YoY

    • 3-star: US$47/room/night, stable QoQ, 7% YoY

    Outlook

     Q2/2017-2018: ~2,000 rooms

    6

    HOTEL

    Central Palace Saigon

  • Supply

     Twelve new projects and next phase of one active project

    (~5,200 units)

     Primary stock: ~42,500 units, 6% QoQ, 14% YoY

     Secondary stock: ~145,000 units, 6% QoQ

    Market performance

     Transaction volume: ~8,800 units, 13% QoQ, 40%YoY

     Absorption rate: 21% 1 ppt QoQ, 4 ppts YoY

     Transaction volume by grade:

    • Grade A: 50% QoQ, 10% YoY

    • Grade B: 35% QoQ, 1% YoY

    • Grade C: 10% QoQ, 78% YoY

     Apartment Index: 92 unchanged QoQ, 1 points YoY

    Outlook

     Q2/2017-2019: 62,200 units

    7

    APARTMENT

    Serenity

    Mid-Town

  • Villas & townhouses

     7 new projects (~590 dwellings)

     Primary stock: ~2,600 units, 14% QoQ, 25% YoY

     Absorption rate: 34%, 1 ppt QoQ, 12 ppts YoY

     Transaction volume: ~880 units, 11% QoQ, 94% YoY

    Land plot

     Six new projects plus launch of 1 active project

    (~710 plots)

     Primary stock: ~2,100 plots, 13% QoQ, 53% YoY

     Absorption rate: 44%, 1 ppt QoQ, 17 ppts YoY

     Transaction volume: ~910 plots, 12% QoQ, 23% YoY

    Outlook

     Q2/2017-2019: ~ 14,100 dwellings/plots

    8

    VILLA | TOWNHOUSE

    Merita

    Valora Kikyo

  • QUARTERLY MARKET REVIEW HANOI Q4/2016

    TOURISM AND HOSPITALITY

  • 10

     Competitiveness index:

    • Ranked 6th in ASEAN

    • Government spending prioritization: marketing

    campaigns and National branding

    • Less international openness: Visa exemption

    policy, VN (23) vs. Thailand (58)

    • Air transport & Tourist service infrastructure

     International arrivals:

    • Ranked 5th in ASEAN

    • Strong potential: 26% growth0

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    Business

    enviroment

    Safety &

    security

    Health &

    hygiene

    Human

    resources

    ICT readiness

    Prioritization of

    tourism

    International

    openess

    Price

    competitiveness

    Environmental

    sustainability

    Air transport

    Ground & port

    infrastructure

    Tourist service

    infrastructure

    Natural

    resources

    Cultural

    resources &

    business travel

    ASEAN Vietnam

    Source: Weforum, 2016

    Tourism competitiveness, 2015

    0%

    10%

    20%

    30%

    0

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    20

    25

    30

    35

    Thailand Malaysia Singapore Indonesia Viet Nam Phillipines Cambodia

    Number of arrivals (mil)-LHS Tourism growth (%)-RHS

    International arrivals, 2016

    Source: Statistics agencies of surveyed countries

    VIET NAM COMPETITIVENESS

  • 11

     China:

    • 1st source market: 2.7 mil arrivals

    • Middle class high affordable demand

    • Strong fluctuating growth (50% YoY)

     Russia:

    • Ruble depreciation driving destination choice

    • Stable growth, nearly 30% pa

     Domestic tourism:

    • Booming demand: affluent class to double;

    middle class increase by half by 2020

    • Low-cost airlines growth

    0%

    20%

    40%

    60%

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    East Asia

    (other than

    China)

    China Europe Asean Russia Others

    Tourist (mil)-LHS Growth rate (%)-RHS

    Source markets, 2016

    Source: VNAT

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    50

    60

    70

    2011 2012 2013 2014 2015 2016

    Airline passengers Domestic trips

    Airline capacity and domestic (million trips)

    Source: GSO and VNAT

    SOURCE MARKETS

  • 12

     HCMC & HN: highest arrivals

    • Economic hubs: MICE and business travelers

    • Gateways to Sapa, Ha Long Bay, Mekong

    delta

     Coastal cities: outperforming growth

    • International airports

    • Nha Trang: tops supply and performance

    • Da Nang leads arrivals volume

    • Phu Quoc: Early-development stage (40%

    YoY)

    • LOS: Nha Trang 3.5 days vs Da Nang 2.8 days

    vs Phu Quoc 2.6 days

    0%

    10%

    20%

    30%

    40%

    50%

    60%

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    HCMC Ha Noi Da Nang Nha Trang Phu Quoc

    International arrival (million trips)-LHS Growth rate (%)-RHS

    Source: Provincial tourism departments

    International arrivals to major cities, 2016

    50%

    60%

    70%

    80%

    90%

    0

    5,000

    10,000

    15,000

    20,000

    HCMC Ha Noi Da Nang Nha Trang Phu Quoc

    Hotel supply (rooms)-LHS Occupancy (%)-RHS

    Hotel market performance, 2016

    Source: Savills Research & Consultancy

    SUB-MARKETS

  • 13

     Airports under pressure:

    • HCMC 130%, Nha Trang 320%, Da

    Nang 113%

     Government efforts:

    • TSN airport: upgrading 25 to 38 mill

    pax/year

    • Da Nang airport: an additional 4-6 mill

    pax/year

    • Cam Ranh airport: 1.5 to 2.5 mill

    pax/year.

     US$5.6 bill required to 2020

    • Government budget?

    • HCMC, Da Nang and Nha Trang supply

    increases 30% pa in three years

    • Hospitality development evaluation?

    0%

    50%

    100%

    150%

    200%

    250%

    300%

    350%

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    HCMC Ha Noi Da Nang Nha Trang Phu Quoc

    Airport capacity (million passengers)-LHS Operating capacity (%)-RHS

    Airport capacity

    Source: ACV and other sources

    AIRPORT CAPACITY

  • 14

    Vietnam has come a long way in only 7 years

    Then (2010) Now (2016)

    5 Million International tourist arrivals

    10 Million International tourist arrival