Post on 01-Aug-2018
HANOI MARKET INSIGHTS – Q1 2015 Presented by: Marc Townsend, Managing Director of CBRE Vietnam
Friday, April 3, 2015
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
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
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
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.