120113 CBRE Fearless Forecast 2012 En

41
Fearless Forecast “Do not let a good crisis go to waste” January 2012 Presented by: Marc Townsend Managing Director CB Richard Ellis (Vietnam) Co., Ltd.

Transcript of 120113 CBRE Fearless Forecast 2012 En

Page 1: 120113 CBRE Fearless Forecast 2012 En

Fearless Forecast “Do not let a good crisis go to waste” J a n u a r y 2 0 1 2

Presented by:

Marc Townsend

Managing Director

CB Richard Ellis (Vietnam) Co., Ltd.

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HCMC 2011… Changes

Times Square Saigon M&C Tower Eden A

Taken on January 12, 2012

Taken on January 2, 2011

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HCMC 2011… Changes

Vietcombank Tower VietinBank BIDV Tower

Taken on January 12, 2012

Taken on January 2, 2011

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HCMC 2011… Changes

Saigon Centre

(phase 2) Ben Thanh Towers

Taken on January 12, 2012

Taken on January 2, 2011

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2011 MOST Fearless Forecasts

Office Tenants

• Multiple choices and softening rents

Hospitality

• Ritz Carlton, St. Regis, Mandarin Oriental, Shangri-La and

Four Seasons to enter market within the next 5 years

Retail

• Refurbished retail areas appear (Saigon Square #3) –

Shipyards moving towards development

• Growth of mini-malls due to lack of land (< 3,000 sm)

• Larger retail areas coming up outside of traditional areas –

District 5 (Tan Da Shopping Center), and Binh Duong

(Becamex New City)

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2011 MOST Fearless Forecasts

Investors

• Property investment remains dangerous for your health

• Change in asset class as gold dips and people moved in other directions

Developers

• Marketing spend TRIPLES as developers search for new ways to sell / lease

their units

• Increased use of technology in property – building management systems, CRM

systems

• Local companies seek capital through IPO’s and more sophisticated financial

structures

• Some residential developers will convert units for sale to units for lease due to

unsold units in completed buildings, or instituting rental pools (guarantees)

• Demand for data centres grows due to the continuing movement online, as our

businesses become more immediate with wi-fi, smart phones and iPads.

Developers prepared to deliver with the requirements needed to support these

trends will profit.

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Source: Historical data by GSO, 1GSO , 2SBV, 3 IMF, 4 SJC, 5 World Bank, 6 Ministry of Investment, 7Oxford Economics

2011 Vietnam Economic Overview 2008 2009 2010 2011 e 2012 f

GDP Growth Rate (y-o-y)

6.2% 5.3% 6.8% 5.91 6.3 3

Lending Rate 12% 12.75%

Down from 21% in Q3

16%-17.0% (Late 2010)

22% - 25%2 N/A

Inflation (Average, y-o-y)

22.9% 6.9%1 9.2%

(Dec‘10: 11.8%) 18.58%1 12.1% 3

Exports US$62.7 bil US$57.1 bil US$71.6 bil US$96.3 bil US$105.4 5

Imports US$80.7 bil US$69.9 bil US$84.0 bil US$105.8 bil US$113.3 5

Gold Price (per Tael)

VND17.8 mil (Dec. 31, 2008, up

7.2% y-o-y)

VND26.7 mil (Dec. 31, 2009, up 50% y-o-y)

VND36.1 mil (Dec. 31, 2010, up

35.2% y-o-y)

VND41.8mil4

(Dec. 30,2011. up 15.8% y-o-y)

N/A

US$/VND (Commercial banks)

17,400 (Dec. 31, 2008)

18,497 (Dec. 31, 2009)

19,500 (Dec. 31, 2010)

Devalued by 5.4% vs. Dec. 2009

21,036 (Dec.31, 2011)

Devalued by 7.9% vs Dec. 2010)

21,7357

US$/VND (Unofficial market)

17,510 (Dec. 31, 2008)

19,470 (Dec. 31, 2009)

21,010 (Dec. 31, 2010)

21,275 (Dec. 31, 2011)

N/A

Committed FDI US$71.7 bil US$22.6 bil 1 US$18.6 bil

(US$6.8 bil real estate)

US$14.7 bil 1

(US$845.6 mil real estate)

US$15 - 16 bil 6

Implemented FDI US$11.7 bil US$10 bil US$11 bil US$11 bil1 N/A

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2011 Regional Economic Comparison

Source: Oxford Economics, Vietnamese General Statistics Office, World Bank, Goldprice.org, goldpricethai.com, pecunix.com

Hong Kong Thailand Singapore China Malaysia Vietnam Indonesia

GDP

Growth Rate 4.9% 1.6% 5.0% 9.0% 4.9% 5.9% 6.3%

Consumer Price

Index 5.3% 3.9% 5.0% 5.6% 3.2% 18.6% 5.4%

Gold Price

( per gram in

US$ equivalent)

US$51.80 US$50.50 US$52.18 US$51.88 US$52.17

US$53.00 2.2% higher

than regional

average

US$52.72

Trade Balance -$55.4 bn $27 bn $48.3 bn $111.9 bn $47.1 bn -$9.5 bn $38.2 bn

FDI (net inflow

in current US$,

2010)

$68.9 bn $6.3 bn $38.6 bn $185.1 bn $9.5 bn $8.0 bn

(Source: World

Bank)

$13.3 bn

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A look ahead to 2012

2012 GDP

(% y-o-y)

CPI

(% y-o-y)

Vietnam 5.8 11.5

Hong Kong 3.5 3.6

Thailand 4.5 2.9

Singapore 3.3 2.8

China 8.1 3.5

Malaysia 4.9 2.8

Indonesia 6.2 5.0

Source: Oxford Economics. Note: GDP growth for Vietnam in 2012, The World Bank, IMF and ADB range between 6.1% – 6.5%.

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

World Western Europe Asia-Pacific United States

With demand from the eurozone and US

expected to remain weak for some time,

emerging East Asia should continue to work

toward increasing intraregional trade and

financial integration, and expanding links

with other emerging economies.

- ADB, Asia Economic Monitor, December 2011 -

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2011 Economic Overview – Inflation

Inflation continues…

• Price of rebar in HCMC:

– Dec. 29 2010 – 15,900 VND/Kg

– Dec. 29 2011 – 19,600 VND/Kg

• Price of cement in HCMC:

– Dec. 29 2010 – 1,520 VND/Kg

– Dec. 29 2011 – 1,980 VND/Kg

• Price of one carton of Heineken in HCMC:

– Dec. 29 2010 – 316,000

– Dec. 29 2011 – 330,000

• Price of food and foodstuffs:

– Dec. 2010: 16.2% y-o-y

– Dec. 2011: 24.8% y-o-y

• CPI figure

– Dec. 2010: 11.8% y-o-y

– Dec. 2011: 18.13% y-o-y

– 2011: 18.58% y-o-y

Time A95 A92 Chg Pct. Chg

Before 16,800 16,300

15-Dec-09 16,450 15,950 (350) -2.15%

14-Jan-10 16,900 16,400 450 2.82%

21-Feb-10 17,490 16,990 590 3.60%

27-May-10 16,990 16,490 (500) -2.94%

8-Jun-10 15,990 (500) -3.03%

9-Aug-10 16,900 16,400 410 2.56%

24-Feb-11 19,800 19,300 2,900 17.68%

29-Mar-11 21,800 21,300 2,000 10.36%

26-Aug-11 21,300 20,800 (500) -2.35%

Source: General Statistics Office, Petrolimex

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2

4

6

8

10

12

14

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

p

20

11

p

FD

I (U

S$ B

illio

ns)

Implemented FDI

2011 Economic Overview – FDI

36.8%

27.3%

9.3%

1.7%

24.9%

COMMITTED FDI, 2010

Real estate

Processing Manufacturing Industry

Construction

Hotels and restaurants

Others

5.8%

48.5%

8.5%

2.9%

34.3%

COMMITTED FDI, 2011

Real estate

Processing Manufacturing Industry

Construction

Hotels and restaurants

Others

Source: Ministry of Planning & Investment

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2011 Economic Overview – Currencies

As per 2010, in 2011 the US Dollar appreciated in Vietnam.

However, in 2011 the US Dollar also appreciated against the

Thai Baht and Singapore Dollar.

Source: Google Finance

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2011 Vietnam Stock Market

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

300

350

400

450

500

550

4-Jan 1-Feb 1-Mar 29-Mar 26-Apr 24-May 21-Jun 19-Jul 16-Aug 13-Sep 11-Oct 8-Nov 6-Dec

Tra

din

g V

alu

e (Billions

VN

D)

Index

Trading value VNIndex

Source: FPT Securities

At the beginning of 2011, some expected a rise. Going into 2012,

some are wondering where the bottom is.

VN Index drops 27.5%, real estate companies drop XYZ%

Little support from those holding gold.

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2011 Regional Stock Market Comparison

Source: ADB

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CBRE Vietnam CBRE Vietnam | Page 15 Fearless Forcast 2012 Source: vov.vn; giadinh.net.vn; tuoitre.vn ; 1star1objet.fr

2012: Gold Supply in Vietnam Increases

The magic from Trinh Duc’s performance in the

Rugby World Cup is overshadowed by:

• Quy Phuc is expected to win the gold in 100 m

freestyle

• Anh Tuan is expected to win the gold in <56 kg

weightlifting

• Ha Thanh is expected to win the gold in the floor

exercise

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2011 International Arrivals

2011: 6 million international arrivals to Vietnam (19.1% y-o-y) and 3.5 million to HCMC (13% y-o-y)

Source: General Statistics Offices; bistrochic.net

Tourism arrivals by country 2011

China 1,416,804

South Korea 536,408

Japan 481,519

US 439,872

Cambodia 423,440

Taiwan 361,051

Australia 289,762

Malaysia 233,132

France 211,444

Thailand 181,820

Others 1,438,779

0

1

2

3

4

5

6

7

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Millions

Vietnam HCMC

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Car Sales

Nguyen Van Linh – the

automobile hub, further

growth expected;

Kia New Morning

VND357,000,000

(US$17,000);

Entry Level Mercedes

VND1,500,000,000

(US$70,000); Car Sales by Manufacturer in Vietnam

79%82%

7%

2%

34% 34%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mekong (Fiat,

Ssangyong, PMC)

VMC (BMW,

Mazda, Kia)

GM Daewoo VinaStar

(Mitsubishi)

Mercedes-Benz

Vietnam

Visuco (Suzuki) Toyota

$.0

$20000.0

$40000.0

$60000.0

$80000.0

$100000.0

$120000.0

2007 2008 2009 2010 11M/2011

Car Sale

s (u

nit)

CAR SALES IN VIETNAM

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2011 Government Decrees

New in 2011:

• Pricing in Dong

– Decree 95/2011/ND-CP states that VND must be used for quotation or advertising of goods and services, etc.

• Relating to Apartment Service Fees – Decision No. 4520/QĐ-UBND provides that the statutory Apartment Service Fee Rates shall be

applied only when the parties has not yet agreed on the Apartment Service Fee in advance

• Non-Agricultural Use Tax – Decree No. 53/2011/ND-CP

– Pilot program for NALU Tax, Prior to enforcement of Decree No. 53 on January 01, 2012, The Ministry of Finance is unrolling a pilot program to collect non-agricultural land-use tax in certain local areas of Hà Nội, Cần Thơ cities and the Bắc Ninh province.

– The pilot stage will focus on identifying taxation areas as well as connecting and exploiting the databases of local agencies on tax and natural resources.

• Requirement for Environmental Impact Statement – Decree No. 29/2011/ ND-CP dated April 18, 2011 is the first guidance on the assessment on

environmental impact

– Proscribes many requirements and procedures to that are required for specific development projects

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The Original Golden Sites

Of the 20 Golden sites:

• 2 completed

• 2 under development

• 16 sites awaiting action

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Infrastructure 2011 Milestones

Roadways

• T3 – Thu Thiem Tunnel

• The ten year Nhieu Loc - Thi Nghe Canal Road widening project is completed

• On August 24, the first Bus Rapid Transport (BRT) route in the city opened from Ben Thanh Market, to Mien Tay Bus Station.

Metro lines

• The expected cost of Metro Line 1 has almost doubled, with progress in compensation.

• Tramway Line No. 1 is being restructured into a Bus Rapid Transit (BRT) system at reduced cost.

Air

• Da Nang’s new airport terminal opens!

• Prime Minister Dung officially approved Long Thanh International Airport’s master plan.

• The airport has an area of 5,000 hectares with investment capital of US$6.7 billion for the first phase.

• Vietjet Air, a new private airline, started operation. (1 Airbus, 2 on order).

Nhieu Loc - Thi Nghe Canal Road Source: www.info.vn

Da Nang New Terminal Source: Tuoi Tre

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2012 Infrastructure

Roads: • Construction of the four main roads in the Thu

Thiem new urban area will start in July, 2012

Completion is expected 2015.

Bridge: • Saigon Bridge No. 2, with four lanes, will start

constructed in April, 2012, and will take 22

months to be completed.

Bus system: • In 2012, the city will focus on improving the bus

system and services, implementing solutions to

improve the backbone of the city’s

transportation.

East – West Highway

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All Future Projects HCMC Hanoi Da Nang Can Tho Nha Trang

(Khanh Hoa)

Vung

Tau

Hai

Phong

Office 267 245 43 22 16 35 13

Retail 86 33 18 7 4 11 5

Hospitality

and SA 44 53 28 12 37 19 6

Residential 311 268 134 10 22 32 9

Projects Under

Construction HCMC Hanoi Da Nang Can Tho

Nha Trang

(Khanh Hoa)

Vung

Tau

Hai

Phong

Office 166 88 15 15 6 19 7

Retail 42 24 6 6 3 1 3

Hospitality

and SA 25 32 17 5 10 8 2

Resi 142 104 19 3 5 14 5

According to BCI Asia…

Source: www.bciasia.com; CBRE Vietnam

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Regional Rental Comparison

$.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

Manila Bangkok KL Taipei Seoul HCMC Hanoi Shanghai

- Pudong

Beijing Singapore Tokyo Hong

Kong

Rents

(U

S$

/psm

/M

onth

)

GRADE A OFFICE RENTS IN KEY ASIAN MARKETS

$.0

$200.0

$400.0

$600.0

$800.0

$1000.0

$1200.0

$1400.0

$1600.0

Manila Bangkok HCMC Hanoi Taipei Singapore Shanghai KL Beijing Tokyo Hong Kong

Rents

(U

S$

/psm

/M

onth

)

PRIME RETAIL RENTS IN KEY ASIAN MARKETS

$.0

$5000.0

$10000.0

$15000.0

$20000.0

$25000.0

$30000.0

$35000.0

$40000.0

Beijing Shanghai Guangzhou Hong Kong Singapore Bangkok HCMC Kuala Lumpur

$.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

LUXURY APARTMENT PRIME PRICES & RENTS IN KEY ASIAN MARKETS

AVERAGE PRIME CAPITAL VALUES (US$ psm) AVERAGE PRIME RENTS (US$ psm/month)

40

90

140

190

Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11

RevPAR (MAT) Indexed

Vietnam Singapore

Source: STR &

Local Currency

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Office - Rents

$20

$30

$40

$50

$60

2009 2010 2011

$10

$15

$20

$25

$30

2009 2010 2011

$10

$15

$20

$25

$30

2009 2010 2011

Grade A Rents (US$ psm)

Grade B Rents (US$ psm)

Grade C Rents (US$ psm)

Rents 3 y ear 1 y ear 1 quarte r

G rade A -55.0% -8.3% -5.8%

Grade B -44.0% -7.5% -1.5%

Grade C -41.5% -8.5% -3.0%

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Office - Vacancy

0%

10%

20%

30%

40%

2009 2010 2011

0%

5%

10%

15%

20%

2009 2010 2011

0%

5%

10%

15%

20%

2009 2010 2011

Grade C Vacancy

Grade B Vacancy

Grade A Vacancy Vacancy 3 year 1 y ear 1 quarte r

G rade A 23.4 pt -14.6 pt -6.1 pt

G rade B 14.4 pt 3.3 pt -0.7 pt

G rade C -2.6 pt -1.9 pt -0.1 pt

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Office - Absorption

-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

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

2007 2008 2009 2010 2011

NET ABSORPTION BY GRADE

Grade A Grade B Grade C

0

50,000

100,000

150,000

200,000

250,000

2003 2004 2005 2006 2007 2008 2009 2010 2011

NET ABSORPTION BY YEAR

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$900

$930

$960

$990

$1,020

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

2009 2010 2011

$650

$670

$690

$710

$730

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

2009 2010 2011

Secondary Asking Price (US$/sm)

$0

$2,000

$4,000

$6,000

2007 2008 2009 2010 2011

Luxury High-end

Mid-end Affordable

3 Year Residential Price Movement

$4,000

$4,100

$4,200

$4,300

$4,400

$4,500

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

2009 2010 2011

Luxury Condominium (US$ psm)

$1,800

$1,830

$1,860

$1,890

$1,920

$1,950

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

2009 2010 2011

High-end Condominium (US$ psm)

Mid-end Condominium (US$ psm) Affordable Condominium (US$ psm)

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Take-up vs. Hangover

Unsold Units Accumulated (Units)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

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

2009 2010 2011

To

tal U

nso

ld U

nit

s

Un

sold

Un

its

by S

eg

men

t

Luxury High-end Mid-end Affordable Total

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

2009 2010 2011

Luxury High-end Mid-end Affordable

Take-Up Rate (%)

Some are waking up with their

head in their hands

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The Residential Nightmare

Q1 5,078 launches

2,229 sales

Q2 4,926 launches

1,390 sales

864 launches

1,867 sales

Q3 1,096 launches

846 sales

Q4

Resolution 11 Dong Devaluation

(9.3%)

US$6,000/unit

in Binh Duong

2012 Death,

Discount or

Opportunity

?

Doc. 8844 /NHNN-CSTT: Remove 4

real estate groups out of the non-

productive outtsatnding loan category

Goldora Villa

sold to ICC Discount Headlines

Property sector, the most attractive

investment channel, but more

cautious to invest in 1-3 years

(survey by Grant Thornton Vietnam)

More incentives to

stimulate sales

More strictly control on

dolarisation price list

in VND

The Ascott signed

Diamond Island

(D.2)

Int’l banks stopped

mortgage lending

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Figures consider the major cities of HCMC and Hanoi;

Assumes that 19% of household income is saved;

Generalised, as assumes no mortgages/family contributions – though majority of purchases are still without a mortgage;

AFFORDABILITY(Something to think about for the year ahead)

Data Sources: TNS, Neilson and CBRE Assumptions

Social

Grouping

% of Total

Households

Annual

Income

(US$)

Annual

Saving

(US$)

YEARS TO AFFORD

An Affordable

Condo

($42,000)

A Mid-end

Condo

($72,000)

A High-end

Condo

($135,000)

A Luxury

Condo

($342,000)

A Villa

($350,000)

A Townhouse

($90,000)

A2 1% 22,845 4,341 10 17 31 79 81 21

A1 10% 11,423 2,170 19 33 62 158 161 41

A 9% 7,996 1,519 28 47 89 225 230 59

B 47% 7,425 1,411 30 51 96 242 248 64

C 21% 2,856 543 77 133 249 630 645 166

D 9% 1,713 326 129 221 415 1,051 1,075 276

E 3% 1,428 271 155 265 498 1,261 1,290 332

F 1% 571 109 387 664 1,244 3,152 3,225 829

Residential For Sale - 2011

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Retail

The past 18 months has seen shopping centre

rentals create a buzz;

2012, we expect department store rentals to come

back to the forefront:

• Lack of quality space in the CBD;

• Still a softening on rents

2012, shopping centre rentals in the CBD to remain

soft;

• Saigon Centre phase 2, the CBD retail hub on the

horizon;

• First new supply in CBD with department store;

Department Store vs. Shopping Centre

1st quality shopping centre outside the CBD –

Crescent Mall;

However, rentals still softening as retailers have

multiple options and established SHOPHOUSE

location remain popular;

Non-CBD Asking Rents (US$/sm/month)

Source: CBRE Vietnam

$0

$20

$40

$60

$80

$100

2008 2009 2010 2011

Department Store Shopping Centre

CBD Asking Rents (US$/sm/month)

Source: CBRE Vietnam

$0

$20

$40

$60

$80

$100

$120

$140

2008 2009 2010 2011

Department Store Shopping Centre

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Retail

New retail entrant - Index Living Mall, District 4:

• Single retailer operating 7,000sm

• Homeware and furnishings

• Success will be key for other similar concepts

New Brands

NEW BRANDS – 2011:

• Luxury brands: Christian Louboutin, Chanel,

Burberry, Cartier, Ralph Lauren

• Cosmetic: Dior, Chanel, M.A.C

• Fashion: GAP, DKNY, Warehouse, LYN Around

• Accessories: Coach, Charles David

• Fast food: Subway, Burger King, Domino Pizza

• Baskin Robbins Ice-cream – re-enter

NEW BRANDS – 2012?

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Hotels 2012

Occupancy and RevPAR both

showing signs of growth in 2011.

Coastal markets such as Phu Quoc,

Nha Trang and Da Nang showed a higher

RevPAR growth rate than HCMC:

20

25

30

35

40

45

50

55

60

2009 2010 2011F

RevPAR (US$/room/night)

HCMC Da Nang Phu Quoc Nha Trang

Phu Quoc continues to lead the coastal

market with 20% y-o-y increase in

RevPAR, expected to be an attractive

destination for investors in 2012.

The operation of new Da Nang International

Airport terminal in December,2011

facilitates more direct international

flights to Da Nang from locations such

as Seoul and Kuala Lumpur.

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Flight Schedule

From Airlines Day of Service Capacity per

flight (pax)

Max. pax

per day

Max. pax

per year

HCMC Vietnam Airlines Ten times daily 68 680 248,200

HCMC Air Mekong Five times daily 90 450 164,250

Rach Gia Vietnam Airlines Once daily 68 68 10,608

Hanoi Air Mekong Once daily 90 90 32,850

Can Tho Vietnam Airlines Once daily 68 68 10,608

Total 18 flight per day 1,288 466,516

From Airlines Day of Service

Capacity

per flight

(pax)

Total pax

per day

Total pax

per year

HCMC Vietnam Airlines Four times daily 162 648 236,520

Hanoi Vietnam Airlines Three times daily 162 486 78,732

Vladivostok OrenAir 1 flight every 10 days 190

Total 07 flight per day 1,134 315,252

=> 18 flights to Phu Quoc per day, compared to just 10 flights in 2010

=> 07 flights to Nha Trang per day

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0

20

40

60

80

100

120

2007 2008 2009 2010 2011F

RevPAR (US$/room/night)

5-star 4-star 3-star

Hotels 2012

Internationally operated 5-star hotels see faster development

progress than there 3-star siblings.

New supply from the Nikko, the Grand expansion, Times Square,

Le Meridien, and Eden A totals over 1,300 new rooms

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Da Nang Hotels/Resorts/2nd Home 2012

2011 y-o-y increase in visitors was 34%, of which international visitors

increased 44% y-o-y

The Hyatt Regency came online in Q4 with 200 five-star rooms, 2012

expects InterContinental, Le Meridien, Melia and Pullman to enter DN

In 2012, the DN hospitality market will target Russian tourists with direct

Russia – Da Nang flights in consideration

Da Nang market continues to perform with 60% of the 40 villas launched

at The Point sold within three months

No construction expected in 2012 without pre-sales

Projects away from the coast see action too – WTC leasing (anchors

already signed) and Azura to complete Q2

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Serviced Apartments 2011

Demand derived from 3 sources: • Professional expatriates – main source

– Both from Asia and the West – Hanoi: employees in the Embassies

• Returning Overseas Vietnamese • Wealthy Vietnamese ← a new and growing trend

“Vietnam will be the 11th most common

destination of companies sending staff on

international assignments up to 2013. Therefore,

this is likely to ensure that the demand for

accommodation from companies sending staff into

Vietnam is likely to remain strong in the next three

years”.

--- Trends in Managing Mobility

Survey 2010, ECA International

H1/2011 work permits issued

to foreigners in HCMC: • Achieved 85.1% of entire 2009

• Down 16.5% against H1/2010

$0 -$1200 $1200 - $2500 $2500 - $3500 $3500+

Q4/2010 10.0% 40.0% 40.0% 10.0%

Q1/2011 17.9% 41.5% 29.2% 11.3%

Q2/2011 20.5% 48.2% 24.1% 7.2%

Q3/2011 11.7% 52.1% 26.6% 9.6%

Source: CBRE Residential Leasing

Proportion of Housing Budget (US$/month)

Proportion of Requested Area (sm)

Source: CBRE Residential Leasing

0%

20%

40%

60%

80%

100%

Q1/2011 Q2/2011 Q3/2011 Q4/2011

0 - 60 60 - 100 100 - 160 160+

TOP DEMAND!

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• Logistics component becomes a must in

industrial park zoning.

• Logistics to grow as Asian regional trade

buoys economy through Eurozone crisis

and slower US growth.

• Japanese investment KEY. Both from

Japan directly, and from Japanese

companies relocating out of Thailand.

• Potential growth areas: • Food & Beverage for South Vietnam

• Electronics for North Vietnam.

• Ready Built Factory rental rates come

down as more supply than ever before.

• With the increasing profile of industrial in

Vietnam, more investors seek wholesale

purchases of operating IPs.

ILS 2012 Forecast

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The Rise of Investment - The Institutional Deal

And a notable variance in yield

At least three

more

institutional

deals to come

in 2012

Pacific Place, Hanoi

Q4 2010 – Reported 12%

CentrePoint, HCMC

Q2 2011 – Reported 10.6 – 11.3%

Saigon Tower, HCMC

Q4 2011 – Reported 8.5%

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CBRE’s 10 Most Fearless Forecasts

1. Nguyen Trai still the retail king!

2. Square office buildings back in fashion! The best tenant deals will have happened

in the first half of 2012.

3. Any residential project that hasn’t broken ground will gravitate to the affordable

(new middle class, less than 21,000,000VND psm) segment.

4. Luxury residential in the CBD WILL sell.

5. Golf – Boom or Bust?!?

6. Revenue from cleared sites skyrockets as they are converted into drive-in movie

theatres and Circle K.

7. Burger King opens at Da Nang airport and Sushi Bar opens in Phu Quoc as

overseas visitors increase a further 20%.

8. In the short-term the new Pudong is not Thu Thiem, it is District 4.

9. Gold price declines with new supply from Vietnam’s two gold medals at the

London Olympics 2012.

10. Registered FDI into real estate triples in 2012 as Vietnam sees 20 new foreign

investors.

11. Jack Dorsey to spend Christmas 2012 in Vietnam, @Townsend_Marc to have

50,000 followers

On December 31, 2012…

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The most insightful real estate publication in Vietnam!

Plan your future with two quarter and eight quarter forward looking analysis.

CBRE Vietnam - HCMC & Hanoi Quarterly Reports

© 2012 CB Richard Ellis (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CB Richard Ellis (Vietnam) Co., Ltd. We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources and make no guarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful consideration of factors known to us for example only, and they may not represent current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis.

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