Da Nang | 24 November 2017

Real Estate Highlights

International arrivals, 2016

Vietnam outperformed other regional destinations with a 26% increase YoY.

International arrivals by cities, 2016

Da Nang appeals to both domestic and international tourists with high growth rate up to over 30%

Supply

Stock: ~91.500 m²

Grade A: 7% Grade B: 51% Grade C: 42%

Performance

Avg. occupancy: 87%

Avg. gross rent: US$10.2/m2/mth

o Grade A: US$17.5/m²/mth

o Grade B: US$10.1/m2/mth

o Grade C: US$9.6/m2/mth

Outlook

2018: 1 projects, ~3,000 m²

2019: 1 projects, ~5,700 m²

Onwards: 9 projects, ~48,200 m²

Indochina Riverside

Da Nang Office

4

Vietin Bank Tower

World Economic Forum

55th up 5 places from last year

up 20 places in 5 years

Higher education and training also advanced (84th),

"the country's growth is nonetheless projected to remain robust from strong exports".

…boost its competitiveness by closing gaps in innovation and sophistication factors…

Source: Global Competitiveness Index2017-2018 edition, International Monetary Fund; World Economic Outlook Database (April 2017)

• F.I.R.E employment: 570,000 jobs

60% are in HCMC and Ha Noi

1.1% of total employment v. Philippines

(1.7%), Thailand (2%), Malaysia (3%)

Future growth potential

• F.I.R.E employment will double in

the next 5 year to catch up?

CBD demand: 40,000 m2 pa

Employment growth 2012-2016

Finance & Insurance 4.6% pa

Real Estate 8.1% pa

6

Demand Drivers - FIRE

F.I.R.E sector (% total employment), 2016

Viet Nam F.I.R.E employment

0%

1%

2%

3%

4%

Malaysia Indonesia Thailand Philipines Viet Nam

Source: Statistics Offices in Surveyed Countries

0

100

200

300

400

500

Q1/2012 Q1/2013 Q1/2014 Q1/2015 Q1/2016 Q1/2017

Source: GSO

Tho

usa

nd

job

s

Finance Real estate

7

Demand Drivers - Banks

# Banks, 2017

Many local banks: Ha Noi (22), HCMC (13)

11 foreign and JV and 52 representative offices

Banks in trophy CBD towers: HCMC (2) & Ha Noi (4)

Strong future demand…

0

10

20

30

40

50

Viet Nam Phillipines Thailand Malaysia

Ban

ks

Source: Savills Research & Consultancy; Various sources

Local Foreign

• CAGR 25% pa in 2015-2020 (Viet Nam insurance market development

strategy - MoF)

• Low penetration and a promising market

• More than 40 players and increasing demand for high-end office

8

Demand Drivers - Insurance

Insurance Premium Penetration, 2016

0

1

2

3

4

5

6

Thailand Malaysia Indonesia Philippines Viet Nam

Source: Swiss Re Sigma 2017

% G

DP

Non-life Life

Market players, 2017

0

50

100

150

Indonesia Philippines Thailand Viet Nam Malaysia

pla

yers

Sources: Global Counsel, 2016

Life Non-life

• Registered ICT FDI booming

from 2016

• Tech firms lead net new space

absorption with big deals

9

Demand Drivers - ICT

Registered ICT FDI

Viet Nam ICT employment

0

100

200

300

400

2013 2014 2015 2016 8M 2017

Source: Savills Research & Consultancy

US

$ m

illi

on

200

250

300

350

400

Q1/2013 Q1/2014 Q1/2015 Q1/2016 Q1/2017

Source: Savills Research & Consultancy

Th

ou

san

d p

eo

ple

Start ups

Vietnam = highly fertile SME environment.

Massive SMEs ~50% workforce

Office Start Ups = ownership and 1st mover advantage.

HCMC

$18B Registered capital - 85% YoY

(Vietnam ~ $40B)

30,500 new enterprises - 13% YoY

95% domestic

78% Services and Commerce

Office Trends

18m sodas pa.

4 levels, no lifts.

HUMANISTIC.

Walk and talk. People, Place, Planet

4 levels, $5B cost.

9,000 trees, egalitarian.

$5B cost, 15n development.

50,000 workers.

Corporate costs:

80% people,

10% real estate,

10% technology

Shared public space to promote community.

Design for refurbishment and to orientate towards supply chain.

Shared Workspace

• Lend Lease = 40% of current tenant base.

• Naked = 30% of workforce by 2030.

• However Shared workspace = 2 to 3 x utilization, + added value services; café, hotel etc.

13

Map of Da Nang Offices

14

PROJECT HILTON DA NANG DIAMOND TOWER

Address 50 Bach Dang, Hai Chau dist. 58 Bach Dang, Hai Chau dist.

Developer Bach Dang JSC Alphanam Group

Expected grade A B

Status Fitting out Foundation

Estimated completion year 2018 2019

NLA (m²) 3,000 5,700

Images

Da Nang Office Supply Outlook

15

Map of Da Nang Four- to Five-star Hotels

Da Nang Hotel

16

InterContinental Da Nang Sun Peninsula Resort

Pullman Da Nang Beach Resort

Supply

Total supply ~ 10,000 rooms

13 five-star 23 four-star 56 three-star

Performance

Avg. occupancy 76% ARR US$110/room/night

o 5-star Occupancy 87% ARR US$227/room/night

o 4-star Occupancy 79% ARR US$69/room/night

o 3-star Occupancy 63% ARR US$25/room/night

Outlook

2018 onwards: 52 projects

o 19 five-star 13 four-star

o Ngu Hanh Son 20 projects

17

Da Nang Hotel Supply Outlook

PROJECT HILTON DA NANG DIAMOND TOWER IBIS STYLE DA NANG

Address 50 Bach Dang, Hai Chau dist. 58 Bach Dang, Hai Chau

dist. 84-88 Bach Dang, Hai Chau dist.

Developer Bach Dang JSC Alphanam Group Novaland

Operator Hilton Marriot Accor

Expected grade 5-star 5-star 3-star

Status Fitting out Foundation Under construction

Estimated completion

year 2018 2019 2019

No. of rooms 223 288 N/A

Image

18

Map of Da Nang & Quang Nam Second-home Villas

Da Nang & Quang Nam Second-home Villa

19

Supply

19 projects (947 dwellings) 8 projects sold out

o Ngu Hanh Son (12 projects) Son Tra (3

projects)

o Dien Ban (2 projects) Hoi An (2 projects)

8 projects sold out

Performance

Avg. absorption 77%

Price 1,200-3,000 USD/m2 for fully-furnished villa

Outlook

Da Nang: 12 projects (~800 dwellings)

Quang Nam: 10 projects (~500 dwellings)

International operators: Shilla, Rosewood

The Ocean Estates

Vinpearl Hoi An Resort and Villas

20

Da Nang & Quang Nam Second-home Villa Supply Outlook

PROJECT SHILLA STAY RESORT VANESEA FIELD NAM O RESORT

Location Dien Ban, Quang Nam Dien Ban, Quang Nam Lien Chieu, Da Nang

Developer Thanh Cong E&C MBLand & Tonkin Property Trung Thuy Group

Operator Shilla Stay Pan Pacific N/A

Scale (ha) 5 8 37

Status Under construction Planning Planning

No. of villas 35 70 N/A

Image

The Ocean Estate

• 33 Resort Villas

• 3-5 bedrooms

• Land Area: 929 - 1,303 sq m

• Construction Area: 570 -740 sq m

• 5 star amenities: Restaurant, Beach Club &

Bistro, outdoor playground, swimming pool, spa,

bar, golf course

• Developer : VinaCapital

• Selling Price: From VND 21,100,000,000

(approx. US$ 930,000)

• Handover condition: Unfurnished

• Handover: 12/2017

Banyan Tree Residence Lang Co

• 82 Hill Villas

• 1-3 bedrooms

• Land Area: 724 – 4,541 sq m

• Construction Area: 260 sq m

• 5 star amenities: Restaurant, beach club, spa,

gym, outdoor playground, golf court, swimming

pool, tennis court

• Developer : Banyan Tree Holdings Limited

• Selling Price: From VND 29,088,000,000

(approx. US$ 1,280,000)

• Handover condition: Fully furnished and

equipped

• Handover: Ongoing since 2012

InterContinental Da Nang Sun Peninsula Residences

• 30 Resort Villas

• 2-3 bedrooms

• Land Area: 1,037 - 1,541 sq m

• Construction Area: 589 - 728 sq m

• 5 star amenities: Restaurant, spa, gym,

swimming pool, MICE facilities

• Developer : Sun Group

• Selling Price: From VND 65,700,000,000

(approx. US$ 2,950,000)

• Handover condition: Fully furnished and

equipped

• Handover: Ongoing since 2016

FDI Overview

US$ 480.56 million US$ 619.72 million 76,493

Turnover of FDI enterprises operating in IPs Export turnover Employees

US$ 87.85 million US$ 513.45 million

Tax contribution Import turnover

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1,000

1,500

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HCMC Da Nang Hai Phong Ha Noi

2012 2013 2014 2015 2016 9M/2017

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$ m

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Total investment capital No. of projects

Pro

jects

FDI projects in IPs by country Annual registered FDI by city

- +

Da Nang Industrial Zones

Da Nang Industrial Parks

0

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60

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CURRENT FUTURE

% h

a

Land area Occupancy

0 50 100 150 200 250

Firm

s

FDI enterprises Total enterprises

Da Nang IPs FDI firms in Da Nang IPs

Expanded Hoa Khanh

Lien Chieu

Da Nang

Seafood Services

Hoa Cam

Hoa Khanh