2017 q2 CBRE market insights EN FINAL

Ho Chi Minh City
Wednesday, 5th July, 2017

AGENDA

Ho Chi Minh City, Vietnam
WEDNESDAY 5th July 2017
Reverie Saigon

09:00am

Opening Remarks
Hang Dang, Managing Director, Vietnam

09:05am

Macro Update
Recent Trends on Capital Markets
Hospitality Market: Beyond APEC 2017
Dung Duong, Head of Research & Consulting, CBRE Vietnam

09:35am

Commercial Market: The Rise of Millennials,
Co-working Space, and Young Demographics Retailing
Hieu Le, Head of Occupier Leasing, CBRE Vietnam

10:05am

Residential Market: How Demand is Shifting
Kiet Vo, Head of Residential Project Marketing, CBRE Vietnam

10:35am

Close


Macro Updates

ECONOMY

REAL ESTATE

MARKET INSIGHTS Q 2 / 2 0 1 7

Despite absence of the TPP, Vietnam looks confident to attract strong inflow of investment

Source: Press articles were retrieved in June 19th 2017.

4


ECONOMY

REAL ESTATE

MARKET INSIGHTS Q 2 / 2 0 1 7

Real Estate Industry is Next Up for Disruption

Frontier Digital Ventures invests in AutoDeal, Propzy

Propzy - an online classifieds platform that originates and facilitates property sale and leasing transactions in Vietnam.

Source: Press articles were retrieved in June 19th 2017.

5

ECONOMY

REAL ESTATE

MARKET INSIGHTS Q 2 / 2 0 1 7

Proposals toward Transparency, Consistency and Sustainability

Green buildings are expected to become a new trend in the low‐
and medium‐priced housing segments.

Source: Press articles were retrieved in June 19th 2017.

6


REAL ESTATE

ECONOMY

MARKET INSIGHTS Q 2 / 2 0 1 7

Still Solid Fundamentals

25

10

20

8

15

6

10

4

5

2

0

GDP growth rate (%)

Interest rate (%)

GDP, CPI and Basic Rates

0
2007

2008

2009

2010

2011

Average CPI (y-o-y)

2012

Lending rate

2013

2014

Deposit rate

2015

2016

6M 2017

GDP Growth Rate

Source: Vietnamese General Statistics Office, commercial banks.

7

REAL ESTATE

ECONOMY

MARKET INSIGHTS Q 2 / 2 0 1 7

Vietnam is Becoming Increasingly More Attractive to Foreign Investors
Vietnam’s FDI, 6M 2017
4%
2%
11%

Vietnam’s CEO Survey, May 2017
Manufacturing

6%

6M
2017

Utility Production,
Distribution
Mining

33%

Retail and wholesale,

vehicles
Real Estate

44%
Source: Vietnamese General Statistics Office.

Source: Vietnam CEO’s Survey by Oxford Business Group, May 2017

Total FDI 6M 2017: US$19.2 billions

54.8%

y-o-y

“

70% of top-level executives expect positive business
conditions in the next 12 months. Some 20% expect
the commercial environment to be very positive,
while just 10% of those interviewed thought the
months ahead will be negative.
8

”


REAL ESTATE

INFRASTRUCTURE

MARKET INSIGHTS Q 2 / 2 0 1 7

HCMC – Diversifying Public Transport System
Metro line no. 1

Bicycle

Possibility to
Develop a Bike Sharing System in
Ho Chi Minh City

Underground package
started on 26 May 2017

First BRT line

Water bus

Route: An Lac
roundabout to Rach
Chiec terminal
Length: 23km
Operation in: 2019

Trial ride at the end
of June. First route
operates in July

9

REAL ESTATE

INFRASTRUCTURE

MARKET INSIGHTS Q 2 / 2 0 1 7

HCMC – Tan Son Nhat Airport Expansion Plan
Tan Son Nhat airport - Expansion

H
HH

•
•

Capacity: 25-45 million passenger per year
Plan to finalised in Dec 2017
H
H
H

To local departure

To int’ departure

Around ten buildings in HCMC have helipads, including
Diamond Plaza, Bitexco Financial Tower and Tan Son Nhat
Saigon Hotel.
Source: VNExpress, CafeF, Baomoi.

10


REAL ESTATE

INFRASTRUCTURE

MARKET INSIGHTS Q 2 / 2 0 1 7

Involvement of Local Developers in Building Metro Lines
Noi Bai Airport

2

6
Me Linh

7
Me Linh

4

Lien Ha

Ba Vi

1

Nhon

Yen Vien

Troi

8
5

Cat Linh

3

Son Dong

Hanoi Station

1

3

Under Planning
Nhu Quynh

3

Duong Xa
Yen So

2A

2A

8

Under Construction
Under Construction –
About to be opened

Ha Dong
Ngoc Hoi

11

REAL ESTATE

INFRASTRUCTURE

MARKET INSIGHTS Q 2 / 2 0 1 7

Hanoi – Active Construction on New Key Roads

2

3

Nguyen Van Cu – Co Linh
Completed –(1/2017)
1/2017

Le Duc Tho – Xuan Phuong
Completed – 4/2017

Pham Van Dong Road
Under-construction (2017)

World’s costliest? Hanoi plans 
to spend over $342mn 
building 2.2km road

11

6
Completed
Under-construction

O Cho Dua – Voi Phuc
Approved for Upgrade
Nguyen Xien – Xa La
Under-construction (2017)

4

Truong Chinh
Under-construction (2018)

5
12


Capital Market

REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Investment Channels
Return from Different Asset Classes

775.5 points

180

23% y-o-y

160

22,400VND

140

0.5% y-o-y

Index

120
100

36.3M VND

80

10% y-o-y

60
40
20
0
June

Apr

Feb

Dec

2016

Oct

Aug

June

Apr

Feb

Local Gold

Dec

2015

Oct

Aug

Jun

Apr

Feb

Dec

VN-Index

Oct

Aug

Jun

Apr

Feb

Dec

Oct

Aug

Jun

2014

2017

USD/VND

Source: Vietnamese General Statistics Office, FTP Securities, SJC.

14


REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Investors Shift to Seek for Yield Spread
Main Investment Motivation in Real Estate

Percentage of 504 responses. 80% of
respondents were companies domiciled
in Asia Pacific and the other 20% were
domiciled primarily in Western Europe,

the Middle East and North America.

Prime Office Yield Relative to 10-year Government Bond

VIETNAM IS
INCREASINGLY
APPEALING TO
FOREIGN
INVESTORS.

Source: CBRE Asia Pacific Investor Intentions Survey, 2016 and 2017.

15

REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Strong Fundamentals
35%

10

20%

5

5%

1H
2017

2016

2015

International arrivals

2014

2013

-10%
2012

-

Growth Rate (%)

15

2011

Arrivals
(Million persons)

Strong Growth of Tourist Arrivals to Vietnam

Growth rate

Source: Ministry of Tourism.

Strong Prime Retail Rental Growth
6
4
2

Source: CBRE Vietnam.

Singapore

New Delhi

Bangkok

Shenzhen

Hanoi

Beijing

Shanghai

Guangzhou

-4

Mumbai

0
-2

HCMC

% Growth rate

8

Source: CBRE Research, New Channels for Old Favourites, 2017

16


REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Local Investors Dominate

2,000
1,600

50
100% Local

SELLER

97% Local

0% Local

BUYER

31% Local

40

1,200

30

800

20

400

10

-

No. of transactions

Transaction value (US$ million)

Vietnam Investment Volume

0
2011

2012

2013

Commercial

2014

Mixed use

2015

Residential

2016

1H 2017

No. of transaction

Dislaimer: Transastion includes deals above US$10 million. Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we
have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use
by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.
Source: CBRE Vietnam, RCA.
17

REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Notable Transactions in 1H 2017
Site in Ha Dong 
Hanoi

Hanoi Times
Square, Hanoi

BIM Group

UDIC
» Lotte Group

23 Le Duan
D1, HCMC
Auction

3,025 sqm

Q1 2017

Lotte/Ciputra Mall
Hanoi
7.3 ha

US$64 mil.
4 ha

» Aeon Mall Vietnam

Q2 2017

9.5 ha

» Elite Capital Resources

Phat Dat Real Estate

9.9 ha

Dai Phuoc Lotus,
Dong Nai
~US$80 mil.
198.5 ha

Vinacapital
» CFLD

US$12 mil.
2.5 ha

» Unknown buyer

Bau Bang Urban
Area & Industrial Park, 

Binh Duong
Becamex
» Paiho Group

» Tan Hoang Minh Group

Diamond Rice
Flower, Hanoi

CII Land Plot
D2, HCMC
CII

7,000 sqm

Vinaland divested from 
Thang Long Property

The Everrich 3, 
District 7, HCMC

» Hong Kong Land

Source: RCA retrieved in Jun ‘17, Vietnam Investment Review.

US$250 mil.
4.2 ha

Kinh Bac Corporation
» Growing Sun Investment 

18


REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Local Developers Seek Funding from Alternative Sources
Financing option

Quarter

Developer

Value US$ mil.

Remark

Debt financing

Q2 2017

Sacomreal

13

Equity raising

Q2 2017

SonKim Land

100

EXS Capital closed the first round of US$46 million, out of
an expected US$100 million follow-on fundraising for
SonKim Land

Joint Venture

Q2 2017

Nam Long

50% of US$348 mil.

JV with Hankyu Realty, Nishi Nippon Railroad to develop
Mizuki Park, 16 ha in HCMC. This JV was formed last year
to develop Flora Sakura, Fuji Residence and Kikyo
Residence in District 9.

Joint Venture

Q1 2017

CII

~US$115 mil. project value

Equity raising

Q4 2016

Novaland

120

70% of investors are foreign

Joint Venture

Q3 2016

Bitexco

290

JV with Mitsubishi Corporation to develop the Manor
Central Park in Hoang Mai, Hanoi

Equity raising

Q3 2016

FLC

480

From existing shareholders

Debt financing

Q2 2016

Nam Long

22

Bond with fixed rate: 11%, tenure: 1 year

JV with Hong Kong Land to develop 96,000sm
development site in District 2

Convertible bond due in 2020, rate 7%

Source: CBRE Vietnam.

19

REAL ESTATE

INVESTMENT

MARKET INSIGHTS Q 2 / 2 0 1 7

Pending Projects Revitalised
HCMC

Old photos

Hanoi

Kenton Node

Thuan Kieu Plaza

The K-Park,
Van Phu NUA

Booyoung Vina

New photos

D1mension

Source: CBRE Vietnam.

20


HOSPITALITY MARKET
Beyond APEC 2017

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

APEC 2017 - An opportunity to showcase Vietnam

APEC in numbers
 21 nations
 200 events across 10 cities of Vietnam
 1,000 business leaders
 10,000 delegates during Summit Week

Preparations for Summit Week in Nov 2017
 Da Nang Airport - International Terminal
 Da Nang International Media Center
 Ariyana Danang Exhibition & Convention Center
 Sheraton Da Nang
 InterContinental Danang Sun Peninsula upgrade
Da Nang Airport - International Terminal

Hanoi

HCMC

Da
Nang

Ha Long

Nha
Trang

Hue

Vinh

Hoi An

Can Tho

Ninh
Binh

Source: Vietnam News, CBRE Vietnam.

22


REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

International Visitors

Persons

International Visitors to Major Cities
6,000,000

1H 2017

5,000,000

International Arrivals

4,000,000

to Nha Trang

80% y-o-y

to Da Nang

72% y-o-y

to Vietnam

30% y-o-y

Nha Trang

Phu Quoc

3,000,000
2,000,000
1,000,000
HCMC

Hanoi
2014

Da Nang
2015

2016

1H 2017

Source: Cities’ Departments of Tourism, CBRE Vietnam.

23

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

City hotels – No new upscale hotel openings in 1H2017
HANOI

HCMC

4-5 Star Hotel Supply

4-5 Star Hotel Supply

12,000
Number of keys

Number of keys

12,000
10,000
8,000
6,000
4,000
2,000
0

10,000
8,000
6,000
4,000
2,000
0

2014
No New
Supply

2015

2016

1H 2017F 2018F 2019F
2017

US$111.2
ADR

73%
OCC

2014
No New
Supply

2015

2016

1H 2017F 2018F 2019F
2017

US$112.0
ADR

86%
OCC

▼ 2% y-o-y

▲ 6 ppts y-o-y

▲ 7% y-o-y

▲ 11 ppts y-o-y

▼ 5% q-o-q

▼ 3 ppts q-o-q

▼ 1% q-o-q

▲ 1 ppts q-o-q

Source: STR Global, CBRE Hotels.
Note: Data from 4-5 star hotels; Q2 only includes April and May

24


REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

City hotels – Hanoi hotels continue to outperform
HANOI

HCMC

120

80%

120

80%

90

60%

90

60%

60

40%

60

40%

30

20%

30

20%

0%

0

0%

0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015

2016

Occupancy (%)

100%

USD/room/night

150

Occupancy (%)

100%

USD/room/night

150

2015

2017

2016

2017

Source: STR Global, CBRE Hotels.
Note: Data from 4-5 star hotels; Q2 only includes April and May

25

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

HCMC – Notable Future 4-5 Star Hotels
No new future supply
2017
2018 – 2020
1. Hilton Saigon – 350 keys

3

4

1

2. Union Square Hotel – ~300 keys
3. Spirit of Saigon – 250 keys
4. Lavenue Crown Hotel – 235 keys
5. Okura Prestige Saigon Hotel – 250 keys

6. Mai House Saigon – 219 keys

2

6

5

Source: CBRE Vietnam, REIC.

26


REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Hanoi – Notable Future 4-5 Star Hotels
3

1

1. Mercure Hanoi – 380 keys

2

2. Novotel Suites Hanoi – Thai Ha – 300 keys
3. Intercontinental Landmark 72 – 359 keys

2017
2018 – 2020

2

1

1.

Hilton Hanoi Westlake – 250 keys

2.

Hanoi Aqua Central -138 keys

3.

Dong Do Hotel – N/A

4.

Westin Hanoi – N/A

5.

Four Seasons Hotel Hanoi – 100 keys

6.

10 Tran Ngyen Han Site – N/A

3

5

Source: CBRE Vietnam.

27

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Coastal Markets – by 1H 2017
4-5 star
Hotel

Secondhome Villa

Condo-tel

Length of
coastline

HA LONG

4,380

rooms

648
units

1,263
units

50
km

DA NANG

7,463
rooms

771
units

6,769
Units

~100
km

9,204
rooms

1,180
units

10,183
units

200
km

4,500
rooms

1,788
units

982
units

135
Km

21,163
rooms

4,413
units

12,309
units

140
Km

Quang Binh

Quy Nhon

NHA TRANG
Ho Tram

PHU QUOC

Source: CBRE Vietnam.

PHUKET

28


REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

NGHỈ DƯỠNG BÁN – KHẢ NĂNG TIÊU THỤ
Second Home BĐS
Market
Sales

Phu Quoc

850 units

2015

1,050 units
576 units

2016

Da Nang

Nha Trang

5,190 units

377 units

970 units
300 units

2015

1H 2017

Source: CBRE Vietnam, Q2 2017.

4,530 units

978 units

2016

1H 2017

2015

2016

1H 2017

Source: CBRE Vietnam, Q2 2017.

Source: CBRE Vietnam, Q2 2017.

29

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Rental Yield & Guaranteed Yield
• Rental yield: 5-10%
• Guaranteed yield: 8-12%
(5-10 years)
High-end condo-tels

Second Home Villas

• Rental yield: 5-9%
• Guaranteed yield: 8-10%
(5-10 years)

DA
NANG

NHA
TRANG

PHU
QUOC

PHUKET

• Rental yield: 6-9%
• Guaranteed yield: 8-10%
(5-10 years)

High-end condo-tels

Second Home Villas

• Rental yield: 4-6%
• Guaranteed yield: 6-7%
(5-15 years)

Note: Yields were surveyed at selected high-end projects and might not represent the entire market.
Source: CBRE Vietnam.

30


REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Existing

Upcoming

Operators - More Brands to Arrive

Note: Not all brands are listed above

31

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Nha Trang – strong influx of condo-tel developments

By 2020: 36,715 keys

Q2 2017: 14,871 (hotel* + condo-tel + villa) completed keys

3

1
2

7
4

5

8

9

10

6

12
11

16
13

14

17

19

15

* Only 4‐5 star hotels
Source: CBRE Vietnam; Photo Credit: Nguyen The Duong

18

Completed Projects

Future Projects

1

Vinpearl Beachfront Condotel - 40Fl

6

Ibis Styles Hotel - 25Fl

11

Havana Nha Trang Plaza - 42Fl

16

Gold Coast Condotel - 40Flx2

2

Starcity Nha Trang - 21Fl

7

Panorama Condotel - 39Fl

12

Ariyana Smart Condotel - 28Fl

17

Ocean Gate - 40Fl

3

Citadines Bayfront Nha Trang - 26Fl

8

AB Central Square - 36Fl

13

The Costa-InterCon Hotel - 19Fl-29Fl

18

Muong Thanh Grand Hotel - 48Fl

4

Muong Thanh Luxury Hotel - 45Fl

9

Vinpearl Empire - 41Fl

14

Sheraton Hotel - 33Fl

19

Royal Marina Complex - 32Flx2

5

Novotel Hotel - 18Fl

10

Tropicana - 49Fl x 2

15

Nha Trang Center - 20Fl

32

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

So is Da Nang

By 2020: 32,021 keys

Q2 2017: 14,255 (hotel* + condo-tel + villa) completed keys
1

3

2

6

5

18

7

9

10 11

8

4

13

16

14

12

17

15

* Only 4‐5 star hotels
Source: CBRE Vietnam; Photo Credit: Nguyen The Duong

Future Projects

Completed Projects

1

Cocobay – 50F

6

Premier Heritage – 26-35 Fl x 5

11

Alphanam Luxury- 33Fl

16

Katsutoshi Grand house- 22Fl

2

Ocean Suites - 9Fl

7

Hyatt Place

12

Fusion Suites – 21F

17

Citadines Blue Cove - 27Fl x 2

18

Southern Tran Thi Ly Bridge

3

Anvie Resort – 18Fl

8

OceanViews- 21Fl

13

Vinpearl Riverfront – 36 Fl

4

Hyatt Regency – 12FL

9

Wynham Soleil – 50Fl x 4

14

Novaland – 29Fl

5

Ariyana Resort & Suites- 25Fl x 3

10

Central Coast - 39Fl

15

Fhome – 27Fl x 2

33

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Phu Quoc also quickly catching up

By 2020: 15,464 keys

Q2 2017: 5,142 (hotel* + condo-tel + villa) completed keys
1

2

3

4

5

6

7

11

8
9

10

13

12

14

15

16

17

19

18

Completed Projects

* Only 4‐5 star hotels
Source: CBRE Vietnam.

Future Projects

1

Vinpearl Phu Quoc Resort

6

Movenpick Phu Quoc

11

Salinda Phu Quoc

16

InterContinental Phu Quoc

2

Grand World

7

Chen Sea Resort

12

Mercure Phu Quoc

17

JW Marriott Phu Quoc

3

Starbay

8

The Shells

13

Sol Beach House Phu Quoc

18

Premier Village Phu Quoc

4

Nam Nghi

9

La Veranda Resort

14

Sonasea Villas & Resort

19

Hon Thom Resort

5

Fusion Resort Phu Quoc

10

Long Beach Resort

15

Sunset Sanato Resort

20

34


REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Re-emergence of Ho Tram

By 2020: ~7,000 keys

Q2 2017: 1,300 (hotel + condo-tel + villa) completed keys

10

8
9

11

Completed Projects

2

3

1

Future Projects

4

6

5

7

* Only 4‐5 star hotels

Source: CBRE Vietnam 

1

Vietsovpetro

7

Carmelina Beach Resort

2

The Hamptons Ho Tram

8

Gallery Villas

3

Ho Tram Beach Boutique Resort

9

The Grand Ho Tram

4

Club Med

10 The Grand Ho Tram Phase 2

5

The Sanctuary

11 The Grand Ho Tram Phase 3

6

The Sanctuary Phase 2
35

REAL ESTATE

H O S P I TA L I T Y

MARKET INSIGHTS Q 2 / 2 0 1 7

Quang Ninh – Bustling with new developments
Strongly improved infrastructure increasingly boosts tourism and investments

No. of hotels
in Quang Ninh

Van Don

6
18
45

VAN DON
International Airport
(under construction)
US$2 bn Casino 
Project

Hotel 
Cluster
36


COMMERCIAL MARKET

The rise of millennials, Co-working space and
Young demographics retailing

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Market Snapshot Q2 2017
HANOI

HCMC

▲ 1.7% y-o-y
▼ 1.7% q-o-q

No New Supply

US$ 36.3
psm pm

▲ 1.2 ppts y-o-y
▼ 1.1 ppts q-o-q
5.3%
Vacancy

▲ 7.5% y-o-y
▲ 2.2% q-o-q

▼ 8.5 ppts y-o-y
▼ 2.0 ppts q-o-q

No New Supply

US$ 24.1
psm pm

11.2%
Vacancy

24,051 sm NLA
New Supply

US$ 13.6
psm pm

17.4%
Vacancy

GRADE A
GRADE B 
23,620 sm NLA
New Supply

US$ 21.0
psm pm

4%
Vacancy

▲ 4.7% y-o-y
▼ 4.0% q-o-q

▲ 0.4 ppts y-o-y
▲ 1.4 ppts q-o-q

▼ 1.1% y-o-y
▲ 0.4% q-o-q

▲ 0.9 ppts y-o-y
▲ 1.0 ppts q-o-q

Source: CBRE Vietnam.
Asking rents are quoted excluding service charge and VAT
38

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

HCMC – 2017 is the Year of Decentralization

Deutsches Haus
Q3 2017
Saigon Giai
Phong
Newspaper
Q1 2017

Viettel Complex
Q2 2017

Mapletree
Business Center
Q1 2017

Saigon Centre P2
Q3 2017

Etown Central
Q4 2017
39

Source: CBRE Vietnam.

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Hanoi – Decentralization is a continued trend

Discovery Complex
2H 2017
Sun Square
Q1 2017

Richy Tower
2H 2017

HUD Tower
Q2 2017
Source: CBRE Vietnam.

DSD Building
2H 2017

Horison Tower
Q2 2017
40

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

HCMC - Now in Top 40 of World's Most Expensive Office Markets
Hanoi - Improving Grade A Performance

35

35%

30

30%

25

25%

20

20%

15

15%

10

10%

5

5%

0

0%

Asking Rents (US$ psm pm)

40%

Vacancy Rate (%)

Asking Rent (US$/sm/month)

40

2016

40%

35

35%

30

30%

25

25%

20

20%

15

15%

10

10%

5

5%

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015

40

0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2017

2015

2016

2017

Asking Rents recorded are exclusive of Service Charge and VAT.
Source: CBRE Vietnam.

41

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Net Absorption: Demand shifted toward decentralized areas

Net Absorption (sm)

HCMC
40,000
30,000
20,000

10,000
0
(10,000)

Q1

Q2

Q3

Q4

Q1

Q2

2015
CBD

Q3

Q4

2016

District 1

District 3

District 7

Q1

Q2
2017

Others (D4, 5, 10, Tan Binh, Binh Thanh, Phu Nhuan)

Net Absorption
(sm)

HANOI
40,000
20,000
0
(20,000)

Q1

Q2

Q3

Q4

Q1

2015
CBD

Midtown

West

Q2
2016
Others

Q3

Q4

Q1

Q2
2017

Source: CBRE Vietnam.

42

Vacancy Rate (%)

HANOI

HCMC


REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Co-Working Space: Alternative Supply and Anchor Tenant

Source: CBRE Vietnam, Primed for Growth, Co-working Space in Vietnam.

43

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Diversifying Demand
Q1 2017

HCMC

9%

Q2 2017

HCMC

21%
Real Estate/
Construction

19%

New-to-market letting
91%

Manufacturing, Real
Estate and
Telecommunication
to step up

79%

HANOI

Relocation & Expansion

16%

18%

New-to-market letting
84%
Relocation & Expansion

Finance and
Banking
20%

Manufacturing
20% - 24%

Telecommunicati
on/ Media
10%

HANOI

82%

Demand
remains strong
in traditional
sectors

IT/Technology
9%

Source: Based on CBRE Vietnam’s enquiries, 2017 y-t-d.

44


REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Preferred Leasing Space is Getting Larger
HCMC

100%
80%
60%
40%
20%
0%
Q1

Q2

Q3

Q4

Q1

Q2

2015

Q3

Q4

Q1

Q2

2016

2017

HANOI
100%
80%
60%
40%
20%
0%
Q1

Q2

Q3

Q4

2015
<100sm
100sm - 299sm

Q1

Q2

300sm - 699sm

Q3
2016
700sm - 1000sm

Q4

Q1

>1000sm

Q2
2017
45

Source: Based on CBRE Vietnam’s enquiries, 2017 y-t-d.

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Large Office Leasing Transactions in 1H 2017
No.

District

Industry

Leasing area (sm)

HCMC

District 7

Transportation

2,400

HCMC

District 7

Home furniture

2,000

HCMC

Binh Thanh District

Merchandising

1,133

HCMC

District 10

Technology

1,019

HCMC

District 1

F&B

1,000

HCMC

District 1

Business Center

1,000

HCMC

Tan Binh District

Fashion

975

Hanoi

Ba Dinh

IT

5,000

Hanoi

Tu Liem

Manufacturing

1,300

Hanoi

Tu Liem

Manufacturing

1,300

Hanoi

Ba Dinh

Logistics

1,000

Hanoi

Hoan Kiem

Real Estate

1,000

Hanoi

Tu Liem

Construction

800

Hanoi

Tu Liem

IT

800

Hanoi

Ba Dinh

Pharmaceuticals

800

Source: Based on CBRE Vietnam’s enquiries, 2017 y-t-d.

46


REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

HCMC – Future Supply

3

1
2

1. Deutsches Haus, D1 – GFA: 38,621 sm
2. Saigon Centre Phase 2, D1 – GFA: 40,000 sm
3. Etown Central, D4 – GFA: 67,760 sm
2017
2018 - 2020

3

1

4

7

1. Saigon M&C, D1 – GFA: 49,000 sm
2. VietCapital Center, D1 – GFA: 38,621 sm
3. CapitaLand at VGR, D1 – GFA: N/A sm
4. SJC Tower, D1 – GFA: 38,000 sm
5. Tax Center, D1 – GFA: 35,000 sm

8

5

6

2

6. Nexus Tower, D1 – GFA: 133,834 sm
7. One Hub, D9 – GFA: 13,000 sm

9

8. Crescent Hub, D7 – GFA: 36,297 sm
9. Spirit of Saigon, D1 – GFA: 12,000 sm

47

Source: CBRE Vietnam.

REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Hanoi – Future Supply

1

2

3

4

1. HUD Tower (2nd tower)
2. Discovery Complex – GFA: 49,000 sm
3. DSD Building – GFA: 20,000 sm
4. Richy Tower – GFA: 9,790 sm
2017
2

2018 - 2019
1. Vietinbank Tower – GFA: 100,000 sm

1

4
3

2. FLC Twin Tower - GFA: 35,960
3. Oriental Sun Tower – GFA: 23,300 sm
4. Eurowindows – GFA: 16,592 sm

5

5. Office building at Metropolis

Source: CBRE Vietnam.

48


REAL ESTATE

OFFICE

MARKET INSIGHTS Q 2 / 2 0 1 7

Market Outlook
HCMC

HANOI

Major Anchor Tenants still prefer to renew rather than
relocate

Limited Grade A supply; Grade A’s performance to
further improve

New Supply in Grade B will continue to have better
absorption than New Supply in Grade A

Higher competition in Grade B due to continued new
supply

Build – Occupy – Lease will continue to be a recurring
theme

Co-working spaces become potential tenants and partners for landlords
Annual New Supply Forecast

2019F

2018F

2017E

1H 2017

2016

2014

2019F

2018F

2017E

1H 2017

2016

2015

Source: CBRE Vietnam, REIC.
2017E: 2H of 2017

2015

140,000
120,000
100,000
80,000
60,000
40,000
20,000
0

New Supply, NLA (sm)

140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2014

New supply, NLA (sm)

Annual New Supply Forecast

49

REAL ESTATE

R E TA I L

MARKET INSIGHTS Q 2 / 2 0 1 7

Market Snapshot Q2 2017
HANOI

HCMC

No new supply

▲ 7.1% y-o-y

▼ 0.2 ppts y-o-y

▼ -0.2% q-o-q

▼ 1.1 ppts q-o-q

US$137.1
psm pm

11.8%

Vacancy

▲ 1.0% y-o-y
0% q-o-q

▲ 0.3 ppts y-o-y
▲ 0.1 ppts q-o-q

No new supply

US$98.1
psm pm

1.9%
Vacancy

33,400 sm NLA
New Supply

US$28.1
psm pm

11%
Vacancy

CBD
NON-CBD
37,389 sm NLA
New Supply

US$37.4
psm pm

8%
Vacancy

▲ 2.6% y-o-y

▼ 0.1 ppts y-o-y

▼ 6.2% y-o-y

▲ 0.4 ppts y-o-y

▲ 1.7% q-o-q

▲ 1.1 ppts q-o-q

▲ 1.8% q-o-q

▼ 0.3 ppts q-o-q

Source: CBRE Vietnam.

50