hcmc market insights q2/2013 - viet nam supply...
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HCMC MARKET INSIGHTS Q2/2013Presented by: Dung Duong (Ms.)July 8, 2013
2 CBRE MARKET INSIGHTS | Q2/2013
Q2 2013 ECONOMIC OVERVIEWVIETNAM ECONOMY
Source: Vietnamese General Statistics office
Q2/2012
Y-o-Y
Q1/2013
Q-o-QQ2/2013
GDP (% y-o-y) 4.8% 4.8% 5.0%
CPI (% y-o-y, e-o-p) 6.9% 6.6% 6.7%
Exchange rate (e-o-p) 20,828 20,828 21,036
Export (US$ Bn) 28.6 29.7 32.4
Import (US$ Bn) 29.0 29.2 34.3
FDI Implemented (US$ Bn) 2.9 2.7 3.0
International Tourist Arrivals (million arrivals) 1.5 1.8 1.7
Retail and Services Turnover (tril. dong) 567.7 636.1 639.3
20,700
20,800
20,900
21,000
21,100
Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13
Inte
rban
k ex
chan
ge ra
te
1% adjustmentStable exchange rate
3 CBRE MARKET INSIGHTS | Q2/2013
GOVERNMENT POLICIES
Expansion Monetary PoliciesFiscal Policies - Tax Cut
Devaluation of the dong 1% versus the dollar ( to VND21,036)
The interest-rate ceilings on short-term dong-denominated bank deposits: lowered to 7.0% from 7.5%
The ceiling on dollar deposits:• For institutional depositors: fall to
0.25% from 1.0%• For individual depositors: fall to
1.25% from 2.0%.
For social housing:• Corporate tax rate: 10%; VAT: cut from 10%
to 5%. Personal income tax:
• The level of deduction: increased to VND9 million/per month from VND4 million/ month;
• The level of deduction for each dependent: increased to VND3.6/ month from VND1.6 million per month for one. dependent.
• Boost domestic consumption and production
• Improve trade balance• Reduce banks' funding costs => Lend at
lower rates• Encourage to exchange USD for VND• Bolster its foreign-exchange reserves
4 CBRE MARKET INSIGHTS | Q2/2013
Q2 2013 ECONOMIC OVERVIEWGold Price And Bank Deposits Become Less Attractive
Global gold price: decrease 24% YTD.
Local gold price: reached its trough in June (22%) and currently downed 19% YTD
Policy rates: 800bps reduction over the last 18 months.
-1
0
1
2
3
4
0
5
10
15
20
25
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
CPI (%
m-o-
m)
CPI (%
y-o-y
) / In
terest
rates
(%)
CPI (y-o-y, Vietnam) Rediscounting Rate Refinancing Rate CPI (m-o-m, Vietnam)
Monetary contraction
Inflation surged
Monetary expansion
Inflation controlled
1,000
1,200
1,400
1,600
1,800
2,000
30
34
38
42
46
50
09/2011 12/2011 03/2012 06/2012 09/2012 12/2012 03/2013 06/2013
Globa
l gold
price
(US$
)
Loca
l gold
sell p
rice (
VND m
illion
)
LOCAL GOLD GLOBAL GOLD
Source: SJC
Source: State Bank of Vietnam
5 CBRE MARKET INSIGHTS | Q2/2013
0
500
1,000
1,500
2,000
2,500
3,000
300
350
400
450
500
550
Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13
Trad
ing
Val
ue (B
illio
ns V
ND
)
VN
Inde
x
Trading value VNIndex
Q2 2013 ECONOMIC OVERVIEW
Regional stock markets, 1 year return as of July 05, 2013: Thailand (SET) up 21.1%;
Singapore (SGX) up 15.2%;
Indonesia (JCI) up 15.8%;
Vietnam (VNINDEX) peaked at 528 points in June, up 26%, currently up 21.1%.
Stock Market Recovers, Real Estate Will Come Back To Focus
REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current
Real Estate Holding & Development Listed Companies
55.5 44.8 39.5 41.9 42.2 45.4
Real Estate Services Listed Companies 84.4 25 23.8 25.3 22.3 26.1
Source: Stockbiz
Source: FPTS, gold.org
Source: Bloomberg
6 CBRE MARKET INSIGHTS | Q2/2013
SnapshotHCMC RESIDENTIAL MARKET
CONDOMINIUM LUXURY HIGH-END MID-END AFFORDABLE TOTAL
Total completion supply (units) 504 19,256 13,944 16,184 49,888
New completion (units) 313 286 263 558 1,420
Total launch supply (units) 1,278 28,255 26,743 39,90096,176
New launch (units) 0 598 425 161 1,184
Secondary market – Average price (US$ psm) $3,756 $1,650 $857 $694
Q-o-q change (%) -2.1% -0.4% -0.2% -0.3%
Y-o-y change (%) -5.2% -5.0% -3.9% -1.7%
All prices are quoted exclusive of VAT and service charges.“New completion”: the total number of units that were completed and started to be delivered to buyers in the review quarter.“New launch”: the number of units that were launched to the market by developers (official start of sales for a project) in the review quarter. Source: CBRE
7 CBRE MARKET INSIGHTS | Q2/2013
HCMC RESIDENTIAL MARKETUnsold stock improved
Source: CBRE
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
New launch Unsold inventory Paused/On-hold/Distressed
Q2 2012 Q1 2013 Q2 2013
by ~400 units
by ~260 unitsdue to some projects converted to social housings or changed to other components
by ~400 unitsthanks to flexible payment terms plus incentives
8 CBRE MARKET INSIGHTS | Q2/2013
03%
30%
26%
42%
Luxury High-end Mid-end Affordable
High-end segment saw more sales y-o-yHCMC RESIDENTIAL MARKET
Units Sold by Quarter
Units Sold by Segment, Q2/2012 Units Sold by Segment, Q2/2013
“ “High-end” has become middle-class housing.
“Affordable” is now truly affordable.
”Source: CBRE
00%
40%
17%
43%
Luxury High-end Mid-end Affordable
$0
$500
$1,000
$1,500
$2,000
$2,500
01,0002,0003,0004,0005,0006,0007,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 2013
Aver
age p
Price
(US$
/m2)
Sold
Units
9 CBRE MARKET INSIGHTS | Q2/2013
HCMC RESIDENTIAL MARKETPrices
Imperia An Phu – District 2
• 700 units• Current asking price: $1,500-$1,800/sm
• Excellent payment terms• Free parking• Furniture package• Gym free for 1 year
The Estella – District 2
• 719 units• Current asking price: $1,600-$1,800/sm
• Good payment terms
Him Lam Riverside – District 7
• 314 units• Current asking price: $1,357 - $1,457/sm
• Good payment term: 50% hand-over, the rest payable in 2 years with 0%
Sunrise City (North – District 7)
• 554 units• Current asking price: $1,119 - $1,428/sm
•Smaller unit size, lower price than P1, •Good payment term (54 months) –Central towers
Tropic Garden– District 2
• 388 units• Current asking price: $1,100-$1,300/sm
• Good payment term
Xi Riverview Palace – District 2
• 258 units• Current asking price: $2,200-$2,500/sm
• High discount: 18% if 98% payable
Happy Valley – District 7
• 541 units• Current asking price: $1,500 - $1,700 /sm
• Longest payment schedule in PMH NUA• Free parking
“ No direct price cut BUT long payment schedules with 0% rate increase sales
”
Source: CBRE
10 CBRE MARKET INSIGHTS | Q2/2013
HCMC RESIDENTIAL MARKETInfrastructure development will ramp up property values
Thao DienPearl
The Vista
Imperial An Phu
CantavilPremier
Estella
Future projects
Existing projects
Metro line 1
Metro stationSource: CBRE
11 CBRE MARKET INSIGHTS | Q2/2013
Advertising activities increaseHCMC RESIDENTIAL MARKET
Residential Projects Advertised by Month, HCMC, 2013
0
5
10
15
20
25
30
March April May June MTD July
No
of P
roje
ct
Newspapers tracked:Tuoi Tre; Mua & Ban; Tap chi Bat Dong San (Property Magazine);; Thanh Nien; Nhip Cau Dau Tu; Doanh nhan Sai Gon; Saigon Times Daily; Vietnam Investment Review; Vietnam News.
12 CBRE MARKET INSIGHTS | Q2/2013
HCMC RESIDENTIAL MARKETNew launches Up
“New launches increased by 51.0% q-o-q and 234.5% y-o-y y.
Some delayed projects were resumed and introduced to the market: New Pearl (D1), Central Plaza (Tan Binh). Others starting to prepare for construction or launch.
Some developers continued launching their second phase.
”Source: CBRE
Units Launched by Year
Units Launched in Q2/2013 (% by Segment)
0%
51%36%
14%
Luxury High-end Mid-end Affordable
High-end – largest proportion in Q2/2013
0
5,000
10,000
15,000
20,000
2008 2009 2010 2011 2012 2013
Num
ber o
f Uni
t
Annual launch Q2 launch
13 CBRE MARKET INSIGHTS | Q2/2013
New Launches – High-end Segment, Q2/2013HCMC RESIDENTIAL MARKET
Happy Valley (2nd&3rd launch) – District 7
• Location: Phu My Hung NUA • Developer: Phu My Hung Corp.• Launched Unit: 266•Launch: June• Current asking price: $1,500-$1,700 psm• Sale rate: 80% of launched units.
Sunrise City (North) – District 7
• Location: Nguyen Huu Tho Street • Developer: Novaland• Launched Unit: 182 (total 554 units)• Launch: Early April •Current asking price: $1,119 - $1,428/sm• Sale rate: 65% of launched unit.
Dragon Hill Residence & Suite – Nha Be
• Location: Nguyen Huu Tho Street • Developer: Phu Long Real Estate Corp.• Launched Unit: ~150 (~200 wholesale)• Launch: late June, early July • Current asking price: $1,190 - $1,286/sm• Sale rate: N/A.
14 CBRE MARKET INSIGHTS | Q2/2013
New Launches – Mid-end and Affordable, Q2/2013 HCMC RESIDENTIAL MARKET
Homyland 2 – District 2
• Location: Nguyen Duy Trinh Street • Developer: Bao Son Co., Ltd• Launched Unit: 425 units•Launch: 29 June• Current asking price: $761 - $881/sm• Sale rate: ~17%• Segment: Mid-end.
Ehome 3 P2 – Binh Tan District
• Location: Ho Ngoc Lam Street• Developer: Nam Long• Launched Unit: 161 (block A5)• Launch: 22 June•Current asking price: $794/sm• Sale rate: 40% of launched unit• Segment: Affordable.
Dream Home – Go Vap District
• Location: Street 59• Developer: Dream Home Co., Ltd.• Launched Unit: 518• Launch: introduce model house• Current asking price: $567• Sale rate: to officially launch in July• Segment: Affordable.
15 CBRE MARKET INSIGHTS | Q2/2013
HCMC RESIDENTIAL MARKET
No further cut is expected BUT more flexible payment terms.
More sales for projects with upfront payment of 30% - 50% to move in;
Free of charge (management, parking) in the first one or two years to share buyers’ financial burdens;
Unit size preferred: <65sm (affordable), and <100sm (high-end);
Changes in personal income tax resulted in disposable income increase => more budget for housing;
CBRE is cautiously optimistic about a limited high end recovery in Q4 2013
Outlook
50% upfront -> hand over
16 CBRE MARKET INSIGHTS | Q2/2013
SnapshotHCMC OFFICE
OFFICE GRADE A GRADE B GRADE C TOTAL
Number of properties 10 53 267 330
Total supply (GFA, sm) 315,855 847,418 922,723 2,085,996
New supply (properties) 0 1 5 6
New supply ( GFA, sm) 0 14,000 25,661 39,661
Net absorption (NLA,sm) – Q2/2013 2,252 18,888 21,140
Net absorption (NLA,sm) – Q1/2013 10,504 15,368 25,873
Q-o-q change (%) -78.6% 22.9% -18.3%
Y-o-y change (%) - 53.2% 91.1% 43.9%
Vacancy rate (%) 12.5% 12.1% 12.2%
Q-o-q change (pp) -0.6 -1.5 -1.2
Y-o-y change (pp) -4.3 -1.1 -2.0
Average asking rents (US$ psm per month) $31.53 $18.06 $21.79
Q-o-q change (%) 0.5% -0.2% 0.0%
Y-o-y change (%) 2.4% 5.9% 4.3%
All rents are the average rents quoted on the NLA basic, exclusive of VAT and service charge.Source: CBRE
17 CBRE MARKET INSIGHTS | Q2/2013
New supply Saigon Airport PlazaHCMC OFFICE
“ Only one new office building for leased completed inQ2/2013
A sky blue office building emerging in the decentralised area, creating more availability for tenants, especially those work in logistics industry. ”
Saigon Airport PlazaDeveloper SSG Group
Address 1 Bach Dang, Tan Binh
Total GFA 14,000sm
18 CBRE MARKET INSIGHTS | Q2/2013
HighlightsHCMC OFFICE
“85 office leases signed in 6 months by CBRE Vietnam, up 20% on 2012.
Healthy absorption as market sentiment improves and Average Grade A office rents rise 0.5% q-o-q. Oversupply a misconception !
Major occupiers FLIGHT TO QUALITY in 1H 2013 and CONSOLIDATION taking advantage of available opportunities in new buildings.
Local banking sector emerging as the largest occupiers of prime District 1 office buildings.
New office buildings showing strong commitment, while major delayed projects have seen no movement. ”CBRE
24%
16%
16%13%
13%
10%
8%Finance
Pharmaceutical
Others
Technology
Manufacturing
Retail
Legal
Tenant breakdown – 1H/2013 (based on CBRE deals)
$15
$17
$19
$21
$23
$25
0
200,000
400,000
600,000
800,000
1,000,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 2013
Leased Area Vacant Area Asking Rent
HCMC Office market performance – Grade A&B
19 CBRE MARKET INSIGHTS | Q2/2013
HCMC OFFICEOversupply is beginning to disappear
“ Number of successful deals during the first half of 2013 done by CBRE Vietnam went up 20% on 2012.
”CBRE
-
30,000
60,000
90,000
120,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 2013
Grade A Grade B
Office Vacancy Spaces – NLA (sm) Office supply (Grade A &B) – NLA (sm)
0
200,000
400,000
600,000
800,000
1,000,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 20
Gro
ss F
loor
Are
a (s
m)
Leased Area Vacant Area
20 CBRE MARKET INSIGHTS | Q2/2013
LEED Office building achieved noticeable performance.HCMC OFFICE - PRESIDENT PLACE
Key facts
More than 75% of total spaces occupied after 3 months of official opening with the remaining 25% under offer.
100% of Tenants are international brands with 66% of committed occupiers technology based clients
Key tenants:
• Canon
• Diageo Vietnam Limited
• Microsoft Vietnam LLC
• Hiring Boss
• Schindler Vietnam
“ A pioneering office development becoming Ho Chi Minh City's first LEED Gold accredited office building. ”
President PlaceDeveloper Sapphire Vietnam
Address 93 Nguyen Du, D1
Total GFA 11,475 sm
Note: Leadership in Energy and Environmental Design (LEED) consists of a suite of rating systems for the design, construction and operation of high performance green buildings, homes and neighborhoods.
21 CBRE MARKET INSIGHTS | Q2/2013
Projects Showed Good Construction Progress in Review QuarterHCMC OFFICE
Vietin Bank TowerLocation Ham Nghi, D1, HCMC
Floor 24 floors
Total GFA 24,315 sm
Status Under construction
Vietcombank TowerLocation Melinh Square, D1,
HCMC
Floor 35 floors
Total GFA 55,000 sm
Status Under construction
Q1/2013
Q2/2013
Q1/2013
Q2/2013
MB Sunny TowerLocation Tran Hung Dao, D1,
HCMC
Floor 22 floors
Total GFA 16,500 sm
Status Under construction
Q1/2013
Q2/2013
LimTowerLocation Ton Duc Thang, D1,
HCMC
Floor 34 floors
Total GFA 34,300 sm
Status Fitting out
Q2/2013
Q1/2013
22 CBRE MARKET INSIGHTS | Q2/2013
HCMC OFFICENew supply from developed projects
TIMESSQUARE22-36 Nguyen Hue, D1GFA: 14,076 sm
Expected completion: Q3/2013
LE MERIDIEN3C Ton Duc Thang, D1GFA: 13,560 sm
Expected completion: 2014
23 CBRE MARKET INSIGHTS | Q2/2013
OutlookHCMC OFFICE
Some project s are on its completion –Providing 602,933
sm office space until 2015
Rents keepstable
Constant demand
cometo the market
Stable office market
for whole year of 2013
OFFICE MARKET WILL BE IN TEMPORARY STABLE SITUATION THROUGH 2013
Given tightening supply and existing demand, the market wide average asking rent is expected to be stable or increase marginally through 2013, however the effective rent will be stable.
Gradual source of demand coming to the market will result in the absorption of available space in the market.
Tenants and landlord will become closer when more flexible leasing packages and higher quality services are offered in the market to satisfy the clients’ needs.
Major half complete / unfinished projects unlikely to come online in 2013 or even early 2014 which is likely to create further upward pressure on rentals until the next wave of major new supply
Market regain confidence
24 CBRE MARKET INSIGHTS | Q2/2013
SnapshotHCMC RETAIL
Retail Department store Shopping centre
Retail arcade/podium Total
Total supply (NLA, sm) 96,754 243,396 60,454 400,604
New supply (NLA, sm) 0 0 0 0
Vacancy rate (%) 8.4% 12.9% 9.8%
Q-o-q change (pp) 0.7 pp 4.0 pp -1.5 pp
Y-o-y change (pp) 8.2 pp -6.3 pp -17.5 pp
CBD – Average rents (US$ psm per month) $81.84 $106.96 $61.49
Q-o-q change (%) 0.6% 0.0% -1.6%
Y-o-y change (%) 0.5% -3.0% NA
Non-CBD – Average rents (US$ psm per month) $48.32 $32.97 $17.09
Q-o-q change (%) -1.5% -3.7% 0.0%
Y-o-y change (%) -1.4% -4.7% NA
All rents are the average rents quoted on the ground floor and first floor, exclusive of VAT and service charge.Source: CBRE
25 CBRE MARKET INSIGHTS | Q2/2013
Vacancy rate increased due to decrease in tenant turnover, i.e. withdrawal of big tenants at VincomCenter A like Home One (1,200 sm), Gloria Jean’s (100 sm), Nike (150 sm), Banana Leaf (100 sm)and Givral (100 sm). Unsustainable high rental rate and low foot traffic are two main observed obstacles.
Rents of Shopping Centres in CBD: stable as developers’ will is either not to decrease rent nor accept weak tenant.
Rents of Department Stores in CBD: slightly increased due to Diamond Plaza’s annual renovation.
In non-CBD, rents continued to decrease to attract new tenants.
HighlightsHCMC RETAIL
Performance of 5 selected shopping centres, HCMC
- 30 60 90
120 150 180
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Aver
age
Ren
t(U
S$/
sm/m
onth
)
Vacancy rate
Crescent Mall
Vincom Center A (Eden A)Vincom Center BDiamond Plaza
Icon 68 Shopping Centre
Source: CBRE
26 CBRE MARKET INSIGHTS | Q2/2013
Taxation and Infrastructure cost burden retail operator, creating deadweight loss for both retailers and consumers.
HCMC RETAIL
Net absorption (NLA, sm)
Source: CBRE
-7%
-1%
5%
11%
17%
23%
-40,000
-20,000
0
20,000
40,000
60,000
2010 2011 2012 2013
Net Absorption (sm) Vacancy Rate (%)
27 CBRE MARKET INSIGHTS | Q2/2013
HCMC RETAIL
Asia Pacific will continue to drive global retail growth in 2013.
Slower economic growth poses significant obstacles for retailers planning to expand.
Retailer expansion: fewer easy wins but still a strategy
Top Cities for New Retailer Entries, 2012
Source: CBRE Global Research & Consulting
2013 50th store opening
28 CBRE MARKET INSIGHTS | Q2/2013
Rental Decline Accelerating
Rental decline Slowing
Rental Growth Accelerating
Rental Growth Slowing
Definition 1. Rents are at their peak and are expected to decline over the next 6-12 months.
2. Rents have started to fall, and the rate of decline is expected to accelerate over the next 6-12 months.
3. The rate of rental decline is at its peak. Rents are expected to continue declining but at a slower rate.4. The rate of rental decline has slowed. Rents are not yet at their trough, and are expected to decline further, but at a slower rate.
5. Rents are at their trough. The next movement is expected to be upwards.6. Rents have started to rise, and the rate of increase is expected to accelerate over the next 6-12 months.
7. The rate of rental growth is not yet at its peak. Rents are expected to continue rising but at a slower rate.8. The rate of rental growth has slowed. Rents are not yet at their peak, and are expected to increase further, but at a slower lower rate.9. Rents are at their peak and are considered to have reached a plateau. Marginal further growth still possible, but a significant decline not yet expected.
RENTAL CYCLEHCMC RETAIL
Vietnam
29 CBRE MARKET INSIGHTS | Q2/2013
Confidence remains in Vietnam retail market despite bridle in spending with expansion plan of Aeon (expand to 20 shopping malls in 2020), Fairprice (and Saigon Coop jointly open CoopXtraplus in May), Lotte Group (plan to expand further 60 supermarkets and shopping centres).
Low consumer demand together with tighten spending budget will continue in the next two quarters.
Future supply will be limited in the next four quarters.
Large projects are facing difficulties in maintaining tenants. Decrease in rents or incentive terms including rent free period, turnover share, well-defined marketing strategy are two recommendedsolutions.
Future supply in the next two quarters include:
OutlookHCMC RETAIL
CantavilPremier 30,000 sm NLAExpected open year: 2013
Times Square4,000 sm GFAExpected open year: 2013
Saigon Airport Plaza6,980 smGFA Expected open year: 2013
ThaoDienPearl20,400 sm GFAExpected open year: 2013
30 CBRE MARKET INSIGHTS | Q2/2013
SnapshotHCMC SERVICED APARTMENTS
SERVICED APARTMENTS GRADE A GRADE B GRADE C TOTAL
Total supply (units) 782 2,462 1,146 4,390
New supply (units) 0 80 10 90
Vacancy rate (%) 4.0% 18.7%
Q-o-q change (pp) -5.5 pp -7.2 pp
Y-o-y change (pp) -13.3 pp -2.3 pp
Average asking rents (US$ psm per month) $31.76 $23.95
Q-o-q change (%) 0.0% -1.3%
Y-o-y change (%) -6.0% -5.7%All rents are quoted inclusive of VAT and service charge.Source: CBRE
31 CBRE MARKET INSIGHTS | Q2/2013
HCMC SERVICED APARTMENTSHighlights
New supply - SAIGON AIRPORT PLAZA
Scale: 84 units
57-sm 1-bedroom
Near Tan Son Nhat International Airport
Developer: SSG Group
Exclusively leased by CBRE Vietnam
First Grade B serviced apartment in Tan Binh
Demand: EnquiriesDECENTRALISED
• Towards D.2 villas• Improved budget
(US$2,000 - $3,000)• Long-term stay: 85%
New SupplyDECENTRALISED
• D.2• D.7• Tan Binh
RentsDOWNWARDS• New bottom
• At slower rate
VacancyDOWNWARDS• Approaching
Q3/2011low levels again
“PRICING IS KEY FACTOR. After rents kept decreasing for EIGHT quarters, vacancy was improved and reached the lowest levels seen in Q3/2011.
”CBRE
32 CBRE MARKET INSIGHTS | Q2/2013
$15
$20
$25
$30
$35
$40
$45
2010 2011 2012 2013
Ren
t (U
S$/
sm/m
onth
)
Grade A Grade B
PerformanceHCMC SERVICED APARTMENTS
Rents (US$/sm/month)
Occupancy (%) – Best performers Vacancy (%)
Source: CBRE
41.6%
15.3%14.9%
12.4%
7.5%
3.8%4.5% District 1
District 7District 3District 2Binh Thanh Tan BinhOthers
1,827
502
480
495
330
84197
1,827
672652
544
330
168197 District 1
District 7District 3District 2Binh Thanh Tan BinhOthers
Q1/2012 Q2/2013
Supply (units) – Decentralised to D.2, D.3, D.7, Tan Binh
91%
92%
93%
94%
95%
96%
97%
$0 $10 $20 $30 $40 $50
Norfolk Mansion
InterContinental Asiana Saigon
Indochine Park Tower Diamond Plaza 0%
5%
10%
15%
20%
25%
30%
2010 2011 2012 2013
Vac
ancy
(%)
Grade A Grade B
Slower decrease
strong take-up
Grade ACBD
33 CBRE MARKET INSIGHTS | Q2/2013
HCMC SERVICED APARTMENTS
Rents are expecting to bottom out as they are decreasing at a slower rate.
Vacancy will continue to decrease as there will be no significant completions through year-end.
As pricing is key factor, landlords are increasingly more flexible in benefits (parking, laundry, electricity and water allowance) for tenants and commission scheme for agents.
Outlook
Laundry
1FURNITURE
2GYMNASIUM
3SWIMMING POOL
4LAUNDRY
5HOUSEKEEPING
6MINIMART
7RESTAURANT
Tenant’s preference
“ Opportunity continues to be at the CBD: Although decentralisation is a notable trend, best performers with highest occupancy are still those at the CBD.
”CBRE
34 CBRE MARKET INSIGHTS | Q2/2013
INDUSTRIAL AND LOGISTICSSmall and medium ready-built-factories draw more attention
FOREIGN TENANTS
LOCAL TENANTS
“ Demand for small and medium ready-to-move-in factory with rents about $3-$5 psm per month are recorded increasingly in the first two quarters.
Amata high tech park in Quang Ninh / VSIP active promotion in Central Vietnam, Quang Ngai.
Samsung / LGE as major magnets to draw investment from Korea / Japan vendors to North Vietnam.
Logistics continue to expand aggressively i.e. DHL.Enquiries from US / Europe stabilizes / pick up, focusing on RBF for both North and South Vietnam.
US IT / chip design seriously expands in HCMC and explore Danang as the 2nd tier city presence. ”CBRE
35 CBRE MARKET INSIGHTS | Q2/2013
INVESTMENT
Transferring realty projects has been much more transparent than before:
Vincom Center A, developed by Vingroup, was reported to have been sold to VIPD Group at VND9.8 trillion in Q1/2013 (US$460 mil)
In May 2013, Vingroup entered into an agreement to transfer 20% of Vincom Retail JSC, to Warburg Pincus, a global private equity firm focused on growth investing. The value of the transfer is expected of US$250 million.
In a further sign of increased capital markets liquidity, VinGroupappear to be re-structuring the ownership of the office component of Vincom Centre B, HCMC, in preparation for a further asset sale.
In Q1/2013, Mapletree Investments, owned by Temasek Holdings of Singapore, successfully bought Centre Point, an office building of the total GFA of 38,610 sm in Phu Nhuan District.
As the first project that is calling for sale publicly, Saigon Link marks a notable change in the behaviors as well as the mindset of developers. Transparent transactions and information will help to re-liquidate the market.
Thawing of Investment Market
SAIGON LINK
For more information regarding this presentation please contact:DUNG DUONG (Ms.)Associate DirectorT +84 8 3824 6125 – Ext. 1224F +84 8 3823 [email protected]