marketinsightshcmc q3 2014 en

8/10/2019 Marketinsightshcmc q3 2014 En

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5 CBRE MARKET INSIGHTS | Q3 2014

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Realty Stocks are Following Closely HCMC MarketRALLY STOCK MARKET

Source: Stockbiz, FPTS.

VNIndex:514

VNIndex: 640

614

Realty stocks


CBRE DASHBOARD PRODUCED MONTHLY

Source: Stockbiz, CBRE Vietnam.

Ye a r M o n th In de x In de x H CM M on th H NJan 41.20 48.9 0 Jan 920Feb 45.60 54.4 0 Feb 356Mar 44.30 64.4 648 Mar 262 Apr 47.20 100.0 0 Apr 616May 44.80 96.7 404 May 353Jun 45.00 72.2 0 Jun 1494Jul 45.20 56.7 417 Jul 901 Aug 43.60 54.4 799 Aug 300Sep 45.60 44.4 330 Sep 1514Oct 40.52 37.8 528 Oct 2397Nov 39.50 25.6 155 Nov 340Dec 37.80 26.7 207 Dec 220Jan 41.76 22.4 132 Jan 772Feb 41.90 24.4 0 Feb 779Mar 46.20 27.8 277 Mar 584 Apr 42.21 31.1 0 Apr 134May 45.39 26.6 165 May 0Jun 42.19 24.3 895 Jun 625Jul 41.30 23.8 301 Jul 622 Aug 41.49 21.1 885 Aug 234Sep 41.20 19.8 1061 Sep 870Oct 43.37 22.0 391 Oct 1538Nov 44.85 32.2 286 Nov 470Dec 45.66 42.0 1451 Dec 363

2014 Jan 49.17 38.5 312 Jan 419Feb 53.23 52.4 0 Feb 200Mar 58.70 60.0 410 Mar 1000 Apr 53.50 48.3 574 Apr 500May 52.44 49.5 714 May 1000Jun 51.16 48.6 775 Jun 50Jul 55.10 63.3 916 Jul 928 Aug 55.89 61.1 356 Aug 464Sep 53.32 54.0 1381 Sep 500

2013

H C M C N e w L a unc h H N N e w L a unc hE H o l d i n g D e v e l o p m e n t

2012

R E S e r v i c e


4/27


INTEREST RATES

Lower Lending Rates

Source: Smartfinance.

(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only. However, the back-dated numbers are theaverage rate which was announced publicly at that point of time, applied for all sectors and all banks . The average lending rate is for referenceonly.(**) Deposit rate is the average deposit rate of a sample of ten banks in which the rates are announced publicly on their websites and can betracked backwards.

13.1%*

6.8%**

0%

5%

10%

15%

20%

25%

Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep

2011 2012 2013 2014

I n t e r e s t r a

t e

Deposit rate (1 year term) Lending rate

Some banks offers lending rates of 7.5%- 8.5% for the first few months only.


CREDIT GROWTH

Reported Number in August 2014

Target for 2014

By the end of August 2014, credit to real estate market hasexpanded 9.85% against the beginning of this year, higherthan the credit growth of the whole economy (5.82%) andother sectors.

Source: State Bank of Vietnam, August 2014.

Poor credit growth is more about sentiment than a real problem. Pham Hong Hai, Head of Global Banking at HSBC, HCMC*All the above articles were retrieved in September 2014.


5/27


Positively Correlated with Stock MarketRECOVERING CONSUMER CONFIDENCE

ANZ Roy Morgan Vietnam Consumer ConfidenceIndex Expectation of Vietnam economic condition

Source: ANZ - Roy Morgan

Expectation of personal family financiallycondition


Sections in District 2

5 6

Progress of Metro Line No. 1INFRASTRUCTURE - HCMC

Section of Metro Line #1 from Thai Van Lung Str. to Ton Duc Thang Str.2

2

45

Section on Nguyen Huu Canh Str., near Van ThanhExpected completion date: January 23, 2017

3

2

3

4 Section on Dien Bien Phu Str., near Saigon Bridge

11 Opera House


6/27

RESIDENTIAL MARKETHCMC Q3 2014


Active Launches evenduring ghost month

New launches from 9projects (3,104 units)Most of new launches arefrom affordable and high-end segments

Most of re-launches areaffordable: Giai Viet, SaigonTown, Topaz Garden, 27Truong Chinh

A Busy Ghost Months Quarter CONDOMINIUMS FOR SALE

SaigonLand Apt. Hoan Cau144 units, $1,132-1,226/sm

Vista Verde (T1,T2) - CapitaLand695 units, $1,442-1,632/sm

Lexington (Blk D) NovaLand276 units, $1,350-1,410/sm

Green Valley (Blk B) PMH108 units, $1,420-1,610/sm

Sunview Town (Saphire) Dat Xanh330 units, $650-700/sm

Lucky Palace NovaLand356 units, $1,179-1,368/sm


7/27


CONDOMINIUMS FOR SALENew Launches in Q3 2014

Green Valley B

District 7, 108 unitsby Phu My Hung

@ $1,420 - 1,610/sm

Lexington Residence Block D

District 2, 276 unitsby NovaLand

@ $1,351 - 1,410/sm

Sunview Town - Sapphire

Thu Duc, 330 unitsby Dat Xanh

@ $650 $700/sm

Saigonland Apartment

Binh Thanh, 144 unitsby Hoan Cau

@ $1,1132 1,226/sm

8X Plus

District 12, 608 unitsby Viet Phat Hung Thinh

@ from $630 - $669/sm

Ehome 3 (A1 - A2)

Binh Tan, 380 unitsby Nam Long

@ from $650 - $850/sm

Tropic Garden A2


@ $1,389 - $1,636/sm

Vista Verde T1&T2

District 2, 695 unitsby Capitaland + Thien Duc

Co., Ltd.@ $1,442 - 1,1,632/sm

Lucky Palace


@ from $1,179 - 1,368/sm


Launch supply in 9 months 2014 surpassed whole year 2013CONDOMINIUMS FOR SALE

Source: CBRE Vietnam, Q3 2014.

New Launches by Year

0

5,000

10,000

15,000

20,000

25,000

2007 2008 2009 2010 2011 2012 2013 YTD 2014

U n i

t 8,393 unitsin 9 months


8/27


Impressive Sales PerformanceCONDOMINIUMS FOR SALE


Sales Performance of New Launches, Units

43% sold

25% sold

25% sold

8,393 units in 9M 20143,104 units in Q3 2014

~ 50% of new launchessold in the quarter

1High-end Mid-end Affordable


The Rise of Under planning DevelopmentsCONDOMINIUMS FOR SALE

Lucky Palace - District 6 356 units Developer: NovaLand

Topaz City - P1 - District 8 273 units Developer: Van Thai

Golf Park - District 9 90 townhouses + 5 villas Developer: NovaLand

Metropolis Thao Dien - District 2 3,000 units Developer: Thao Dien Investment

Vinhomes Central Park - Binh Thanh 10,000 units Developer: VinGroup

La Astoria - District 2 Condos + Townhouses Developer: An Gia Hung


9/27


Busy Activities in CBDCONDOMINIUMS FOR SALE

SG Waterfront D. 1By Canh Hung Hai Thanh

Leman C.T Plaza D. 3by C.T Group

C.T Plaza Saigon D. 1By C.T Group

Saigon Plaza D. 1By Quoc Cuong Gia Lai

The One D. 1By Bitexco

Lavenue Crown D. 1By May Flower

Eximbank Tower D. 1By EximLand

Nguyen Dinh Chieu D. 1By undisclosed developer



Prices Start IncreasingCONDOMINIUMS FOR SALE

-30%

-20%

-10%0%

10%

20%

30%

40%

2010 2011 2012 2013 2014

-6%

-4%

-2%

0%

2%

4%

6%

2011 2012 2013 2014

Luxury High-end Mid-end Affordable

Secondary price changes: Divergent

Primary price changes: Convergent

- Affordable: US$3,000 psm



10/27


Unit Size - Smaller CONDOMINIUMS FOR SALE

(*): First tier: Luxury and high-end products; Second tier: Mid-end and affordable productsSource: CBRE Vietnam, Q3 2014.

48 sm

50 sm

55 sm

65 sm

75 sm

91 sm

90 sm

110 sm

90 sm

110 sm

110 sm

125 sm

150 sm

250 sm

250 sm

300 sm

After 2012

Before 2012

After 2012

Before 2012

S e c o n

d t i e r

F i r s

t t i e r

1BR 2BR 3BR 4BR+

Condominium Unit Size Change (HCMC)

Unit sizes reducednotably in the Luxuryand High-end

segments


Unit Type Higher Proportion of 1-2 bedroom unitsCONDOMINIUMS FOR SALE

(*): First tier: Luxury and high-end products; Second tier: Mid-end and affordable productsSource: CBRE Vietnam, Q3 2014.

Condominium Unit Type Change (HCMC)

9%

7%

12%

3%

63%

59%

45%

35%

27%

27%

28%

45%

1%

7%

14%

16%

After 2012

Before 2012

After 2012

Before 2012

S e c o n

d t i e r

F i r s

t t i e r

1BR 2BR 3BR 4BR+

Proportion of 1BRand 2BR typesincreasedsignificantly


11/27


Positioning Shift to Affordable Segment - HCMCCONDOMINIUMS FOR SALE

(*): Accumulative launches since 1999, including both completion and under construction units, sold and unsold units.


Befor e 2010 Af ter 2010

31%

31%

37%

1%

48%

24%

27%

1%

Luxury

High-end

Mid-end

Affordable

Total Launched Unit* (HCMC)


Transactions on the RiseCONDOMINIUMS FOR SALE

Sales volume in Q3 continued to increase despite the ghost monthHigh-end and affordable made up the largest proportions.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012 2013 2014

S o l

d u n i t


Sold Unit by Quarter and by Segment, HCMC



12/27


Unsold Unit DiminishingCONDOMINIUMS FOR SALE

Unsold Unit by Year and by Segment, HCMC

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

2011 2012 2013 YTD 2014

U n i

t




High rental yield encouraging investorsCONDOMINIUMS FOR SALE

(*) Selected projects:District 7: Sunrise City, Sky Garden, Panorama;District 2: Xi Riverview Palace, The Estella, The Vista

Source: CBRE Vietnam.

Rental yield at selected high-end projects

7.4%

7.5%

7.7%

7.8%

8.0%

8.1%

7.0%

7.2%

7.4%

7.6%

7.8%

8.0%

8.2%

2012 2013 Q2 2014

District 7 District 2

YTD 2014


13/27


Future Launches in the next 6 MonthsCONDOMINIUMS FOR SALE

Future Launches in the Next 6 Months

Ehome 6 District 9 500 units Expected price: N/A psm Developer: Nam Long

Docklands Saigon District 7 365 units Expected price: N/A Developer: Paujar

TOPAZ CITY P1 District 8 273 units Expected price: US$700 psm Developer: Van Thai

SUNVIEW TOWN A3 Thu Duc 330 units Expected price: ~US$620 psm Developer: Dat Xanh Group

Scenic Valley D2, E1* District 7 270 units Expected price: N/A psm Developer: Phu My Hung


Outlook for HCMCCONDOMINIUMS FOR SALE

More stock expected to be released till year-end to capture slowly revivedpurchase momentum

Increasing sales volume pushing prices up.

Buy-to-let investors back to the market.

The East of HCMC continues to be the most sought-after area thanks to

improving infrastructure.


14/27

COMMERCIAL MARKETSHCMC Q3 2014


MB SUNNY TOWER

Limited New SupplyOFFICE

0

50

100

150

200

250

300

350

G F A ( 0 0 0 s m

)

Grade A Grade B

New Supply by Year, HCMCAN PHU PLAZA EMPRESS TOWER TIMES SQUARE

PRESIDENT PLACE


SAIGON ARIPORTPLAZA

PICO SAIGONPLAZA

LIM TOWER


15/27


0%10%20%30%40%50%$0$5$10$15$20$25$30$35

Rent Up, Vacancy DownOFFICE


AVERAGE ASKING RENT(US$/sm/month)

VACANCY RATE(%)

2014Q3Q2Q1

2013

Q4Q3Q2Q1

2012

Q4Q3Q2Q1

2011

Q4Q3Q2Q1

GRADE B GRADE A GRADE B GRADE A

$0 $5 $10 $15 $20 $25 $30 $35

2014Q3Q2Q1

2013

Q4Q3Q2Q1

2012

Q4Q3Q2Q1

2011

Q4Q3Q2Q1

0% 10% 20% 30% 40% 50%


-10%

-5%

0%

5%

10%

15%

20%

M a n

i l a

S i n g a p o r e

H o

C h i M i n h C i t y

N e w

D e l

h i

K u a

l a L u m p u r

T a i p e i

S e o u l

A u c

k l a n

d

B a n g k o k

S h a n g

h a i

G u a n g z h o u

B e i

j i n g

S y d n e y

T o k y o

H o n g

K o n g

M e l

b o u r n e

H a n o i

M u m

b a i

B r i s

b a n e

Rental Growth, H1 2014 Forecast Rental Growth, 2014

APAC Rental GrowthOFFICE

(*) Forecasted at the end of 2013Source: CBRE Research, August 2014.

Better than expected In line with expectations Lagging behind expectations

*


16/27


0

10,000

20,000

30,000

40,000

50,000

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

2011 2012 2013 2014

N L A ( s m

)

Grade A Grade B

Very Restricted New Supply -> Limited Leasing OptionsOFFICE


Net absorption perquarter 3-year average

Grade A & B Net Absorption, Q3 2014


Tenant CategoriesOFFICE

Source: CBRE Vietnam, Q3 2014.Number is calculated based on CBREs enquiries only

By Industry, Q3 2014 By Nationality, Q3 2014

By Size

17%

23%

35%

37%

28%

30%

19%

10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

YTD 2014

20131000 sm

23%

19%

10%7%6%

6%

29%

Manufacturing

Finance & Consulting Services

EducationSourcing

Logistic

Technology/Electronic

Others

29%

23%19%

7%

6%

16%US

Europe

Vietnam

Hong Kong

Japan

Others


17/27


Tenant PreferencesOFFICE

The percentage is based on net absorption recorded in each district per year


2014

Limited centralised supplyresulting in decentralisationand consolidation outsideCBDRents softening in centralised

areas => opportunities toupgrade or relocate to coreCBDDecentralisation trend to new,

good quality non-CBDbuildings

District 1

District 3

District 7 and Tan Binh

Others

2012

58%

9%

18%

15% 2013

75% 5%

17%

3%

42%

2%

41%

15%


Future SupplyOFFICE

SSG TOWER561A Dien Bien Phu St, Ward 25,Binh Thanh.GFA: 37,434 sm

Estimated completion: Q3/2015

VIETCOMBANK TOWER5 Melinh Square, D1

GFA: 55,000 smEstimated completion: Q2/2015

VIETTEL OFFICE & TRADECENTER285 Cach Mang Thang Tam, D10GFA: 65,971 sm

Estimated completion: Q2/2015

LIM TOWER 2158 Vo Van Tan, D3GFA: 20,467 sm

Estimated completion:Q1/2015


18/27


0

500,000

1,000,000

1,500,000

2,000,000

2012 2013 2014 2015f 2016f 2017f

G F A ( s m

)

Grade B Grade A

HCMC Future SupplyOFFICE

Limited supply in the last quarter of 2014

3 large projects completed in 2015, most of which are pre-committed or partially

owner occupied

Total supply is projected to reach 1.4 mil sqm by Q4/2015

New Supply by Year, HCMC


Total 332,538 sm GFA added


Outlook for HCMCOFFICE

Average rent remain stable till the end of the year.

The vacancy rate will fluctuate (slightly) but still on an overall downwardtrend.

Steady demand for office spaces on the back of positive market condition.Budget is still the matter.

Limited new supply will come from large scale, mixed use projects and from

those projects developed partly for owner- occupation.


19/27


Saigon Tax Trade Center to a Iconic Mixed-Use DevelopmentRETAIL

40-storey skyscraper Shopping centre:5 floors + 1.5 basements

Retail GFA: 40,159 sm

Officially closed inSeptember 25, 2014

Expect to open in 2018


New OpeningsRETAIL

* Opens a 1,200 smflagship store in VincomCenter B in Sept 2014

* 1st

store in HCMC Vietnamin Dong Khoi Street, District1, in Q3 2014.

New Openings by Trade, Q3 2014


0%

20%

40%

60%

80%

100%

Q2 2014 Q3 2014

% i n t e r m s o f

N L A

, s m

Others Home dcor

Kids CosmeticsF&B Fashion & Accessories

* Open soon in Crescent Mallin November 2014


20/27


Rent and Occupancy Improved in CBDRETAIL


AVERAGE ASKING RENT(US$/sm/month)

VACANCY RATE(%)

2014Q3

Q2

Q1

2013

Q4

Q3

Q2

Q1

2012

Q4

Q3

Q2Q1

NON-CBD CBD

30 50 70 90 11030507090110

-4%

2%

8%

14%

20%

(20,000)

-

20,000

40,000

60,000

2012 2013 2014

N e t a b s o r p

t i o n

( N L A

, s m

)

Net Absorption (sm) Vacancy Rate (%)


Future SupplyRETAIL

Thao Dien PearlDistrict 2GFA: 20,400 sm3 floors

Completed. Leasing

Expect to Complete/ Open in 2014 - 2015

Sunrise City Phase 2District 7GFA: 23,739 sm 4 floorsTopped out

SC VivoCity District 7 GFA: 72,000 sm 1 basement, 5 floors

Fitting out. Leasing.


21/27


Future SupplyRETAIL

Viettel Office &Trade Center District 10 GFA: 15,025 sm

4 floors Under-construction.Leasing.

Lman CT PlazaDistrict 3GFA: 12,000 sm 6 floors

Under-construction.Parkson

Expect to Complete/ Open in 2014 - 2015

SSG Tower Binh Thanh DistrictGFA: 20,500 sm 6 floors

Under-construction.

Lim Tower 2 District 3 GFA: 6,519 sm 5 floors

Under-construction.


0200400

600800

1,0001,2001,400

1,6001,8002,000

T o k y o

B

a n g k o k

B e i

j i n g

K u a

l a L u m p u r

N e w

D e l

h i

S h e n z

h e n

H a n o i

G u a n g z

h o u

S h a n g

h a i

S y d n e y

S i n g a p o r e

M a n

i l a

M e l b o u r n e

J a k a r t a

B r i s

b a n e

M u m

b a i

H o

C h i M i n h C i t y

A

d e l a i d e

H o n g

K o n g

P e r

t h

T a i p e i

A u c

k l a n

d

W e l

l i n g t o n

D e v e l o p m e n

t P i p e l

i n e (

0 0 0 s m

) 2015 2014

APAC Development PipelineRETAIL

Development Pipeline, Q2 2014

Source: CBRE Research Q2 2014.


22/27


Outlook for HCMCRETAIL

F&B and supermarket are necessary elements in any modern shopping

center

Street front shops and boutiques still maintain their uniqueness andattractiveness

Retail space in the CBD is in high demand in spite of high rents due tobig retailers preferences, particularly new entries.

Luxury shopping centers should create better tenant mix and offer moreprofessional services to serve sophisticated and discerning customers.


Vacancy Rate/Asking RentSERVICED APARTMENTS


Both grades stopped the downwards trend in pricing with minor improvement(up 0.5% for Grade A and 0.3% for Grade B) due to better absorption.

Larger units tended to revise the rent down in order to retain tenants.

Achieved Rent 1 bedroom (US$/month) Achieved Rent 2-3 bedrooms (US$/month)

$1,600

$1,800$2,000

$2,200

$2,400

$2,600

Q4/2013 Q1/2014 Q2/2014 Q3/2014 R e n

t s ( U S $ / m o n

t h )

Grade A 1BR Grade B 1BR

$2,600

$3,100

$3,600

$4,100

Q4/2013 Q1/2014 Q2/2014 Q3/2014 R e n

t s ( U S $ / m o n

t h )

Grade A 2-3BR Grade B 2-3BR


23/27


Vacancy Rate/Asking RentSERVICED APARTMENTS


Q3 market-wide vacancy matched the long-term average line.

Vacancy Rate (%)

0%

5%

10%

15%

20%25%

30%

2012 2013 2014

Current Vacancy (%) Long-term Average


Occupiers SentimentsSERVICED APARTMENTS

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

2010

2011

2012

2013

9M 2014

District 1 District 2 District 3

District 7 Binh Thanh Others

CBRE Enquiries by Location


24/27


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

Q1/2013

Q2/2013

Q3/2013

Q4/2013

Q1/2014Q2/2014

Q3/2014

US$0 -$1000 US$1000 - $2000 US$2000 - $4000US$4000 - $6000 US$6000+

Occupiers SentimentsSERVICED APARTMENTS

Emergence of deep-pocket enquiries (US$6,000 - $10,000),up 2.5 times q-o-q.

Source: CBRE Vietnam, Q3 2014, based on CBREs enquiries.

CBRE Enquiries by Housing Budget


Buy to let trendSERVICED APARTMENTS

In order to attract more buyers, developers of newlybuilt building in Hanoi are also offering moreincentives, including being prepared to take on newly-bought apartments and putting them out to lease.

Vietnam Investment Review


25/27


Outlook for HCMCSERVICED APARTMENT

Average rent will remain flat

The vacancy rate will fluctuate slightly due to limited major new supply

Shift from Asian tenants back to the Westerners.The first sign of deep-pocket tenants in the last 3 years.

Increasingly fierce competition from the buy-to-let alternatives and a possibledrop in number of expatriates working in HCMC.


AEON BINH TAN

Address: International Hi-tech

Healthcare Park, Binh Tan, HCMC

Scale: 4.7 ha

Price: $8.7 million

Seller: Aseana Properties JV Hoa Lam

Buyer: Aeon Mall

STORY ON THE MARKET, Q2 2014

Source: RCA, retrieve d July 1, 2014

HANOI TIMES TOWER(*)

Address: Van Phu, Ha Dong, Hanoi

Scale: 1.3 ha

Amount: $15.4 million

Investor/Lender: Ocean Bank

Owner: Petro Vietnam

*Refinancing transaction

INDOCHINE PARK TOWER

Address: 1 Le Quy Don, D1, HCMC

Scale: 55 units serviced apartments

Price: $14.3 million

Seller: Mulpha International Bhd

Buyer: Lemongrass Master Fund

DEVELOPMENT SITE

KHU T D N


26/27


27/27


Vietnam keeps appealing to Korean investorsINVESTMENT

Domestic63%

Japan6%

Korea13%

Offshore4%

Singapore8%

Taiwan2%

Thailand4%

Domestic54%

Hong Kong15%

Japan2%

Korea13%

Malaysia3%

Netherlands5%

Offshore8%

Domestic

Hong Kong

Japan

Korea

Malaysia

Netherlands

Offshore

(blank)

Data recorded during the period of 2011- YTD 2014Source: RCA, retrieved Sep 2014

BUYERS SELLERS

Singapore

Taiwan

Thailand

Every week NEWSPAPER UPDATESEvery month DASHBOARD

Every quarter QUARTERLY REPORT

At CBRE, we live and breathethe business of real estate

For more information regarding this presentation please contact:CBRE Vietnam Co., Ltd.Research & Consulting

T +84 8 3824 6125F +84 8 3823 [email protected]

marketinsightshcmc q3 2014 en

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