IF NOT NOW, WHEN? · Foreign tourists Growth rate 6M VN-Index Price chart 6M foreign tourists to Vietnam increased 21% y -o-y Stable FDI disbursement in 6M 2014 Strong export of mobile

Presented by: Marc Townsend, Managing Director, CBRE Vietnam

July 11, 2014

IF NOT NOW, WHEN?

www.kiribane.com

2 IF NOT NOW, WHEN? | Q2/2014

TIME TO LOOK FOR A SUBSTITUTION

Lessons learnt from the Big Game

Dream huge.

If your goalkeeper has let in four

goals in seven minutes,

substitute him immediately.

German discipline in, Brazilian

flair out.

Short back & sides beats long &

lanky

Business is business, do not get

sentimental

Team work is more important

than one individual

And finally, always have a Plan B. Scolari to Vietnam???


EAST SEA TENSION


INCREASING INTEGRATION AND INVESTMENT

Samsung Wins License for $1 Billion Factory to Produce High-Resolution Displays


FOREIGN DIRECT INVESTMENT Increased FDI to real estate

Large real estate FDI

project, 6M 2014 Location

US$

million Investors

Mixed-use development VSIP Binh Hoa – Binh Duong 99.6 Singapore investor

Residential project Ward 22, Binh Thanh, HCMC 200 Sun Wah Vietnam Real Estate

Limited (Hong Kong)

Alma Resort Khanh Hoa 300 Alma Group (Israel)

Flowers Resort Cam Ranh, Khanh Hoa 89 State Development Co. (Russia)

Starlake Tay Ho District, Hanoi 234 T.H.T.

6M 2014: FDI in real estate US$692

million, up 65% y-o-y

70%

10%

7%

13% Manufacturing

Real estate

Construction

Others

FDI Structure, 6M 2014


FREE TRADE AGREEMENTS (FTA) To ensure sustainable economic growth

“ TPP would increase

Vietnam’s GDP in 2025 to

28.4% more than GDP

without TPP’s support.

Likewise, export value

would be more than 35.7%.

” United States Department of Commerce

Vietnam – EU FTA negotiations are undertaken at a greater urge towards the aim of

concluding the negotiation in 2014.

Currently, only 42% of Vietnam products are applicable to EU's GSP. However, if the

FTA with the EU is finalized, at least 90% Vietnam products can enjoy the tax rate of 0%.

Marc Townsend went to Washington to

lobby on behalf of TPP and Eximbank

reauthorization.


350

450

550

650

Jan

-14

Fe

b-1

4

Ma

r-1

4

Ap

r-14

Ma

y-1

4

Jun

-14

VN

Ind

ex

Fluctuated in short term but still remained strong

ECONOMIC INDICATORS

Tensions with

China

-

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 6M 2014

US

$ m

illio

n

FDI registered FDI implemented

0%

10%

20%

30%

40%

0

2

4

6

8

2010 2011 2012 2013 6M 2014

Gro

wth

rate

(%

)

Mill

ion

pe

op

le

Foreign tourists Growth rate

6M VN-Index Price chart 6M foreign tourists to Vietnam increased 21% y-o-y

Strong export of mobile phones in 6M 2014 Stable FDI disbursement in 6M 2014

16%

13%

7%

6% 6% 5% 5%

42%

Mobile phones and appliances

Garments & textiles

Shoes

Electronics, computers and parts

Crude oil

Seafood

Machinery and parts

Others

In 6M 2014, export of mobile phones was US$11.7 billion , an

increase of 18% y-o-y.


VIETNAM GROWTH OUTLOOK

World Bank maintained

Vietnam GDP growth

outlook in 2014 as of

5.5%.

Medium- and long-term economic prospects remain positive

Vietnam’s Business Climate Index on

upward trend

EuroCham Business Climate Index


GOVERNMENT MEASURES On the move

VAMC:

• Total VND49 trillion NPLs bought in 6M 2014,

increasing VND10 trillion from Dec. 2013.

• In April, the system’s NPL ratio was 4.03%, up

from the 3.74% recorded in January

• Target to buy about VND70 trillion–100 trillion in 2014.

• Considering selling NPLs to foreign investors. The first

batch of NPLs is expected to be available for investors

in the third quarter.

VND30trillion stimulus package: 7% disbursed,

up from 4% reported end Feb 2014.

The SBV estimated 2014 capital inflows at US$26

billion, more than sufficient to cover trade deficits.

SBV continues to purchase FX in order to rebuild its

reserves

SBV devaluated the dong 1% on 19 June 2014 to

spur exports.

Fiscal policy

FX policy

Monetary policy

17,000

18,000

19,000

20,000

21,000

22,000

De

c-1

0

Ju

l-1

1

Fe

b-1

2

Sep

-12

Apr-

13

No

v-1

3

Ju

n-1

4

VN

D t

ho

usa

nd

Cumulative disbursement of VND30trillion package USD/VND Interbank Exchange rate

0

500

1,000

1,500

2,000

2,500

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Ja

n-1

4

Fe

b-1

4

Ma

r-1

4

Ap

r-1

4

Ma

y-1

4

VN

D b

illio

n


Keep going down

BCI NUMBERS

All Future

Projects

(2014-2025)

HCMC Hanoi Da

Nang

Can

Tho

Nha

Trang

Vung

Tau

Hai

Phong

Office 188 359 63 30 12 27 14

Retail 85 189 33 3 10 21 2

Hospitality

and SA 26 45 34 4 34 19 8

Residential 252 390 133 11 18 26 15

Total 551 983 263 48 74 93 39

Retreived on June 27, 2014 Source: www.bciasia.com; CBRE

Projects under construction, y-o-y change All future projects (2014 – 2025), y-o-y change

Projects

Under

Construction

HCMC Hanoi Da

Nang

Can

Tho

Nha

Trang

Vung

Tau

Hai

Phong

Office 107 118 15 6 5 8 2

Retail 49 42 4 1 3 7 0

Hospitality

and SA 14 8 13 0 9 8 0

Resi 119 101 14 1 4 7 2

Total 289 269 46 8 21 30 4

-50%

-40%

-30%

-20%

-10%

0%HCMC Hanoi

DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Perc

enta

ge c

hange

Compared to 1H 2013 Compared to 2013

-100%

-50%

0%

50%

100%

150%

HCMC Hanoi DaNang

CanTho

KhanhHoa

VungTau

HaiPhong

Perc

enta

ge c

hange

Compared to 1H 2013 Compared to 2013

http://www.bciasia.com/


HANOI CBD

HA DONG BUS

STATION

Progress of Metro Line No. 2

INFRASTRUCTURE - HANOI

Elevated Ring Road (Under planning)

Major Artery (Completed)

Ring Road (Completed)

Elevated Ring Road (Completed)

UMRT Line 2 (Under Construction)

Giai

Phon

g Rd

.

1

4

2

4

3

3

5

5

Section on Dong Da Lake

Section on Nguyen Trai

street, intersect RR #3

Section on Nguyen Trai

street, near Royal City Section on Nguyen Trai street, Ha Dong District.

Expected completion date: September 2015

2 1

THANH XUAN

DONG DA


INFRASTRUCTURE - HANOI More bridges coming online

3

Thanh Tri Bridge

Vinh Tuy Bridge

Chuong Duong Bridge

Nhat Tan Bridge

Thang Long Bridge Dong Tru Bridge

Exp. comp. Oct 2014

Exp. comp. Oct 2014

Nhat Tan Bridge (8.9 km)

Dong Tru Bridge (1.1km)

HA DONG HOANG MAI

TU LIEM

TAY HO

CAU GIAY


Progress of Metro Line No. 1

INFRASTRUCTURE

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

1

4 5

Section on Nguyen Huu Canh Str., near Van Thanh

Expected completion date: January 23, 2017

2

2

3

Sections in District 2

4 5

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


Thu Thiem New Urban Area

INFRASTRUCTURE

Thu Thiem in the past

Thu Thiem today (pix taken in Jul 2014)


INFRASTRUCTURE Ports in HCMC replaced by mixed-use projects

Saigon New Port

Relocated to Cat Lai Port (2008)

and relocating to Cai Mep Port

Operation stop: May 2015

Converting to mixed-use projects

Partnered with Vingroup

1

Khanh Hoi - Nha Rong Port

To be converted in Q1 2016.

Partnered with Vingroup

2

Ba Son Shipyard

Waiting for approval on 1/500 plan

Ba Son site will be auctioned.

3

1

2

3

RESIDENTIAL MARKET


Total Supply*

CONDOMINIUMS FOR SALE

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

Source: CBRE Vietnam, Q2 2014.

125,917 units

105,001 units

1%

29%

29%

41%

2%

18%

29%

30%

21%

Higher price for the same

product quality due to higher

land cost than HCMC. AFFORDABLE

MID END

HIGH END

LUXURY

HCMC HANOI


Prices become more competitive, so are payment terms


Source: CBRE Vietnam.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014

Se

co

nd

ary

askin

g p

rice

(U

S$

psm

)

High-end Mid-end Affordable

HCMC HANOI

Condominiums for Sale, Secondary Asking Price, US$ psm


Sales transactions increased steadily



79% of units sold in Hanoi are completed unit.

Mid-end sales sharply increase due to:

More launches with lower prices

Aggressive sales strategies at existing projects.

Sold Units by Year and by Segment

0 500 1,000 1,500 2,000 2,500 3,000

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2012

2013

2014

Luxury High-end Mid-end Affordable

04008001,2001,6002,0002,4002,8003,200 0 400 800 1,200 1,600 2,000 2,400 2,800 3,200

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

20

12

20

13

20

14

HCMC HANOI


-

5,000

10,000

15,000

20,000

25,000

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

2013 2014 2013 2014

Luxury High-end Mid-end Affordable

Unsold stocks decreased steadily


(*) Unsold unit excludes suspended projects.


Despite increasing launches, unsold units decreased steadily since Q4 2013.

Unsold stock concentrated on mid-end segment in Hanoi due to extremely slow construction of some

existing projects driven by financial shortage.

HCMC HANOI

Unsold Units (*) by Year and by Segment


80% of units with

value above

US$47,000/unit

Hanoi - Supply not yet in sync the mass market


Total supply

125,917 units

Unsold units

Majority of current stocks with unit value above US$47,000/unit

due to:

Large unit size

Mostly high-end and mid-end projects

19%

47%

35%

Completed

Under construction

Pending


16% 84%

Total unsold units

Total sold units

50%

36%

15%

44% 39%

17%


Hanoi real demand outstrips supply


7.1 mil. ppl in Hanoi

3.2 mil. ppl in

working age* 3.1 mil. ppl

employed

Less than

10,000

condos

<US$47k/unit

300,000** ppl

need houses

DEMAND SUPPLIED (*) GSO: 4.1 mil. people in working age above 15 years old.

CBRE: assumed 3.1 mil. people in working age above 18 years old

(**) It is assumed that 10% of employed people need houses,

including 40,000 new married couples per year

Source: General Statistics Office and CBRE Vietnam’s assumption


Unit sizes – Adapting to a new reality


(*): First tier: Luxury and high-end products; Second tier: Mid-end and affordable products


Common condominium unit sizes

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

Seco

nd t

ier

Fir

st tie

r

1BR 2BR 3BR 4BR+


FLC Garden City

Nam Tu Liem District

1,100 units

Expected price: US$563 psm

(Developer: FLC Group

Future launches in 2H 2014


Docklands Saigon

• District 7

• 365 units

• Expected price: N/A

• Developer: Paujar

Ehome 6

• District 9

• 500 units

• Expected price: US$755 psm

• Developer: Nam Long

Vista Verde • District 2

• 200 units (Phase 1)

• Expected price: US$1,400 psm

• Developer: JV CapitaLand,

Thien Duc

Sunview Town - Sapphire

• District 9

• 330 units

• Expected price: US$684 psm

• Developer: Dat Xanh Group

HCMC HANOI

FLC Complex • Cau Giay Dist.

• 38 stories

• Expected price:

US$981 psm

• Developer: FLC Group

Golden Silk (To be re-started)

Hoang Mai District

No. of units: N/A

Expected price: N/A

Developer: Vinaconex 2

COMMERCIAL MARKETS


Rent – marginal increase in HCMC and decrease in Hanoi

OFFICE

Source: CBRE Vietnam, Q2 2014

HC

MC

$0

$10

$20

$30

$40

$50

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

2010 2011 2012 2013 2014

Ave

rage

askin

g r

en

t (U

S$

/sm

/mo

nth

)

Grade A Grade B

Han

oi

$0

$10

$20

$30

$40

$50


2010 2011 2012 2013 2014

Ave

rage

askin

g r

en

t (U

S$

/sm

/mo

nth

)

Grade A Grade B


Vacancy Rate

OFFICE


HC

MC

H

an

oi

0%

10%

20%

30%

40%

50%


2010 2011 2012 2013 2014

Va

ca

ncy r

ate

(%

) Grade A Grade B

0%

10%

20%

30%

40%

50%


2010 2011 2012 2013 2014

Va

ca

ncy r

ate

(%

)

Grade A Grade B


Net absorption below 3-year average

OFFICE


0

20,000

40,000

60,000

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

2011 2012 2013 2014

NLA

(sm

)

Grade A Grade B

Net absorption per quarter 3-

year average

0

20,000

40,000

60,000

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

2011 2012 2013 2014

NLA

(sm

)

Grade A Grade B

Net absorption per quarter 3-

year average

HC

MC

H

an

oi


Within APAC market

OFFICE

Y-o-Y CHANGE IN PRIME RENT

THE AMERICAS ASIA PACIFIC EMEA

+3.3% +2.9% -0.1% TOP 5 GROWTH MARKETS

19.40%

12.50%11.00%

10.30% 10.20%

Seattle Subburban

San Francisco

Downtown

San Francisco

Peninsula

Houston Suburban

Houston Downtown

15.80%

13.50%

7.70% 7.30%

5.70%

Dublin LondonWest End

Lille Gothenburg Rotterdam

60.10%

16.70%

13.40%

9.30%7.90%

Jarkarta* Kuala Lumpur

Seoul Yeouido

Manila Ho Chi Minh City

Prime rent definition: average asking rent at top three office buildings in the market. In HCMC, top three buildings include Saigon Tower,

Kumho Asiana Plaza and Sunwah Tower

EMEA: Europe, Middle East and Africa

*Leases in Jakarta are typically written in U.S. dollars, but paid in rupiah, which means the occupancy cost increase is greatly affected by

currency depreciation in Indonesia.

Source: CBRE Global, Q1 2014

Jakarta*


Tenant categories

OFFICE


Number is calculated based on CBRE’s enquiries only

New letting: New business start-up, newly opened offices/branches

HCMC, by Industry Hanoi, by Industry

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

HCM

HN

<100 100-300 300-1000 >1000

HCMC and Hanoi, by Deal Size

26%

17%

13%9%

9%

26%

Finance/consultancy

Pharmaceutical

Manufacturing

Technology/Electronic

Cosmetic

Other

Finance/Consultancy

Technology/Electronics

Cosmetics

26%

19%

6%5%1%

43%

Technology/Electronic

Finance/Consultant

Construction/real estate

Pharmeceutical

Legal

Other

Pharmaceutical

Finance/Consultancy

Construction/Real estate

Technology/Electronics


Ho Chi Minh

City

Hanoi

Tenant nationality

OFFICE

Source: CBRE’s enquiry number

Number is calculated based on CBRE’s enquiries only

U.S. EMEA APAC

9% 15% 76%*

U.S. EMEA APAC

30% 20% 50%**

**In which 13% are from Vietnam, 37% are from other countries

*In which 58% are from Vietnam, 18% are from other countries


Floors available for sale/long term lease

OFFICE

Address: 45A Tran Thai Tong Street, Cau Giay Dist.

GFA: 61,400 sm

NLA: 38,957 sm

Height: 25 floors

Completion: Q3 2013

Average asking price: US$1,800/sm/50 years

PVI Tower

ICON4 Tower

Address: 243A La Thanh Str, Dong Da Dist.

GFA: 52,656 sm

Typical floor plate: 1,200 sm

Height: 25 floors

Completion: Q2 2012


Eurowindow Multicomplex

Address: 27 Tran Duy Hung, Cau Giay Dist.

GFA: 10,000 sm

Floor plate: 1,500 sm

Height: 25 floors

Expected completion date: Q3 2013



Future supply

OFFICE

HCMC

Vietcombank Tower

5 Melinh Square, D1

GFA: 77,000 sm

Expected completion:

Q4/2014

Viettel Office & Trade

Center

285 CMT8, D10

GFA: 65,971 sm

Estimated completion:

Q1/2015

Lim Tower 2

158 Vo Van Tan, D3

GFA: 20,467 sm


Q1/2015

SSG Tower

561A Dien Bien Phu St, Ward

25, Binh Thanh.

GFA: 37,434 sm

Estimated completion: Q3/2015

Lotte Center Hanoi

Lieu Giai Street, Ba Dinh Dist

GFA: 65,000 sm


Q3/2014

Handico Tower

Me Tri NUA, Tu Liem Dist.

GFA: 29,040 sm

Expected completion: 2014

147 Hoang Quoc Viet

147 Hoang Quoc Viet, Cau

Giay Dist.

GFA: 39,419 sm

Estimated completion: 2014

Ho Guom Plaza

Mo Lao NUA, Ha Dong Dist.

GFA: 12,000 sm

Estimated completion: 2014

HANOI


New retailer entries & expansions

RETAIL

New retailer entry

Robins department store

Expansion

• Opened 20th store in Q2

2014.

• 1st store in Hanoi in July

• 3 restaurants open in

HCMC in 2014.

• Opened 8th store in

HCMC and to open 1st

store in Hanoi in Q3

2014.

• 1st shopping center in

Hanoi in March, 2014

• 2nd store in Hanoi in

September 2014

• To open 2nd mall in Binh

Duong in Q4 2014.

• 1st mall in Hanoi in 2015

• 1st store in Hanoi, 10,000 sqm in Vincom Megamall Royal City,

opened in March 2014

• 2nd store in HCMC, 12,000 sqm in The Crescent Mall, expected to

open in Nov 2014.


Vietnam remained above the average in terms of global consumer

confidence

RETAIL

80

90

100

110

120

130

140

Indonesia Philippines Thailand Singapore Vietnam Malaysia Global

Co

ns

um

er c

on

fid

en

ce

Q2 2013 Q3 2013 Q4 2013 Q1 2014


-

20

40

60

80

100

120

140

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

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

2012 2013 2014 2012 2013 2014

US

$/s

m/m

on

th

NL

A, sm

Occupied space Vacant space CBD average rent Non-CBD average rent

Rent decreases, vacancy increases

RETAIL


HCMC HANOI

Rent and Vacancy


HCMC and Hanoi are top targets to open stores in 2014

RETAIL

Source: CBRE Survey – How Active are Retailers in Asia Pacific 2014?

Top 10 CITIES where retailers intend to open stores in 2014


Future supplies with GFA greater than 20,000 sm

RETAIL

SC VivoCity

• District 7

• GFA: 72,000 sm

• Superstructure U/C. Leasing underway.

• To open in 2014

Sunrise City Phase 2

• District 7

• GFA: 25,000 sm

• Superstructure U/C.

• To open in 2015

SSG Tower

• District 3

• GFA: 20,500 sm

• Superstructure U/C.

• To open in 2015

HCMC HANOI

Mo Market

• Hai Ba Trung District

• GFA: 24,300 sm

• Fitting out.

• To open in 2014.

Ho Guom Plaza

• Ha Dong District

• GFA: 23,400 sm

• Completed. Leasing.


Lotte Hanoi Center

• Ba Dinh

• GFA: 20,000 sm

• Completed. Leasing.


Ciputra Mall Hanoi

• Tay Ho

• GFA: 130,000 sm

• Under planning.

• To open in 2015

Aeon Mall

• Long Bien district

• GFA: 108,000 sm

• Under construction.

• To open in 2015

Vincom Nguyen

Chi Thanh

• Dong Da

• GFA: 65,400 sm

• Under construction.

• To open in 2015


0

100,000

200,000

300,000

Ja

n

Fe

b

Ma

r

Apr

Ma

y

Ju

n

Ju

l

Aug

Sep

Oct

Nov

Dec

Ja

n

Fe

b

Ma

r

Apr

Ma

y

Ju

n

2013 2014

China tension – acute indigestion for tourism industry

HOTEL

Source: Vietnam Tourism Department

Number of Chinese Arrivals to Vietnam by Month

In June M-o-m change:

↓ 29.5% in Chinese tourist

↓ 19.9% in International tourist

Y-o-y change:

↑ 5.5% in Chinese tourist

↓ 4.9% in International tourist

14 out of 15 chartered flight routes between China and Da Nang cancelled until at least Sep 2014.

HOWEVER:

Korean Air increased from 4 flights/week (2013) to 7 flights/week (2014);

New route Narita – Da Nang (operated by Vietnam Airlines) with 4 flights/week, will open from July 16;

Re-operate route Kuala Lumpur – Da Nang by late August.


Ho Chi Minh

City

Hanoi

HOTEL Big investments are seeping into hospitality sector

• Acquired project from Ha Do Group

Source: Compiled from various sources

POSITION INVESTORS /

DEVELOPERS COMPONENTS VALUE

Sapa Sun Group

• Fansipan cable car

• Hotel

• Entertainment complex

$206 mil.

Hanoi Thanh Hoa

Construction Corp. * • 4-star Hotel -

Quang

Ninh

Nakheel

Sovico Holding • Urban- tourism complex $550 mil.

VinGroup • Resort complex $45 mil.

ISC Corporation

Tuan Chau

• Casino

• Recreation complex $7,000 mil.

Hai Phong VLC • 200-room hotel/Accor

• 24 serviced apartments -

Thanh Hoa FLC Group • 18-hole golf course,

• Resort complex $257.5 mil.

Phu Yen Vung Ro Petroleum • Resort complex $2,500 mil

Phu Quoc

VinGroup • 27-hole golf course

• Resort complex $796 mil.

CEO Group • Resort complex

• 406-room Hotel (Novotel) $210.7 mil.

BIM Group • Resort complex

• 400-room Hotel (Crowne Plaza) $70.2 mil


New airport

115 Flights per week (current capacity)

187 max pax per flight (current capacity)

760,000 max pax per year (current capacity)

2,700,000 max pax per year (expected capacity in 2020)

The rise of Phu Quoc Island

HOTEL

Old airport

100 Flights per week

90 max pax per flight

450,000 max pax per year

NEW INTERNATIONAL AIRPORT

50-60% ENERGY COST DROPS WITH POWER

CONNECTED TO NATIONAL GRIDLINE

LARGE-SCALE PROJECTS LINING UP

Vinpearl Phu Quoc

Salinda Premium Resort & Spa

Lower expected ADR => Phu Quoc become more attractive destination

Increasing operating revenue as energy

cost is expected to reduce significantly


INVESTMENT DEALS IN 1H 2014

Source: RCA, retrieved July 1, 2014

LOTS G-H

• Location: Hanoi

• Seller: Vietin

• Buyer: Ha Dong District

People’s Committee

AEON BINH TAN

DEVELOPMENT

SITE

• Location: HCMC

• Seller: Aseana Properties

JV Hoa Lam

• Buyer: Aeon Mall

PICO PLAZA

• Location: HCMC

• Seller: Pico

• Buyer: Lotte

DEVELOPMENT

SITE

GALAXY 9 ICON 56 LEXINGTON RESIDENCE

• Location: HCMC

• Seller: Hoa Binh

• Buyer: Novaland

• Location: HCMC


• Buyer: Novaland

• Location: HCMC


• Buyer: Novaland

INDOCHINE PARK TOWER

• Location: HCMC

• Seller: Mulpha

International Bhd

• Buyer: Lemongrass

Master Fund

FLC COMPLEX

• Location: Hanoi

• Seller: ION Complex

Investment & Property

Management Co. Ltd.

• Buyer: FLC Group


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

GLOBAL

North America

Asia Pacific

European

Western European North America Developed Asia

Emerging Asia Pacific South America

CEE Africa and Middle East

INVESTMENT Between regions – APAC, EMEA and America

39% of investors

choosing APAC countries

as investment

destination.

*Regions most preferred by investors if investing outside their own region

CEE: Central and Eastern European Counties

Source: CBRE Investors Intentions Survey 2014

Investors in the three regions see different threats Investors in the three regions see different threats

NORTH AMERICA ASIA PACIFIC EUROPE

Tapering

and rising

interest

rate

Economic

slowdown driven

by issues around

the sustainability

of growth in China

Perception that

property has

become over-

priced

Regions most preferred by investors(*)


INVESTMENT Continued pockets of interest from overseas investors

For the majority of deals the big four

questions still remain

VALUATION

TRANSPARENCY

STRUCTURING

BIG 4

QUESTIONS TRACK RECORD

Source: RCA, retrieved July 1, 2014

37%

63%

Local-Local Foreign Involvement

Investment deals, 2013-1H 2014

73%

27%

Foreign Investor with good track-record in Vietnam

New foreign investors

https://apacnavigator.cbre.com/Marcomms/ImagesLibrary/04.0 FINANCE/fin_00025_lres.jpg

https://apacnavigator.cbre.com/Marcomms/ImagesLibrary/04.0 FINANCE/fin_00025_lres.jpg

2H 2014 OUTLOOK


Macro-economic and Infrastructure

TPP will not happen until 2015 at the earliest. The EU FTA will happen first.

Other Asia Pacific countries will put their own relationship with China before

supporting Vietnam in the East Sea (including the US).

No perceptible long-term fall out from the May Uprising except in the Tourism

sector. Most industries are back at work. Shaken badly, yes; pulling out of

Vietnam, no.

Macro-economic statistics and fundamentals, all appear to be in good shape.

Infrastructure continues to amaze, especially with more bridges coming online

and the Metro Line No. 2.

SOE equitisation is moving ahead, slowly.

Jakarta and Manila are getting all the attention.

CBRE’S FORECASTS – 2H 2014


Residential

Affordable housing is still grabbing the headlines.

Hold your breath for the Foreign Ownership on Land and Property by year-end.

Other developers are dusting off their old Residential and Township plans.

More cranes to be seen on both sides of the Red River.

As pricing is coming down, people can move up to the next quality bracket.



Residential (cont.)

The mid- to high-end markets will receive more end-users while the high-end

segment will see buy-to-let investors coming back.

Prime-location projects stay still or convert into other land-use purpose.

Developers are still sending out spam emails & SMS because they didn’t come

to CBRE’s Brand Building events where they learnt to make use of the

WhatsApp and Viber.



Office

A strategic approach will be required for major occupiers now planning and

negotiating for leases which expire in mid to late 2014. Rents should be

locked in for the next five years until the next wave of new supply comes

online.

Very few new entrants to the Vietnam market; however, there are a noticeable

number of up-graders and re-inforcers.

Under revised Real Estate Law, strata-title opportunities will open up more

transactions. However, this will require strong DMCs (shared responsibilities

amongst the owners).

“Bitten off more than you can chew?” – perhaps the continued glut of office

space in Hanoi and the unfinished buildings in HCMC. Like Suarez to

Barcelona, it will take a lot of money and some frank discussions to resolve.



Retail

Retail market has more confidence and supply

Foreign retail developers with modern, tried and tested international concepts

will create even more competition for struggling local retail formats

No new shopping centre to be developed in the Hanoi’s CBD will result in

more demand for shop space and higher rents.

Shopping centers need to be more creative with their marketing and price

sensitive to compete against high street stores and online shopping in order to

convert window shoppers into consumers

International retailers will pay more attention as Vietnam will open completely

its market in January 2015 under WTO obligations.

Hospitality

Edward Snowden to go on holiday in Phu Quoc as the Russians keep coming.

Coastal cities would be interesting but again, can Developments come at the

right price?



Investment

Funds continue to dispose of their assets but also be interested in acquiring

well-priced assets.

Local and foreign buyers are STILL looking but not finding well-priced assets.

Skeleton buildings still sit empty and un-loved.

No real urgency in the market.

Still a Tale of Two Cities.

If not now, when?



AT CBRE, WE LIVE AND BREATHE THE BUSINESS OF REAL ESTATE

Every quarter

QUARTERLY REPORT

Ad-hoc

VIEWPOINT & SPECIAL REPORT


AT CBRE, WE LIVE AND BREATHE THE BUSINESS OF REAL ESTATE

Every week

NEWSPAPER UPDATE

Every month

DASHBOARD

Every quarter

MARKETVIEW

© 2014 CBRE (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CBRE (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 CBRE clients, and cannot be reproduced without prior written permission of CBRE.

Hanoi Hanoi

© 2014 CBRE Group, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no

guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale,

lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current

or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

Thank you

PLEASE FILL IN THE QUESTIONNAIRE,

YOUR OPINIONS ARE VERY MUCH APPRECIATED

Documents

IF NOT NOW, WHEN? · Foreign tourists Growth rate 6M VN-Index Price chart 6M foreign tourists to Vietnam increased 21% y -o-y Stable FDI disbursement in 6M 2014 Strong export of mobile