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OPPORTUNITIES IN THE NEW NORMAL
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VIETNAM
A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
2
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
3
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
1. VIETNAM ECONOMY
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
4
More than 200 tons of died fish collected in Westlake, Hanoi
ENVIRONMENTAL ISSUES C H A L L E N G E S F R O M D R O U G H T, F LO O D A N D OT H E R S
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
5
URBAN MIGRATION AND ITS NET EFFECT
159,501 Passenger Cars Sold in 2016 (up 36% y-o-y)
3,121,023 Motorbikes Sold in 2016 (up 9.5% y-o-y)
8,000 motorbikes/day
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
6
0
1
2
3
4
5
6
7
8
9
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
Rea
l G
DP
Gro
wth
Ra
te (
%)
Source: GSO, Oxford Economics 2016.
2016 GDP GROWTH LOWER THAN EXPECTED
6.21%
Forecast
S T I L L A M O N G R E G I O N ’ S S T R O N G E S T
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
7
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Inte
rest
ra
te (
%)
Average CPI (y-o-y) Lending rate Deposit rate
Average CPI: 2.7% y-o-y Basic Inflation: 1.83% y-o-y
Source: Macrobond, CBRE Research Q2 2016
INFLATION PICKS UP WHILE INTEREST RATES STAYED LOW
Source: GSO, CBRE Vietnam.
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
8
Source: HNC, Gold.org, SJC, SBV.
0
20
40
60
80
100
120
140
160
Jan
Feb
Ma
r
Ap
r
Ma
y
Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Jan
Feb
Ma
r
Ap
r
Ma
y
Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Jan
Feb
Ma
r
Ap
r
Ma
y
Jun
e
July
Au
g
Sep
Oct
No
v
Dec
2014 2015 2016
Ind
ex
Government Bond VN-Index Local Gold USD/VND Crude Oil
MAJOR ASSET CLASSES
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
9
FDI REACHED 8 -YEAR HIGH
24
-
20
40
60
802
00
7
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
Reg
iste
red
FD
I (U
S$
Bil
lio
ns)
Real estate accounts for 7% of
registered FDI, ranks 2nd among sectors
1
2
3
Major Real Estate Deals, 2016
US$315m Industrial Park - Quang Ninh
US$309m Township - Dong Nai
US$300m 21-storey building - Hanoi
Vietnam Registered FDI in 2016: US$24.4 billion
Source: Vietnam Ministry of Planning and Investment.
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
10
REAL ESTATE DASHBOARD
(*) Current lending rate is the average lending rate surveyed at ten banks, and only applicable for home loan. However, the back-dated numbers were the average rate announced publicly at that point of time, applied for all sectors and all banks. The average lending rate is for reference only. (**) Deposit rate is the average deposit rate from a sample comprised of ten banks, in which the rates are announced publicly on their websites and can be tracked backwards.
ECONOMIC INDICATORS
2Y 1Y 6M 3M 1M Current
CPI (%) y-o-y 1.8 0.6 1.7 1.9 4.5 4.7
Trade balance (US$, bil)
(1.1) (0.6) (0.1) (0.1) (0.4) (0.3)
Retail & services Turnover (VND, tril)
273.3 294.7 295.8 294.4 302.9 320.2
BANKING & FINANCE 2Y 1Y 6M 3M 1M Current
VN-Index 576.1 545.3 652.2 682.3 663.5 681.3
USD/VND (inter-bank) 21,458 21,881 21,862 22,156 22,156 22,161
Local gold (VND mil/tael) 35.4 32.8 36.8 35.8 36.1 36.7
Lending Rate (%)* 8.8% 7.6% 7.0% 7.3% 7.7% 8.4%
Deposit rate (%)** (1-year term)
6.4% 6.3% 6.7% 6.7% 6.5% 6.6%
REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current
Real Estate Holding & Development Listed Companies
48.60 45.22 51.00 47.24 45.63 46.55
Real Estate Services Listed Companies
52.8 41.3 28.3 30.89 26.98 27.06
Source: Stockbiz, Jan 2017
Source: GSO, Dec, 2016
Source: GSO, SBV, SJC & HSX, Jan, 2017
NEW LAUNCHES 2Y 1Y 6M 3M 1M Current
HCMC New launches (unit) 70,902 37,278 21,088 11,926 6,272 3,957
HN New launches (unit) 45,921 25,485 17,460 10,409 5,712 2,712
Source: CBRE, Dec 2016
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
11
BCI NUMBERS
All Future Projects
(2017-2030) HCMC Hanoi
Da Nang
Can Tho
Nha Trang
Vung Tau
Hai Phong
Office 253 247 53 33 20 36 47
Retail 164 132 66 5 22 11 11
Hospitality and SA
60 31 76 4 56 17 6
Residential 404 188 42 13 13 22 10
Total 881 598 237 55 111 86 74
Projects Under
Construction
HCMC Hanoi Da
Nang Can Tho
Nha Trang
Vung Tau
Hai Phong
Office 142 161 27 20 13 16 29
Retail 100 81 47 2 14 6 8
Hospitality and SA
35 16 55 4 35 10 3
Residential 286 105 22 8 23 13 8
Total 563 363 151 34 85 45 48
Source: www.bciasia.com; CBRE Vietnam, January 2017. Source: www.bciasia.com; CBRE Vietnam, January 2017.
-100%
100%
300%
HCMC Hanoi Da Nang Can Tho Khanh Hoa Vung Tau Hai Phong
Perce
ntag
e cha
nge
2017 YTD vs 2016 2016 vs 2015
-100%
100%
300%
HCMC Hanoi Da Nang Can Tho Khanh Hoa Vung Tau Hai Phong
Perce
ntag
e cha
nge
2017 YTD vs 2016 2016 vs 2015
ALL FUTURE PROJECTS (2016 – 2030), Y-O-Y CHANGE PROJECTS UNDER CONSTRUCTION, Y-O-Y CHANGE
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
12
THE MAIN NEW FOCUSES… ANYTHING BUT TPP
Forget TPP, The Focus is now on
RCEP
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
13
THE ONE BIG MANUFACTURER
Source: Vietnam Ministry of Planning and Investment.
US$ 36.4 billion
9.3% y-o-y 7,036
2,590
2,419
1,875
1,860
South Korea
Japan
Singapore
China
Taiwan
Top FDI Investors, US$ million, 2016
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
14
THAT ONE BIG DEVELOPER
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
15
HCMC 20 GOLDEN S ITES 2 C O M P L E T E D, 4 U N D E R C O N S T R U C T I O N
VINHOMES GOLDEN RIVER
UNION SQUARE
SAIGON MELINH TOWER
THE SPIRIT OF SAIGON
SJC
VINCOM CENTER DONG KHOI
3
16
7
2
1
9
20
5
17
4
6 13 8
18 19
12 14
15
11
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
16
WALKABOUT IN HCMC BUSY CONSTRUCTION ACTIVITY IN DISTRICT 1 AND DISTRICT 3
95 projects found on 132 streets in District 1
15 Cleared Sites
5 Public Projects
7 Hotels
6 Residential
2 Retail
33 Offices
45 projects found on 24 streets in District 3
18 Offices
2 SAs
2 Residential
8 Private Use
2 Hotels
10 Unknown
3 Others
Only 2 Grade A
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
17
FORTUNE GLOBAL 500 FORTUNE COMPANIES IN VIETNAM
218 companies in 2015 230 companies in 2016
Source: CBRE Vietnam.
0
5
10
15
20
25
30
35
40
45
Food
& D
rug
Sto
res
Tele
com
mun
ication
s
App
are
l
Tra
nspo
rtation
Chem
ical
Techn
olo
gy
Ene
rgy
Eng
inee
ring
& C
on
str
uctio
n
House
hold
pro
du
cts
Busin
ess S
erv
ice
Mo
tor
Ve
hic
les &
Pa
rts
Reta
iling
Wh
ole
sa
lers
Fin
ance
Health
Ca
re
Ind
ustr
ials
Food
, B
eve
rag
es &
To
ba
cco
Ho
tels
, R
esta
ura
nts
&…
Aeo
rosp
ace
s &
De
fen
se
Ma
teri
als
Me
dia
No
. o
f co
mp
an
ies
2015
2016
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
18
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
2. INFRASTRUCTURE
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
19
Under construction
Under planning 2 3
1
4 5 6
INFRASTRUCTURE & PUBLIC TRANSPORTATION
D E M A N D F O R T R A N S I T O R I E N T E D D E V E L O P M E N T S
Retail
Office
Amenities
P Parking
A GROWING CONCERN AS THE FIRST METRO LINE IS CLOSE TO COMPLETION
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
20
INFRASTRUCTURE & PUBLIC TRANSPORTATION
Under Construction Metro Line
Under Planning Metro Line
D E M A N D F O R T R A N S I T O R I E N T E D D E V E L O P M E N T S
Retail
Office
Amenities
P Parking
2
3
A GROWING CONCERN AS THE FIRST METRO LINE IS CLOSE TO COMPLETION
THE EIGHT METRO LINES OF HANOI
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
21
MEANWHILE IN BANGKOK
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
22
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
3. CONDOMINIUM
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
23
OVERSUPPLY CONCERN
Hot launches near Thu Thiem
147 deals closed from July 2015 up to December 2016
Some projects in Thao Dien already reached the 30% threshold of foreign buyers
Main groups of foreign buyers in 2016: Singapore: 18% Japan/Hong Kong/Europe: 16% each
FOREIGN BUYERS AT CBRE
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
24
Source: CBRE Vietnam , Q4 2016
HANOI - NEW LAUNCH BY YEAR HCMC - NEW LAUNCH BY YEAR
NEW LAUNCH DECREASE Y -O-Y BUT HIGHER ON 10 -YR AVERAGE
37,419 units 10% y-o-y
HCMC - 2016 30,028 units 13% y-o-y
HANOI - 2016
0
10,000
20,000
30,000
40,000
50,000
2009 2010 2011 2012 2013 2014 2015 2016
No
. o
f u
nit
Luxury High-end Mid-end Affordable
0
10,000
20,000
30,000
40,000
50,000
2009 2010 2011 2012 2013 2014 2015 2016
No
. o
f u
nit
Luxury High-end Mid-end Affordable
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
25
36% 40%
Source: CBRE Vietnam , Q4 2016. Luxury: >US$3,500 per sm
High-end: US$1,500 to US$3,500 per sm Mid-end: US$800 to $1,500 per sm
Affordable: US$800 per sm
0%
20%
40%
60%
80%
100%
2014 2015 2016
Luxury High-end Mid-end Affordable
36% 40% 47%
HANOI - NEW LAUNCH BREAKDOWN HCMC - NEW LAUNCH BREAKDOWN
MID-END SEGMENT EXPANDING E A S I N G H I G H - E N D OV E R S U P P LY F E A R
51%
42%56%
0%
20%
40%
60%
80%
100%
2014 2015 2016
Luxury High-end Mid-end Affordable
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
26
H C M C : E A S T A N D S O U T H
North 7%
East 41%
West 11% Central
8%
South 34%
H A N O I : W E S T A N D S O U T H W E S T
West 37%
South West 24%
South 12%
East 10%
North 4%
Midtown 7%
CBD 1%
CBD fringe 6%
NEW LAUNCH REMAINS STRONG IN DECENTRALIZED DISTRICTS
Source: CBRE Vietnam , Q4 2016.
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
27
0
10,000
20,000
30,000
40,000
50,000
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
F
20
18
F
20
19
F
New
lau
nch
su
pp
ly (
un
its)
Luxury High-end Mid-end Affordable
-
10,000
20,000
30,000
40,000
50,000
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
F
20
18
F
20
19
F
New
lau
nch
su
pp
ly (
un
its)
Luxury High-end Mid-end Affordable
Source: CBRE Vietnam , Q4 2016
HANOI - NEW LAUNCH FORECAST HCMC - NEW LAUNCH FORECAST
LOWER SEGMENTS IN THE L IMEL IGHT FOR THE NEXT 3 YEARS
Forecast Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
28
NEW SALES 2016
21,188 units
2% y-o-y
HANOI
35,008 units
4% y-o-y
HCMC
SALES DECREASE Y-O-Y B U T I S C ATC H I N G U P FA S T W I T H N E W L AU N C H
2016: 69% TOTAL SOLD UNITS (*) NEW LAUNCH
HANOI
2015: 64%
2016: 94% HCMC
2015: 88% (%)
(*) Total sold units include both units sold at newly-launched projects in the period and at previously-launched projects
Source: CBRE Vietnam , Q4 2016
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
29
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
No
. o
f so
ld u
nit
s
Luxury High-end Mid-end Affordable
Source: CBRE Vietnam , Q4 2016
HANOI – SOLD UNITS BY YEAR HCMC - SOLD UNITS BY YEAR
SALES MOMENTUM REMAINS UPBEAT
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2011 2012 2013 2014 2015 2016 2017F2018F2019F
No
. o
f so
ld u
nit
s
Luxury High-end Mid-end Affordable
Forecast Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
30
~68.6% of new launches sold in 2016
No. of Project
Sales rate (%)
1
44%
9
50%
7
53%
14
62%
6
48%
3
72%
4
48%
4
69%
3
32%
9
57%
3
42%
5
53%
11
70%
3
65%
2
42%
9
73%
1
88%
HCMC: HIGH SALES RATES IN DISTRICT 2 , 9 AND NHA BE Implication for districts only, not exact project location
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
31
Implication for districts only, not exact project location
No. of Projects Sales rate (%)
5 62%
2 82%
5 69%
2 62%
5 86%
3 76%
13 75%
13 65%
8 48%
7 53%
~64% of new launch in 2016 sold
HIGH SALES RATES IN BA DINH, HAI BA TRUNG DISTRICTS
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
32
0%
50%
100%
150%
200%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
Per
cen
tag
e ch
ang
e (%
)
Luxury High-end Mid-end Affordable
0%
50%
100%
150%
200%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019FPer
cen
tag
e ch
ang
e (%
)
HANOI - PRIMARY PRICE FORECAST
HCMC - PRIMARY PRICE FORECAST
PRIMARY PRIC ING UP ACROSS SEGMENTS
Source: CBRE Vietnam , Q4 2016. Note: (1) Base year is 2005 (2) No luxury projects in Hanoi until 2011.
Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
33
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
4. OFFICE
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
34
Source: CBRE Research, January 2017.
Tenant - Driven Landlord – Driven
Shanghai Shenzhen
Brisbane Guangzhou
Ho Chi Minh City Mumbai
Beijing Hong Kong New Delhi
Auckland Bangkok
Taipei Tokyo
Melbourne Sydney
Bangalore
Hanoi Perth Seoul
Singapore
APAC OFF ICE RENTAL CYCLE
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
35
-15
-10
-5
0
5
10
15
20
25
30S
yd
ney
Bang
alo
re
Melb
ou
rne
Bang
ko
k
Guan
gzhou
Gurg
aon
Auckla
nd
Tokyo
Brisban
e
Mum
bai
Hano
i
Ho C
hi M
inh C
ity
Taip
ei
Delh
i
Seou
l
Hong
Kong
Shan
gha
i
Shen
zh
en
Pert
h
Beiji
ng
Ja
kart
a
Sin
gap
ore
Gra
de
A E
ffec
tive
Ren
tal G
row
th (
%) 2016F 2017F
WEAKER RENTAL GROWTH IS EXPECTED
Source: CBRE Research, January 2017.
Bottoming Out
Peaking
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
36
Hanoi
Rents
2.9% y-o-y 0.6%
y-o-y
3.3 ppts y-o-y
5.6 ppts y-o-y
Vacancy rate (%)
Grade A Grade B
HCMC
Rents
Vacancy rate (%)
Grade A Grade B
1.9% y-o-y
6.2% y-o-y
1.6 ppts y-o-y
VACANCY TRENDS DIFFER
Rent: US$/sm/month, excludes VAT and Service charge Source: CBRE Vietnam, Q4 2016.
3.3 ppts y-o-y
US$36 US$21 US$28 US$18
8.0% 2.8% 15.8% 16.5%
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
37
+14% y-o-y
415,355 sm
+5% y-o-y
774,792 sm
Grade A: Grade B:
0
300,000
600,000
900,000
1,200,000
2009 2010 2011 2012 2013 2014 2015 2016
To
tal
Su
pp
ly (
NL
A,
sm)
Grade A Grade B
HANOI - TOTAL SUPPLY HCMC - TOTAL SUPPLY
+7.7% y-o-y
758,280 sm
+1.5% y-o-y
321,557 sm
Grade A: Grade B:
SUPPLY GROWTH FASTER IN HANOI
Source: CBRE Vietnam , Q4 2016.
0
300,000
600,000
900,000
1,200,000
2009 2010 2011 2012 2013 2014 2015 2016
To
tal
Su
pp
ly (
NL
A,
sm)
Grade A Grade B
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
38
0
50,000
100,000
150,000
200,000
250,0002
00
9
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
F
20
18
F
20
19
F
New
Su
pp
ly (
NL
A, s
m)
Grade A Grade B
0
50,000
100,000
150,000
200,000
250,000
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
F
20
18
F
20
19
F
New
Su
pp
ly (
sm, N
LA
)
Grade A Grade B
HANOI – NEW SUPPLY FORECAST HCMC - NEW SUPPLY FORECAST
…BUT HCMC STARTED TO CATCH UP
No
New
Su
pp
ly
Source: CBRE Vietnam, Q4 2016.
Forecast Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
39
0
50,000
100,000
150,000
2009 2010 2011 2012 2013 2014 2015 2016Net
ab
sorp
tio
n
(NL
A,
sm)
Net Absorption - Grade A Net Absorption - Grade B
NET ABSORPTION LAGS BEHIND 2015
Source: CBRE Vietnam , Q4 2016.
HANOI – Net Absorption
HCMC – Net Absorption
0
50,000
100,000
150,000
2009 2010 2011 2012 2013 2014 2015 2016
Net
Ab
sorp
tio
n
(NL
A,
sm)
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
40
-2.9% y-o-y
US$ 28.5
+0.6% y-o-y
US$ 17.8
Grade A: Grade B:
HANOI - ASKING RENTS HCMC - ASKING RENTS
US$21.0
+6.2% y-o-y
US$36.6
Grade A: Grade B: +1.9% y-o-y
MODERATE RENTAL GROWTH IN HCMC W H I L E R AT E S A R E S TA B I L I Z I N G I N H A N O I
Source: CBRE Vietnam , Q4 2016.
0
10
20
30
40
50
2009 2010 2011 2012 2013 2014 2015 2016Ask
ing
ren
ts (
US
$ p
sm p
m)
Grade A Grade B
0
10
20
30
40
50
2009 2010 2011 2012 2013 2014 2015 2016
Ask
ing
ren
ts (
US
$ p
sm p
m)
Grade A Grade B
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
41
0%
10%
20%
30%
40%
50%
0
10
20
30
40
50
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
F
20
18
F
20
19
F
Va
can
cy R
ate
(%
)
Ren
te (
US
$ p
sm p
m)
0%
10%
20%
30%
40%
50%
0
10
20
30
40
50
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
F
20
18
F
20
19
F
Va
can
cy r
ate
s (%
)
Ren
ts (
US
$ p
sm p
m)
HANOI – PERFORMANCE FORECAST HCMC – PERFORMANCE FORECAST
ST ILL LARGELY A TALE OF TWO CIT IES L I M I T E D R E N TA L G R O W T H P R O S P E C T S
Source: CBRE Vietnam , Q4 2016.
Forecast Forecast
Grade A – Rents Grade B – Rents
Grade A – Vacancy Grade B – Vacancy The presented rents are rents of Q4 of each respected year.
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
42
DISRUPTIVE TECH & ENTRENEURSHIP P R O P T E C H, R E T E C H, C O -W O R K I N G S PAC E
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
43
Decentralization
Limited space in CBD: • Rental growth for
CBD buildings • Certain winners in
Midtown and West
Flight to Quality
• Big occupiers to relocate and expand to higher quality buildings
Diversified Demand
• High demand from traditional sectors
• Start-ups boom: Growth of Co-working space
Supply Growth
• New supply coming from CBD and Non-CBD area to meet strong market demand
Hanoi HCMC Hanoi & HCMC
OPPORTUNIT IES ABOUND FOR THE MARKET
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
44
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
5. RETAIL
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
45
HCMC
HANOI
0
100,000
200,000
300,000
2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
Su
pp
ly
(NL
A, s
m)
RETAIL SUPPLY GROWTH ACCELERATING IN BOTH CIT IES
0
100,000
200,000
300,000
2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
Su
pp
ly
(NL
A, s
m)
Forecast
Source: CBRE Vietnam , Q4 2016.
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
46
26,000 sm NLA Expected 2018
35,000 sm GFA Expected 2020
59,000 sm NLA Expected 2017
40,000 sm GFA Expected 2017
48,000 sm GFA Expected 2018
53,000 sm GFA Opened Q1 2016
32,000 sm GFA Opened Q2 2016
ROBUST NEW SUPPLY IN AND OUT OF HCMC CBD
2017-2020 Completion (E)
2016 Opening
28,000 sm GFA Opened Q1 2016
50,000 sm GFA Opened Q3 2016
114,000 sm GFA Opened Q3 2016
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
47
BA DINH
TAY HO
HOAN KIEM
DONG DA
HAI BA TRUNG
LONG BIEN
HOANG MAI
CAU GIAY TU LIEM
DONG ANH
HOAI DUC
HA DONG THANH TRI
GIA LAM
THANH XUAN
WEST LAKE
91,000 sm GFA Expected 2019
15,365 sm GFA Expected 2017
41,450 sm GFA Expected 2017
180,000 sm GFA Expected 2018
24,000 sm GFA Opened Q3 2016
26,850 sm GFA Opened Q4 2016
27,000 sm GFA Opened Q4 2016
RETAIL SUPPLY IS FURTHER DECENTRALIZED IN HANOI
2017-2019 Completion (E)
2016 Opening 18,900 sm GFA Expected 2017
53,864 sm GFA Expected 2018
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
48
PLACEMAKING MADE ITS WAY TO VIETNAM
R E TA I L E R S D E M A N D
Source: CBRE Vietnam, Q4 2016.
PLACEMAKING IS ABOUT CREATING AN
ENVIRONMENT THAT PEOPLE WANT
TO VISIT AND RETURN TO
T R A D I T I O N A L VA LU E S W I T H A C R E AT I V E TO U C H
ASIA PACIFIC
VIETNAM
Luxury
F&B Fast Fashion Sport Entertainment
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
49
9%
36% 37%
19%
8%
22%
12%
5%
19% 19%
29%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
2
4
6
8
10
12
HongKong
India Indonesia Malaysia NewZealand
Philippines Singapore Taiwan Thailand Vietnam Other Asia-Pacific
CA
GR
20
15
-20
20
E-c
om
mer
ce R
even
ue
(US
D b
illi
on
)
2015 E-commerce Revenue CAGR 2015-2020
CHANGING DIGITAL LANDSCAPE IN VIETNAM E - C O M M E R C E : F U T U R E T R E N D ?
Source: CBRE Asia Pacific, 2016
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
50
(US$ per NLA sm on ground and first floor, excl. tax and service charge)
0
30
60
90
120
150
2009 2010 2011 2012 2013 2014 2015 2016
Ask
ing
Ren
t (U
S$
/sm
/mo
nth
)
CBD Non-CBD
CBD
2% y-o-y
-5.9% y-o-y
Non-CBD
RENTAL GROWTH L IMITED TO CBD MALLS
CBD
15.1% y-o-y
-4.4% y-o-y
Non-CBD
Source: CBRE Vietnam, Q4 2016.
HCMC HANOI
0
30
60
90
120
150
2009 2010 2011 2012 2013 2014 2015 2016
Ask
ing
Ren
t (U
S$
/sm
/mo
nth
)
CBD Non-CBD
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
51
0%
10%
20%
30%
0
20
40
60
80
2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
Vac
ancy
Rat
e (%
)
Ren
t (U
S$
/sm
/mo
nth
)
HANOI
RENTAL RATES TO STABIL IZE AMIDST FURTHER SUPPLY
0%
10%
20%
30%
0
20
40
60
80
2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
Vac
ancy
Ra
te (
%)
Ren
t (U
S$
/sm
/mo
nth
)
Rent Vacancy
HCMC
Source: CBRE Vietnam , Q4 2016.
Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
52
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
6. LOGISTICS
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
53
Electronics Automobile & Motorcycle
E-commerce
Local Foreigner
RISING DEMAND FROM E-COMMERCE AND HI-TECH SECTORS
MORE QUALITY SUPPLY
Source: CBRE Vietnam , Q4 2016.
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
54
0%
6%
12%
18%
24%
30%
0
40
80
120
160
200
2015 2016 2017F 2018F 2019F
Vac
ancy
Rat
e
NF
A (
'00
0 s
qm
)
New Supply - South New Supply - NorthVacancy Rate - South Vacancy Rate - North
0%
6%
12%
18%
24%
30%
0
40
80
120
160
200
2015 2016 2017F 2018F 2019F
Vac
ancy
Rat
e
NF
A (
'00
0 s
qm
)
New Supply - South New Supply - NorthVacancy Rate - South Vacancy Rate - North
Warehouse - New supply and vacancy rate Ready-built-factory - New supply and vacancy rate
Source: CBRE Vietnam , Q4 2016. Southern area: HCMC, Long An, Binh Duong, Dong Nai Northern area: Bac Ninh, Bac Giang, Ha Noi, Hai Phong, Hung Yen
M O R E Q UA L I T Y S U P P LY
MOVING UP THE VALUE CHAIN
FTAs alternative for TPP. Supply: more quality supply from both foreigner and local developers. Demand: more demand from electronics, e-commerce and FMCG sectors. Rents: large number of supply in 2017 lead to slower growth in rents
Forecast Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
55
0%
3%
6%
9%
12%
15%
0
1
2
3
4
5
2015 2016 2017F 2018F 2019F
% G
row
th Y
-o-Y
Ren
tal
rate
(U
S$
/sm
/mo
nth
)
Rents - South Rents - North
Rental Growth - South Rental Growth - North
Warehouse - rental rate Ready-built-factory - rental rate
MODEST RENTAL GROWTH PROSPECTS
0%
3%
6%
9%
12%
15%
0
1
2
3
4
5
2015 2016 2017F 2018F 2019F
% G
row
th Y
-o-Y
Ren
tal
rate
(U
S$
/sm
/mo
nth
)
Rents -South Rents - North
Rental Growth - South Rental Growth - North
Source: CBRE Vietnam , Q4 2016. Southern area: HCMC, Long An, Binh Duong, Dong Nai Northern area: Bac Ninh, Bac Giang, Ha Noi, Hai Phong, Hung Yen
Forecast Forecast
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
56
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
7. CAPITAL MARKET
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
57
-4%
-2%
0%
2%
4%
6%
8%P
ert
h
Ha
noi
Bri
sba
ne
To
kyo
Au
ckla
nd
Ho C
hi M
inh
Cit
y
Ba
ng
kok
Melb
ou
rne
Seou
l
Syd
ney
Mu
mb
ai
Ku
ala
Lu
mp
ur
Ta
ipei
Beij
ing
Sh
an
gh
ai
New
Delh
i
Gu
an
gzh
ou
Ba
ng
alo
re
Sin
ga
po
re
Sh
en
zh
en
Hon
g K
on
g
Off
ice Y
ield
Sp
rea
d
Ten Year High
2017F
Ten Year Low
Yield spread narrowed to
100 bps or below
Source: CBRE Research, December 2016.
YIELD SPREAD CONTINUES AT LOW LEVELS O F F I C E Y I E L D V S 1 0 -Y E A R G O V E R N M E N T B O N D Y I E L D
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
58
A YEAR OF M&A
Source: RCA.
International Centre KEPPEL LAND LTD.
►►VINACAPITAL
@ US$ 13.8 MIL.
OFFICE
Hanoi
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
59
TOP 10 REAL ESTATE STORIES
1. Growing Hospitality Market 2. Issuance of 06/2016/NHNN Circular 3. The end of 30.000 billion VND package 4. Public announcement of mortgaged projects 5. Name projects that are unqualified for Fire Safety 6. Active M&A market 7. Trend of “green” in buildings development 8. The growth of affordable segment 9. Renovation of old apartments 10. The entrance of non-real estate players
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
60
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
61
City Venue Date
Singapore Arts House January 24
Seoul, South Korea Four Seasons February 14
Sydney, Australia Sydney Conservatorium of Music February 22
Brisbane, Australia To be announced March 7
Melbourne, Australia Park Hyatt Melbourne March 9
Auckland, New Zealand To be announced March 14
Hong Kong To be announced April 5
New Delhi, India To be announced April 19
Adelaide, Australia To be announced May 9
Perth, Australia To be announced May 11
Tokyo To be announced June 2
2017 ROADSHOW S A V E T H E D AT E
ASIA PACIFIC REGIONAL REPORT
JANUARY 24
VIETNAM NATIONAL REPORT
MID-FEBRUARY
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K
62
This presentation has been prepared in good faith based on CBRE’s current views of the commercial real-estate market. Although CBRE believes its views reflect market conditions on the date of this presentation, they are subject to significant uncertainties and contingencies, many of which are beyond CBRE’s control. In addition, many of CBRE’s views are opinion and/or projections based on CBRE’s subjective analyses of current market circumstances. Other firms may have different opinions, projections and analyses, and actual market conditions in the future may cause CBRE’s current views to later be incorrect. CBRE has no obligation to update its views herein if its opinions, projections, analyses or market circumstances later change. Nothing in this presentation should be construed as an indicator of the future performance of CBRE’s securities or of the performance of any other company’s securities. You should not purchase or sell securities – of CBRE or any other company – based on the views herein. CBRE disclaims all liability for securities purchased or sold based on information herein, and by viewing this presentation, you waive all claims against CBRE and the presenter as well as against CBRE’s affiliates, officers, directors, employees, agents, advisers and representatives arising out of the accuracy, completeness, adequacy or your use of the information herein.
DISCLAIMERS AND WAIVERS
Thank You
2 0 1 7 A S I A P A C I F I C R E A L E S T A T E M A R K E T O U T L O O K