/pulse/ Vietnam Property Market Monitor

4Q12

Key Economic Indicators

GDP Growth (2012, y-o-y, in real terms)

5.03%

CPI Growth (2012, y-o-y)

9.21%

Trade Surplus (2012, % of export)

0.25%

Index of Industrial Production (2012, y-o-y)

4.80%

Retail Sales Growth (2012, y-o-y, in real terms)

6.20%

International Visitor Growth (2012, y-o-y)

9.50%

Source: General Statistics Office, Jones Lang LaSalle Research, 4Q12

Key Investment Transactions

Name Price ($ mil) Gia Phu Apartment-HCMC

12.0

Source: Jones Lang LaSalle Research, 4Q12

Vietnam

Nearly one million out of work: According to the Labour Force Survey Report 2012, nearly one million workers remained unemployed. The unemployment rate was higher in urban areas than in the countryside, showing 3.3% and 1.4% the first three quarters of 2012, respectively.

The central bank announces minimum lending rate: The minimum lending rate will be lowered to 12% after 24 December. The refinancing and discount rates will drop to 9% and 7% per year, respectively. The actions are part of the efforts of the central bank to ease the difficulties working against businesses.

Vietnam FDI disbursements approach USD 11 billion: According to the Ministry of Planning and Investment’s Foreign Investment Agency, FDI disbursements reached about USD 10.46 billion in 2012, lower than the USD 11 billion seen in 2011.

Remittances flow into the nation at a fast pace: According to the World Bank’s remittance report update for 2012 released last November, the remittances going to Vietnam this year were forecast to be USD 9 billion, ranking the country ninth of the top 10 recipients of migrant remittances worldwide.

Ho Chi Minh City (HCMC)

The city’s CPI increases upwards by 0.17%: HCMC’s CPI was estimated to have increased by 0.17% in December, extending the city’s 2012 CPI to 4.07%. Garments and footwear saw the sharpest rise of 0.96%, followed by household appliances and goods. Culture entertainment and tourism increased just 0.29% even at year end.

Manufacturing Purchasing Managers’ Index (PMI) rises to a 14-month high: According to HSBC Vietnam, November’s Manufacturing PMI stayed above the neutral 50.5 value for the first time, reaching the highest level recorded in 14 months. The improvement in operating conditions indicates that both production levels and new orders resumed in November.

Spain cuts funding for Metro Line No. 5: As Spain is experiencing a debt crisis, the country can only provide EUR 200 million (USD 256 million) to fund HCMC’s Metro Line No. 5 project instead of the EUR 500 million previously planned. However, Spain plans to help HCMC access other sources of capital, such as banks in Europe. The Metro Line No. 5 project will be developed with total investment capital of some USD 1.85 billion. As Spain’s ODA is only equal to around 40% of the amount needed for Phase 1 of the project, HCMC will have to look for additional funding.

Big C Pandora opened: On 4 November 2012, Big C Truong Chinh, the chain’s sixth supermarket in HCMC, opened at No.1/1 Truong Chinh Street, Tan Phu District. Big C Truong Chinh occupies over 12,000 sqm on the first and second floors of Pandora City. Launched during 4Q12 in the Tan Phu District, Pandora City is the newest shopping centre to enter HCMC and features Big C, Megastar and branded food and beverage outlets.

Ascott expands in Vietnam with new properties: Ascott announced that it was awarded a contract to manage a serviced residence in HCMC. Under the contract, the new 100-unit Somerset Vista is slated to open in December. The project is part of The Vista, which is being developed by an alliance formed between CapitaLand, Thien Duc Trading Construction Company and Phu Gia Investment JSC. Ascot will also manage Vista Residence, a 168-unit property within The Vista.

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Hanoi

Hanoi’s December CPI edges up 0.26% m-o-m: Hanoi’s CPI in December is estimated to have increased by 0.26% m-o-m and 6.29% since December 2011. The capital city’s average CPI in 2012 was kept in single digits and was recorded at 8.57%. During the year, the education segment posted the strongest rise, registering above 12.5%, followed by the apparel products, hats and footwear segment, which recorded an increase of 10.67%, and the housing, electricity, water, fuel and construction materials segment, which rose 10.47%.

Korean investor launches a new urban area project: The Republic of Korea’s T.H.T limited company officially held the ground-breaking ceremony for an urban area in Hanoi with a total investment of USD 2.5 billion. The Starlake project will be built on an area of 207.66 ha to the west of the West Lake. The project will reserve 46 ha for the construction of commercial projects, financial centres and offices. A land area of 26 ha has been specially set aside for the development of high-rise apartment buildings, houses and villas, which will serve around 25,000 people.

Pullman Hanoi opens its doors: Accor, the largest international hotel operator in Asia Pacific and Vietnam, announced the opening of Pullman Hanoi, the first Pullman hotel in Vietnam. Previously known as Hanoi Horison Hotel, Pullman Hanoi recently completed a comprehensive refurbishment that transformed it into one of the city’s most modern properties. Pullman Hanoi is located just 10 minutes from Hanoi’s historical quarter and comprises 242 rooms and meeting rooms that can service up to 1,000 people.

VinaCapital seeks to divest from Hanoi Metropole:

Da Nang

Da Phuoc cancels plans to develop a golf course: The Da Phuoc International Township project received approval from the Da Nang Municipal People’s Committee to cancel plans to develop an 18-hole golf course. Because of tough economic conditions, Daewon Cantavil Company - the developer - wanted to focus on developing an urban area instead of a golf course. The authorities allowed the developers to transform part of the former golf course project into landed houses and high-rise buildings, while taking back 10-ha to develop a software centre.

Tourism in Danang still shows growth in 2012: In 2012, the number of tourists visiting Danang reached 2.7 million people, increasing 12% y-o-y. 600,000 of these tourists were foreigners, a rise of 18% y-o-y.

Danang seeks loans for a second economic corridor: Danang is seeking capital from the Asian Development Bank to develop the East-West Economic Corridor 2 (EWEC 2) project to support economic growth in the central region. Danang wants to have ODA funds to build EWEC 2, which will run through Danang Port, the 14B and 14D national highways, the Dac Oc border gate in Quang Nam, the Boloven Highlands in Laos and the Chong Mek-Nakhon-Bangkok in Thailand.

Other Provinces

Phu Quoc: A new airport on the southern resort island of Phu Quoc was opened to the domestic flights of Vietnam Airlines and Air Mekong on 2 December, just four years after Kien Giang Province launched its mammoth project. The Phu Quoc International Airport can handle bigger aircraft and some 2.65 million passengers a year.

Binh Duong: Binh Duong, one of the country’s southern provinces attracted an estimated USD 2.6 billion FDI during 2012. According to the Provincial People's Committee, this amount far exceeds the province’s target of USD 1 billion. Faced with the difficulties of the global economy, Binh Duong’s strong inflow of FDI shows that the province responded to the demands of investors and developed a safe and secure investment environment.

Lam Dong: Lam Dong Province decided to stop two projects, Lam Dong Loc Phat Golf Course and Lam Dong Loc Phat Hill State. With investment capital estimated to total USD 15.8 million, Lam Dong Loc Phat Golf course had a total land area of 392 ha and would have featured a 72-hole golf course, a 320-room hotel and a 300-seat convention centre. Lam Dong Loc Phat Hill State would have developed a 5-star hotel with 300 rooms on an area of 164 ha.

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/pulse/ Vietnam Property Market Monitor

4Q12