Vietnam Quarterly Knowledge Report | Q4 2016

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VIETNAM QUARTERLY KNOWLEDGE REPORT Q4 2016

TABLE OF CONTENTS

ECONOMIC OVERVIEW...............................................................................................................

VIETNAM ....................................................................................................................................

HO CHI MINH CITY ......................................................................................................................

HA NOI ........................................................................................................................................

HO CHI MINH CITY MARKET OVERVIEW ........................................................................ OFFICE ........................................................................................................................................

RETAIL ........................................................................................................................................

CONDOMINIUM ............................................................................................................................

VILLA & TOWNHOUSE .................................................................................................................

SERVICED APARTMENT ..............................................................................................................

INDUSTRIAL ................................................................................................................................

HA NOI MARKET OVERVIEW ................................................................................................ OFFICE ........................................................................................................................................

RETAIL ........................................................................................................................................

CONDOMINIUM ............................................................................................................................

VILLA & TOWNHOUSE .................................................................................................................

SERVICED APARTMENT ..............................................................................................................

INDUSTRIAL ................................................................................................................................

Cover Page: Saigon Skyline

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LIST OF FIGURES Figure 1: Vietnam Exports - Imports in 2016.......................................................................................

Figure 2: International Arrivals to Vietnam in 2016 ............................................................................

Figure 3: FDI Capital of HCMC and Hanoi ..........................................................................................

Figure 4: GDP Growth Rate of HCMC and Hanoi ................................................................................

HO CHI MINH CITY MARKET OVERVIEW Figure 5: Office, Average Asking Rent ................................................................................................

Figure 6: Office, Occupancy Rate .......................................................................................................

Figure 7: Retail, Market Performance by Year .....................................................................................

Figure 8: Retail, Total Supply by Year .................................................................................................

Figure 9: Condominium, Primary Asking Price ...................................................................................

Figure 10: Condominium, New Launches by Year ...............................................................................

Figure 11: Condominium, Sold Units by Segment and Year ..................................................................

Figure 12: Villa and Townhouse, Selling Prices by Quarter..................................................................

Figure 13: Villa and Townhouse, Supply by Year .................................................................................

Figure 14: Villa and Townhouse, Primary Stock by District .................................................................

Figure 15: Serviced Apartment, Occupancy Rate ...............................................................................

Figure 16: Serviced Apartment, Average Asking Rent by Grade ...........................................................

Figure 17: Industrial, Market Performance by District .........................................................................

Figure 18: Industrial, Supply by District ..............................................................................................

LIST OF TABLES Table 1: Macroeconomic Indicators of HCMC and Hanoi ......................................................................

Table 2: Office, Future Supply ............................................................................................................

Table 3: Significant Office Projects ....................................................................................................

Table 4: Retail, Significant Future Projects under Construction ..........................................................

Table 5: Significant Retail Projects ....................................................................................................

Table 6: Condominium, Significant new Projects launched in Q4 2016 ................................................

Table 7: Villa and Townhouse, Significant new Projects launched in Q4 2016 ......................................

Table 8: Serviced Apartment, Significant Future Projects under construction .....................................

Table 9: Significant Serviced Apartment Projects ...............................................................................

Table 10: Industrial, Future Supply .....................................................................................................

Table 11: Industrial, Market Overview ................................................................................................

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LIST OF FIGURES

Figure 19: Office, Average Asking Rent...................................................................................................

Figure 20: Office, Occupancy Rate .........................................................................................................

Figure 21: Retail, Market Performance ...................................................................................................

Figure 22: Retail, Total Supply ...............................................................................................................

Figure 23: Condominium, Primary Sale Price .........................................................................................

Figure 24: Condominium, New Launches by Year ...................................................................................

Figure 25: Condominium, Sold Units by Segment and Year .....................................................................

Figure 26: Villa and Townhouse, Supply by Quarter ................................................................................

Figure 27: Villa and Townhouse, Supply by District .................................................................................

Figure 28: Villa and Townhouse, Q-o-Q changes in Secondary Price .......................................................

Figure 29: Serviced Apartment, Average Asking Rent by Grade ...............................................................

Figure 30: Serviced Apartment, Current Grade A&B supply ....................................................................

Figure 31: Industrial, Market Performance by Distrtict .............................................................................

Figure 35: Industrial, Supply by District ..................................................................................................

LIST OF TABLES Table 12: Office, Future Supply.................................................................................................................

Table 13: Significant CBD Office Projects ................................................................................................

Table 14: Retail, Future Supply ................................................................................................................

Table 15: Significant Retail Projects ........................................................................................................

Table 16: Condominium, New Projects Launched in Q4 2016 ...................................................................

Table 17: Villa and Townhouse, New Projects Launched in Q4 2016 .........................................................

Table 18: Serviced Apartment, Future Supply ..........................................................................................

Table 19: Significant Serviced Apartment Projects ..................................................................................

Table 20: Industrial, Future Supply .........................................................................................................

Table 21: Hanoi Industrial Market Overview .............................................................................................

LIST OF ABBREVIATIONS ARR: Average Rental Rate CBD: Central Business District

CPI: Consumer Price Index GDP: Gross Domestic Product

GFA: Gross Floor Area GRDP: Gross Regional Domestic Product

LUR: Land Use Right IP: Industrial Park

NLA: Net Lettable Area Q-o-Q: Quarter on Quarter

TPP: Trans-Pacific Partnership Y-o-Y: Year on Year

WTO: World Trade Organization

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HA NOI MARKET OVERVIEW

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GDPVietnam’s GDP was estimated to grow by 6.2% in 2016, driven mostly by industrial expansion and growth in construction and services. This year recorded a decrease in the country’s economic growth rate compared to the growth of 6.68% in 2015. The service sector grew by 7.57% y-o-y while the industrial and construction increased by 6.98% y-o-y. The whole year witnessed a big slowdown in agriculture-forestry-fishing with a modest growth rate of 1.36% y-o-y mainly due to natural disasters. Although 2016’s GDP was below the 6.7% target set by the National Assembly, the country remained one of the strongest performers in the region. We expect next year’s GDP to remain on a positive trajectory with our full year forecast standing at 6.5% on the back of increasing global integration and local production recovery.

CPIThe last month of 2016 saw a slight increase of 0.73% m-o-m in CPI index, despite purchasing needs at the year end. For the whole year, average CPI rose by 2.7% y-o-y. Six out of eleven major goods and service groups saw price rises with the highest growth recorded in medicine and healthcare services, at 5.3%. Main reasons for the CPI hike in 2016 were determined to be the government’s upward price adjustment of healthcare services and natural disasters’ effects on crops.With the target CPI of 4% set by National Assembly, price adjustment methods should be implemented for key commodity groups such as healthcare services, electricity and water, as well as a close supervision process should be kept on the world oil price to prevent the domestic price from shooting up.

FDIAs of the end of 2016, the country attracted 2,556 new foreign investment projects with total investment of both newly registered and supplementary capital reaching USD24.37 billion, representing an increase of 7.1% y-o-y in capital. Of the total, there are 1,225 already-operating projects raising their capital by more than USD5.7 billion. Investment in real estate accounted for 10.1%, which is equivalent to USD1.52 billion. South Korea was the largest foreign investor with USD5.5 billion, accounting for 36.6% of total capital, followed by Singapore and China with USD1.59 billion and USD1.26 billion, respectively.

RETAIL SALES Vietnam’s retail sales of goods and services reached USD156 billion, up 10.2% y-o-y. If the price factor was excluded, the growth rate would be 7.8% y-o-y, lower than the increase of 8.5% y-o-y in 2015. By sector, retail sales of goods achieved USD118.4 billion, accounting for 75.9% of total sales, up 10.2% y-o-y. Retail sales of accommodation and catering services reached USD18.3 billion, accounting for 11.3% of total sales, representing an increase of 10.7% y-o-y. Retail sales of tourism services, comprising 1% of total sales, reached USD 1.5 billion, up 12% y-o-y. Retail sales of other services, accounting for 11.4% of total sales, were estimated at USD17.8 billion, equivalent to 9.3% increase y-o-y.

INTERNATIONAL ARRIVALS In 2016, Vietnam welcomed 10.01 million international visitors, equivalent to a significant increase of 26% y-o-y. Thanks to visa exemption policy for citizens from five European countries and various tourism marketing strategies, this is the first time the country attracted such a high number of international tourists, a twofold increase compared to the number of 2010. Asian visitors took the lead with more than 7.2 million arrivals, mainly from traditional markets such as China, South Korea and Japan, comprising 72.5% of total visitors, followed by European visitors with 1.6 million arrivals and American tourists with 0.7 million arrivals, respectively.

TRADE BALANCEIn 2016, Vietnam earned roughly USD175.9 billion from exports, reporting an increase of 8.6% y-o-y. Import turnovers reached USD173.3 billion, up 4.6% against the previous year. As a result, the whole country registered a USD2.6 billion trade surplus. Of the total, the domestic economic sector reported a trade deficit of USD21.02 billion with USD50 billion in exports and USD71.1 billion in imports. On the contrary, the FDI sector enjoyed a trade surplus of USD23.7 with export revenues of USD125.9 and import revenues of USD102.1. While the United States took the lead in export revenues with USD38.1 billion, China remained the country’s largest import market with USD49.8 billion. By product, phones and phone parts, electronic goods, textile and garments, computers, machinery and equipment are the major foreign currency earners.

Q4 2016 | ECONOMIC OVERVIEW

©2017 Colliers International Research

VIETNAM QUARTERLY KNOWLEDGE REPORT

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2017 forecast

Figure 1: Exports - Imports in Vietnam in 2016

Source: General Statistics Office | Colliers International Research

Figure 2: International arrivals to Vietnam in 2016


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Figure 4: GDP Growth Rate of HCMC and Hanoi



Table 1: Marcoeconomic Indicators of HCMC and Hanoi

HCMC Hanoi

2016 2017 2016 2017

GDP (billion) 45.3 21.2

FDI (million) 1443.8 2800

Retail sales (billion) 30.1 22.3

Export (billion) 31.8 24.8

Import (billion) 37.9 14.2

HO CHI MINH CITY

In 2016, GRDP of Ho Chi Minh City achieved USD45.29 billion with the growth rate of 8.05% y-o-y. In particular, the service sector was the dominant contributor with USD24.8 billion, comprising 54.8% of the city’s economy, followed by the industrial & construction sector and the agriculture-forestry-fishery sector, accounting for 0.84% and 28.76% respectively. Of the whole year, total newly registered and supplementary FDI achieved USD1.44 billion in which there were 177 supplementary projects, worth of USD529.2 million. Investment in real estate took the lead with 24 projects and USD357.4 million, accounting for 39.1% of total inflows. Cayman Islands was recorded as the biggest foreign investor in the city, with USD270.5 million in registered capital, accounting for 29.6%, followed by Japan (USD190.2 million) and Singapore (USD110.9 million).Retail sales achieved USD30.1 billion, up 9.1% y-o-y. Highest growth rates were seen in products which help to improve the quality of life and traveling demand such as motor vehicles, household appliances, building materials and gasoline.The city’s export values reached USD31.8 billion, up 5.2% y-o-y. Garments, agricultural products and computers & electronic devices contributed the most to export values. The United States was the largest export market with nearly USD5.4 billion, up 5% y-o-y. Import values increased by 12.4% y-o-y, worth of USD37.85 billion, resulting in the city’s trade deficit of USD6 billion. The top segments of import values were milk and dairy products, fuel, garment material, plastics and iron & steel.

HANOI

In 2016, Hanoi’s GRDP achieved USD21.18 billion with the growth rate of 8.2%. The industrial-construction sector and the service sector had the highest growth rates, up 9% and 8.3% y-o-y respectively, while the agriculture-forestry-fishery sector saw a modest growth rate of 2.21% y-o-y. Of the whole year, the capital city’s CPI increased 2.66% y-o-y. Out of 11 sectors in the CPI basket, food and transportation witnessed a slight fall in price. As of the end of 2016, FDI inflows of both newly registered and supplementary capital reached USD2.8 billion, up 46.4% in number of projects and 164% in capital compared to the same period last year. Disbursed capital was USD1.2 billion.Retail sales of the capital city were up 8.8% compared to last year, reaching USD22.3 billion.In 2016, the city achieved USD10.61 billion in export revenues and USD24.83 billion in import revenues, causing a trade deficit of USD14.22 billion in the whole year. The capital city welcomed 2.8 million international visitors in 2016, equivalent to an increment of 19.9% y-o-y.

Figure 3: FDI Capital of HCMC and Hanoi


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Figure 6: Office, Occupancy Rate

PERFORMANCEQ4 2016 witnessed an increase of 3.1% q-o-q in the average asking rent across all grades, recording at USD32.5/sqm/month. The market remained tight with average occupancy rate of 95.9%, marginally down 0.45ppts q-o-q but up slightly 0.4 ppts y-o-y. By segment, average rent for Grade A space was up 1.7% q-o-q, staying at USD41.1/sqm/month whilst Grade B’s rental rates were up 5.7% q-o-q, at USD23.8/sqm/month. On a yearly basis, both Grade A and Grade B experienced significant rent growth of 14.2% and 13.6% respectively due to high demand and limited prime office space in 2016. While Grade A’s occupancy rate was slightly down 1ppt q-o-q but up 1ppt y-o-y to 95%, Grade B’s occupancy stayed unchanged at 97% compared to both the previous quarter and the same period last year.

SUPPLYThe last quarter of 2016 welcomed 33,840sqm NLA from the opening of Mapletree Business Centre and Ha Do Building, recording an increase of 12.8% in the newly launched stock compared to the same quarter last year. Currently, the city has a total of 11 Grade A buildings and 63 Grade B buildings, covering approximately 212,651sqm and 896,624sqm of net leasable space to the market respectively. By location, all Grade A and nearly 50% of Grade B are concentrated in the Central Business District (CBD). Clusters of Grade B buildings are also located in District 3, Tan Binh District and Phu My Hung New Urban Area in District 7.

DEMANDTertiary industry is one of the key drivers of demand for office space as service sector businesses tend to be more labor intensive and less capital intensive. Indeed, by looking more closely at components of the city GDP over the past 6 years (2011- 2016), we find that there is a strong relationship between the service industry’s contribution to the city’s economy and the average occupancy rate with relative high correlation coefficient of 0.7. With HCMC government’s plans to develop a service-led economy, targeting to increase the service sector by 10.17%-11% in the period of 2016-2020, the relationship between the service sector’s expansion and the demand for office space is more likely to continue in the coming years.

OUTLOOKGiven the current construction status, it is expected that there will be 62,300sqm of new Grade A and 124,392sqm of new Grade B office space coming on line in 2017. Up to 71,122sqm of such space will be located outside the CBD while 115,570sqm will be located within the CBD. Mature buildings in prime locations are forecasted to maintain good performance as the amount of new office space in the pipeline is limited and demand for high-quality office space in good locations continues. In contrast, office buildings in decentralized districts will face more pressure as the ample supply, raising concerns of falling rents and increased incentives. Furthermore, Novaland’s purchase of Continental Tower and the transfer of ownership for Metropolitan building are expected to put further pressure on the city’s market in the coming years.

Q4 2016 | HO CHI MINH CITY | OFFICE



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Table 2: Office, Future Supply

Source: Colliers International Research



Figure 5: Office, Average Asking Rent

Project name Grade NLA (sqm) Expected Completion

Viettel Complex B 26,320 Q1 2017

Waterfront Saigon B 8,822 Q1 2017

Deutsches Haus A 22,300 Q3 2017

Saigon Center phase 2 A 40,000 Q3 2017

Thaco-Sala Residence B 78,000 Q3 2017

The Khai B 11,250 Q4 2017

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Q4 2016 | HO CHI MINH CITY | OFFICE



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(*) US$/sqm/month (NLA)

Table 3: Significant Office Projects

No Name Address Completion Year

NLA (sqm)

Service Charges (*)

Occupancy rate

Average asking rent

(**)1 Saigon Centre 65 Le Loi 1996 11,650 7.5 99% 42.0

2 Saigon Tower 29 Le Duan 1997 13,950 7.5 99% 44.03 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 99% 40.04 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 82% 45.05 Diamond Plaza 34 Le Duan 1999 15,936 8.0 94% 41.06 Kumho Asiana Plaza 39 Le Duan 2009 26,000 8.0 84% 42.5

7 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 96% 44.58 President Place 93 Nguyen Du 2012 8,330 7.0 95% 39.0

9 Times Square 22-36 Nguyen Hue 2012 12,704 7.0 97% 40.010 Le Meridien 3C Ton Duc Thang 2013 9,125 6.0 95% 35.011 Vietcombank Tower 5 Me Linh Square 2015 41,250 7.0 99% 37.0

Grade A 212,655 7.2 95% 41.1

1 VTP-OSIC 8 Nguyen Hue 1993 6,500 6.0 100% 25.02 Yo Co Building 41 Nguyen Thi Minh Khai 1995 5,000 3.0 98% 23.03 Somerset Chancellor Court 21-23 NguyenThi Minh Khai 1996 3,200 5.0 100% 22.0

4 Central Plaza 17 Le Duan 1997 7,405 6.0 100% 27.0

5 Harbour View Tower 35 Nguyen Hue 1997 8,000 6.7 91% 20.06 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 99% 28.07 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.5 99% 27.6

8 MeLinh Point Tower 2 Ngo Duc Ke 1999 17,600 6.0 97% 36.09 Zen Plaza 54-56 Nguyen Trai 2001 11,037 5.0 95% 24.810 The Landmark 5B Ton Duc Thang 2005 8,000 7.9 98% 28.911 Opera View 161-167 Dong Khoi 2006 3,100 7.0 100% 27.012 City Light 45 Vo Thi Sau 2007 10,000 5.0 100% 19.013 Petro Tower 1-5 Le Duan 2007 13,304 6.5 95% 50.014 The Lancaster 22 – 22 Bis Le Thanh Ton 2007 7,000 6.7 90% 25.015 CJ Building 5 Le Thanh Ton 2008 14,000 8.7 99% 25.016 Continential Tower 81-85 Ham Nghi 2008 15,000 6.0 99% 22.017 Havana Tower 132 Ham Nghi 2008 7,326 8.0 79% 29.3

18 Royal Center 235 Nguyen Van Cu 2008 14,320 6.0 100% 23.019 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 96% 27.0

20 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 24.021 A&B Tower 76 Le Lai 2010 17,120 6.0 97% 32.022 Bao Viet Tower 233 Dong Khoi 2010 10,650 5.0 98% 28.023 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 97% 27.024 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19,596 5.0 95% 21.025 Saigon Royal 91 Pasteur 2010 5,340 6.0 100% 23.026 Vincom Center 68 -70 -72 Le Thanh Ton 2010 56,600 5.0 95% 32.027 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 100% 27.028 Lim Tower 9-11 Ton Duc Thang 2013 22,000 6.0 99% 28.029 MB Sunny Tower 259 Tran Hung Dao, Co Giang 2013 13,200 5.5 100% 22.030 Lim Tower 2 Vo Van Tan 2015 8,400 5.5 100% 24.0

Grade B 401,162 5.9 97% 27.8

Q4 2016 | HO CHI MINH CITY | OFFICE Q4 2016 | HO CHI MINH CITY | OFFICE



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SAIGON SKYLINE REVIEW- CBD HCMC GRADE A OFFICE BUILDINGS

KUMHO ASIANA PLAZA39 Le Duan, District 1

26,000/4,062$ 42.50

$ 8.00

DIAMOND PLAZA SAIGON34 Le Duan, District 1

15,936/1,020$ 41.00$ 8.00

LE MERIDIEN 3C Ton Duc Thang, District 1

9,125/500$ 35.00$ 6.00

SAIGON TOWER29 Le Duan, District 1

13,950/101$ 44.00$ 7.50

DEUTSCHES HAUS3-5 Le Van Huu, District 1

THE METROPOLITAN235 Dong Khoi, District 1

15,200/2,748$ 45.00$ 6.00

PRESIDENT PLACE93 Nguyen Du, District 1

8,330/384$ 39.00$ 7.00

BITEXCO FINANCIAL TOWER45 Ngo Duc Ke, District 1

37,710/1,627$ 44.5$ 8.00

VIETCOMBANK TOWER5 Me Linh Square, District 1

41,250/565$ 37.00$ 7.00

TIMES SQUARE SAIGON22-36 Nguyen Hue, District 1

12,704/400$ 40.00$ 7.00

SAIGON CENTRE65 Le Loi, District 1

11,650/ 155$ 42.00$ 7.50

SUNWAH TOWER115 Nguyen Hue, District 1

20,800/ 128$ 40.00$ 6.00

Q4 2016 | HO CHI MINH CITY | RETAIL



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Table 4: Retail, Significant Future Projects Under Construction

PERFORMANCEThe year 2016 recorded a significant rental growth of 12% y-o-y across the market. Being a hot spot for new international brands, the CBD remained its high average asking rents thanks to limited supply. New supply during the year stabilized rental rates of suburban districts. Improvement was seen in occupancy rate, up 2% y-o-y thanks to effective leasing strategies and stronger demand for retail space in the city.

SUPPLYThe last quarter of 2016 welcomed the opening of Golden Plaza, adding approximately 15,000sqm to the existing retail stock. Located in a strategic location of District 5 with four street frontages, the mall offers more than 600 kiosks with special considerations to fengshui design. This is the first center that combines both traditional and online sale for wholesale and retail. The total retail stock increased 13% y-o-y, reaching nearly 900,000sqm. The majority of new supply in 2016 was decentralized to suburban districts, where having large land bank and improving infrastructure.

DEMANDWith a population of more than 8 million people, an urbanisation rate of 82.5% and an average income per capita of approximately 3,650 USD, HCMC is the leading city in terms of total retail sales. In 2016, the total value was USD30.1 billion, increasing by 9.1% compared to the same period last year, indicating a significant improvement in local buying power. The continued strong retail sales growth implies expanding demand for retail space in the city in the coming years.

OUTLOOKVietnam has become one of the most attractive destinations for retailers in South East Asia on the back of strong inflow of foreign direct investment, rising household spending, a young population and improving economic conditions. Likewise, Ho Chi Minh City’s economic importance and status as retail hub continues to attract a strong development pipeline. There is currently approximately 300,000sqm GFA of retail space under construction that will open for business in 2017. Stronger competition from new openings is forecasted to push down rents and occupancy rates by 2% in the next two years.

Figure 8: Retail, Total Supply by Year



Figure 7: Retail, Market Performance by Year


Project name District NLA (sqm) Expected Completion

Viettel Complex 10 6,400 Q1 2017

Union Square 1 39,454 Q2 2017

Leman CT Plaza 3 12,000 Q2 2017

Thaco-Sala Residence 2 24,000 Q3 2017

The Garden Mall 5 24,000 Q3 2017

Xi Grand Court 10 60,000 Q4 2017

Su Van Hanh Mall 10 96,152 Q4 2017

Vinhomes Central Park Binh Thanh 44,250 Q4 2017

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©2017 Colliers International Research Page 11

Table 3: Significant Office Projects

(*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT

Table 5: Significant Retail Projects

No Name of Project/Building Address Location Completion Year

NLA (sq m) ARR (*) Occupancy

Rate1 Sheraton Saigon 88 Dong Khoi District 1 2003 750 130 100%2 The Manor 1 91 Nguyen Huu Canh Binh Thanh 2006 2,000 20 100%3 Opera View Lam Son Square District 1 2006 1,260 54 100%4 Caravelle Hotel 19 Lam Son Square District 1 2007 150 100 100%5 New World Hotel 76 Le Lai Street District 1 2009 1,000 90 100%6 Hotel Continental Sai Gon 132-134 Dong Khoi District 1 2009 200 90 100%7 Centre Point 106 Nguyen Van Troi Phu Nhuan 2009 2,000 22 93%8 Saigon Pearl 92 Nguyen Huu Canh Binh Thanh 2011 5,000 25 88%

9 The Manor 2 91 Nguyen Huu Canh Binh Thanh 2011 2,500 20 100%

10 The Oxygen Mall An Phu Ward District 2 2011 5,000 30 65%11 Rex Arcade 141 Nguyen Hue District 1 2011 2,000 125 100%

12 ICON 68 @ BFT 45 Ngo Duc Ke District 1 2011 8,000 90 99%

13 Kumho Asiana 35 Le Duan District 1 2009 6,830 50 100%

14 Saigon Airport Plaza 1 Bach Dang, Ward 2 Tan Binh 2013 7,623 23 75%15 Imperia An Phu An Phu Ward District 2 2013 2,940 15 100%16 President Place 93 Nguyen Du District 1 2013 800 42 98%17 Times Square 22-36 Nguyen Hue District 1 2013 9,000 300 100%18 Thao Dien Pearl 12 Quoc Huong District 2 2015 12,855 32 81%

Retail Podium 69,908 76.9 90%

1 Diamond Plaza 34 Le Duan District 1 1999 9,000 166 100%2 Parkson Saigontourist Plaza 35 Le Thanh Ton Street District 1 2002 17,000 100 99%3 Parkson Hung Vuong Plaza 126 Hung Vuong Street District 5 2007 24,000 60 97%4 Parkson C.T. Plaza Tan Son Nhat, Truong Son Tan Binh 2008 12,235 41 98%5 Parkson Flemington Le Dai Hanh District 11 2010 26,000 40 95%6 Parkson Cantavil Premier Cantavil Premier District 2 2013 17,815 35 96%

Department Store 106,050 64.0 97%

1 Saigon Center 35 Nam Ky Khoi Nghia District 1 1996 47,000 100 100%2 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 100 92%3 Vincom Plaza 3/2 3C Ba Thang Hai District 10 2010 25,000 40 95%4 Crescent Mall 101 Ton Dat Tien District 7 2011 45,000 43 85%5 Lotte Mart Saigon South 469 Nguyen Huu Tho District 7 2008 24,000 40 99%6 Lotte Mart Phu Tho 968 Ba Thang Hai District 11 2010 24,500 38 98%7 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 - 100%8 Union Square 171 Dong Khoi District 1 2012 38,000 Under renovation9 Zen Plaza 54-56 Nguyen Trai District 1 2001 6,817 60 100%10 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 70 100%11 Superbowl Vietnam TSN A43 Truong Son Tan Binh 2002 5,500 30 80%12 Satra Pham Hung C6/27 Pham Hung District 8 2011 11,528 14 100%13 An Dong Plaza 18 An Duong Vuong District 5 2004 18,000 - 92%

Shopping Centre 292,645 63.2 94%

Accelerating success

Q4 2016 | HO CHI MINH CITY | CONDOMINIUM



Table 3: Significant Office ProjectsPERFORMANCEMarket sentiment was improved in the last quarter of the year with nearly 12,000 successful transactions, up 55% compared to the previous quarter. The whole year witnessed a drop of 4% y-o-y in the number of sold units as competition was more intense by new entrants. Long-term market fundamentals remained positive with increasing genuine home buyers who can afford their own property thanks to rising income and supporting finance conditions. On the primary market, price appreciation was modest at 4% y-o-y as developers were more cautious in their pricing strategies in the midst of increasing new launches. Looking forward to 2017, sale price is forecasted to move upward, ranging from 3%-7%, depending on each market segment.

SUPPLYThe year 2016 witnessed a decline of 11% y-o-y in total new launches, prompting the market was cooling down from 2015 boom. While mid-end segment still dominated new launches, high-end segment reduced their market shares by 13% y-o-y as developers began to shift their attention to lower-end market. Robust infrastructure development and large land bank in the east and south of the city are supporting market momentum in these two areas. It is expected that the trend will be ongoing on the back of the city’s master plan toward 2020.

DEMANDConsidered as potential target customers, the employed population, especially those with stable income, will support housing purchases. It was estimated that the labour force in Ho Chi Minh City reached 4.1 million people in 2015, making up more than 50% of the total population. The percentage of trained labour increased from 40% in 2005 to 72.3% in 2015, and was forecasted to reach 80% by the end of 2016.

OUTLOOKWhile the majority of high-end condo buyers tend to be investors looking to rent out their units or speculators, real massive housing demand are in the mid-end and affordable condo segments. It is observed that condo projects with prices below USD900 (VND20 million) per sqm have received positive feedbacks from the market, and apartments’ size ranging from 60 – 90 square meters, with prices ranging from USD35.6 thousand to USD62.2 thousand (VND800 million to VND1.4 billion) per unit have captured attention. Therefore, it is expected that many developers will shift their condo development towards mid-end segment to meet the market demand.

Figure 9: Condominium, Primary Asking Price


Figure 11: Condominium, Sold Units by Segment and Year


Figure 10: Condominium, New Launches by Year


0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

2010 2011 2012 2013 2014 2015 2016

USD

/sqm

Luxury High-end Mid-end Affordable

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F

units

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F

units








Table 6: Condominium, Significant new projects launched in Q4 2016

No Name of Project/Building Developer Location Completion Year

Number of units

Asking Price (US$/sqm)

1 Summer Square GotecLand Vietnam District 6 2017 256 8002 Dream Home Palace The Global Group District 8 2018 978 6403 Republic Plaza Thuy Duong - Duc Binh Tan Binh 2019 266 1,7004 Thu Thiem Garden Thu Thiem Corp. District 2 2017 375 7205 Sun Tower N.H.O Khang Viet. District 9 2018 379 6506 4S Linh Đông - block D Thanh Truong Loc Cu Chi 2018 220 8507 Him Lam Phu An Him Lam Land District 9 2017 1092 9008 Grand Riverside - phase 2 Hong Ha Corp District 4 2017 240 1,550

9 Park Vista Đông Mekong Nha Be 2018 1300 800

10 Citi Soho Kien A Group District 2 2019 781 870

New launches in Q4 2016 5,887

* Excluding all kinds of tax, promotions and management feeThe information is updated as at the end of Q4 2016


Q4 2016 | HO CHI MINH CITY | VILLA & TOWNHOUSE



PERFORMANCEThe villa and townhouse segment performed well in 2016 with a number of successful projects such as Palm Residence, Ha Do Centrosa, Lakeview City or Melosa Garden. The transaction volume reached 2,200 dwellings, with a growth rate of 2% y-o-y.

On the back of ongoing demand and improving market sentiment, new launched projects increased their primary average asking price to 13% y-o-y. Similarly, price on the secondary market was up 10% y-o-y.

SUPPLYLaunches were limited in the last quarter of 2016 with only two new projects coming online, adding 307 dwellings to the primary market, down 45% q-o-q. However, 2016 is the year for landed properties when new launches reached 3,000 dwellings, up 40% y-o-y.

The eastern part of the city including District 2 and District 9 has been capturing attention of developers thanks to its large available land bank, upgraded infrastructure and a long-term vision of urban planning.

DEMANDIn recent years, the acceleration of city infrastructure development such as Metro lines, Thu Thiem bridges, new ring roads has enhanced connectivity of suburban districts with the CBD. Shorter commuting times, better transportation system and green living environment are key factors that encourage buyers of landed properties in the city outskirt. Ongoing infrastructure projects will continue to support growing demand for villas and townhouses in the future.

OUTLOOKLooking forward to 2017, selling price is forecasted to grow but on a slower pace at approximately 4-5% y-o-y as new projects will target at lower-end market segments in less developed locations of the city.

Sale transactions will be stable thanks to solid demand from both end-users and investors while future supply pipeline is expected to decline after the market reached its climax in 2016.

Figure 12: Villa and Townhouse, Selling Prices by Quarter


Figure 14: Villa and Townhouse, Primary Stock by District


Figure 13: Villa&Townhouse, Supply by Year


0

1000

2000

3000

4000

5000

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2 Q3 Q4

USD

/sq

m

District 7 District 9 District 2 Others

0

2,000

4,000

6,000

8,000

10,000

12,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

units

Existing supply New supply

District 237%

District 9 25%

Nha Be18%

District 125%

District 76%

District 104%

Binh Chanh4%

Thu Duc 4%

Others 5%







Table 7: Villa and Townhouse, Significant new projects launched in Q4 2016


Number of units


1 Serenity Sky Villas SonkimLand District 3 2017 45 5,000-6,000 2 VX home center Van Xuan District 12 2018 70 1,300 3 Dragon Parc Phu Long Nha Be 2018 58 2,000 4 PhoDong Village SCC District 2 2018 44 1,500 5 Lucasta Khang Dien District 9 2019 140 800

New launches in Q4 2016 357


Q4 2016 | HO CHI MINH CITY | SERVICED APARTMENT



PERFORMANCEIn the last quarter of 2016, the average net asking rent across both Grades recorded at USD33.9/sqm/month, up 2.6% q-o-q and 9.8% y-o-y. While Grade A saw a slight drop of 2% q-o-q in asking rent, staying at USD37.9/sqm/month, Grade B’s rent experienced a remarkable growth of 9% compared to the previous quarter, achieving USD29.9/sqm/month mainly due to the opening of a serviced apartment in District 3. By location, the CBD continued to record the highest average rent due to good location in conjunction with sufficient amenities and facilities. The city’s serviced apartment market remained healthy with relatively high occupancy rate, at 91%, marginally down 1ppt both on a quarterly and yearly basis.

SUPPLYCurrently, there are 37 serviced apartments of all grades providing about 3,335 units in HCMC, mainly in District 1, District 3 and District 7. The market’s only new supply last quarter was the Oakwood Apartments HCMC located in District 3, expanding the total stock by 2% q-o-q. Developed by Sonkim Land, the property provides 68 units with the interior inspired from Saigonese architecture in the period of 1950s-1970s. In terms of location, the CBD continued to be the most favored destination, contributing 44% of total supply. Serviced apartment developments are also clustered in District 3 and District 7 thanks to their convenient locations and availability of services targeting foreigners.

DEMANDSeveral years ago, serviced apartment used to be seen as a narrowed market segment targeting only expatriates. However, the segment has been expanded due to rising demand from Vietnamese tenants who want to enjoy the flexibility, privacy and independence offered by serviced apartments. Demand for serviced apartments is also being pushed upward as an increasingly mobile workforce drives business travel and relocation activity. It is expected that the positive economic outlook, coupled with an increasing number of expatriates coming to Vietnam promise higher demand for serviced apartments in the coming periods.

OUTLOOKBy the end of 2017, there will be some 987 units from four projects coming online. One project is located in the CBD while the other three are in decentralized districts. As the fierce competition between serviced apartments and buy-to-let apartments in the city, rental prices across two grades of the market are forecasted to soften. Limited future supply will allow the sector to continue to enjoy high occupancy in the coming years.

Project name District Total units

Expected Completion

Ascott Waterfront 1 222 Q1 2017

Saigon Center (phase 2) 7 200 Q3 2017

Oakwood Residence Saigon & Richmond Residence 7 480 Q4 2017

Berkley Serviced Residence 2 85 Q4 2017

Table 8: Serviced apartment, Significant Future Projects under construction


Figure 15: Serviced Apartment, Occupancy Rate


Figure 16: Serviced Apartment, Average Asking Rent by Grade


70

75

80

85

90

95

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

2013 2014 2015 2016

%

Grade A Grade B

0

5

10

15

20

25

30

35

40

45

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

2013 2014 2015 2016

USD/

sqm

/mon

thGrade A Grade B







Table 9: Significant Serviced Apartment Projects

No. Project Name Address Location Completion Year

Total Room

Average Occupancy

ARR(*) (**)

1 The Landmark 5B Ton Duc Thang District 1 1995 66 95.0% 26.02 Sedona Suites 65 Le Loi District 1 1996 89 98.0% 34.0

3 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 90.0% 32.0

4 Nguyen Du Park Villas 111 Nguyen Du District 1 2004 41 95.0% 22.05 The Lancaster 22-22 Bis Le Thanh Ton District 1 2007 55 73.0% 37.06 Intercontinental Asian Saigon 39 Le Duan District 1 2009 260 90.0% 36.0

Grade A 683 90.5% 34.1

1 Norfork Mansion 17-21 Ly Tu Trong District 1 1998 126 100.0% 33.02 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 85.0% 18.03 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 100.0% 26.04 Diamond Plaza 34 Le Duan District 1 1999 42 95.0% 25.05 Garden View Court 101 Nguyen Du District 1 2000 76 99.0% 29.06 Ben Thanh Luxury 172-174 Ky Con District 1 2010 88 91.0% 20.0

7 Lafayette De SaiGon 8 Phung Khac Khoan District 1 2010 18 100.0% 36.0

8 Vincom Center 45A Ly Tu Trong District 1 2010 60 34.0% 20.0

9 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 100.0% 34.0

10 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 84.0% 37.0

11 Spring Court 1Bis Phung Khac Khoan District 1 2011 14 87.0% 21.0

Grade B 814 90.4% 25.6

(*) US/sqm/month(**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge


Q4 2016 | HO CHI MINH CITY | INDUSTRIAL



PERFORMANCERents remained relatively stable on quarterly basis but fluctuated on yearly basis. More specifically, the average asking rent stayed at USD138.3/sqm/term, recording a nominal increase of 0.2% compared to the previous quarter but a significant growth of 15% compared to the same period last year. The increase was mainly due to higher asking rent of some IPs. Since no new IP entered the market in the last quarter of 2016, the average Land Use Right term was 35.8 years, unchanged q-o-q. The average occupancy rate was 67.5%, down 2.5 ppts q-o-q but up 0.5 ppts y-o-y. There are eight fully occupied IPs out of 19 existing IPs. Cu Chi district remained its lowest average occupancy rate of 42.3%, whilst 5 districts were reported to have occupancy rates of 100%, namely District 9, 12, 2, Tan Phu and Thu Duc districts. For a minimum leasable area from 1,000-5,000sqm, ready-built factories charge USD2.5 USD4.0/sqm/month (excluding VAT and service charge).

SUPPLYThe existing stock was unchanged compared to the previous quarter with 19 operating IPs, covering a total area of nearly 3,940 hectares. The leasable area is estimated to be 71% of total land area with nearly 2,800 hectares. Binh Chanh district remained the largest supplier with 770 hectares, accounting for more than 26% of the market share, followed by Cu Chi and Thu Duc districts. Le Minh Xuan (phase 2 and 3), Vinh Loc I (phase 2 and 3), Vinh Loc III, Phong Phu in Binh Chanh, Tay Bac Cu Chi (phase 2) in Cu Chi, Hiep Phuoc (phase 2) in Nha Be are some IPs that are under construction and expected to coming on stream in the coming years.

DEMANDThe fact that TPP ratification was deferred after the US presidential election won by Republican Donald Trump has raised concerns about foreign investment into Vietnam. Obviously, the lack of TPP will negatively affect some future investment, particularly in export and manufacturing industries. However, it is believed that foreign inflows will continue to be strong. Firstly, the country’s macro-economics are stable with average annual growth rate 6%. Secondly, the government offers favorable policies that would help to attract more investments from foreign investors. Thirdly, labor costs are expected to be low, about half of China’s and not likely to fluctuate in the short or medium term. As a result, demand for industrial space is expected to rise in the near future.

OUTLOOKThe future pipeline will expand with approximately 2,800 hectares from 8 new IPs entering the market in the coming years, up approximately 60% from the current stock.There is a fact that development of previous industrial zones in Ho Chi Minh City did not take into consideration high speed of urbanization, and thus contributing to bad traffic situation of the City. Demand for transportation facilities between factories/enterprises in IPs and ports/airports are forecasted to increase in conjunction with rising demand for industrial properties. Therefore, the City government is now planning a number of new transportation projects to improve the city’s infrastructure, making Ho Chi Minh City’s industrial market more attractive to international firms.


Figure 17: Industrial, Market Performance by District


Figure 18: Industrial, Supply by District



Table 10: Industrial, Future Supply

Industrial Park Name District GFA (ha)

Le Minh Xuan Industrial Park - phase 2 Binh Chanh 338

Le Minh Xuan Industrial Park - phase 3 Binh Chanh 242

Vinh Loc I - phase 2 Binh Chanh 56

Vinh Loc I - phase 3 Binh Chanh 200

Vinh Loc Industrial Park III Binh Chanh 210.3

Tay Bac Cu Chi Industrial Park - phase 3 Cu Chi 1,000

Hiep Phuoc Industrial Park - phase 2 Nha Be 597

Phong Phu Industrial Park Binh Chanh 148.4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

District 9 District 12 Cu Chi Binh Chanh Nha Be District 7 Tan Phu District 2 Thu Duc

US

D/s

qm/t

erm


Binh Chanh19%

District 911%

Nha Be20%

Cu Chi31%

Others19%






Table 3: Significant Office ProjectsTable 11: HCMC Industrial Market Overview

No Name of Industrial Park Location Distance to CBD (km)

Total Area(ha)

Total leasable area (ha)

Asking Rent (US$/sqm/

term)Occupancy LUR Term

1 Tan Thuan Export Processing Zone District 7 6.4 300 204 260 81% 20412 Tan Binh Industrial Park(P1+2) Tan Phu 11 129 100 235 100% 20473 Saigon Hi-tech Park P1 District 9 15 300 300 180 100% 20524 Vinh Loc Industrial Park Binh Chanh 15 203 131 250 95% 20475 Binh Chieu Industrial Park Thu Duc 16 27 27 150 100% 20466 Tan Thoi Hiep District 12 16 28 20 144 100% 20497 Linh Trung 2 Export Processing Zone Thu Duc 17 62 44 60 100% 20508 Tan Tao Industrial Park 1 Binh Chanh 17 161 97 240 97% 20479 Tan Tao Industrial Park 2 Binh Chanh 17 183 116 240 78% 205010 Linh Trung 1 Export Processing Zone Thu Duc 18 62 46 60 100% 204211 Le Minh Xuan Industrial Park Binh Chanh 20 100 66 120 100% 204712 Hiep Phuoc Industrial Park 1 Nha Be 21 311 224 125 100% 204813 Cat Lai Industrial Park (Cluster II) District 2 21 137 87 90 100% 206114 Hiep Phuoc Industrial Park 2 Nha Be 22 597 345 125 31% 205815 An Ha Industrial Park Binh Chanh 23 124 124 69 23% 205816 Dong Nam Industrial Park Cu Chi 30 343 287 63 69% 205817 Tay Bac Cu Chi Industrial Park Cu Chi 36.5 208 150 80 3% 204818 Tan Phu Trung Industrial Park Cu Chi 37 543 359 80 30% 2054

19 Automotive-Mechanical (Hoa Phu) Industrial park Cu Chi 40 99 67 80 83% 2057

Total 3,916 2,794 138.3 68%


Q4 2016 | HA NOI | OFFICE



PERFORMANCEThe last quarter of 2016 witnessed a fall in rents across all grades due to continued oversupply, staying at USD22.5/sqm/month, down 1.7% q-o-q. Average net asking rent of Grade A declined 3% q-o-q to USD27.2/sqm/month while Grade B’s rent remained relatively static at USD17.9/sqm/month. Average occupancy rate continued to show a downward trend because of an oversupply, standing at 78.7%, which was a decline of 4.5 ppts q-o-q. Grade A’s occupancy rate was down 3 ppts to 80% while Grade B experienced a significant decrease of 6 ppts q-o-q, staying at 78%. The diminishing trend in both rents and occupancy rates is expected to continue in 2017 since a huge gap exists between supply and demand in Hanoi’s office marke.

SUPPLYThe last quarter of 2016 recorded no new supply entering the market. The capital city currently has approximately 410,000 sqm NLA of Grade A and 770,000sqm NLA of Grade B office buildings. On a yearly basis, the city saw a surge in supply in both Grade A and Grade B buildings with growth rates of nearly 14% y-o-y and 5% y-o-y, respectively. Despite an existing oversupply, it is predicted that a large amount of additional supply would be coming in the future as many office projects which were due for completion in 2016 rescheduled their construction progress for 2017.

DEMANDRecently, the Federal Reserve decided to raise its key interest rate by a quarter point, which is forecasted to widely affect the global economy. Theoretically, once US rates rise, global investors are more likely to move their money out of emerging markets like Vietnam and back to less risky countries like US. Nevertheless, in the short and medium run, this small change will not be enough to dramatically affect capital flows, suggesting that the impact on property market and demand for office space as well will be limited. Economic recovery, coupled with improvements in business environment in previous years are expected to fuel the demand for establishing a new office or expanding current premises of foreign and domestic enterprises, proving a supportive landscape for the office market in Hanoi in the upcoming period.

OUTLOOKBy 2017, the capital city’s office market will welcome 8 new projects which are currently under construction, providing approximately 331,122 sqm of new space. Given the huge pipeline, the office market in Hanoi will remain as the tenant-oriented market, indicating that rental rates will maintain their downward trend in the coming years. As rents and vacancy rates are continuing to come down, we will see tight competition between landlords in CBD and non-CBD areas. In order to attract more tenants, property owners need to apply appropriate marketing and pricing strategy as well as to maintain their properties with good management services.

Figure 19: Office, Average Asking Rent


Figure 20: Office, Occupancy Rate


Table 12: Office, Future Supply


Project name Grade NLA (sqm)

Expected completion

Horison Tower B 8,000 Q1 2017

Discovery Complex B 93,320 Q2 2017

Comatce Tower B 43,100 Q2 2017

Eurowindow Building B 16,592 Q3 2017

Vinacomin Tower B 103,100 Q4 2017

DSD Building B 6,860 Q4 2017

Handi Resco Tower B 24,190 Q4 2017

FLC Twin Tower B 35,960 Q4 2017

0

5

10

15

20

25

30

35

40

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

2012 2013 2014 2015 2016

US

$/sq

m/m

onth

Grade A Grade B

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%


2012 2013 2014 2015 2016

Grade A Grade B

Q4 2016 | HA NOI | OFFICE



Page 21

(*) US$/sqm/month (NLA)

Table 13: Significant CBD Office Projects

No Name Address Completion Year

NLA (sqm)

Service Charges

(*)

Occupancy rate

Average asking rent

(**)1 Central Building 31 Hai Ba Trung 1995 3,653 9.0 100% 33.0

2 International Centre 17 Ngo Quyen 1995 6,500 - 90% 24.03 Hanoi Tower 49 Hai Ba Trung 1997 9,000 - 100% 27.04 63 Ly Thai To Building 63 Ly Thai To 1998 6,753 included 100% 47.05 Sun Red River Building 23 Phan Chu Trinh 1999 13,459 7.0 97% 28.06 Vietcombank Tower 198 Tran Quang Khai 2000 19,563 included 100% 29.0

7 Opera Business Centre 60 Ly Thai To 2007 3,787 included 98% 22.08 Pacific Palace 83B Ly Thuong Kiet 2007 16,600 7.4 85% 36.8

9 Asia Tower 2 Nha Tho 2007 3,100 7.7 87% 38.010 Sun City Building 13 Hai Ba Trung 2007 6,400 - 100% 45.0

11 BIDV Tower 194 Tran Quang Khai 2010 10,120 7.0 96% 29.3

12 Sentinel Place Hang Da 2010 8,000 8.5 98% 35.0

13 Corner Stone 16 Phan Chu Trinh 2013 26,500 7.0 96% 31.0

14 Hong Ha Center 25 Ly Thuong Kiet 2013 11,000 5.0 93% 20.0

Grade A 144,435 7.0 96% 31.1

1 Tungshing Square 2 Ngo Quyen 1996 8,306 5.7 90% 28.72 Melia Hotel 44B Ly Thuong Kiet 1997 8,500 - 90% 38.0

3 Prime Centre 53 Quang Trung 1998 7,600 - 100% 27.0

4 VIB Hai Ba Trung 59 Quang Trung 2006 3,000 - 68% 16.05 Capital Tower 109 Tran Hung Dao 2010 21,089 7.0 99% 35.06 Hanoi Tourist Building 18 Ly Thuong Kiet 2010 7,600 - 100% 24.0

7 Capital Building 72 Tran Hung Dao 2013 5,800 - 100% 25.08 Coalimex Building 33 Trang Thi 2013 5,071 5.0 79% 18.09 VID Building 115 Tran Hung Dao 2013 4,930 - 89% 23.010 Artex Port 31-33 Ngo Quyen 2014 4,725 - 100% 23

Grade B 76,621 6.0 94% 28.6


Q4 2016 | HA NOI | RETAIL



Table 3: Significant Office ProjectsPERFORMANCEAverage net asking rents in 2016 dropped 5% y-o-y, staying at USD38/sqm/month. While rents of the CBD recorded a nominal rise by 2% y-o-y, reaching USD81/sqm/month, those of non-CBD declined 6% y-o-y, staying at USD30/sqm/month. Due to weak purchasing power and considerable new supply, retail centers in Hanoi are suffering from increasing vacancy space. Average occupancy rates in 2016 decreased 2%, staying at 87% across all segments.

SUPPLYIn Q4 2016, three new retail centers, Vincom Center Pham Ngoc Thach, Vincom Plaza Bac Tu Liem and Trang An Complex entered the market, providing an additional 64,500sqm GFA. With a prominent retail mix of shopping, entertainment and F&B services, Vingroup has expanded its network across the capital city through its 6th and 7th shopping mall. Trang An Complex includes 10,500sqm GFA of retail space which has been fully occupied. After eight years of operation, Parkson Viet Tower was closed in December 2016, withdrawing 11,000sqm GFA. With the closure of two department stores within a two-year period, Parkson officially decided to leave Hanoi.

DEMANDAccording to a recent survey in Vietnam by Nielsen, as of Q3 2016, Consumer Confidence Index in Viet Nam remained strong at 107 points, unchanged from the previous quarter and stayed among the top 10 most optimistic globally. Compared to neighboring countries, Vietnam’s consumer confidence level ranked fourth out of six South East Asia countries, lagging behind the Philippines, Indonesia and Thailand, while other regional peers experienced below 100 points over the same period. The continued strong consumer confidence index may have positive impacts on retail sales and in turn spur demand for retail space in Hanoi.

OUTLOOKThere are a number of developments which were under construction, or being proposed, which include quality retail facilities that will provide more shopping centres over the coming years. A steady supply of new developments is expected to enter the market from 2017 onwards, and overall the long-term outlook is positive on the back of improved economic growth and benefits from the liberalization of retail sector under conditions of Vietnam’s WTO membership and the recent participation in the Trans-Pacific Partnership.

Figure 21: Retail, Market Performance

Table 14: Retail, Future Supply



Figure 22: Retail, Total Supply


Project Name District GFA (sqm) Expected completion

Horizon Tower Tu Liem 6,719 Q1 2017

Discovery Complex Cau Giay 38,144 Q2 2017

Ecolife Capital Nam Tu Liem 20,000 Q3 2017

Artemis Thanh Xuan 27,000 Q3 2017

Loc Ninh Singashine Chuong My 14,800 Q4 2017

FLC Twin Towers Cau Giay 25,000 Q4 2017

Handi Resco Thanh Xuan 4,769 Q4 2017

Eco Green City Hoang Mai 7,000 Q4 2017

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2010 2011 2012 2013 2014 2015 2016

sqm

CBD Non-CBD

0

10

20

30

40

50

60

70

75%

80%

85%

90%

95%

100%

2010 2011 2012 2013 2014 2015 2016

US$/

sqm

/mon

th

Rental rate Occupancy



Q4 2016 | HA NOI | RETAIL



Table 15: Significant Retail Projects

No Name of Project /Building Address Location Completion

YearNLA

(sq m) ARR (*) Occupancy Rate

1 Central Building 31 Hai Ba Trung Hoan Kiem 1995 550 90-100 100%2 Hanoi Tower 49 Hai Ba Trung Hoan Kiem 1997 2,515 50-60 73%3 63 Ly Thai To Building 63 Ly Thai To Hoan Kiem 1998 650 150 100%4 ICC Building 71 Nguyen Chi Thanh Dong Da 2006 2,900 19 87%5 Pacific Place 83b Ly Thuong Kiet Hoan Kiem 2007 2,300 72 100%6 Opera Business Center 6b Trang Tien Hoan Kiem 2007 370 90-150 100%

7 Asia Tower 6 Pho Nha Tho Hoan Kiem 2008 300 95 41%

8 Sentinel Place 41A Ly Thai To Hoan Kiem 2010 700 45 100%9 Sky City Tower 88 Lang Ha Dong Da 2010 5,400 20-80 100%10 The Lancaster Hanoi 20 Nui Truc Ba Dinh 2013 3,123 26-33 74%11 Madarin Garden Residential 1 Hoang Minh Giam Cau Giay 2013 11,000 25-30 97%

Retail Podium 29,808 92%

1 Vincom Center Ba Trieu - Tower A&B 191 Ba Trieu Hai Ba Trung 2004 17,700 90-100 99%2 Vincom Center Ba Trieu - Tower C 191 Ba Trieu Hai Ba Trung 2004 10,974 80 100%3 Ruby Plaza 44 Le Ngoc Han Hai Ba Trung 2007 2,400 18 99%4 Syrena 51B Xuan Dieu Tay Ho 2008 4,153 30 100%5 Trang Tien Plaza 24 Hai Ba Trung Hoan Kiem 2008 12,000 10 85%6 Savico MegaMall 7-9 Nguyen Van Linh Long Bien 2011 43,500 20-25 99%7 Vincom Center Long Bien KDT Vincom Long Bien 2012 29,000 20 70%8 Indochina Plaza Hanoi 241 Xuan Thuy Cau Giay 2012 17,000 27 97%9 Vincom Mega Mall - Royal City 72A Nguyen Trai Thanh Xuan 2013 181,317 70 99%10 Vincom Mega Mall - Time City 458 Minh Khai Hai Ba Trung 2014 83,950 50 100%11 Aeon Mall Long Bien 2 Co Linh Long Bien 2015 72,000 45 100%12 Vincom Nguyen Chi Thanh 54A Nguyen Chi Thanh Dong Da 2015 65,328 70-80 99%

Shopping Centre 539,322 97%

1 The Garden (Bitexco) Me Tri Tu Liem 2007 24,063 28-35 90%2 Ho Guom Plaza Ha Dong Ha Dong 2013 23,380 16 94%3 Lotte Department Store 54 Lieu Giai Ba Dinh 2014 21,480 43 97%

Department Store 68,923 94%

(*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT


Q4 2016 | HA NOI | CONDOMINIUM



PERFORMANCEThe year 2016 recorded 20,900 successful transactions across all segments, down 1.9% compared to the previous year. Mid to high-end segments dominated sales with 9,700 and 6,800 sold units, accounting for 46% and 32% of market share respectively. Price growth on the primary market was at 3-5% y-o-y on average. Prices in high-end segments registered the strongest growth at 9% y-o-y while those in mid-end and affordable segments were static at 2% and 1% growth on yearly basis.

SUPPLYThe total number of newly launched units in 2016 reached approximately 30,000 which were lower 10% than those of 2015. By segment, mid-end and high-end segment recorded the highest number of new launches with more than 80% of total new supply. The luxury segment was revived with two new projects in the Westlake while the affordable segment significantly decreased in its stock. Large land bank and upgrading infrastructure enabled the West and South West to provide largest supply among other areas of the city.

DEMANDHanoi currently has a population of approximately 7.5 million, comprising 12.2% of the whole nation’s population of 91.7 million people. The population growth rate is proportionally high compared to the country average of 1.07% between 2010 and 2015. The number of residents in the city is forecasted to continue to rise at a constant rate to an estimated figure of 7.9 million at the end of 2020. Steady population growth is the main driver of the condominium market in the city.

OUTLOOKVingroup, a leading property developer, recently unveiled Vin City, a brand-new project aimed at providing affordable apartments in seven major cities and provinces throughout the country. To meet the demand of middle and low income buyers, more developers in Hanoi have begun to tap into this potential market segment. It is expected that the shortage of affordable housing will be resolved in coming years.

Figure 23: Condominium, Primary Sale Price


Figure 24: Condominium, New Launches by Year



Figure 25: Condominium, Sold Units by Segment and Year

$-

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Table 3: Significant Office ProjectsTable 3: Significant Office Projects


Table 16: Condominium, New projects launched in Q4 2016


Number of units


1 Tu Hiep Plaza Vinh Hanh Corp Thanh Tri 2016 648 7002 Anland Complex Nam Cuong Corp Ha Dong 2017 533 1,1003 Roman Plaza Hai Phat Corp Ha Dong 2017 804 1,0004 The Legend Nguyen Tuan Dai Viet Tri Tue Thanh Xuan 2017 400 1,5205 Sunshine Garden Sunshine Group Hai Ba Trung 2017 1,278 1,1506 Sunshine Boulevard Sunshine Group Thanh Xuan 2017 500 1,4007 Sunshine Center Sunshine Group Nam Tu Liem 2017 398 1,300

8 Sunshine Riverside Sunshine Group Tay Ho 2017 168 1,600

9 Ha Noi Paragon VT Corp Cau Giay 2017 495 1,400

10 Sunshine Palace Sunshine Group Hoang Mai 2017 396 1,200

11 D’.Capitale - C1, C6 Tan Hoang Minh Cau Giay 2018 1,800 1,850

12 D’.Eldorado 1 Tan Hoang Minh Tay Ho 2018 340 1,700

13 D’.Eldorado 2 - Phu Thanh complex Tan Hoang Minh Tay Ho 2018 136 1,600

14 Rivera Park Long Giang Land Thanh Xuan 2018 666 1,250

15 The Golden Palm HDIS Nam Tu Liem 2018 400 1,500

16 An Bình City - block A2 Geleximco Thanh Xuan 2018 276 1,000

17 Legend Park VIG Nam Tu Liem 2018 318 1,800

New launches in Q4 2016 9,556


Q4 2016 | HA NOI | VILLA & TOWNHOUSE



PERFORMANCEThanks to improved year-end sentiment, the last quarter of 2016 witnessed the highest transaction volumes in two years with more than 750 successful deals, up 129% compared to the previous quarter. By type of property, townhouses dominated sales activities with 64% of total transactions. Tu Liem and Ha Dong took the lead with nearly 50% of sales owning to their large land availability. Market secondary price saw a decrease of 2% q-o-q and 3% y-o-y, averaging at USD3,238.6 for completed properties. Cau Giay District had the highest average price, up 4.2% q-o-q. Meanwhile, most of other districts recorded a decline in price on the secondary market.

SUPPLYThe supply pipeline in the last quarter of 2016 saw approximately 370 dwellings from 5 projects coming to the market. Ha Dong, Nam Tu Liem and Bac Tu Liem Districts were the dominant contributors, cumulatively accounting for more than 80% of the market share. Townhouse was the most popular product with 275 units, accounting for nearly 75% of total newly launched supply. Some of notable launches in Q4 2016 were Belleville, Foresa Villa, Mai Son Du Parc and 24h Van Phuc.

DEMANDWhile pricing is the most determinant element for buyers in affordable segment, the villa and townhouse segment targets affluent customers who initially focus their spending on improving living conditions. With the growing middle and affluent class in Vietnam, the demand for landed properties is expected to be on the rise.In addition, landed property is considered as an investment vehicle, which ensures the highest profitability possible and protects investors’ assets against currency devaluation. The preferred choice of landed housing among Vietnamese people is also supporting the segment.

OUTLOOKGiven the current construction status, the market will see 8 projects coming online, providing some 2680 units in the next coming years, with the number of townhouses expected to dominate the market share. The villa and townhouse performance in the Hanoi City market is predicted to remain strong in the short term owning to the positive sentiment in both demand and supply. Thanks to better land availability, landed property projects tend to be developed in suburban districts. The success of these projects is closely linked to infrastructure development.

Figure 26: Villa and Townhouse, Supply by quarter


Figure 27: Villa and Townhouse, Supply by District



Figure 28: Villa and Townhouse, Q-o-Q changes in secondary price

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Ha Dong 31%

Nam Tu Liem26%

Bac Tu Liem25%

Cau Giay18%







Table 3: Significant Office ProjectsTable 3: Significant Office ProjectsTable 3: Significant Office Projects


Table 17: Significant new projects launched in Q4 2016


Number of units


1 Roman Plaza Hai Phat Tu Liem 2019 59 4,000 2 24h Van Phuc Hai Phat Ha Dong 2017 125 5,300 3 Foresa Villa Tasco Nam Tu Liem 2017 35 1,400 4 Belleville Vimedimex Group Cau Giay 2017 66 9,200 5 Mai Son Du Parc Geleximco Bac Tu Liem 2016 94 4,200

New launches in Q4 2016 379


Q4 2016 | HA NOI | SERVICED APARTMENT



Table 3: Significant Office ProjectsPERFORMANCEThe market in the capital city saw a slight increase of 1ppt q-o-q in the average occupancy rate, staying at 85%, but also witnessed a slight decrease of 2% q-o-q in average rental rates, staying at USD26.1/sqm/month. On a yearly basis, the city’s average occupancy rate remained unchanged, whilst the decline of average rental price was about 3.3%, equivalent to a drop of USD0.9/sqm/month. By segment, Grade A’s rent stayed unchanged q-o-q, at USD32/sqm/month and its occupancy rate dipped slightly by 1ppt, at 84%. Grade B dropped 5% q-o-q in rents but climbed 3.5ppts in occupancy rates, staying at 84% and USD20.2/sqm/month respectively.

SUPPLYThe market, with no new supply last quarter, has 41 buildings providing 2,200 serviced apartments from studios to four-bedroom units and penthouses. By type of apartments, two-bedroom units continued to dominate the market share with more than 50% of total supply. The asking rent of this type of apartments usually falls into a range of USD1,600-USD2,000 per unit. In terms of location, Ba Dinh District was the largest source of supply in Hanoi serviced apartment, accounting for 28% of all units in the market, followed by Tay Ho District with 24% of total supply.

DEMANDServiced apartments can be seen as hybrid properties filling the gap between leased residences and hotel rooms as they offer flexibility, modern conveniences and value-added services to tenants. According to the General Statistics Office, the annual growth rate of international visitors to Vietnam is about 20% per year. The fact that serviced apartments are now more preferred by travelers as opposed to hotels due to their additional space and amenities will push upward pressure on demand for this sector.

OUTLOOKIn the near to medium term, the market will see further supply expansion as developers rush to meet the high demand. There will be 571 units coming on stream in the next two years from one project located in Tay Ho District and the other two located in Cau Giay District. The facts that buy-to-let trend is becoming more popular and some hotels are converting part of them into serviced apartments will create more pressure on serviced apartment market, resulting in a more competitive playing field going forward.

Table 18: Serviced Apartment, Future Supply


Figure 29: Serviced Apartment, Average Asking Rent by Grade


Figure 30: Serviced Apartment, Current Grade A&B supply


Project Name District Expected units

Expected completion

Trang An Complex Cau Giay 42 Q1 2017

Somerset West Point Tay Ho 247 Q1 2017

Somerset West Central Hanoi Cau Giay 252 2018

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Table 3: Significant Office ProjectsTable 19: Significant Serviced Apartment Projects

No. Project Name Address Location Total Units

Average Occupancy

ARR(*) (**)

1 Hanoi Daewoo 360 Kim Ma Ba Dinh 194 85% 28.02 Hanoi Somerset Grand 49 Hai Ba Trung Hoan Kiem 185 70% 30.0

3 Sedona Suites 96 To Ngoc Van Tay Ho 181 90% 34.3

4 Somerset West Lake 254D Thuy Khue Tay Ho 90 82% 33.05 Sofitel Plaza 1 Thanh Nien Ba Dinh 56 100% 38.06 Sun Red River 23 Phan Chu Trinh Hoan Kiem 46 96% 27.07 Hanoi Lake View 28 Thanh Nien Tay Ho 26 100% 25.08 Pacific Place 83B Ly Thuong Kiet Hoan Kiem 35 55% 23.09 Intercontinental Ha Noi 13 Nghi Tam Tay Ho 25 88% 35.010 Somerset Hoa Binh 106 Hoang Quoc Viet Cau Giay 206 87% 31.011 Fraser Suites Hanoi 51 Xuan Dieu Tay Ho 184 95% 40.512 Crown Plaza 36 Le Duc Tho Tu Liem 136 95% 35.013 Calidas E6, Pham Hung Tu Liem 378 99% 38.014 Lotte Center Dao Tan, Cong Vi Ba Dinh 258 87% 44.015 Hanoi Club 76 Yen Phu Tay Ho 54 96% 29.0

Grade A 2,054 89% 34.9

1 Oriental Palace 33 Tay Ho Tay Ho 59 88% 30.02 Pan Horizon 157 Xuan Thuy Cau Giay 86 80% 30.03 Rose Garden 170 Ngoc Khanh Ba Dinh 96 91% 24.04 Jana Garden Terrace 6 Kim Dong Hoang Mai 72 83% 20.05 V-Tower 649 Kim Ma Ba Dinh 36 100% 28.06 DMC Lake View 535 Kim Ma Ba Dinh 66 82% 16.07 Atlanta 49 Hang Chuoi Hai Ba Trung 50 92% 24.08 Elegant Suites Hahoi 19B Ha Hoi Hoan Kiem 39 92% 23.0

9 Hoa Binh Green No. 14, Ally 376 Buoi Ba Dinh 40 92% 22.0

10 Times City 485 Minh Khai Hai Ba Trung 150 85% 19.011 Royal City 72 Nguyen Trai Thanh Xuan 100 70% 17.0

12 My Way 4, Alley 86, Duy Tan Cau Giay 39 93% 25.0

13 Rainbow 7 Trieu Viet Vuong Hai Ba Trung 26 88% 14.014 Dolphin 28 Tran Binh Tu Liem 70 93% 15.015 Lancaster Hanoi 20 Nui Truc Ba Dinh 31 90% 24.016 Elegant Suites Westlake 10C Dang Thai Mai Tay Ho 131 94% 27.017 May Fair 34B Tran Phu Ba Dinh 48 95% 17.0

18 Hanoi Lakes Residences 11-13 Nam Trang Ba Dinh 10 100% 9.0

19 Skyline Tower 4 Dang Dung Ba Dinh 79 80% 30.0

20 Candle Hotel 287-301 Doi Can Ba Dinh 69 74% 27.0

21 Park View 9 Nguyen Binh Khiem Hai Ba Trung 6 100% 14.0

22 Flower Village Hanoi 14 Thuy Khue Tay Ho 131 90% 23.0

23 Palace de Thien Thai 2 Tho Nhuom Hoan Kiem 16 98% 23.0

24 The City Residences 37 Phan Dinh Phung Ba Dinh 15 67% 15.0

25 Swan Lake 3/61/31 Xuan Dieu Tay Ho 6 99% 16.0

26 Lakeside Garden 56 Xuan Dieu Tay Ho 8 62% 14.0

Grade B 1,479 87% 22.6

(*) US/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge

Q4 2016 | HA NOI | INDUSTRIAL



PERFORMANCERental rates in Hanoi are generally lower compared to Ho Chi Minh City. Average asking rent in Q4 2016 surged 20% on a yearly basis but remained stable on a quarterly basis, recorded at USD99.5/sqm/term. Remaining lease term is from 30-45 years. Nam Thang Long industrial park offered the highest asking rent at USD155/sqm/term. In spite of such a high rental rate, the 261ha industrial park was fully occupied. Rents of ready-built factory in Hanoi is USD1.5-2.5/sqm/month,approximately 40% lower than those of Ho Chi Minh City. The average occupancy rate increased by 15ppts on both quarterly and yearly basis, reaching 77.3%. There are five out of 11 IPs fully occupied, namely Nam Thang Long, Phu Nghia 1, Sai Dong B, Thach That-Quoc Oai and Thang Long. Tu Liem and Long Bien are two districts in which IPs were 100% leased out.

SUPPLYThe total stock was unchanged compared to the previous quarter as there was no new supply in Q4 2016. Currently there are 11 operating IPs in Ha Noi, covering total land area of over 2,700 ha. Chuong My, Thach That, Dong Anh districts are main suppliers to the market, comprising of approximately 54% of the market share.

DEMANDJapan, China and Hong Kong are three leading investors at Hanoi’s IPs, focusing on supporting industries, mechanical technology and electronics. The recent US interest rate hike is expected to bring some negative effects on foreign investment to emerging markets like Vietnam. However, with such a small change, this impact on capital inflows will be insignificant in the short run. Foreign manufacturing firms will continue to expand their operation and set up their factories in the country on the back of relative low labor costs and young dynamic workforce. Hence, demand for industrial properties in the coming years will continue to be strong.

OUTLOOKThe future IP supply in Ha Noi is relatively higher than in HCM City. By 2020, it is estimated to have 14 new IPs, with about 6,100 ha of total land area, equivalent to a 250% increase against the current number. Recently, Ha Noi’s government has agreed to switch functions and implement the relocation plan for many IPs in order to deal with the environmental pollution. As only 60% of industrial parks have wastewater treatment systems, most of wastewater is discharged directly into the environment. Thus, heavy metal concentrations in soil in some villages have exceeded the allowed standards. It is crucial that the establishment of industrial parks should pay attention to environmental issues sustainable development.


Figure 31: Industrial, Market Performance by District


Figure 32: Industrial, Supply by District


Table 20: Industrial, Future Supply


Industrial Park Name District GFA (ha)

Quang Minh II Industrial Park Me Linh 266

Phuc Tho Industrial Park Phuc Tho 74

Phu Xuyen Industrial Park Phu Xuyen 488

Thanh My - Xuan Son Industrial Park Son Tay 108

Soc Son Industrial Park Soc Son 340

Soc Son II Industrial Park Soc Son 204

Soc Son III Industrial Park Soc Son 180

Soc Son IV Industrial Park Soc Son 216

Thanh Oai II Industrial Park Thanh Oai 480

Habeco Industrial Park Thuong Tin 300

Ha Noi Hi-BioTech Park Tu Liem 200

Chuong My15%

Thach That25%

Dong Anh28%

Others32%

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Q4 2016 | HA NOI | INDUSTRIAL Q4 2016 | HA NOI | INDUSTRIAL



Table 3: Significant Office ProjectsTable 21: Hanoi Industrial Market Overview

No. Name of Industrial Park Location Distance to CBD (km)

Total Area(ha)

Asking Rent (US$/sqm) Occupancy LUR Term

1 Nam Thang Long Tu Liem 15 261 155 100% 20482 Noi Bai Soc Son 31 116 135 90% 20583 Phu Nghia 1 Chuong My 24 170 95 100% 20584 Phu Nghia 2 Chuong My 24 238 95 65% 20585 Quang Minh Me Linh 24 344 130 95% 20526 Sai Dong B (Phase I&II) Long Bien 11 97 95 100% 20467 Thach That Thach That 24 150 100 100% 20568 Thang Long Dong anh 16 302 95 100% 20479 Hanssip (phase 1) Phu Xuyen 44 72 120 25% 206010 Hoa Lac Hi-Tech Thach That 39 549 50 20% 204811 Dong Anh Dong Anh 19 470 100 95% 2057

Total 2,770 99.5 77.3%

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Vietnam Quarterly Knowledge Report | Q4 2016