MARKETBEAT Industrial Snapshot Q2 2016 Hanoi, Vietnam Economy HANOI INDUSTRIAL PARK Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Trade balance (billion US$) 12-Month Forecast Market Indicators Q2 15 Q2 16 Overall Vacancy 28.7% 27.7% Net Absorption Under Construction Average Asking Rent (VND/sq.m/term) 12.8 340 5.8 340 2,399,000 2,451,000 12-Month Forecast The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Overview Net Absorption/Asking Rent 30 25 20 15 10 -5 -10 -15 3,000,000 2,500,000 2,000,000 1,500,000 Q2 2016, total existing supply reduced by 2% to around 1,390 hectares (ha) due to the conversion of the Hanoi – Dai Tu IP in Long Bien District into urban area due to its poor performance in attracting tenants Overall market performance was relatively stable, with the overall occupancy remained stable at well over 72% on quarter but up percentage point y-o-y Six out of 10 IPs were fully occupied Significant improvement was recorded at Noi Bai IP Phase II and Phu Nghia IP with absorption of around each 1,000,000 500,000 2012 2013 2014 2015 Net Absorption, 2016 Asking Rent, VND PSQ.M Average asking rent in Q2 2016 down 1% q-o-q but up 2% y-oy, recorded at VND2,451,000 per square meter per term (/sq.m./term), equivalent to US$110/sq.m/term Hanoi’s rent remained the highest in the Northern region, about 50% higher than that of Hai Phong and Bac Ninh Nam Thang Long IP offered the highest rent at VND4,172,000/sq.m/term (US$187/sq.m/term) * ALL RENTS ARE ASKING RENTS AND VAT EXCLUDED Overall Vacancy Outlook An additional supply of nearly 2,360 hectares from identified IP projects is expected to enter the market through 2020, which is equivalent to 132% of current supply By 2030 with vision to 2050, Hanoi will have 33 IPs with an area of 8,000 hectares in total 40% 30% Historical Average = 30% With the TPP and other free trade agreements that Vietnam has participated in recently, coupled with stable economic conditions, favorable government policies and low labor cost, Vietnam will attract more investments from foreign manufacturers as they shift their operations to Vietnam With demand for industrial land on the rise, this segment will remain a compelling investment 20% 10% 0% 2012 2013 2014 2015 2016 www.cushmanwakefield.com MARKETBEAT Industrial Snapshot Q2 2016 Hanoi, Vietnam YTD LEASING ACTIVITY OVERALL VACANCY (ha) RATE YTD NET OVERALL ABSORPTION (ha) UNDER CONSTRUCTION (ha) (VND/SQ.M/TERM) 20% 2,342,000 0% 0 2,676,000 0% 0 3,791,000 0% 0 3,568,000 56% 2.5 1,607,000 0 4,172,000 2.8 340 3,084,000 340 2,451,000 SUBMARKET TOTAL IPs INVENTORY (ha) Chuong My 110 88 Dong Anh 206 206 Gia Lam 78 78 Me Linh 240 240 Thach That & Quoc Oai 619 273 Tu Liem 24 24 0% Soc Son 117 99 17% HANOI TOTALS 10 1,394 1,008 28% 13.3 NET RENT Significant Future Projects PROJECT NAME AREA (ha) DISTRICT STATUS Soc Son Clean IP 340 Soc Son Under construction North Thuong Tin 430 Thuong Tin Site clearance Quang Minh II 266 Me Linh Site clearance Dong Anh IP 300 Dong Anh Planning Thanh My – Xuan Son 100 Son Tay Planning About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 Phuoc.Vo@cushwake.com www.cushmanwakefield.com MARKETBEAT Office Snapshot Q2 2016 Hanoi, Vietnam Economy HANOI OFFICE The World Bank (WB) has revised its forecast for Vietnam’s 2016 economic growth to 6.2% from previous estimate of 6.5%, mainly due to unfavorable business climate and weak global demand However, Vietnam is still expected to have one of the brightest growth prospects among Southeast Asian countries, and one of the most attractive environments for foreign investors Economic Indicators months 15 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 Grade A Overall Vacancy 20.4% 19.2% Grade A Net Absorption 12.6k 20.7k Under Construction Grade A Average Asking Rent (/sqm/mo.) 141.94k 113.4k $30.25 $28.41 Trade balance (billion US$) 12-Month Forecast months 16 Market Indicators As of May 2016, total inbound Foreign Direct Investment (FDI) to Vietnam reached USD 10.16 billion (both newly registered and adjusted), up 136.0% year-on-year (YoY); implemented FDI was estimated to have reached USD 5.8 billion, up 17.2% YoY The manufacturing and processing industry attracted the largest share with 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor, with newly registered FDI accounting for 38.0% of total new investment 12-Month Forecast Market Overview Grade A - Net Absorption/Asking Rent 25,000 $50 20,000 $40 15,000 10,000 $30 5,000 $20 -5,000 $10 2010 2011 2012 2013 Net Absorption, SQ.M 2014 2015 2016 Asking Rent, $ PSQ.M The second quarter of 2016 recorded significant improvements in terms of market performance for both grades Occupancy of Grade A spaces increased by percentage points quarter-on-quarter (QoQ) to 79.0%, but lower by percentage point year-on-year (YoY) Grade B tallied nearly 91.0%, up percentage point QoQ and percentage points YoY The total net absorption for both grades stood at nearly 28,540 sq.m this quarter, up by 53.0% QoQ, but down 26.0% YoY Net absorption of Grade A offices reached over 20,710 sq.m., accounting for 73.0% of the total absorption, while Grade B accounted for the remaining 7,830 sq.m Average asking rent of both grades remained stable compared to the previous quarter Average rent for Grade A stayed at VND 634,000 per square meter per month (/sq.m./mo.) or USD 28.41/sq.m./month, while average rent for Grade B was VND 406,000/sq.m/month, or USD 18.22/sq.m/mo Grade A - Overall Vacancy 40% 35% 30% Outlook 25% 20% Nine new projects are expected to be delivered in the second half of 2016, providing approximately 171,550 sq.m of office space to the market Due to the availability of land to develop large-scale projects, most of these projects are located in the Non-CBD and West area, contributing 56.0% and 41.0% of new supply, respectively Two-thirds of of these projects are currently at the end stages of construction Historical Average = 22% 15% 10% 5% 0% 2010 No new projects entered the market in the second quarter of 2016 Currently, there are 17 Grade A and 67 Grade B office buildings, supplying over 400,000 square meters (sq.m.) and 784,000 sq.m of available office space, respectively Nearly half of the total supply is concentrated in the Non-Central Business District (CBD) area, roughly one-third are in the West, and only 20.0% in the CBD 2011 2012 2013 2014 2015 2016 www.cushmanwakefield.com MARKETBEAT Office Snapshot Q2 2016 Hanoi, Vietnam UNDER CONSTRUCTION (SQ.M) AVERAGE ASKING RENT (US$/SQ.M/MO.) US$ SF/YR EURO SF/YR 19,200 34.01 37.92 33.37 5,000 26.37 29.40 25.87 24,200 30.27 33.74 29.69 13,350 94,200 29.85 33.28 29.28 2,720 203,640 16.67 18.58 16.35 TOTAL BUILDINGS INVENTORY (SQM) 10 118,000 6,970 5.9% 1,500 15 113,360 7,640 6.7% 640 25 231,360 14,610 6.3% 2,140 Non-CBD – Grade A 108,300 47,240 43.6% Non-CBD – Grade B 36 443,560 45,100 10.2% SUBMARKET CBD – Grade A CBD – Grade B CBD Totals VACANT AREA OVERALL CURRENT NET (SQ.M) VACANCY RATE (%) ABSORPTION (SQ.M) 39 551,860 92,340 16.6% 16,070 297,840 19.26 21.47 18.89 West – Grade A 174,650 31,100 17.8% 5,850 23.74 26.47 23.29 West – Grade B 16 227,440 21,870 9.6% 4,480 190,700 17.18 19.15 16.85 20 402,090 52,970 13.2% 10,330 190,700 20.03 22.33 19.65 84 1,185,310 159,920 13.4% 28,540 512,740 21.67 24.16 21.26 Non-CBD Totals West Totals HANOI TOTALS *Rental rates reflect gross asking $psq.m/year TOTAL BUILDINGS INVENTORY (SQ.M) Grade A 17 400,940 85,310 Grade B 67 784,370 74,610 SUMMARY BY GRADE CURRENT NET ABSORPTION (SQ.M) YTD NET ABSORPTION (SQ.M) UNDER CNSTR (SQ.M) AVERAGE ASKING RENT OVERALL (US$/SQ.M/MO.) AVERAGE ASKING RENT DIRECT (US$/SQ.M/MO.) 21.3% 20,710 33,560 113,400 28.41 28.41 9.5% 7,830 13,650 399,340 18.22 18.22 DIRECT VACANT VACANCY RATE (SQ.M) (%) Key Lease Transactions Q2 2016 PROPERTY SQ.M TENANT TRANSACTION TYPE SUBMARKET Vinafor Building 2,800 Flamingo Resort Relocation Non-CBD Lotte Center Hanoi 2,000 Tek-experts Relocation Non-CBD Lotte Center Hanoi 1,500 Toyota Relocation Non-CBD TNR Tower 1,500 MB Finance Expansion Non-CBD Significant Projects Under Construction Q2 2016 PROPERTY SQ.M MAJOR TENANT COMPLETION DATE SUBMARKET Thang Long Garden Tower 37,500 N/A 2016 Non-CBD Vicem Tower 37,800 N/A 2016 West BRG 19,200 N/A 2017 CBD VietinBank Tower 94,200 N/A 2017 Non-CBD About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 Phuoc.Vo@cushwake.com www.cushmanwakefield.com MARKETBEAT Residential Snapshot Q2 2016 Hanoi, Vietnam Economy HANOI APARTMENT The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Trade balance (billion US$) 12-Month Forecast As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Indicators Primary supply Net Absorption Overall Average Asking Price (mil VND/sq.m) Q2 15 Q2 16 14,650 16,960 42% 30% 24.7 27.1 12-Month Forecast Market Overview Overall Primary Supply / Asking Prices 24,000 35 20,000 30 16,000 12,000 25 8,000 20 4,000 15 2013 2014 Primary Stock, UNITS 2015 2016 Aksing Price, MIL VND/SQM Asking Prices of All Segments 80,000,000 Q2 2016 witnessed positive market momentum, reflected by strong launches of nearly 8,000 units across all grades from both new and active projects Q2 2016, there are over 16,960 available units for sale across all Grades in the primary market, of which Grade B accounted for 59%, while Grade A and Grade C contributed around 4% and 37% respectively Transaction volume fell both on a quarterly and yearly basis, at 11% and 17% respectively 64% of sold units were Grade B, followed by Grade C with 34% Tu Liem District had the highest share of over 33% of total sale volume this quarter Grade A and Grade C recorded an increase in price level on both a quarterly and yearly basis, up 29% q-o-q and 17% y-o-y, to nearly VND60.5 million per square meter (/sq.m) (US$2,714/sq.m.) for Grade A; and up 3% q-o-q and 14% y-o-y , to reach VND19.1 million/sq.m (US$820/sq.m) for Grade C The increase was mainly due to the higher prices being offered by new projects In contrast, Grade B’s price declined by nearly 6% q-o-q and 12% y-o-y, reaching VND29.7 million/sq.m (US$1,326/sq.m.) 70,000,000 Outlook 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Grade A Lowest asking price (VND/sq.m) Grade B Grade C Highest asking price (VND/sq.m) Market sentiment is expected to remain positive in the second half of 2016, in terms of both the number of newly launched projects and sale performance.The Western area is expected to see the highest supply of apartments in 2016 The high to mid-end segments tend to come back the market and attract a large number of investors * ALL PRICES ARE VAT EXCLUDED www.cushmanwakefield.com MARKETBEAT Residential Snapshot Q2 2016 Hanoi, Vietnam SUMMARY BY GRADE TOTAL PROJECTS INVENTORY NET ABSORPTION AVERAGE PRICE LEVEL* (mil VND/SQM) Grade A 760 13% 60.5 Grade B 46 9,940 33% 29.6 Grade C 45 6,260, 28% 19.1 TOTAL 96 16,960 30% 27.1 Key launched projects Q2 2016 MARKET APPROACH DISTRICT GRADE NO UNITS LAUNCHED D'le Roi Soleil PROPERTY New launch Tay Ho A 540 Park Hill Premium (T10) New launch Hai Ba Trung B 682 Goldmark – Sapphire New launch Tu Liem B 663 Added Thanh Xuan B 640 Ecolife Tay Ho New launch Tu Liem B 185 Golden Field My Dinh New launch Tu Liem B 233 FLC Star Tower New launch Ha Dong C 444 Thong tan xa Tower New launch Hoang Mai C 720 Thap doanh nhan New launch Ha Dong C 390 Happy Star Tower New launch Long Bien C 156 PROPERTY LOCATION EST TOTAL UNITS STATUS EXPECTED COMPLETION YEAR Legend Tower Thanh Xuan 460 Under construction 2016 Vinhomes Metropolis Ba Dinh 365 Foundation 2016 Garden Hill Tu Liem 375 Foundation 2016 FLC Garden City Tu Liem 1,100 Foundation 2016 Gold Season Key future projects About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 phuoc.vo@Cushwake.com www.cushmanwakefield.com MARKETBEAT Retail Snapshot Q2 2016 Hanoi, Vietnam Economy HANOI RETAIL The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors Economic Indicators months 2015 months 2016 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Trade balance (billion US$) 12-Month Forecast As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Indicators 12-Month Forecast Q2 15 Q2 16 Overall Vacancy 17.8% 10.9% Net Absorption Overall Average Asking Rent (VND/sq.m/month) (1,085) 8,580 813,000 887,000 Market Overview Net Absorption/Asking Rent 1,200 140,000 120,000 100,000 80,000 60,000 40,000 20,000 -20,000 1,000 800 600 2010 2011 2012 2013 2014 2015 2016 Net Absorption, SQ.M (*) Average rent on the ground level is used as a benchmark to represent the rent of each retail center All rents include Service charge and exclude VAT Overall Vacancy 30% Overall market performance continued to experience steady improvement, with vacancy rate down by ppt q-o-q and ppts y-o-y to well under 11% in Q2 2016 This was mainly attributed to outstanding performance of shopping centers, especially significant absorption at Vincom Mega Mall Royal City and Times City Meanwhile, vacancies of department store and retail podium slightly increased by to ppts q-o-q The average asking rent was recorded at VND887,000/sq.m/month (US$39.8/sq.m/month), down 1% q-o-q but up 7% y-o-y While the asking rent of the CBD was stable on quarter but down 6% on year, to approximately VND2,647,000 million per square meter (/sq.m) (US$119/sq.m.), tripled that in the non-CBD Outlook Around 118,960 sq.m of new supply is expected to be completed in the second half of 2016, 40% of which will be from the two Vincom shopping centres in Cau Giay and Dong Da No additional retail space in CBD is expected to be completed in 2016 20% Historical Average = 14% 10% 0% 2010 No new retail centres entered the market in Q2 2016 Currently, there are 50 projects supplying around 883,900 sq.m, unchanged since Q4 2015 and up 22% y-o-y Approximately 97% of the total supply is concentrated in the non-CBD areas as land available for development in the CBD remains limited 2011 2012 2013 2014 2015 2016 With WTO commitments, FTA participation and the signing of TPP, the number of retailers into Viet Nam is expected to rise in the future and consequently intensify competition between domestic and foreign retailers www.cushmanwakefield.com MARKETBEAT Retail Snapshot Q2 2016 Hanoi, Vietnam TOTAL BLDGS INVENTORY (SQ.M) VACANT AREA (SQ.M) OVERALL VACANCY RATE CURRENT NET ABSORPTION UNDER CNSTR AVERAGE ASKING RENT (VND/SQ.M/MONTH)* Department Store 34,000 2,000 5.9% (680) 1,582,000 Shopping Center 24 805,170 91,910 11.4% 9,830 170,630 851,000 Retail Podium 24 44,730 2,850 6.4% (570) 379,560 1,020,000 HANOI TOTALS 50 883,900 96,760 10.9% 8,580 550,190 887,000 SUBMARKET TOTAL BLDGS INVENTORY (SQ.M) VACANCY RATE CURRENT NET ABSORPTION (SQ.M) YTD NET ABSORPTION (SQ.M) AVERAGE ASKING RENT (VND/sq.m/month) CBD 13 24,090 2.9% 360 360 2,647,000 Non - CBD 37 859,810 11.2% 8,220 9,650 840,000 TOTAL 50 883,900 10.9% 8,580 10,010 887,000 SUMMARY BY LOCATION Significant projects under construction Q2 2016 PROPERTY LOCATION SQ.M STATUS Vincom Pham Ngoc Thach Non-CBD 27,000 Under construction 2016 Capital Garden Non-CBD 10,180 Under construction 2016 FLC Twin Tower Non-CBD 18,750 Under construction 2017 Discovery Complex Non-CBD 21,950 Under construction 2017 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy COMPLETION DATE Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 Phuoc.Vo@cushwake.com www.cushmanwakefield.com MARKETBEAT Serviced Apartment Snapshot Q2 2016 Hanoi, Vietnam Economy HANOI SERVICED APARTMENT Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Trade balance (billion US$) 12-Month Forecast Market Indicators Q2 15 Q2 16 16.5% 14.2% 39 units 103 units Grade A Vacancy Grade A Net Absorption Grade A Average Rent VND719,000 VND727,000 Grade B Vacancy Grade B Net Absorption Grade B Average Rent 12-Month Forecast 16.7% 9.9% 73 units 36 units VND492,000 VND466,000 Net Absorption/Asking Rent 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 2012 2013 2014 Net Absorption, SQ.M 2015 As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Overview 160 140 120 100 80 60 40 20 -20 -40 -60 2011 The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors 2016 Asking Rent, VND PSQ.M Overall Vacancy 25% 20% One Grade A project has completed in Q2 2016, raised Grade A stock by roughly 8% q-o-q and y-o-y to nearly 2,090 units from 13 projects Meanwhile, Grade B supply had remained unchanged since Q1 2014 with nearly 1,170 units from 18 projects Non-CBD area accounted for 60% of total stock, followed by Western districts with 31%, leaving only 9% in the CBD Overall occupancy of both grades remained stable on quarter but up ppts y-o-y Specifically, while occupancy of Grade B reached 90% in Q2 2016, up ppts q-o-q and ppts y-o-y, that of Grade A was recorded at round 86%, down ppt q-o-q but still up ppts y-o-y The new project had quite good performance but still caused the overall occupancy of Grade A to decrease compared to the previous quarter Overall average asking rent for both grades stood at VND634,000/sq.m/month (US$28.4/sq.m/month), up 4% q-o-q but down 2% y-o-y The higher rent of the new project caused the average asking rent of Grade A to increase by nearly ppts on quarter, to VND727,000/sq.m/month (US$32.6/sq.m/month), but remained stable on year Meanwhile, the average rent of Grade B continued its downward trend, standing at VND466,000/sq.m/month (US$20.9/sq.m/month), down ppts q-o-q and ppts y-o-y * ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED Outlook 15% Historical Average = 16% 10% 5% 2011 2012 2013 2014 2015 2016 There is no new project expected to come online in 2016 However, the market will experience more competition from Grade A buy-tolet apartments besides the current over-supply status Therefore, the asking rents are expected to remain stable or slightly decrease otherwise in order to maintain occupancy www.cushmanwakefield.com MARKETBEAT Serviced Apartment Snapshot Q2 2016 Hanoi, Vietnam TOTAL BLDGS TOTAL UNITS VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION AVERAGE ASKING RENT OVERALL* AVERAGE ASKING RENT DIRECT* Grade A 13 2,087 14.2% 103 118 VND727,000 VND727,000 Grade B 18 1,167 9.9% 36 19 VND466,000 VND466,000 SUMMARY BY GRADE Significant Projects Under Construction Q2 2016 PROPERTY EST NUMBER OF UNITS LOCATION DEVELOPER EXPECTED COMPLETION DATE Somerset West Point 200 Tay Ho Golden Villa Ltd Co 2017 Somerset West Central Hanoi 252 Cau Giay Handico Thuy Duong JSC 2017 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 Phuoc.Vo@cushwake.com www.cushmanwakefield.com MARKETBEAT Industrial Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC INDUSTRIAL Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 29% 35% Trade balance (billion US$) 12-Month Forecast Market Indicators Overall Vacancy Net Absorption Under Construction Overall Average Asking Rent (/sqm/term) 18 1,000 1,000 12-Month Forecast One new industrial park (Binh Chanh) entered the market this quarter, adding more than 300 hectares space to the market Currently, there are 19 operating IPs covering a total area of nearly 3,940 hectares The leasable area is estimated to be about 63% of the total land area, while the average remaining LUR years is 35 VND2,740k VND2,858k 4Q TRAILING AVERAGE 80 70 60 50 40 30 20 10 2,900,000 2,800,000 2,700,000 2,600,000 2,500,000 2013 2014 Net Absorption, 2015 As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Overview Net Absorption/Asking Rent 2012 The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors 2016 Asking Rent, VND PSQM Overall occupancy saw a drop by percentage points both on quarter and on year, to 65%, mostly due to the low occupancy at new project; whilst average rent rose 2% on both a quarterly and yearly basis, at around VND2,858,000 per square meter per term (/sq.m./term), equivalent to US$128/sq.m./term The increase was mainly due to the higher offer rent of the new IP This rent was around two times higher than that in the neighboring provinces, such as Binh Duong and Dong Nai Ready-Built Factory rents for areas of about 2,000 - 3,000 sq.m ranged from VND55,760 - 78,060/sq.m./month (US$2.5 - 3.5/sq.m./month) * ALL RENTS ARE ASKING, EXCLUDING VAT Outlook Overall Vacancy The total increase in industrial land in HCMC up to 2030 is projected at approximately 2,600 hectares from 10 new IPs, up some 66% from the current stock However, the majority of future projects are still in the clearance and compensation stage; construction progress is expected to be protracted 40% 35% 30% With the TPP and other free trade agreements that Vietnam has participated in recently, coupled with stable economic conditions, favorable government policies and low labor cost, Vietnam will attract more investments from foreign manufacturers as they shift their operations to Vietnam With demand for industrial land on the rise, this segment will remain a compelling investment Historical Average = 33% 25% 20% 2012 2013 2014 2015 2016 www.cushmanwakefield.com MARKETBEAT Industrial Snapshot Q2 2016 Ho Chi Minh City, Vietnam TOTAL IPs INVENTORY (HA) YTD LEASING ACTIVITY (HA) OVERALL VACANCY RATE UNDER CNSTR (HA) NET RENT (VND/SQM/TERM) District 72 72 0% VND2,230,000 District 195 193 1% VND5,799,000 District 12 22 22 0% VND2,221,000 Binh Tan District 321 321 0% VND4,972,000 Tan Phu District 92 92 0% VND4,460,000 Thu Duc District 110 110 0% VND3,931,000 Nha Be District 506 315 38% VND2,102,000 Binh Chanh District 421 110 74% 231 VND2,562,000 SUBMARKET Cu Chi District 753 396 47% 173 VND1,595,000 TOTAL 19 2,493 1,631 35% 404 VND2,858,000 *Rental rates reflect asking $psqm/term Significant projects Q2 2016 PROPERTY Le Minh Xuan – Phase Tay Bac Cu Chi – Phase Hiep Phuoc – Phase Vinh Loc – Phase HECTARE DISTRICT STATUS 231 Binh Chanh Under Construction 173 Cu Chi Under Construction Nha Be Clearance & Compensation Binh Chanh Clearance & Compensation 1,000 200 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 phuoc.vo@Cushwake.com www.cushmanwakefield.com MARKETBEAT Office Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HO CHI MINH OFFICE The World Bank (WB) has revised its forecast for Vietnam’s 2016 economic growth to 6.2% from previous estimate of 6.5%, mainly due to unfavorable business climate and weak global demand However, Vietnam is still expected to have one of the brightest growth prospects among Southeast Asian countries, and one of the most attractive environments for foreign investors Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 7.8% 5.9% Trade balance (billion US$) 12-Month Forecast As of May 2016, total inbound Foreign Direct Investment (FDI) to Vietnam reached USD 10.16 billion (both newly registered and adjusted), up 136.0% year-on-year (YoY); implemented FDI was estimated to have reached USD 5.8 billion, up 17.2% YoY The manufacturing and processing industry attracted the largest share with 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor, with newly registered FDI accounting for 38.0% of total new investment Market Indicators Grade A Overall Vacancy Grade A Net Absorption 1.36k 5.42k Under Construction Grade A Average Asking Rent (/sqm/mo.) 221.6k 184.5k $46.6 $47.5 12-Month Forecast Market Overview Grade A - Net Absorption/Asking Rent 4Q TRAILING AVERAGE 35,000 $56 30,000 $54 25,000 $52 20,000 15,000 $50 10,000 $48 5,000 $46 -5,000 2011 $44 2012 2013 Net Absorption, SQM 2014 2015 2016 Asking Rent, $ PSQM No new office buildings entered the market in the second quarter of 2016, however, one Grade B building converted over 6,000 square meters (sq.m.) of space into office-for-lease and another Grade B building was removed for internal use Currently, there are ten Grade A and 47 Grade B office buildings, providing approximately 193,800 sq.m and 704,800 sq.m of space available to the market, respectively All Grade A and 64.0% of Grade B supplies are concentrated in the Central Business District (CBD) Grade A buildings saw an improvement in market performance with average occupancy up by almost percentage points quarteron-quarter (QoQ) and percentage points YoY, to 94.0% Grade B occupancy remained stable on both quarterly and yearly basis, at 95.0% Total net absorption of both grades reached 6,380 sq.m this quarter (232% QoQ and 536% YoY) Grade A offices registered over 5,400 sq.m., comprising 85.0% of the total absorption this quarter, while Grade B accounted for the remaining 760 sq.m., of which CBD buildings recorded negative absorption of nearly 2,000 sq.m 30% With limited Grade A space available for lease, average rent rose 3.0% QoQ and 2.0% YoY, to VND 1,059,300 per square meter per month (/sq.m./mo.), equivalent to USD 47.5/sq.m./mo Average rent for Grade B remained stable at around VND 612,300/sq.m./mo (USD 27.5/sq.m./mo.) on both quarterly and yearly basis 25% Outlook Grade A - Overall Vacancy 35% 20% 15% 10% 5% 2011 Historical Average = 14% 2012 2013 2014 2015 2016 Over 80,000 sq.m of new Grade B supply are expected to be completed in 2016 The limited Grade A supply, particularly large spaces, will keep average rent in this segment stable with moderate increase likely by the end of the year The market remains tilted in favor of tenants as occupiers continue to look for ways to reduce cost by renegotiating with landlords, or relocating to more cost-efficient buildings www.cushmanwakefield.com MARKETBEAT Office Snapshot Q2 2016 Ho Chi Minh City, Vietnam TOTAL BUILDINGS INVENTORY (SQ.M) UNDER CNSTR (SQ.M) OVERALL VACANCY RATE (%) CBD A – Grade 10 193,800 184,560 5.9 5,420 CBD B – Grade 30 417,750 30,000 5.8 (1,990) Non – CBD B – Grade 17 287,060 111,900 5.0 2,750 TOTALS 57 898,610 326,460 5.6 TOTAL BUILDINGS INVENTORY (SQ.M) Class A 10 193,800 11,460 Class B 47 704,810 38,760 SUBMARKET CURRENT NET YTD CONSTRUCTION AVERAGE ASKING ABSORPTION COMPLETION RENT (SQ.M) (SQ.M) (US$/SQ.M/MO.) US$ SF/YR EURO SF/YR 47.50 52.95 46.59 31.95 35.62 31.34 20.91 23.31 20.49 6,180 31.78 35.42 31.17 CURRENT NET ABSORPTION (SQ.M) YTD NET ABSORPTION (SQ.M) UNDER CNSTR (SQ.M) 5.9 5,420 990 184,560 47.50 47.50 5.5 760 511 141,900 27.46 27.46 *Rental rates reflect gross asking $psqm/month SUMMARY BY CLASS DIRECT VACANT VACANCY RATE (SQ.M) (%) AVERAGE ASKING AVERAGE ASKING RENT OVERALL RENT DIRECT (US$/SQ.M/MO.) (US$/SQ.M/MO.) Key Lease Transactions Q2 2016 PROPERTY SQ.M TENANT TRANSACTION TYPE SUBMARKET Pearl Plaza 3,000 Roche Relocation Non-CBD Vietcombank Tower 2,200 Hoa Sen Group Expanding CBD Times Square 1,450 Mitsui & Co Vietnam Relocation CBD VRG Building 790 CIMB Acquisition Non-CBD Harbour View 623 UTS Relocation CBD Petro Vietnam Tower 597 Aero Asia Relocation CBD Harbour View 499 Hanjin Shipping Expanding CBD Harbour View 499 Openasia Group Relocation CBD Lawrence S Ting 450 ConCung Expanding Non-CBD Diamond Plaza 400 Baxter Healthcare Relocation CBD SQ.M MAJOR TENANT Significant Projects Under Construction Q2 2016 PROPERTY COMPLETION DATE SUBMARKET HQC Royal Tower 22,500 N/A 2016 Non - CBD SGGP Building 16,940 N/A 2016 Non - CBD Hai Quan Tower 30,000 N/A 2016 CBD Saigon Center Phase 40,000 N/A 2017 CBD Deutsches Haus 24,900 N/A 2017 CBD Mapletree Business Center 30,000 N/A 2017 Non - CBD E.Town Central 35,000 N/A 2017 Non – CBD About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 phuoc.vo@ap.cushwake.com www.cushmanwakefield.com MARKETBEAT Residential For Sale Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC APARTMENT The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Trade balance (billion US$) 12-Month Forecast As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Indicators 12-Month Forecast Q2 15 Q2 16 Primary supply (units) 19,760 23,000 Overall Absorption Rate (%) Overall Average Price (mil VND/sq.m) 42.4% 25.7% 24.3 33.05 Market Overview Overall Primary supply/Asking Prices Q2 2016 24,000 35 20,000 30 16,000 12,000 25 There was an increase in new supply in Q2 2016 across all grades, totaling over 9,770 units from both new and active projects, of which more than one-third are concentrated in the Southern region As of Q2 2016, there are around 23,000 available units for sale across all grades in the primary market, of which Grade B led the market, accounted for 38%, while Grade A and Grade C contributed 29% and 33% respectively Districts 2, 7, and Binh Thanh dominated the market, accounting for 54% of the total primary stock 8,000 20 4,000 15 2011 2012 2013 2014 Primary Stock, UNITS 2015 2016 Aksing Price, MIL VND/SQM Primary Stock/Price Range by Grade Q2 2016 140 9,000 120 7,500 100 6,000 80 4,500 60 3,000 40 1,500 20 0 Grade A Grade B Primary Stock, UNITS Highest Price (MIL VND/SQM) * ALL PRICES ARE VAT EXCLUDED Grade C Lowest Price (MIL VND/SQM) Transaction volume fell both on a quarterly and yearly basis, registering a decline of 25% q-o-q and 29% y-o-y Districts 2, 7, and Binh Thanh led the market, accounting for over a half of total absorbed units this quarter Grade A and Grade C recorded an increase in price level on both a quarterly and yearly basis, up 9% q-o-q and 17% y-o-y, to nearly VND53.3 million per square meter (/sq.m) (US$2,389/ sq.m.) for Grade A; and up moderately by 1% q-o-q and 8% y-o-y, to reach VND19.6 million/sq.m (US$879/sq.m) for Grade C The increase was mainly due to the higher prices being offered by new projects In contrast, Grade B’s price declined by nearly 5% q-o-q and 3% y-o-y, reaching VND29.5 million/sq.m (US$1,314/sq.m.) Outlook From the second half of 2016 onwards, approximately 80,000 units are expected to be launched Future supply tends to concentrate in Southern and Eastern regions, accounting for nearly 60% of the total future stock A number of recent Grade A and Grade B projects that situated in a good location have been well received by investors Sentiment in the city’s residential market is expected to continually improve in the short to medium term www.cushmanwakefield.com MARKETBEAT Residential For Sale Snapshot Q2 2016 Ho Chi Minh City, Vietnam TOTAL PROJECTS INVENTORY NET ABSORPTION AVERAGE PRICE LEVEL* (MIL VND/SQM) Grade A 32 6,690 25.1% 53.3 Grade B 55 8,730 24.9% 29.3 Grade C 45 7,580 27.3% 19.6 TOTAL 132 23,000 25.7% 33.0 SUMMARY BY GRADE * ALL PRICES ARE VAT EXCLUDED Significant Projects Launched In Q2 2016 PROPERTY LOCATION EXPECTED COMPLETION DATE UNITS LAUNCHED MARKET APPROACH New launch Vinhomes Golden River District 2017 - 2018 1,000 The Art District 2017 510 Added Opal Riverside Thu Duc 2017 434 New launch Heaven Riverview District 2017 390 New launch Xi Grand Court District 10 2017 360 New launch Celadon City Tan Phu 2017 270 Added Richstar Tan Phu 2018 860 Added River City District 2018 850 New launch Centa Park Tan Phu 2018 350 New launch The Golden Star District 2018 330 New launch Rivera Park District 10 2018 270 New launch Valeo Dam Sen Tan Phu 2018 170 New launch Sunrise Riverside Nha Be 2018 150 Added Newton Phu Nhuan 2018 150 New launch Bonatica Premier Tan Binh 2018 140 Added Samland Riverside Binh Thanh 2018 140 New launch Nam Phuc – Le Jardin District 2018 116 New launch Diamond Riverside District 2019 1,566 New launch Saigon Royal District 2019 340 New launch Significant Projects Under Construction Q2 2016 PROPERTY EST NUMBER OF UNITS LOCATION DEVELOPER EXPECTED COMPLETION DATE Vinhomes Golden River 3,000 District VinGroup 2017 - 2018 The Goldview 1,905 District Saigon Garment – Match JSC 2017 M – one Saigon 963 District Thao Dien Investment 2017 Hung Phuc Residence 544 District Phu My Hung 2018 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 phuoc.vo@Cushwake.com www.cushmanwakefield.com MARKETBEAT Retail Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC RETAIL Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 9.3% 8.0% 17.4k sq.m 4.4k sq.m Trade balance (billion US$) 12-Month Forecast Market Indicators Overall Vacancy Net Absorption Average Asking Rent (per sq.m per month) 12-Month Forecast 4Q TRAILING AVERAGE 60,000 1,600,000 50,000 1,500,000 40,000 1,400,000 30,000 1,300,000 20,000 1,200,000 10,000 1,100,000 -10,000 1,000,000 2012 2013 Net Absorption, SQM 2014 2015 2016 Asking Rent, VND PSQM (*) Average rent on the ground level is used as a benchmark to represent the rent of each retail centre All rents include Service charge and exclude VAT Overall Vacancy 20% 15% Historical Average = 13% 5% 2012 2013 2014 Q2 2016, one shopping center and two supermarkets were completed, adding nearly 17,000 square meters (sq.m.) of retail space to the market However, one shopping center in District ceased operations due to weak performance Currently, there are 132 retail centers in the city with a total area of over 1.10 million sq.m District remains the most concentrated retail market in the city, accounting for approximately 16% of total supply Overall occupancy remained stable on quarter but up percentage points (ppts) on year, to 92% The aforementioned new comer achieved high occupancy rate at above 80% The recent trend of high profile investments from retailing giants into Non-CBD areas, establishing large retail outlets and offering aggressive rents has paid off with a higher occupancy rate at 94% This is in contrast to the CBD, which saw occupancy remaining unchanged q-o-q but down ppts y-oy, to 86%, due mainly to the partial renovation of a big shopping center Average rents continued to trend downwards on a yearly basis, downed 3% y-o-y, to VND1.27 million per square meter per month (/sq.m./mo) (US$56.8/sq.m./mo.) due to lower rents at the new projects All new projects over the last six quarters are in the non-CBD area Rents in the CBD remained stable on quarter, but up 4% on year, to VND2.43 million/sq.m./mo (US$109/sq.m./mo.), doubled secondary area‘s and tripled those in the suburban area Outlook 10% 0% 2011 As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Overview VND1,280k VND1,267k Net Absorption/Asking Rent 2011 The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors 2015 2016 Over 173,000 sq.m of new supply is expected to be completed in 2016 While demand for CBD retail space is expected to remain high, limited land for development means that significant future projects will mainly be located in the non-CBD areas, mostly be in the south and west where much of the infrastructure and residential developments have been established www.cushmanwakefield.com MARKETBEAT Retail Snapshot Q2 2016 Ho Chi Minh City, Vietnam SUMMARY BY TYPE TOTAL BLDGS INVENTORY (SQ.M) VACANCY RATE CURRENT NET ABSORPTION (SQ.M) YTD NET ABSORPTION (SQ.M) AVERAGE ASKING RENT (VND/SQ.M/MO.) Retail Podium 10 31,520 11.2% 650 2,620 803,000 Department Store 116,270 4.6% (8,370) (8,370) 1,160,000 Shopping Centre 24 572,040 8.4% 12,100 48,500 1,174,000 Bazaar 34,490 10.4% 30 (1,850) 3,224,000 Supermarket 79 285,090 - - - - Wholesale Centre 66,000 - - - - 132 1,105,400 8.0% 4,400 40,900 1,267,000 TOTAL BLDGS INVENTORY (SQ.M) VACANCY RATE CURRENT NET ABSORPTION (SQ.M) YTD NET ABSORPTION (SQ.M) AVERAGE ASKING RENT (VND/SQ.M/MO.) CBD 30 184,850 14% 1,170 1,980 2,4280,00 Non - CBD 100 920,550 6% 3,230 38,920 944,000 TOTAL 130 1,105,400 8.0% 4,400 40,900 1,267,000 TOTAL SUMMARY BY LOCATION Significant Projects Under Construction Q2 2016 PROPERTY SQ.M COMPLETION DATE SUBMARKET Saigon Centre (Phase 2) 55,000 2016 CBD Aeon mall Binh Tan 64,000 2016 Non-CBD About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 phuoc.vo@Cushwake.com www.cushmanwakefield.com MARKETBEAT Serviced Apartment Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC SERVICED APARTMENT Economic Indicators months 15 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 4.9% 13.7% VND646k VND684k 12.3% 5.2% VND471k VND486k Trade balance (billion US$) 12-Month Forecast Market Indicators Grade A Vacancy Grade A Average Rent Grade B Vacancy Grade B Average Rent 12-Month Forecast The World Bank has revised its forecast for Vietnam’s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects among Southeast Asian economies and one of the most attractive environment for foreign investors As of May 2016, total inward FDI into Vietnam reached US$10.16 billion (both newly registered and adjusted), up 136% y-o-y; implemented FDI was estimated to have reached US$5.8 billion, up 17.2% y-o-y The manufacturing and processing industry attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Overview One new Grade B serviced apartment entered the market in Q2 2016, adding its first 90 units to current stock Currently, the market comprises over 760 units from eight Grade A buildings and 2,380 units from 24 Grade B buildings Those in District make up Net Absorption/Asking Rent approximately 44% of the total supply 4Q TRAILING AVERAGE Grade B continued to see gradual improvement with average 160 580,000 occupancy rising on yearly basis, up ppts on year, to 95% In 120 560,000 contrast, average occupancy of Grade A down by ppts on quarter 540,000 80 520,000 40 500,000 480,000 -40 460,000 2011 2012 2013 Net Absorption, units 2014 2015 2016 Asking Rent, VND PSQM and nearly ppts on year to 86%, largely due to the low occupancy rate recorded at the new project District have traditionally outperformed due to its prime location, accessibility and full range of facilities However, lower occupancy at the new project proved a drag as overall occupancy in the district fell to 90%; non-CBD occupancy reached 95% Average rents of both grades experienced increases on both a quarterly and yearly basis, mostly due to the higher rent offered at new projects Grade A rose by 2% q-o-q and nearly 6% y-o-y, to Overall Vacancy VND684,300 per square meter per month* (/sq.m./mo.), equivalent to around US$31/sq.m./mo., Grade B’s rent up over 2% q-o-q and 3% y- 25% o-y, stood at VND486,300/sq.m./mo (US$21.8/sq.m./mo.) Rents in the CBD are always higher than Non-CBD area around 40 - 50% 20% Outlook 15% Historical Average = 14% 10% 5% 2010 2011 2012 2013 2014 2015 2016 * ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED Over 600 units from five projects are expected to enter the market in 2H 2016, of which around 55% will be in District – the CBD continues to be the preferred location of developers Under the Trans Pacific Partnership Agreement and the Vietnam-EU Free Trade Agreement, Vietnam ‘s economic outlook remain positive which will drive prospects n the serviced apartment market www.cushmanwakefield.com MARKETBEAT Serviced Apartment Snapshot Q2 2016 Ho Chi Minh City, Vietnam TOTAL BLDGS TOTAL UNITS VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION AVERAGE ASKING RENT OVERALL* AVERAGE ASKING RENT DIRECT* Class A 760 13.7% 13 VND684,300 VND684,300 Class B 24 2,380 5.2% 88 130 VND486,000 VND486,000 SUMMARY BY CLASS * All Rents are asking rents, with service charge included and VAT excluded Significant Projects Under Construction Q2 2016 PROPERTY EST NUMBER OF UNITS LOCATION EXPECTED COMPLETION DATE DEVELOPER Ascott Waterfront Saigon 222 District M.I.K Corporation 2016 New Pearl Residence 120 District Sunny World 2016 Saigon Plaza 119 District Quoc Cuong Group 2016 Cosmo Residence 89 District N/A 2016 Sila Urban Living 127 District Hieu Duc JSC 2016 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter Copyright © 2016 Cushman & Wakefield All rights reserved The information contained within this report is gathered from multiple sources considered to be reliable The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 3823 7968 Fax: +84 3823 7969 phuoc.vo@Cushwake.com www.cushmanwakefield.com [...]... FDI accounting for 38% of total new investment Market Indicators 12-Month Forecast Q2 15 Q2 16 Primary supply (units) 19,760 23,000 Overall Absorption Rate (%) Overall Average Price (mil VND/sq.m) 42.4% 25.7% 24.3 33.05 Market Overview Overall Primary supply/Asking Prices Q2 2016 24,000 35 20,000 30 16,000 12,000 25 There was an increase in new supply in Q2 2016 across all grades, totaling over 9,770... 8 3823 7969 phuoc.vo@Cushwake.com www.cushmanwakefield.com MARKETBEAT Office Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HO CHI MINH OFFICE The World Bank (WB) has revised its forecast for Vietnam s 2016 economic growth to 6.2% from previous estimate of 6.5%, mainly due to unfavorable business climate and weak global demand However, Vietnam is still expected to have one of the brightest growth... 3823 7969 phuoc.vo@ap.cushwake.com www.cushmanwakefield.com MARKETBEAT Residential For Sale Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC APARTMENT The World Bank has revised its forecast for Vietnam s economic growth for 2016 to 6.2% from previous estimate of 6.5%, mainly due to unfavorable climate and weaker global demand However, Vietnam is still expected to have the brightest growth prospects...MARKETBEAT Industrial Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC INDUSTRIAL Economic Indicators 5 months 15 5 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 29% 35% Trade balance (billion US$) 12-Month Forecast Market Indicators Overall Vacancy Net Absorption Under Construction... 1,105,400 8.0% 4,400 40,900 1,267,000 TOTAL SUMMARY BY LOCATION Significant Projects Under Construction Q2 2016 PROPERTY SQ.M COMPLETION DATE SUBMARKET Saigon Centre (Phase 2) 55,000 2016 CBD Aeon mall Binh Tan 64,000 2016 Non-CBD About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live The firm’s 43,000... attracted the largest share, at 65% of total registered capital Real estate ranked third with 5.4% Korea was the leading investor with newly registered FDI accounting for 38% of total new investment Market Overview One new Grade B serviced apartment entered the market in Q2 2016, adding its first 90 units to current stock Currently, the market comprises over 760 units from eight Grade A buildings and... Significant Projects Under Construction Q2 2016 PROPERTY EST NUMBER OF UNITS LOCATION EXPECTED COMPLETION DATE DEVELOPER Ascott Waterfront Saigon 222 District 1 M.I.K Corporation 2016 New Pearl Residence 120 District 3 Sunny World 2016 Saigon Plaza 119 District 1 Quoc Cuong Group 2016 Cosmo Residence 89 District 3 N/A 2016 Sila Urban Living 127 District 3 Hieu Duc JSC 2016 About Cushman & Wakefield Cushman... phuoc.vo@Cushwake.com www.cushmanwakefield.com MARKETBEAT Retail Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC RETAIL Economic Indicators 5 months 15 5 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 9.3% 8.0% 17.4k sq.m 4.4k sq.m Trade balance (billion US$) 12-Month Forecast Market Indicators Overall Vacancy Net Absorption Average Asking Rent (per... Expanding Non-CBD Diamond Plaza 400 Baxter Healthcare Relocation CBD SQ.M MAJOR TENANT Significant Projects Under Construction Q2 2016 PROPERTY COMPLETION DATE SUBMARKET HQC Royal Tower 22,500 N/A 2016 Non - CBD SGGP Building 16,940 N/A 2016 Non - CBD Hai Quan Tower 30,000 N/A 2016 CBD Saigon Center Phase 2 40,000 N/A 2017 CBD Deutsches Haus 24,900 N/A 2017 CBD Mapletree Business Center 30,000 N/A 2017... www.cushmanwakefield.com MARKETBEAT Serviced Apartment Snapshot Q2 2016 Ho Chi Minh City, Vietnam Economy HCMC SERVICED APARTMENT Economic Indicators 5 months 15 5 months 16 CPI (%) 0.83 1.59 Inward FDI (billion US$) 4.30 10.16 (3.00) 1.36 Q2 15 Q2 16 4.9% 13.7% VND646k VND684k 12.3% 5.2% VND471k VND486k Trade balance (billion US$) 12-Month Forecast Market Indicators Grade A Vacancy Grade A Average Rent Grade