MARKET INSIGHT HO CHI MINH CITY WEDNESDAY, 4 JANUARY 2017

Transcription

1 MARKET INSIGHT HO CHI MINH CITY WEDNESDAY, 4 JANUARY 2017

2 A g e n d a 1 Vietnam Economy 5 Office 2 Infrastructure 6 Retail 3 Condominium 7 Investment 4 Ready-built Villa/Townhouse

3 1. VIETNAM ECONOMY

4 V I E T N A M E C O N O M Y Vietnam Economy Forget TPP, The Focus is now on RCEP

5 V I E T N A M E C O N O M Y

6 Index V I E T N A M E C O N O M Y Major Asset Classes Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar June Sep Dec Government Bond VN-Index Local Gold USD/VND Crude Oil Source: HNC, Gold.org, SJC, SBV

7 V I E T N A M E C O N O M Y FDI Reached a New High Vietnam Registered FDI in 2016: USD24.4 billion (the highest since 2008) 75% 25% Real estate 21% Others 7% 8% 64% Manufacturing Automobiles, Motorbikes Real Estate Others Top FDI Investors, USD million, 2016 Major Real Estate Deals, 2016 Taiwan China Singapore Japan South Korea 1,860 1,875 2,419 2,590 7, Cayman Islands invested US$315 million for an IP project in Quang Ninh Province. 2. Long Thanh Amata City in Dong Nai received ~US$309 million from Thai Investor to build a service township 3. Samsung to invest US$300 million in a 21-storey building in Hanoi. 4. TNR Holdings and a Russian partner signed the memo regarding implement a US$300 million project in Hanoi.

8 2. INFRASTRUCTURE MORE INVESTMENT IN TAN SON NHAT AIRPORT, THE EAST AND THE SOUTH

9 H C M C I N F R A S T R U C T U R E Tan Son Nhat Binh Loi Ring Road New Mien Dong bus station project East area 5 storeys parking in Tan Son Nhat airport Tan Son Nhat Airport Metro Line no.1 Saigon bridge South area 9,000 sm T2 terminal expansion Ca Cam Bridge

10 H C M C I N F R A S T R U C T U R E New Projects in 2017 En-Parking Lam Son Bach Dang Marina park Elevated road no.1 Metro route leading to Tan Son Nhat International Airport Lam Son Square, District 1 Site area: 1,410 sm Storey: 9 floors Car park: 168 Ton Duc Thang street, District 1 Site Area: 7.02 ha Route: Cong Hoa Intersection Dien Bien Phu Length: 9.5km Width: 17.5m Investment: US$800 million Route: Hoang Van Thu Airport Length: 2km Construction: Investment: US$250 million

11 H C M C I N F R A S T R U C T U R E Metro Line No. 1 Update 1 Under construction Under planning Suoi Tien Station SHTP Station An Phu Station Tan Cang Station Opera House Station Ben Thanh Station

12 H C M C I N F R A S T R U C T U R E Airports Hai Phong New Terminal Da Nang International Terminal under construction HCMC - 9,000 sm T2 terminal expansion Dong Nai 3 new designs for Long Thanh International Airport Source: Retrieve on Internet on January, 2016

13 3. CONDOMINIUM

14 H C M C C O N D O M I N I U M Market Snapshot More balanced market: mid-end products accounted for 47% of total launch and 44% of total sales in 2016 (compared to 40% and 39% respectively in 2015). A small price adjustment: 4.6% y-o-y increase A good mixture of buyers: both end-users and investors, both local and foreign NEW LAUNCH 2016 Q4/ ,419 units 9,145 units 10% y-o-y 33% y-o-y 34% q-o-q NEW SALES 2016 Q4/ ,008 units 11,941 units 4% y-o-y 11% y-o-y 52% q-o-q Source: CBRE Research

15 Units H C M C C O N D O M I N I U M Mid-end segment is advancing, easing high-end oversupply fear NEW LAUNCH BY YEAR 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Luxury High-end Mid-end Affordable NEW LAUNCH BY MARKET SHARE 100% 80% 60% 36% 40% 47% 40% 20% 0% Luxury High-end Mid-end Affordable Source: CBRE Research

16 H C M C C O N D O M I N I U M The East and the South continued to take the lead 2016 NEW LAUNCH BY AREA 2016 NEW LAUNCH BY DISTRICT West 11% North 7% Central 8% East 41% Others 31% D8 16% Binh Thanh 12% South 34% D1 7% D9 11% D2 11% D7 12%

17 No. of Sold Units Units H C M C C O N D O M I N I U M Improvement in sales due to strong demand from both end-users and investors SOLD UNITS BY YEAR 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, SUPPLY vs SOLD UNIT - SMALLER GAP 50,000 40,000 30,000 20,000 10, New Launches Sold Units Luxury High-end Mid-end Affordable Source: CBRE Research

18 Unsold Units Net Absorption Rate (%) H C M C C O N D O M I N I U M Improving absorption rate led to slower growth in inventory ACCUMULATIVE INVENTORIES NET ABSORPTION RATE (*) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 21% 9% 80% 70% 60% 50% 40% 30% 20% 10% % Luxury High-end Mid-end Affordable Luxury High-end Mid-end Affordable (*) Net Absorption Rate = Sold units in the period/ (Unsold units in the period + New launches in the period) Source: CBRE Research

19 H C M C C O N D O M I N I U M Sales took place across all districts ~68.6% of new launches sold No. of Project Sold rate (%)

20 Percentage change (%) H C M C C O N D O M I N I U M Large supply keeps price in check. The market is far from bubble CHANGE IN PRIMARY SELLING PRICE 30% 20% 10% 0% -10% -20% -30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Luxury High-end Mid-end Affordable Source: CBRE Research

21 H C M C C O N D O M I N I U M Government policies remain polarized The government s focus will be on protecting buyers and boosting the lower end segment while curbing property bubbles in the higher end segment.

22 New launch supply (units) H C M C C O N D O M I N I U M Market Outlook The market continues to welcome a big wave of supply, it will however swift toward a more affordable market. FORECAST ON SUPPLY 50,000 40,000 30,000 20,000 10, F 2018F 2019F Luxury High-end Mid-end Affordable Source: CBRE Vietnam, Q4 2016

23 Percentage change (%) H C M C C O N D O M I N I U M Market Outlook (cont d) In 2017, the price growth will mostly come from new top-tier projects at very prime locations, leading to an increase of 5-10% for luxury and high-end segment. The price for mid-end and affordable segment will be stable as these markets target at end-users and affordability will be the key issue. FORECAST ON PRIMARY SELLING PRICE 20% 15% 10% 5% 0% -5% -10% -15% -20% F 2018F 2019F Luxury High-end Mid-end Affordable Source: CBRE Vietnam, Q4 2016

24 Sold units H C M C C O N D O M I N I U M Market Outlook (cont d) The luxury and high-end market likely see a small drop in absorption rate in 2017 as buyers need time to get familiar with a higher price level while the mid-end and affordable market continue to have a good absorption. FORECAST ON SOLD UNITS AND ABSORPTION 50,000 60% 40,000 48% 30,000 36% 20,000 24% 10,000 12% F 2018F 2019F Luxury High-end Mid-end Affordable Absorption 0% Source: CBRE Vietnam, Q4 2016

25 4. LANDED PROPERTY READY-BUILT VILLA AND TOWNHOUSE

26 H C M C R E A D Y - B U I L T V I L L A A N D T O W N H O U S E Market Snapshot Most of 2016 new launches were from large-scale townships. Stable absorption from both end-users and investors. Price increased the most at suburban districts. NEW LAUNCH IN Q LaVila In Nha Be District 238 units ~US$1,506/sm The Pegasuite In District 8 69 units ~US$3,768/sm Merita Khang Dien In District units Soft launch River Park In District units Soft launch Source: CBRE Vietnam, Q4 2016

27 New Supply (units) H C M C R E A D Y - B U I L T V I L L A A N D T O W N H O U S E Active New Supply, Especially in The East 1,500 1, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 North 38% East 44% 2016 Launches 3, % y-o-y Sales 2, % y-o-y West 2% Central 2% Q % q-o-q % q-o-q South 14% Source: CBRE Vietnam, Q4 2016

28 Average asking price (US$/land sm) H C M C R E A D Y - B U I L T V I L L A A N D T O W N H O U S E Flat selling price 4,500 3,000 1,500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q District 2 District 9 District 7 Others Average selling price (y-o-y) District 2 District 9 District 7 Others -2.7% 10.1% 2.4% 6.5% (*): excl. District 1 US$ 3,145 US$ 1,697 US$ 3,846 US$ 3,075 (*) Source: CBRE Vietnam, Q4 2016

29 H C M C R E A D Y - B U I L T V I L L A A N D T O W N H O U S E Developers move further from CBD West North Central East District 9 running out of cheap, good land bank Developers move far East and South More townhouses of lower prices to be developed Some developers tend to develop readybuilt houses instead of land plots South

30 New Supply (units) H C M C R E A D Y - B U I L T V I L L A A N D T O W N H O U S E Market Outlook Limited good location land bank. Future supply to be spread in different districts. FORECAST ON SUPPLY F 2018F 2019F Source: CBRE Vietnam, Q4 2016

31 Average Selling Price (USD/land sm) H C M C R E A D Y - B U I L T V I L L A A N D T O W N H O U S E Market Outlook Price expected to increase amid growing preference from buyers on landed properties Net absorption is expected to reach 60-65% for each year. FORECAST ON PRIMARY SELLING PRICE 6,000 4,500 3,000 1, F 2018F 2019F District 2 District 9 District 7 Others Source: CBRE Vietnam, Q4 2016

32 5. OFFICE

33 H C M C O F F I C E Market Snapshot Limited supply is recorded in CBD area as demand for these spaces continues to rise. Grade A and Grade B both recorded a healthy net absorption (2,116 sm NLA and 13,092 sm NLA, respectively). Co-working Spaces and Business Centers are on the rise, with older buildings maximizing old retail podiums to be turned into co-working spaces. Asking Rents Grade A Grade B 1.7 % q-o-q 5.9% y-o-y 5.4% q-o-q 6.2% y-o-y Vacancy Rates Grade A Grade B 0.3 ppts q-o-q 0.7 ppts y-o-y 0 ppts q-o-q 1.8 ppts y-o-y Source: CBRE Research

34 Supply (NLA sm) H C M C O F F I C E Limited Supply in 2016 Only two projects: Mapletree Business Center (District 7;30,000 sm GFA) & Ha Do (Tan Binh District; 14,000 sm GFA) OFFICE SUPPLY BY YEAR 1,200,000 1,000, , , , ,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Grade A Grade B Source: CBRE Vietnam, Q Source: CBRE Vietnam, Q4 2016

35 H C M C O F F I C E Incoming wave of Grade A Future Supply Grade A CBD constructions to restart after a long time of being inactive, notably with SJC tower and Tax Center Grade A Grade B Grade A DEUTSCHES HAUS CBD GFA: 38,621 sm SAIGON CENTER P2 CBD GFA: 40,000 sm ETOWN CENTRAL Non-CBD GFA: 67,760 sm 2020 VIETTEL TRADE CENTER Non-CBD GFA: 65,971 sm SPIRIT OF SAIGON CBD GFA: 15,000 sm SAIGON M&C CBD GFA: 49,000 sm VIET CAPITAL CENTER CBD GFA: 38,621 sm SJC TOWER CBD GFA: 38,000 sm TAX CENTER CBD GFA: 35,000 sm Source: CBRE Vietnam, Q4 2016

36 H C M C O F F I C E Overall Asking Rent increase y-o-y ASKING RENT BY YEAR Grade B Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 $40 $35 $30 $25 $20 $15 $10 Source: CBRE Vietnam, Q $5 Grade A $0 $0 $5 $10 $15 $20 $25 $30 $35 $40 Grade A Grade B +5.9 % Y-o-Y US$ 38.0 US$ % Y-o-Y Grade A: Upcoming new supply lowered average rent q-o-q Grade B: Stable rental growth Source: CBRE Vietnam, Q % Q-o-Q +5.4% Q-o-Q

37 Net Absorption ( NLA sm) Vacancy Rate H C M C O F F I C E Vacancy Rate decreases slightly, Net Absorption remains low OFFICE PERFORMANCE BY QUARTER 40,000 30,000 20,000 10,000 15% 12% 9% 6% 0-10,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Net Absorption - Grade A Net Absorption - Grade B Vacancy Rate - Grade A Vacancy Rate - Grade B 3% 0% Q Net absorption (Grade A + B) = 1,191 sm Vacancy remains stable as the market absorbs the remaining limited supply Source: CBRE Vietnam, Q Grade A Net Absorption: -77% y-o-y Vacancy: ppts y-o-y Grade B Net Absorption: -99%y-o-y Vacancy: -1.8 ppts y-o-y

38 H C M C O F F I C E Demand drivers continue the same trend High demand still comes from traditional sectors. Tenants still display the same trend of looking forwards to moving into newer, better quality within CBD. IT/Technology tenants has displayed a preference towards decentralized, campus style hub. Banking/Insurance IT/Technology Pharmaceuticals Source: CBRE Vietnam, Q4 2016

39 H C M C O F F I C E Opportunities abound for the market Ongoing Supply Excess supply coming from CBD and Non-CBD area Rents are expected to become more competitive Higher demand still comes for CBD Flight to value Big occupiers to relocate and expand to higher quality buildings Diversified Demand High demand from traditional sectors Start-up boom: Growth of co-working space Source: CBRE Vietnam, Q4 2016

40 H C M C O F F I C E 10 Existing Co-working Spaces and More to Come Toong Coming soon to Oxygen Mall in Vista An Phu WORK Saigon DreamPlex BigWork US$356/ month/ private room Source: CBRE Vietnam, Q US$27 90/ monthly pass US$95 monthly pass

41 Grade A Supply (NLA, sm) No New Supply No New Supply No New Supply No New Supply H C M C O F F I C E Market Outlook Older Grade A building is expected to see a shift of tenants as tenants flock to newer Grade A buildings. Grade B supply in both CBD and non-cbd is also expected to increase and provide more spaces into the market. FORECAST ON SUPPLY 120, ,000 80,000 60,000 40,000 20, F 2018 F 2019 F Source: CBRE Vietnam, Q Source: CBRE Vietnam, Q4 2016

42 Rent (US$/sm/month) Vacancy Rate (%) H C M C O F F I C E Market Outlook Grade A asking rent is expected to have a gradual increase as the new supply comes steadily each year. Because of the excess supply, vacancy rate may increase and then becoming stable as the market gradually absorb the new spaces. FORECAST ON PERFORMANCE 50 30% % 18% 12% 6% F 2018F 2019F 0% Rent Vacancy Rate Source: CBRE Vietnam, Q Source: CBRE Vietnam, Q4 2016

43 6. RETAIL

44 New Supply (sm) H C M C R E T A I L Market Snapshot 2016 welcomed the highest new annual supply in history, most in non-cbd areas. Improvement in vacancy rate supported by stable rental rate in non-cbd areas. Tenant mix was driven toward true customers demand. RETAIL SUPPLY BY YEAR 250, , , ,000 50, Source: CBRE Vietnam, Q

45 H C M C R E T A I L Q no new supply but busy construction activities Taka 23/9 Park District kiosks Completion: Food Square Tan Phu District GFA: 1,000 sm Completion: 2017 Garden Mall (Thuan Kieu Plaza) District 5 GFA: 19,200 sm Completion: 2018 Crescent Mall (P2) District 7 GFA: 18,000 sm Completion: 2018 Tax Plaza District 1 GFA: 34,000 sm Completion: 2020 Q1 Q1 Q2 Q3 Q3 Vincom Plaza Le Van Viet District 9 53,000 sm GFA Vincom Plaza Go Vap Go Vap District 28,000 sm GFA LotteMart Go Vap Go Vap District 32,000 sm GFA Aeon Mall Binh Tan Binh Tan District 114,000 sm GFA Saigon Centre Phase 2 District 1 50,000 sm GFA

46 H C M C R E T A I L Map of Significant Future Supply Union Square Dong Khoi Str. 40,000 sm GFA To open in 2017 Estella Heights Hanoi Highway 26,000 sm NLA To open in 2018 The Spirit of Saigon Pham Ngu Lao Str. 48,000 sm GFA To open in 2018 Tax Center Le Loi Nguyen Hue Str. 35,000 sm GFA To open in 2020 Vincom Center Mall Tan Cang, BT Dist. 59,000 sm NLA To open in end 2017

47 Net Absorption (sm) Vacancy Rate (%) H C M C R E T A I L Improvement in vacancy rate Low net absorption in Q4 due to limited supply Improvement in vacancy rate seen majorly in retail podiums (Vista Walk in D2) NET ABSORPTION AND VACANCY RATE 120, ,000 80,000 60,000 40,000 20, ,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Vacancy Q4/ % q-o-q -1.8% y-o-y Net absorption Vacancy rate Source: CBRE Vietnam, Q

48 H C M C R E T A I L Retail rents CBD areas recorded the strongest rate of growth as a number of new leases were signed by international retailers and space in these areas remained limited Landlords in non-cbd malls maintain rents flat in and effort to retain existing tenants and attract new tenants amid increasing supply in these areas ASKING RENT (US$ per NLA sm on ground and first floor, excl. tax and service charge) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-CBD CBD % q-o-q CBD 15% y-o-y Non CBD 1.2% q-o-q 0.1% y-o-y

49 H C M C R E T A I L Expansion of bazaar and convenience stores due to strong consumer demand for F&B and necessities Vingroup introduced Vincom+ Rubik Zoo District 1 Oxygen Mall District 2 Source: CBRE Vietnam, Q Taka 23/9 Park District 1 Food Square Tan Phu District

50 H C M C R E T A I L Growing spending following Vietnam s receptivity of international shopping trends Vietnam: 20% use phones to shops. 30% shop online in Source: Nielsen Research, 2015 Source: CBRE Vietnam, Q

51 New Supply (NLA, sm) H C M C R E T A I L Market Outlook The development pipeline remains considerable with 500,000 sm NLA to be added in the next three years, mostly in 2017 and Shopping centres and retail podiums are the major future supply FORECAST ON SUPPLY 300, , , , ,000 50, F 2018F 2019F Source: CBRE Vietnam, Q

52 Rent (US$/sm/month) Vacancy Rate (%) H C M C R E T A I L Market Outlook (cont ) Rents will see a marginal drop due to anticipated new openings in non-cbd areas during and recover in 2019 with new supply coming online in CBD area. A small increase in the vacancy rate in 2017 due to new supply before gradually being absorbed afterwards FORECAST ON PERFORMANCE F 2018F 2019F 40% 35% 30% 25% 20% 15% 10% 5% 0% Source: CBRE Vietnam, Q Rent Vacancy Rate

53 7. INVESTMENT

54 I N V E S T M E N T M a j o r I n v e s t m e n t D e a l s i n Q Hanoi HCMC HCMC Sofitel Legend Metropole Hotel Hanoi VINACAPITAL VIETNAM OPPORTUNITY FUND LIMITED JV BETWEEN VINACAPITAL AND WARBURG PINCUS 50% STAKE US$ 100 MIL. 364-KEY HOTEL Casuarina Cove Vietnam KEPPEL LAND HUNG PHU RE INV. 60% US$ 24.1 MIL. 120 VILLAS Riviera Cove HUNG PHU RE INV. KEPPEL LAND 40% US$ 14.5 MIL. 96 VILLA

55 I N V E S T M E N T M a j o r I n v e s t m e n t D e a l s i n Q

56 I N V E S T M E N T I n v e s t m e n t D e a l s i n Pink: 2016 trasaction value Grey: 2015 transaction value HOTEL AND DVELOPMENT SITES PLAY KEY ROLE Hanoi US$310 million US$502 million Ho Chi Minh City US$ 493 million US$294 million Other province US$ 84 million US$307 million 4% 4% Hotel 14% 33% Development site Mixed-use Office 24% Retail Others 21% Source: RCA, retrieved in 3 January Size of the circle represents total transaction value in 2016

57 Thank You

58 For more information regarding this presentation please contact: CBRE Vietnam Co., Ltd. Research & Consulting T F research.vietnam@cbre.com All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.