KNOWLEDGE REPORT VIETNAM - 2Q 2014 | VIETNAM OVERVIEW - www.colliers.com/vietnam - Colliers International
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2Q 2014 | VIETNAM OVERVIEW
VIETNAM
KNOWLEDGE REPORT
The Vista, District 2, HCMC
www.colliers.com/vietnam
VIE TNAM PROPERT Y MARKE T AT A GL ANCE TABLE OF CONTENTS VIETNAM ECONOMIC UPDATE • Vietnam’s macroeconomic improving thanks to ............................................... 1 stable FDI inflows HO CHI MINH CITY & HANOI’S ECONOMIC UPDATE HO CHI MINH CITY PROPERTY MARKET Office ............................................... 2 • Market Overview • Market Insight • Forecast Retail ............................................... 3 • Market Overview • Market Insight • Forecast Condominium .............................................. 5 • Market Overview • Market Insight • Forecast Serviced Apartment .............................................. 7 • Market Overview • Market Insight • Forecast HCMC INDUSTRIAL MARKET .............................................. 9 HANOI PROPERTY MARKET ............................................... 10 Office • Market Overview ............................................... 11 • Market Insight • Forecast Retail ............................................... 12 • Market Overview • Market Insight • Forecast Residential .............................................. 13 • Market Overview • Market Insight • Forecast
VIETNAM | 2Q 2014 | ECONOMIC UPDATE
Vietnam’s macroeconomic improving thanks to stable FDI inflows
VIETNAM 2Q14 Y-O-Y 3Q14F In 2Q14, GDP growth rate achieved 5.25%, bringing the six-month
GDP Growth 5.25% 0.3%
rate to 5.18%, according to the General Statistical Office. Vietnam’s
Total Registered FDI (US$ billion) 3.52 -21%
Exports (US$ billion) 37.6 16.2% macroeconomic continues to improve thanks to stable FDI inflows and
Imports (US$ billion) 37.3 9.0% strong manufacturing export though the domestic demand remains
CPI 4.7% -1.8%
Total retail sales (VND billion) 737.6 10.7%
weak given low sentiment from private sector and risky bad debts of
International Visitors (million) 1.9 9.0% commercial banks.
Base Rate 9% 0.0%
Exchange Rate (US$) 21,246 -0.9% The incidents of China’ oil rig dispute put some challenges
VN-Index 562.02 8.4%
to the economy growth yet impacts were limited. Japanese,
Gold Price (VND million/ tael) 36.7 -9.79%
Source: Colliers International
Korean, American and Taiwanese are currently major FDI
stocks in Vietnam. The total registered FDI from China into
Vietnam remains small although it has been risen in recent
FDI OF VIETNAM, 2Q 2014
years.
Moreover, trade activities between two countries well improved
in the first half of 2014 when both export and import turnovers
increased steadily 20.8% and 21.1% alternately compared to the
similar period last year. However, tourism industry has been hurted
because of dramatical fall from Chinese holidaymakers after big
surge of 30% in the first four months of 2014. International visitors
to Vietnam through the border gates with China in June slowed
Source: GSO, Colliers International
down 50% against May.
VIETNAM’ S IMPORT - EXPORT FIGURES, 2Q 2014 Forecast
>> The expected Free Trade Agreements (FTA) between European
Union (EU) and Vietnam by the end of this year will strongly
increase the country’s export turnover because most of applied
taxes to Vietnamese products trade to EU will gradually reduce
to 0%.
> > The FTA signing will also provide many opportunities for
local firms to gain significant flow of quality investment
Source: GSO, Colliers International from Europe nations, acceleration of shared expertise and
transfer of advanced technology.
>> It is noticed that local authorities have implemented strategic progress to minimise economic dependence on China market
as well as meeting the Trans-Pacific Partnership requirements.
> > In the near future, Vietnamese manufactures have to utilise local resources and seek for alternative exporting markets.
> > Meanwhile, there are also other segments required urgent improvement including logistics infrastructure, shortage of
skilled labor, supply chain management capability and facilitate linkages with foreign firms.
P.1 | Colliers International
HO CHI MINH & HA NOI | 2Q 2014 | ECONOMIC UPDATE
Export turnover of HCMC expects strong growth in 2014
HO CHI MINH CITY 2Q14 Y-O-Y 3Q14F >> The impact of tax incentives and other preferential
GDP Growth 8.7% 0.6% policies encourage an enormous capital inflow from
Registered FDI (US$ million) 106 -18.2% foreign investment, contributed around 23.3% to
Exports (US$ billion) 7.85 10.2% the city budget in 2Q14.
Imports (US$ billion) 7.06 -5.1%
CPI 5.02% 2.54% >> HCMC, being an export-oriented economy,
Total retail sales (VND billion) 159.5 6.6% recorded export turnover of approximately
International Visitors (million) 0.8 -1.5% US$14,182 million in the first six months of 2014,
Source: GSO, Colliers International growing approximately 5.7% year-on-year.
>> In June, income from exporting was 4.3% lower than experienced figure in May, reflecting temporary market disruptions.
>> However, with recently adjusted the VND/USD exchange rate up by one percent and external demand picking up in the second half of
the year, exports are forecast to bounce back and accelerate in the upcoming months.
Ha Noi saw growth of implementing FDI
HA NOI 2Q14 Y-O-Y 3Q14F >> In the first half of 2014, Hanoi’s GDP increased by
GDP Growth 7.4% -0.3% 7.4% (y-o-y).
Registered FDI (US$ million) 522 13.7% >> The service sector contributed 4.1 percentage
Exports (US$ billion) 2.85 8.0%
points and another 3.2 percentage points was
Imports (US$ billion) 5.1 -21.5%
added by the Construction and Industry.
CPI 6.43% 1.0%
International Visitors (million) 0.59 18.4% > > Generally, the CPI of June saw a y-o-y gain of
Source: GSO, Colliers International approx. 6.43%.
>> Regarding to foreign investment, the accumulating registered FDI of Hanoi in the first two quarters of this year reached US$560
million, a 13.7% y-o-y growth.
>> The implementing FDI was estimated about US$405 million, increasing by 6.5% y-o-y.
>> The predicted total number of international visitors to Hanoi in the first six-month of this year reached approx. 1.1 million, equaling
to 28.2% y-o-y increase. The forecasted number of local visitors rose by only 3.2% (y-o-y).
HCMC - HANOI FDI GROWTH BY MONTH HCMC - HANOI GDP GROWTH RATE, 2Q 2014
Source: GSO, Colliers International Source: GSO, Colliers International
P.2 | Colliers International
HO CHI MINH CITY | 2Q 2014 | PROPERTY MARKET HCMC Property Market Overview View of HCMC CBD
HO CHI MINH CITY | 2Q 2014 | OFFICE MARKET
2Q14 3Q14F* Office market retains upward movement
> > In 2Q14, Grade A buildings saw a lift of occupancy rate, whilst
Average asking rent
asking rent slightly declined by 0.74% q-o-q, yet growing 5% in
comparison to the same period of 2013.
Occupancy rate
> > Vacancy rate of Grade B continued its noticed improvement
dropping to 8.6% from 9.2% in previous quarter.
Supply > > The average asking rent of CBD Grade B towers went up to
US$19.48/ sq m/ month while non-CBD buildings witnessed a
GRADE A OFFICE PERFORMANCE, 2Q 2014 difficult period when both asking rents and occupancy rate fell
moderately in reviewed quarter.
Market Insight
>> Currently, there are few options for tenants who require adequate
office spaces in CBD Grade A and B buildings.
> > This provides opportunities for office developments in CBD
fringe and outer districts including District 3, 2 and 7 with
Source: Colliers International
GRADE B OFFICE PERFORMANCE, 2Q 2014 competitive rental rate and incentives.
> > In particular, District 2 will be a promising office area as
a new CBD of the city connecting directly to District 1 and
surrounding zones.
>> We predict a trend of moving out of downtown early next year with
completion of buildings with high quality specifications covering
Lim 2 Tower, SSG Tower and Viettel Office and Trade Center.
Source: Colliers International
> > As a result of stable demand and steady occupied space,
VIETTEL COMPLEX UNDER CONSTRUCTION sublease activities at top graded office developments has
been more popular in second quarter of this year.
Forecast
>> We foresee a moderate growth from both average asking
rents and occupancy rate during the latter half of 2014 given
improving economic scenes though at low pace compared to
the previous year.
> > During the next quarters, retaining existing tenants will be
top priority of landlords to secure constant income as well
as pricing strategy.
Source: Colliers International
P.3 | Colliers International
HO CHI MINH CITY | 2Q 2014 | OFFICE MARKET
HCMC Office Market Overview
Com-
NLA Service Occupancy NFA asking rent
No Name Address pletion
(sq m) Charges (*) rate (*)
Year
1 Saigon Centre 65 Le Loi 1996 11,650 6.5 95% 40.0
2 Saigon Tower 29 Le Duan 1997 13,950 6.0 99% 37.0
3 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 91% 43.0
4 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 94% 41.0
5 Diamond Plaza 34 Le Duan 1999 15,936 8.0 99% 41.0
6 Kumho Asiana Plaza 39 Le Duan 2009 26,000 8.0 93% 49.0
7 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 8.0 88% 34.0
8 President Place 93 Nguyen Du 2012 8,330 6.0 97% 30.0
9 Times Square 22-36 Nguyen Hue 2012 9,000 7.0 60% 50.0
Grade A 158,576 7.0 90.4% 39.8
1 OSIC 8 Nguyen Hue 1993 6,500 6.0 94% 20.0
2 Yoco Building 41 Nguyen Thi Minh Khai 1995 5,000 4.0 100% 16.0
3 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai 1996 3,200 5.0 100% 21.0
4 Central Plaza 17 Le Duan 1997 6,094 5.0 100% 26.0
5 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 98% 20.0
6 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 6.0 96% 23.0
7 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 98% 22.0
8 MeLinh Point Tower 02 Ngo Duc Ke 1999 17,600 6.0 99% 24.0
9 Zen Plaza 54-56 Nguyen Trai 2001 11,037 5.0 95% 21.0
10 Bitexco Office Building 19-25 Nguyen Hue 2003 6,000 5.0 92% 25.0
11 The Landmark 5B Ton Duc Thang 2005 8,000 5.0 82% 21.0
12 Opera View 161-167 Dong Khoi 2006 3,100 7.0 90% 26.0
13 Indochina Park Tower 4Bis Nguyen Dinh Chieu 2006 2,145 3.0 77% 10.0
14 Petro Tower 1-5 Le Duan 2007 13,304 5.0 99% 30.0
15 City Light 45 Vo Thi Sau 2007 10,000 5.0 98% 15.0
16 The Landcaster 22Bis Le Thanh Ton 2007 7,000 5.0 100% 24.0
17 Gemadept Tower 5 Le Thanh Ton 2008 14,000 7.0 100% 23.0
18 Fideco Tower 81-85 Ham Nghi 2008 15,000 6.0 100% 20.0
19 Havana Tower 132 Ham Nghi 2008 7,326 6.0 99% 21.0
20 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 96% 26.0
21 Royal Center 235 Nguyen Van Cu 2008 14,320 5.0 100% 23.0
22 TMS 172 Hai Ba Trung 2009 4,000 4.0 100% 23.0
23 Bao Viet Tower 233 Dong Khoi 2010 10,650 6.0 100% 21.0
24 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 96% 22.0
25 Vincom Center 68-70-72 Le Thanh Ton 2010 56,600 5.0 70% 23.0
26 Saigon Royal 91 Pasteur 2010 5,340 4.0 100% 19.0
27 A&B Tower 76 Le Lai 2010 17,120 6.0 98% 29.0
28 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19.596 5.0 89% 23.0
29 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 93% 26.0
30 Lim Tower 9-11 Ton Duc Thang 2013 29,265 6.0 97% 28.0
31 Sunny MB Tower 259 Tran Hung Dao 2013 13,200 5.5 12% 22.0
Grade B 399,596 6.0 89.5% 23.1
* US$/ sq. m/ month (on net area)
P.4 | Colliers International
HO CHI MINH CITY | 2Q 2014 | RETAIL MARKET
2Q14 3Q14F* Reverse movements between retail malls and
high street shops
Average asking rent
HCMC retail market witnessed a downturn tendency with fall in both
Occupancy rate occupancy rate and rental from retail centers during 1H 2014.
The retail podium experienced slight drop in both figures with notable
Supply vacant spaces within CBD area after prolonged fully-occupied condition.
Regardless weaken adjustment in rents, both department store and
MARKET PERFORMANCE, 2Q 2014 shopping centre segments still recorded 3% and 2% increase in
vacancy rate respectively, mostly contributed by suburban malls.
In contrast, we saw accelaration of expansion activities from international
F&B brands with open of the 2nd McDonald’s restaurant, the 3rd Starbuck
and the 17th Baskin Robbins stores in HCMC.
Market Insight
Source: Colliers International Central shopping centers struggling in retain tenants
MARKET PERFORMANCE BY SECTOR, 2Q 2014 >> We noticed significant empty spaces in both CBD and suburban retail
centres during last quarter disregard moderate decline in rental from
operators.
>> A lengthen pull back period of consumer’s expenses forced retailers,
especially local brands, to review business plan while top brands
took the opportunities to obtain prime locations in order to seize the
market shares.
>> However, either move-out or relocation trend still excess expansion
movement.
Source: Colliers International
>> Medium-sized sites ranging from 150-200sm. q in city downtown
SC VIVOCITY @ SAIGON SOUTH are current market hot spots.
Forecast
> > We expect increasing competition in retail sector given
a pipeline of new projects coming in next year including
SC Vivocity (District 7), Vietttel Complex (District 10),
Lim Tower 2 (District 3) and SSG Tower (Binh Thanh).
> > Nevertheless, recent acquisitions of Pico Plaza (Tan
Binh) by Lotte and Hi-tech Healthcare Park (Binh Tan)
by Aeon Mall show prospective outlook of local market
Source: Colliers International to foreign investors.
P.5 | Colliers International
HO CHI MINH CITY | 2Q 2014 | RETAIL MARKET
HCMC Retail Market Overview
Name of Project / Comple- NLA Average Rental
No Address Location Occupancy Rate
Building tion Year (sq m) (US$/sq m/month)
1 Hotel Continental Saigon 132-134 Dong Khoi District 1 2000 200 90 100%
2 Caravelle Hotel 19 Lam Son Square District 1 2000 150 95 100%
3 New World Hotel 79 Le Lai District 1 2000 1,000 40 100%
4 Sheraton Saigon 88 Dong Khoi District 1 2002 750 125 67%
5 Opera View Lam Son Square District 1 2006 1,260 100 100%
6 The Manor 1 91 Nguyen Huu Canh Binh Thanh 2006 2,000 20 90%
7 Saigon Pearl 92 Nguyen Huu Canh Binh Thanh 2009 5,000 16 75%
8 Rex Arcade 141 Nguyen Hue District 1 2010 2,000 120 99%
9 The Manor 2 91 Nguyen Huu Canh Binh Thanh 2010 2,500 20 90%
10 Bitexco Financial Tower 45 Ngo Duc Ke District 1 2011 8,000 35 79%
11 The Vista Walk Ha Noi Highway District 2 2012 5,000 20 40%
12 President Place 93 Nguyen Du District 1 2012 800 60 67%
13 Times Square 22-36 Nguyen Hue District 1 2013 9,000 90 72%
14 Saigon Airport Plaza 1 Bach Dang Tan Binh 2013 7,623 17 90%
Retail Podium 50,323 57 78%
1 Diamond Plaza 34 Le Duan District 1 1999 9,000 90 98%
2 Zen Plaza 54-56 Nguyen Trai District 1 2001 6,817 60 97%
3 Parkson Saigon Tourist 35 Le Thanh Ton District 1 2002 17,000 90 97%
4 Parkson Hung Vuong 126 Hung Vuong District 5 2007 24,000 60 70%
5 Kumho Asiana Plaza 35 Le Duan District 1 2009 6,830 40 100%
6 Parkson Flemington Le Dai Hanh District 11 2009 26,000 25 50%
7 Parkson Paragon Nguyen Luong Bang District 7 2011 7,500 35 65%
8 Parkson C.T Plaza Truong Son Tan Binh 2012 12,235 40 90%
9 Parkson Cantavil Premier Ha Noi Highway District 2 2013 17,815 40 82%
Department Store 127,198 52 77%
1 Saigon Center 65 Le Loi District 1 1996 3,500 75 100%
2 City Plaza 230 Nguyen Trai District 1 2000 5,250 16 88%
3 Superbowl Vietnam - TSN Truong Son Tan Binh 2002 5,500 18 55%
4 Tax Center 135 Nguyen Hue District 1 2003 7,000 75 100%
5 An Dong Plaza 18 An Duong Vuong District 5 2004 18,000 40 80%
6 Saigon Square 1 77-89 Nam Ky Khoi Nghia District 1 2006 1,300 167 100%
7 Nowzone Nguyen Van Cu District 1 2008 9,000 35 95%
8 Lotte Mart Saigon South Nguyen Huu Tho District 7 2008 24,000 35 96%
9 Saigon Square 2 7-9 Ton Duc Thang District 1 2009 1,400 90 80%
10 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 63 73%
11 Maximark 3/2 Extension 3/2 Street District 10 2010 25,000 35 80%
12 Lotte Mart Phu Tho Le Dai Hanh District 11 2010 24,500 30 85%
13 Crescent Mall Nguyen Van Linh District 7 2011 45,000 35 78%
14 Satra Pham Hung Pham Hung District 8 2011 11,528 15 55%
15 CMC Plaza 79B Ly Thuong Kiet Tan Binh 2011 18,000 10 60%
16 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 90 100%
17 Union Square Dong Khoi District 1 2012 38,000 73 65%
Shopping Centre 349,062 40 80%
P.6 | Colliers International
HO CHI MINH CITY | 2Q 2014 | CONDOMINIUM MARKET
Local developers endeavour to gain trust from buyers
> > The Secondary market recorded a minor q-o-q drop in price though
2Q14 3Q14F*
it is still a considerable decline to 2Q12.
Primary market
>> During second quarter of 2014, the Primary Condominium market saw
a q-o-q gain of almost 7% in average asking price while it is almost
Secondary market
equivalent to same period of 2012.
Supply >> High-end apartments experienced a slight decrease in price while that
of both Mid-end and Affordable segments notably gained 15% and 9%
Sold rate respectively in reviewed quarter.
The first half of this year noted surge in absorption rate
CHANGE OF UNIT TYPES OVER 2010 PERIOD
of residential sector, mostly from affordable condominiums
located in suburban areas.
As a result of that, there was a strong growth in supply of
residential for sale market from both newly-launched and
re-launched projects.
Followed a large stream of new developments in 1Q, last
quarter witnessed release of next phases and relaunch of
delayed condominiums.
Docklands Saigon (District 7) was relaunched by Pau Jar Group
Source: Colliers International after nearly 2 mute years while Hung Thinh Group introduced 8x
Thai An (formerly named Thai An 6) at Go Vap District given the
success of 8x Dam Sen in Tan Phu District.
SECONDARY MARKET PERFORMANCE BY DISTRICT
The Primary market also welcomed 727 new apartments
from mid-scale residential developments including Topaz
Garden, An Gia Garden (Tan Phu) and SSG Tower (Binh
Thanh).
Market Insight
> > Positive performance during 1H14 showed sign of recover for
residential market, especially from affordable and mid-end
segments.
Source: Colliers International > > That reflects an increase of market confidence after a long
period of wait-and-see attitude.
P.7 | Colliers InternationalHO CHI MINH CITY | 2Q 2014 | CONDOMINIUM MARKET
> > We saw significant efforts from local developers in building reputation and gaining buyer’s trust via good construction
progress from many projects.
> > Instead of totally rely on traditional sources from bank loan and customer’s cashflow, the developers now seek for
alternative financial supports including partners, construction vendors and even brokerage firms.
> > Multiple partners can share development risks whilst construction companies are willing to obtain en bloc of units for
trading as part of their business strategy.
Forecast
Steady take-up of new launchs given gain of market confidence
>> We expect constant absorption rate from new market supply till the end of this year given growth in market confidence.
> > Efficient-sized flats selling at US$700 per sq. m will remain the most sought-after products because of acceptable
expenses and eligible elements for financial support from 30 Trillion Package.
> > Existing developments face competitive pressure leading to strategic changes of (1) rebrand project with new pricing
approach and marketing strategy or (2) transfer project, mostly via loan acquisition.
HCMC Condominium Market Overview
Launched Average asking
No Name of Project Address Location Grade Total units
Year price (*)
1 Xi Riverview Palace 190 Nguyen Van Huong District 2 2008 High-end 270 2,100
2 Cantavil Premier Ha Noi Highway District 2 2010 High-end 200 1,720
3 Canh Vien 3 Nam Vien Area, PMH District 7 2011 High-end 116 1,990
4 C.T Leman Plaza 117 Nguyen Dinh Chieu District 3 2011 High-end 200 4,200
5 Star Hill Commercial Area, PMH District 7 2012 High-end 351 2,000
6 The Vista (Tower 4) Ha Noi Highway District 7 2013 High-end 141 1,470
7 The Prince Residence Nguyen Van Troi Phu Nhuan 2013 High-end 282 2,190
High-end developments
1 Everrich 2 422 Dao Tri District 7 2010 Mid-end 3,125 1,350
2 Thao Dien Pearl 12 Quoc Huong District 2 2010 Mid-end 450 1,670
3 Saigon Airport Plaza 1 Bach Dang Tan Binh 2011 Mid-end 242 1,800
4 Tropic Garden Nguyen Van Huong District 2 2012 Mid-end 388 1,200
5 Happy Valley Nguyen Van Linh, PMH District 7 2012 Mid-end 818 1,670
6 Sunrise City (Central + North) Nguyen Huu Tho District 7 2013 Mid-end 1,500 1,550
Mid-end developments
1 Topaz Garden Trinh DInh Thao Tan Phu 2014 Affordable 212 610
2 Ngoc Khanh Tower Nguyen Bieu District 5 2014 Mid-end 99 1,260
3 8x Thai An Phan Huy Ich Go Va[ 2014 Affordable 200 650
4 The Park Residence Nguyen Huu Tho District 7 2014 Mid-end 716 715
5 Parc Spring Nguyen Duy Trinh District 2 2014 Affordable 265 850
New launches in 2Q 2014
* US$/ sq. m
P.8 | Colliers InternationalHO CHI MINH CITY | 2Q 2014 | SERVICED APARTMENT MARKET
Noticed new market supply from refunctioned condominium developments
2Q14 3Q14F* >> Top-tier serviced apartments in HCMC experienced fall in occupancy
rate during last quarter.
Average asking rent
>> Grade A buildings slightly increase average asking rent given stable
vacancy rate approximately 10%.
Occupancy rate >> Last month, Grade B buildings recorded a drop of 6% in rental.
The first half of 2014 saw a notable new supply being refunctioned from
Supply condominium projects in CBD areas.
The New Pearl condominium project in District 3 is informed to be
GRADE A PERFORMANCE, 2Q 2014 completed by 3Q 2015 with 160 serviced flats after a prolonged
delay in construction.
The Waterfront Luxury Apartment (formerly known as Delta River
Tower) in District 1 with over 180 units is expected to operate by early
of 2016.
Market Insight
>> Continous stagnant condition of luxury residential market and solid
performance of serviced apartment lead to temporary refunctional
Source: Colliers International
decisions.
>> The developers will be able to get cashflow from leasing activities in short to mid-term while the buildings are revertable to
apartment for sales given similar specifications.
Comple- Total Average
No Project Name Address Location ARR(*)
tion Year Room Occupancy
1 The Landmark 5B Ton Duc Thang District 1 1995 66 81% 31
2 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 93% 34
3 Sedona Suites 65 Le Loi District 1 1996 89 82% 30
4 Nguyen Du Park Villas 111 Nguyen Du District 1 2004 41 94% 30
5 The Landcaster 22 Bis Le Thanh Ton District 1 2007 55 73% 37
6 InterContinental Asiana Saigon 39 Le Duan District 1 2009 260 97% 36
Grade A 701 90% 34
1 Somerset HCM 8A Nguyen Binh Khiem District 1 1998 165 85% 26
2 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 83% 26
3 Norfolk Mansion 17-21 Ly Tu Trong District 1 1998 126 90% 33
4 Diamond Plaza 34 Le Duan District 1 1999 42 98% 29
5 Garden View Court 101 Nguyen Du District 1 2000 76 93% 31
6 Nikko Saigon 235 Nguyen Van Cu District 1 2011 54 60% 28
Grade B 738 79% 27
P.9 | Colliers InternationalHO CHI MINH CITY | 2Q 2014 | INDUSTRIAL MARKET
Foreign 3PLs show increasing interests in RBF and warehouse segment
HCMC MASTER PLAN OF INDUSTRIAL ESTATES > > There is no new industrial supply during last quarter.
>> There are 13 industrial parks, 3 export processing zones and Saigon
Hitech Park with a total area of approximately 4,600 hectares operating
in HCMC
> > According to the master plan, by 2020, the city will have 22 industrial
areas with 7,000 hectares of new and expanded land area.
>> Current average vacancy rate of industrial properties in HCMC in reviewed
quarter is 33% and expected to be flat throughout this year given moderate
economic growth forecast.
> > The average asking rent of HCMC industrial parks was almost flat in
the last three months and is predicted to gain slightly 2% next year
due to increasing demand at a constant market supply.
Source: Public Domain, Colliers International
Market Insight
>> The Northern and Western zones are projected as major manufacturing and industrial hubs of the city taking advantage of Ring
Road System and East-West Highway.
> > The Southern zone with Hiep Phuoc IP as a core development will become a logistics and supply chain management center
given the cluster of main seaports in the surrounding areas.
> > Foreign third-party logistics (3PL) service providers show increasing interests in Ready-Built-Factory (RBF) and warehouse
segment. The typical size of these workshops is 1,000-2,000sq. m.
HCMC Industrial Market Overview
Area
No Name of Development Location Warehouse Rental Occupancy Rate
(hecta)
1 Tan Binh Tan Binh + Tan Phu District 128 3-4 100%
2 Linh Trung 1 Thu Duc District 62 3-4 100%
3 Tan Tao Binh Chanh District 380 3 87.7%
4 Tan Thuan District 7 300 4 81%
5 Le Minh Xuan Binh Chanh District 100 3 100%
6 Vinh Loc Binh Chanh District 203 3-4 100%
7 Cu Chi Western North Cu Chi District 208 2-3 100%
8 Hien Phuoc 1 Nha Be District 311 3-4 92%
9 Cat Lai 2 District 2 124 3.5 89%
10 Dong Nam Cu Chi District 287 2-3 27%
* US$/ sq. m
P.10 | Colliers InternationalHANOI | 2Q 2014 | PROPERTY MARKET Hanoi Property Market Overview Keangnam Hanoi Landmark Tower
HANOI | 2Q 2014 | OFFICE MARKET
Office market experienced downward tendency in last quarter
>> The down trend in office market has continued in reviewed
2Q14 3Q14F* quarter with decline in both occupancy rate and asking rent.
Average asking rent >> In 2Q 2014, Grade A asking rents experienced downward tendency.
>> Rent was recorded on average as US$31.6 per sq. m per month
Occupancy rate as landlord of office buildings are offering incentives to ease up
situation for tenants.
Supply >> The average occupancy of the Grade A offices was about 73%,
a bit lower than the previous quarter.
GRADE A OFFICE PERFORMANCE
EVN Tower (Cua Bac Street, Ba Dinh District) has been launched
in this quarter, adding approx. 45,621 sq m of NLA to the market.
Lotte Centre Hanoi hasn’t been ready to use in this quarter as
schedule. It is planned to open in September 2014.
As the supply still outweighed the demand, the market still
belonged to tenants. Whereas the Western segment became
Source: Colliers International
strongly competitive, landlords of Grade A building in the old
FUTURE SUPPLY BY DISTRICT CBD remain confident to their strategic location.
However, on another hand, it seems to be right time for the owners
of old buildings in the CBD to renovate and upgrade in order to
maintain their conditions.
The reasonable asking rental also attracted tenants from “villa” or
“townhouse” offices moving to standard office buildings.
Completed NLA Average asking
No Name of Project Developer Location
Year (sq m.) price (*)
Source: Hoa Binh Trading & Invest-
1 Colliers International
Viet Tower 1 Thai Ha, Dong Da 2008 20,000 18
ment JSC
2 EVN Tower EVN 11 Cua Bac, Ba Dinh 2012 45,621 45
Lot 32, Duong Dinh
3 Star Tower CFTD - VLA 2012 3,465 17
Nghe, Cau Giay
2 Dai Co Viet, Hai Ba
4 Pacific Building NCX 2013 4,279 17
Trung
115 Tran Hung Dao,
5 VID Tower 30/4 Tourism & Trading JSC 2013 4,136 21
Hoan Kiem
63 Le Van Luong,
6 63 Le Van Luong 319 Group 2013 12,254 18
Trung Hoa, Cau Giay
P.11 | Colliers InternationalHANOI | 2Q 2014 | RETAIL MARKET
Market expect more supply in latter half of 2014
>> The supply was unchanged as there was no new space adding
2Q14 3Q14F*
to the market in this quarter.
Average asking rent >> The average market rent was recorded at approximately US
$48.85/ sq m, a decrease of 1.8% q-o-q or approx. 25.9% y-o-y.
Occupancy rate >> The occupancy rate was about 80.2%, declining by 1.4 percentage
point q-o-q.
Supply
>> Generally, the retail market seems silent as the economic still
MARKET PERFORMANCE, 2Q 2014 grey. However, we still see some lighting points. Baskin Robbins,
the world’s largest chain of ice cream specialty shops, opened its
first shop in the old CBD of Hanoi, after a chain of 20 shops had
already launched in HCMC.
Lotte Center Hanoi is delayed to launch until 3Q 2014. Given their
prime location covering a very large area between the Old and
Source: Colliers International
New CBDs, its huge supply has been forecasted to strongly affect
MARKET SUPPLY, 2Q 2014
the market.
However, the current silent of other large retail spaces at Times
City, Royal City raises a question on the future launching of Lotte
Center Hanoi.
Source: Colliers International
Completed NLA Average asking
No Name of Project Developer Location
Year (sq m.) price (*)
1 EVN Tower EVN 11 Cua Bac, Ba Dinh 2012 4,385 45
2 Tran Hung Dao, Hoan
2 Hong River Tower Thien Duc Services JSC 2012 2,300 35
Kiem
63 Le Van Luong,
3 63 Le Van Luong 319 Group 2013 20,728 45
Trung Hoa, Cau Giay
459C Bach Mai, Truong
4 Mo Market Shopping Mall Vinaconex 2013 24,223 45
Dinh, Hai Ba Trung
5 CTM Building CTM 139 Cau Giay 2014 5,000 45
* US$/ sq m/ month (on net area)
P.12 | Colliers InternationalHANOI | 2Q 2014 | RESIDENTIAL MARKET
End-users are major demand of Hanoi residential market
2Q14 3Q14F* >> The average asking price of the primary market increased
slightly about 1% comparing to 1Q14.
Primary market
>> The secondary market marginally dropped 0.8% in asking
price from previous quarter with the average asking price of
Secondary market US$1,472 per sqm. It has not yet shown the actually recovery of
the market but it leads to increase the demand for apartment.
Supply
>> The 2-bedroom units with efficient area of 65sq. m to 80sq. m
are preferable regarding market liquidity and total price.
Sold rate >> From US$1,000 to US$1,500 per sqm is the asking price of the
most number of units in both primary and secondary market.
PRIMARY MARKET PERFORMANCE, 2Q 2014
>> Ha Dong and Cau Giay areas with affordable projects pricing
at US$857 per sq. m on average are leading in supply number
of apartments.
The survey of Colliers showed that the number of apartments in
the primary market decreased of approximately 6% from previous
quarter.
The price of apartment has slightly increased in compare with
Q1.2014; meanwhile, the transaction volume has notably increased.
Source: Colliers International This escalation trends to continue in next quarter.
In 2Q14, the Vietnamese government has released series of legal documents related to the real estate market including two sig-
nificant documents:
>> Circular No. 76: the apartment buyer has to pay the land use tax instead of the developer. This policy aims to reduce the financial
burden for the investor so the construction progress could be improved. But it also raises the concern in the buyers about the
transparency of the calculation and allocation this land use tax.
>> In a declaration in July 2014, Vietnamese government stated that they would terminate approving new commercial residential
project until 2015. It is predicted that this declaration will reduce the supply of apartment to market therefore the transaction price
will increase more.
Hand-over Average asking
No Name of Project Developer Location Total units
Period price (*)
No. 1 Thang Long High-
1 Thang Long Number One Viglacera 2Q 2014 1,000 1,619
way, South Tu Lam
62 Nguyen Huy Tuong,
2 My Son Tower My Son 2Q 2016 340 1,071
Thanh Xuan
Linh Dam Urban,
3 HH4 Hop Phu 1Q 2016 1,800 857
Hoang Mai
234 Pham Van Dong,
4 Green Starts An Binh 1Q 2016 930 985
North Tu Liem
5 Discovery Complex Kinh Do 302 Cau Giay, Cau Giay 1Q 2016 512 1,500
P.13 | Colliers InternationalKNOWLEDGE REPORT | 2Q 2014 | VIETNAM
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