VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT Q1 2018

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

TABLE OF CONTENTS ECONOMIC OVERVIEW . . VIETNAM . . HO CHI MINH CITY . . HANOI . . DANANG . . HO CHI MINH CITY MARKET OVERVIEW . . OFFICE . . RETAIL . . CONDOMINIUM . . VILLA & TOWNHOUSE . . SERVICED APARTMENT . . INDUSTRIAL . . HANOI MARKET OVERVIEW . . OFFICE . . RETAIL . . CONDOMINIUM . . VILLA & TOWNHOUSE . . SERVICED APARTMENT . . INDUSTRIAL . . DANANG MARKET OVERVIEW . . OFFICE . . RETAIL . . CONDOTEL . . VILLA . . Cover Page: Deutsches Haus - Grade A Office Building, HCMC 6-7 6 7 7 7 8-20 8 11 13 15 17 19 21-32 21 23 25 27 29 31 33-40 33 35 37 39 Page

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

LIST OF FIGURES Figure 1: Vietnam Exports - Imports in 2017 . . Figure 2: International Arrivals to Vietnam in 2017 . . Figure 3: GDP Growth Rate of HCMC, Hanoi and Danang . . Figure 4: FDI of HCMC, Hanoi and Danang . . HO CHI MINH CITY MARKET OVERVIEW Figure 5: Office, Average Asking Rent . . Figure 6: Office, Occupancy Rate . . Figure 7: Retail, Rental Rate by quarter . . Figure 8: Retail, Occupacy Rate by quarter . . Figure 9: Condominium, New Launches by Segment and Quarter . . Figure 10: Condominium, Sold Units by Segment and Quarter . . Figure 11: Condominium, Primary Asking Price . .

Figure 12: Villa and Townhouse, Selling Prices on Land Area by District . . Figure 13: Villa and Townhouse, Transaction Volume by Quarter . . Figure 14: Villa and Townhouse, New Launches by District . . Figure 15: Serviced Apartment, Occupancy Rate . . Figure 16: Serviced Apartment, Average Asking Rent . . Figure 17: Industrial, Market Performance by District . . Figure 18: Industrial, Supply by District . . LIST OF TABLES Table 1: Macroeconomic Indicators of HCMC, Hanoi and Da Nang . . Table 2: Significant Projects under expected completion in 2018 . . Table 3: Significant Office Projects .

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Table 4: Retail, Significant Future Projects under Construction . . Table 5: Significant Retail Projects . . Table 6: Condominium, Significant new Projects launched in 2017 . . Table 7: Villa and Townhouse, Significant new Projects launched in 2017 . . Table 8: Serviced Apartment, Significant Future Projects under construction . . Table 9: Significant Serviced Apartment Projects . . Table 10: Industrial, Future Supply . . Table 11: Industrial, Market Overview . . 6 6 7 7 8 8 11 11 13 13 13 15 15 15 17 17 19 19 7 8 9 11 12 14 16 17 18 19 20 Page

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

LIST OF FIGURES Figure 19: Office, Average Asking Rent .

. Figure 20: Office, Occupancy Rate . . Figure 21: Retail, Rental Rates by Quater . . Figure 22: Retail, Occupancy Rates by Quarter . . Figure 23: Condominium, Sold Units and Absorption Rate by Segment . . Figure 24: Condominium, New Launches . . Figure 25: Condominium, Sold Units by Segment . . Figure 26: Villa and Townhouse, Supply by Quarter, Hanoi . . Figure 27: Villa and Townhouse, Asking Price on Secondary Market . . Figure 28: Hanoi District Map . .

Figure 29: Serviced Apartment, Supply by Quarter . . Figure 30: Serviced Apartment, Occupancy Rate . . Figure 31: Serviced Apartment, Average Asking Rent . . Figure 32: Industrial, Market Performance by Distrtict . . Figure 33: Industrial, Supply by District . . LIST OF TABLES Table 12: Office, Future Supply . . Table 13: Significant CBD Office Projects . . Table 14: Retail, Significant Future Supply . . Table 15: Significant Retail Projects . . Table 16: Condominium, Significant New Projects Launched in Q4 2017 . . Table 17: Villa and Townhouse, Significant New Projects Launched in Q4 2017 .

. Table 18: Significant Serviced Apartment Projects . .

Table 19: Industrial, Future Supply . . Table 20: Hanoi Industrial Market Overview . . HANOI MARKET OVERVIEW Page 21 21 23 23 25 25 25 27 27 27 29 29 29 31 31 21 22 23 24 26 28 29 31 32

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

LIST OF FIGURES Figure 34: Office, Market Performance as of Q4 2017 . . Figure 35: Office, Market Performance by Quarter . . Figure 36: Office, Supply by Grade . . Figure 37: Retail, Market Performance as of Q4 2017 . . Figure 38: Retail, Market Performance Comparision among Key Cities . . Figure 39: Retail, Supply by District . . Figure 40: Condotel, Market Performance .

. Figure 41: Condotel, Supply by District . . Figure 42: Condotel, Guaranteed Return by Project . . Figure 43: Villa, Market Performance . . Figure 44: Villa, Primary Supply by District . . Figure 45: Villa, Buyer Profile . . LIST OF TABLES Table 21: Significant Office Projects . . Table 22: Significant Retail Projects . . Table 23: Significant Condotel Projects . . Table 24: Significant Villa Projects . . LIST OF ABBREVIATIONS ARR: Average Rental Rate CBD: Central Business District CPI: Consumer Price Index GDP: Gross Domestic Product GFA: Gross Floor Area GRDP: Gross Regional Domestic Product LUR: Land Use Right IP: Industrial Park NLA: Net Lettable Area Q-o-Q: Quarter on Quarter Y-o-Y: Year on Year Exchange rate: USD/VND = 22,750 33 33 33 35 35 35 37 37 37 39 39 39 34 36 38 40 DANANG MARKET OVERVIEW Page

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 6 Q1 2018 | GDP GDP in the first quarter of 2018 achieved an estimated increase of 7.38% compared to the same period last year. This is the highest growth rate of the first quarter in the last ten years, starting with assurance that the Government has demonstrated effective solutions on all levels, sectors and localities in the first days and first months of 2018. As a result, the agriculture, forestry and fishery sectors rose by 4.05% q-o-q. Manufacturing was also a key contributor to growth, rising 13.56% over the quarter driven by a 9.07% rise in the industry and construction sector; the service sector expanded by 6.7% over the same quarter of the previous year.

CPI AND INFLATION Consumer price index (CPI) in March was up 0.97% since last December, making the average CPI in first quarter 2.82% higher than the CPI of 2017. Core inflation in March 2018 decreased by 0.09% over the previous month however still up by 1.38% from the same period last year. Average core inflation in the first Quarter of 2018 rose by 1.34% compared with the corresponding period in 2017. FOREIGN DIRECT INVESTMENT (FDI) Total FDI in Vietnam during Jan-March 2018 stood at approximately USD 5.8 billion, 24.8% down on the same period last year. However, there was still USD 2.12 billion coming from 618 newly licensed projects.

The remainder was contributed by 199 currently-operating projects that raised their capital by more than USD 1.79 billion in total. Indeed, the manufacturing and processing industries are the main destinations of FDI inflows, receiving USD 3.44 billion, comprising 59.4% of the total registered FDI. The Republic of Korea is still the leading investor in Vietnam’s FDI projects with USD 1.84 billion. Hong Kong and Singapore’s FDI is behind Korea but levels are increasing over time.

RETAIL SALES According to the General Statistics Office (GSO), the total Vietnam revenue from retail trade and services exceeds USD 44.05 billion in the first quarter of 2018, an increase of 10% year-on-year. The retail sales of goods, which accounted for more than 75% of the revenue, topped USD 35.22 billion, up 10.5% year-on-year. Overall, all the sectors show positive signs including food and foodstuff (up 12%), textiles and garments (up 13%), home appliances (up 11%) and transport services (up 8.4%). INTERNATIONAL ARRIVALS Total international arrivals in first three months reached 4,205,401 arrivals, an increase of 30.9% over the same period last year.

Based on booking data in the first quarter of 2018, Airbnb announced a list of the world’s top 10 destinations for the coming year, in which Da Nang ranks fifth in booking, surges up 25.5% against the same period this year while Hanoi comes 9th on the list, with a 21.2% year-on-year increase.

TRADE BALANCE Export turnovers of goods in the first quarter of 2018 was estimated to reach USD 54.31 billion, up 22% from the same period last year, of which the domestic economic sector achieved USD 14.97 billion, up 18.9%; the FDI sector (including crude oil) gained USD 39.34 billion, rose by 23.2%. Import turnovers of goods in the first quarter of 2018 reached an estimate of USD 53.01 billion, an increase of 13.6% from the same period last year, of which the domestic economic sector gained USD 21.26 billion, climbing by 13.4%; the FDI sector achieved USD 31.75 billion, increasing by 13.7%.

Trade deficit of services in the first quarter was USD 391 million, equaling 10% of the service export turnovers.

REMITTANCES & REAL ESTATE ENTERPRISES DEVELOPMENT In the first quarter of 2018, HCM City remained the largest recipient of remittances in Vietnam, with the inflows estimated at USD 5.2 billion, a 4.5% y-o-y increase. However, according to the National Center for Information and Forecast of Social - Economic (NCIF), in 2018 further pressure on remittances to Vietnam will keep on this year due to the recovery of the world economy, high remittances costs and coordination between stakeholders. VIETNAM ECONOMIC OVERVIEW 2018 forecast Figure 1: Vietnam, Exports - Imports, 2018 Source: General Statistics Office | Colliers International Research Figure 2: FDI in Vietnam, 2018 Source: General Statistics Office | Colliers International Research

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 7 Q1 2018 | ECONOMIC OVERVIEW Figure 4: FDI of HCMC, Hanoi and Danang Source: General Statistics Office | Colliers International Research Source: General Statistics Office | Colliers International Research Table 1: Marcoeconomic Indicators of HCMC, Hanoi and Danang HO CHI MINH CITY According to Statistical Office in Ho Chi Minh City, the GRDP (Gross Regional Domestic Product) in the first quarter of 2018 was estimated to reach VND 260,317 billion, increasing by 7.64% compare to the first quarter in 2017. The growth is considered to be the highest among the first quarters since 2016, a sign that Ho Chi Minh City’s economy is growing steadily.

The success of Ho Chi Minh City market is partially due to the growth of agricultural, fishery and forestry sectors which increased by 5.83%. The sector of industrial and construction increased by 7.25% and the customer service industry sector increased by 7.98%. There are 9 industries accounted for 55.11% in GRDP; 92.56% of which are for the customer service sector. And among them the 4 major industries include: retail (13.6%), industrial and warehouse (9.2%), commercial real estate (6.0%), investment and banking (7.6%). These are the industries boosting the economy in Ho Chi Minh City. HANOI In 2017, Hanoi’s economy grew positively with improvements recorded in most economic indicators.

The GRDP of 2018 expects to increase by 7 %. The industrial and construction sector is the leading factor for the economic growth with an estimation of 11% increase. Export turnovers reached USD 54.3 billion, an increase of 23% y-o-y, import turnovers at USD 53 billion, up 13.6% y-o-y. FDI is expected to reach USD 3.88 billion with an increase of 7.2 % y-o-y due to the strong performance in manufacturing and processing. Hanoi market has some favorable conditions to achieve its target of 7% growth this year. However, the government should pay attention closely to ensure the positive momentum for Ha Noi market in the next quarters.

Figure 3: GDP Growth Rate of HCMC, Hanoi and Danang Source: General Statistics Office | Colliers International Research DANANG Da Nang’s economy continued strong momentum in the first quarter of 2018 with GRDP growth rate at 9 to10% compared to the same period last year. Industrial production index (IPI) of Da Nang in 2018 increased by 7.9% y-o-y, lower than the index of 2017 which was recorded at 13.82% but is still considered significant growth. A total retail sale of goods and services reached USD 7.04 billion, an increase of 14% y-o-y. Another positive sign was reported in the Consumption Price Index (CPI) in the first quarter with an increase of 3.06% compared with the same period in 2017.

In the first quarter of 2018, Da Nang attracted almost VND 6.922 billion from investors, increasing by 3.24% compared to first quarter in 2017. In this amount, the money from central government accounted for 23.0%, private sector account 70.0%, and Foreign Direct Investment (FDI) 7.0%. The tourism industry is one of the major sources of income for Da Nang. The number of people coming to Da Nang in first quarter was approximately 926,000 increased by 3.34%, among them; 235,000 were international travelers, up by 9.52% on previous year.

2017 HCMC Hanoi Danang GDP growth rate (%) 7.64% 7% 9% Index of Industry Product IIP (%) 6.05% 7.10% 7.98% Retail Sales (USD billion) 11.3 6.2 0.608 FDI (USD million) 439 451 22.4

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 8 Q1 2018 | Figure 6: Office, Occupancy Rate PERFORMANCE Ho Chi Minh City continued to show rising demand for office space with an increase of 2% in occupancy q-o-q among Grade A and Grade B offices. Average rents for Grade A decreased by 2.8% q-o-q, sitting at USD 43.2/sqm/month. With the opening of Saigon Centre Phase 2 and Deutsches Haus HCMC at the end of 2017, the old Grade A office buildings have had to adjust the rent downward to make them more attractive to potential tenants.

On the other hand, the Grade B segment enjoyed a growth of 9% occupancy rate q-o-q and the average NLA increased by 11.3% due to strong flow of Foreign Direct Investment (FDI) up to USD 17.5 billion compared to 2017’s USD 15.8 Billion.

SUPPLY The last quarter of 2017 welcomed Etown Central, a high quality building located in District 4 with 36,500 sqm NLA. We also welcomed Deutsches Haus HCMC, a Grade A building with LEED certificate (very first building to receive this certificate in Vietnam) located in D1 with 25.000 sqm. No Grade A offices are set to open in 2018. In constrast, one Grade B building and four Grade C building are expected to open this year, adding more than 50,000 sqm NLA to the total office stock. DEMAND Ho Chi Minh City remains a top choice for multi-national companies to open head offices in Vietnam.

In the long term, the city’s reliable workforce coupled with the number of upcoming infrastructure projects are seen to unlock the city’s potential in office space, especially buildings located in outskirt districts, facilitating faster decentralization trend in the coming years. In the short term, the lack of Grade A office spaces will create rises in rental rates. With the growing of start-up companies; 33,000 new companies created in 2017, the demand for Grade B and C office space will also increase in the upcoming year.

OUTLOOK There are indicators that show the demand could exceed the supply in next year and it appears to favor landlords with more bargaining power. The shortage of supply in Grade A office in Ho Chi Minh City makes it very attractive for developers to plan new projects in the city. There is no Grade A building set to come on the market in the next 2 years. Nevertheless, conditions can vary significantly depending on location and building quality. Due to a new regulation to encourage start-up companies, the market expects the demand in Grade B and C offices to increase to accommodate the need for office spaces for start-up companies.

HO CHI MINH CITY | OFFICE Table 2: Significant Projects under Expected Completion in 2018-2020 Source: Colliers International Research Source: Colliers International Research Source: Colliers International Research Figure 5: Office, Average Asking Rent Project name Location Grade Estimated NLA Year The Spirit of Saigon District 1 A 43500 2020 Tax Plaza District 1 A 82872 2020 Sun Tower District 9 A 106850 2020 Saigon Gem Complex District 1 A 35900 2020 Viet Capital District 1 A 45591 2020 Nexus District 1 A 70000 2020

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 9 Q1 2018 | HO CHI MINH CITY | OFFICE (*) USD/sqm/month (NLA) No Name Address Completion Year NLA (sqm) Service Charges (*) Occupancy rate Average net asking rent 1 Saigon Centre 1 65 Le Loi 1996 51,650 6.8 98.3% 43.8 2 Saigon Tower 29 Le Duan 1997 13,950 6.0 100% 45.2 3 Sunwah Tower 115 Nguyen Hue 1997 20,800 6.0 98.9% 47.7 4 The Metropolitan 235 Dong Khoi 1997 15,200 6.0 95.1% 45.0 5 Diamond Plaza 34 Le Duan 1999 15,936 8.0 95.1% 41.0 6 mPlaza Saigon 39 Le Duan 2009 26,000 6.5 92.4% 51.7 7 Bitexco Financial Tower 45 Ngo Duc Ke 2010 37,710 7.0 95.4% 44.3 8 President Place 93 Nguyen Du 2012 8,330 7.0 97.2% 36.0 9 Times Square 22-36 Nguyen Hue 2012 12,704 7.0 97.5% 53.3 10 Vietcombank Tower 5 Me Linh Square 2015 41,250 7.0 99.3% 38.0 11 Saigon Centre 2 67 Le Loi 2017 50,000 7 80% 45.0 12 Deutsches Haus HCMC 33 Le Duan 2017 25,062 7.0 80% 60.0 Grade A 1 VTP-OSIC 8 Nguyen Hue 1993 6,500 6.0 100% 28.0 2 Yo Co Building 41 Nguyen Thi Minh Khai 1995 5,000 5.0 100% 23.0 3 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai 1996 3,200 5.0 100% 22.0 4 Central Plaza 17 Le Duan 1997 7,405 6.0 98.1% 25.0 5 Harbour View Tower 35 Nguyen Hue 1997 8,000 5.0 96.7% 28.3 6 Saigon Riverside Office 2A-4A Ton Duc Thang 1997 10,000 5.0 100% 28.0 7 Saigon Trade Center 37 Ton Duc Thang 1997 31,416 7.0 85% 31.0 8 MeLinh Point Tower 2 Ngo Duc Ke 1999 17,600 6.0 100% 36.0 9 Zen Plaza 54-56 Nguyen Trai 2001 11,037 6.0 90% 25.0 10 The Landmark 5B Ton Duc Thang 2005 8,000 6.0 97% 28.9 11 Opera View 161-167 Dong Khoi 2006 3,100 7.0 100% 27.0 12 City Light 45 Vo Thi Sau 2007 10,000 5.0 100% 19.0 13 Petro Tower 1-5 Le Duan 2007 13,304 6.5 97.9% 38.4 14 The Lancaster 22 – 22 Bis Le Thanh Ton 2007 7,000 5.0 100% 25.0 15 CJ Building 5 Le Thanh Ton 2008 14,000 6.5 99.3% 30.0 16 Ruby Tower 81-85 Ham Nghi 2008 15,000 6.5 100% 26.0 17 Havana Tower 132 Ham Nghi 2008 7,326 6.0 92.7% 29.3 18 Royal Center 235 Nguyen Van Cu 2008 14,320 6.0 95.7% 23.0 19 Sailing Tower 51 Nguyen Thi Minh Khai 2008 16,910 6.0 95.2% 27.0 20 TMS 172 Hai Ba Trung 2009 4,000 5.0 97.5% 30.0 21 A&B Tower 76 Le Lai 2010 17,120 6.5 100% 36.0 22 Bao Viet Tower 233 Dong Khoi 2010 10,650 5.0 100% 28.0 23 Green Power Tower 35 Ton Duc Thang 2010 15,600 6.0 95.8% 28.0 24 Maritime Bank Tower 192 Nguyen Cong Tru 2010 19,596 5.0 95.8% 22.9 25 Saigon Royal 91 Pasteur 2010 5,340 6.0 100% 23.0 26 Vincom Center 68 -70 -72 Le Thanh Ton 2010 56,600 5.0 97.2% 25.0 27 Empress Tower 138 Hai Ba Trung 2012 19,538 6.0 100% 27.0 28 Lim Tower 9-11 Ton Duc Thang 2013 22,000 6.0 100% 33.0 29 MB Sunny Tower 259 Tran Hung Dao, Co Giang 2013 13,200 5.5 94.5% 24.0 30 Le Meridien 3C Ton Duc Thang 2013 9,125 6.0 98.6% 33.0 31 Etown Central 11 Doan Van Bo 2017 33,258 5.0 40% 23.0 Grade B Table 3: Significant Office Projects

VIETNAM REAL ESTATE QUARTERLY KNOWLEDGE REPORT

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 10 Q1 2018 | HO CHI MINH CITY | OFFICE SKYLINE REVIEW- CBD HCMC GRADE A OFFICE BUILDINGS mPLAZA SAIGON 39 Le Duan, District 1 26,000/1,402 $ 51.70 $ 6.50 DIAMOND PLAZA SAIGON 34 Le Duan, District 1 15,936/2,200 $ 41.00 $ 8.00 SAIGON TOWER 29 Le Duan, District 1 13,950/920 $ 45.2 $ 6.00 DEUTSCHES HAUS 3-5 Le Van Huu, District 1 25,062/1,400 $ 55.00 $ 7.00 THE METROPOLITAN 235 Dong Khoi, District 1 15,200/1,000 $ 45.00 $ 6.00 PRESIDENT PLACE 93 Nguyen Du, District 1 8,330/635-774 $ 36.00 $ 7.00 BITEXCO FINANCIAL TOWER 45 Ngo Duc Ke, District 1 37,710/900-1,300 $ 44.30 $ 7.00 VIETCOMBANK TOWER 5 Me Linh Square, District 1 41,250/NA $ 38.00 $ 7.00 TIMES SQUARE SAIGON 22-36 Nguyen Hue, District 1 12,704/1,450 $ 53.30 $ 7.00 SAIGON CENTRE 65 Le Loi, District 1 11,650/ 1,073 $ 43.80 $ 6.80 SUNWAH TOWER 115 Nguyen Hue, District 1 20,800/1,166 $ 47.70 $ 6.00

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 11 Q1 2018 | HO CHI MINH CITY | RETAIL Table 4: Some Significant Future Projects (2018-2019) PERFORMANCE In Q1 2018, the retail segment in Ho Chi Minh City was one of the major segments to contribute to the GDRP for the city. It accounted for 13.6% Gross Regional Domestic Product (GRDP). It ranked second after the manufacturing industry. Regarding rental rates, the CBD rent is increasing due to the good performance from its tenants which are mostly from the Food and Beverage, Fashion, Health and Entertainment sectors.

Due to solid demand, rents of CBD retail properties will continue to rise in next two to three years and vacancy shall remain under 5%.

SUPPLY In Q1, the retail stock in Ho Chi Minh City increased with over 50,000 sqm NLA from the Van Hanh Mall (District 10). The Xiaomi Corporation opened their first store in Vietnam called Mi Store. G25, a grocery store company from South Korea, opened its first store in the Ho Chi Minh City market. However, the closing down of 26,000 sqm of Parkson Fleminton in District 11 caused a slight decrease in total supply. There will not be any new supply in CBD until Q3 earliest and five new projects scartterd around non-CBD supplying around 293,000 sqm NLA. Currently, the total net floor area of retail in Ho Chi Minh City remains the same to previous quarter with over 1.1 million sqm.

Among the new supply, the retail podiums still maintain dominant position. The average market rent is USD 47/sqm, inceasing by 1.1% compared to first quarter in 2017. For upcoming quarters, the retail market is expected to welcome 3 new buildings include The Spirit of Saigon, Union Square, and Vinhomes Central Park in the third quarter of 2018. The fourth quarter will welcome Cresent Mall phase 2 and Estella Place. DEMAND With a young population and the country’s average income per capita growing at a rate 30% every two years, it means that the middle and affluent classes will account for 33 million people by 2020.

Therefore, the demand for Food and Beverage, High-end Fashion, Health and Entertainment sectors will increase. In the 2016-2020 periods, Vietnam’s retail market expected to reach about USD 179 billion by the end of 2020. In addition, in 2018, market demand for the Vietnam clothing market was forecasted approximately at USD 35.2 billion.

OUTLOOK With a population of more than 90 milions among which 40% are under 25 years old, the potential in the Vietname retail market has been long recognized. Ho Chi Minh City continues to be an attractive destination for retailers in South East Asia, mostly due to the rising household expenditure, the young population and large labour force and improving economic conditions. Therefore, Ho Chi Minh City’s economic importance and status as retail hub continue to attract a strong development pipeline. The supply pipeline is expected to grow bigger in 2018-2020 with about 50,000sqm NLA in the suburban area expected to open in upcoming quarters and account for 25% of total supply in 2018.

Lifestyle concept and co-working space are most likely to attract interest from big retail companies. In 2018 the market will witness significant expansion of the convenience store segment. The G25 opened its first store this quarter and plans to open 2,500 stores in the next 10 years, with a lot of merging and acquisition from the corporation giants like Vinmart bought out Ocean Mart, Vomatexmart, and Maximark; Berli Jucker, Central Group from Thailand acquired the Metro chain and Big C Vietnam. In 2019 and 2020, there is 124,000 sqm of new supply coming from the podiums of luxury mixed-use projects such as Golden Hill, Tax Plaza and The Spirit of Saigon.

Figure 8: Retail, Occupancy Rate by Quarter Source: Colliers International Research Source: Colliers International Research Figure 7: Retail, Average Asking Rent by Quarter Source: Colliers International Research Project name District NLA (sqm) Expected Completion The Spirit of Saigon 1 35,000 Q3 2018 Union Square 1 48,000 Q3 2018 Vinhomes Central Park Binh Thanh 57,760 Q3 2018 Crescent Mall Phase 2 7 18,000 Q4 2018 Estella Place 2 32,500 Q4 2018 Sala Shopping Centre 2 60,054 Q2 2019 Elite Mall 8 42,000 Q2 2019

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 12 Q1 2018 | HO CHI MINH CITY | RETAIL Table 3: Significant Office Projects (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT No Name of Project/Building Address Location Completion Year NLA (sq m) ARR (*) Occupancy Rate 1 Sheraton Saigon 88 Dong Khoi District 1 2003 750 125 100% 2 The Manor 1 91 Nguyen Huu Canh Binh Thanh 2006 2,000 22 100% 3 Opera View Lam Son Square District 1 2006 1,260 54 100% 4 Caravelle Hotel 19 Lam Son Square District 1 2007 150 105 100% 5 New World Hotel 76 Le Lai Street District 1 2009 1,000 92 100% 6 Hotel Continental Sai Gon 132-134 Dong Khoi District 1 2009 200 90 100% 7 Centre Point 106 Nguyen Van Troi Phu Nhuan 2009 2,000 22 93% 8 mPlaza Saigon 35 Le Duan District 1 2009 6,830 60 98% 9 Saigon Pearl 92 Nguyen Huu Canh Binh Thanh 2011 5,000 27 88% 10 The Manor 2 91 Nguyen Huu Canh Binh Thanh 2011 2,500 22 100% 11 The Oxygen Mall An Phu Ward District 2 2011 5,000 30 90% 12 Rex Arcade 141 Nguyen Hue District 1 2011 2,000 130 100% 13 ICON 68 @ BFT 45 Ngo Duc Ke District 1 2011 8,000 90 95% 14 Saigon Airport Plaza 1 Bach Dang, Ward 2 Tan Binh 2013 7,623 22 92% 15 Imperia An Phu An Phu Ward District 2 2013 2,940 15 100% 16 President Place 93 Nguyen Du District 1 2013 800 42 98% 17 Times Square 22-36 Nguyen Hue District 1 2013 9,000 300 100% 18 Sunrise City - phase 1 23-25-27 Nguyen Huu Tho District 7 2014 3,500 35 100% 19 Pearl Center 12 Quoc Huong District 2 2015 24,000 32 81% 20 Thuan Kieu Plaza 190 Hong Bang District 5 2017 24,000 35 90% Retail Podium 1 Diamond Plaza 34 Le Duan District 1 1999 9,000 166 100% 2 Parkson Saigontourist Plaza 35 Le Thanh Ton Street District 1 2002 17,000 90 98% 3 Parkson Hung Vuong Plaza 126 Hung Vuong Street District 5 2007 24,000 62 98% 4 Parkson C.T.

Plaza Tan Son Nhat, Truong Son Tan Binh 2008 12,235 41 96% 5 Parkson Flemington Le Dai Hanh District 11 2010 26,000 37 92% 6 Parkson Cantavil Premier Cantavil Premier District 2 2013 17,815 33 96% 7 RomeA 117 Nguyen Dinh Chieu District 3 2017 12,000 80 80% Department Store 1 Saigon Center 35 Nam Ky Khoi Nghia District 1 1996 47,000 120 99% 2 Zen Plaza 54-56 Nguyen Trai District 1 2001 11,528 19 87% 3 Superbowl Vietnam TSN A43 Truong Son Tan Binh 2002 5,500 24 89% 4 Lotte Mart Saigon South 469 Nguyen Huu Tho District 7 2008 24,000 40 99% 5 Vincom Center B 72 Le Thanh Ton District 1 2010 45,000 102 93% 6 Vincom Plaza 3/2 3C Ba Thang Hai District 10 2010 25,000 42 95% 7 Lotte Mart Phu Tho 968 Ba Thang Hai District 11 2010 24,500 40 99% 8 Crescent Mall 101 Ton Dat Tien District 7 2011 45,000 44 85% 9 Taka Plaza 102 Nam Ky Khoi Nghia District 1 2011 1,000 - 100% 10 Satra Pham Hung C6/27 Pham Hung District 8 2011 11,528 19 87% 11 Union Square 171 Dong Khoi District 1 2012 38,000 Under renovation Shopping Centre Table 5: Significant Retail Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 13 Q1 2018 | HO CHI MINH CITY | CONDOMINIUM PERFORMANCE In the first quarter of 2018, Ho Chi Minh market launched a total of 30.000 new units. Compared to the last year, the units decreased by 18% year-on-year because there is no major project open for sales this quarter. The mid-range segment accounted for the majority of this new supply of 61%. The high-end segment took 23%, compared to the same quarter in 2017, it decreased by 10%. The market expects to have greater interest in the affordable apartments for upcoming quarters.

SUPPLY The first quarter of 2018 only saw one luxury project to launch in HCM market, making up for 0.8% of new supply. District 2 hotspots (Thu Thiem, An Phu, Thach My Loi) will be the focal point of new developments. Later this year, with a lot of launch dates announced for many new condominium projects, estimated to add more than 36,000 new units to market later this year. Foreign developers currently have 13% of market share in luxury condominium segmentation are planning to launch many new projects in Ho Chi Minh City market to increase its hold. The competition between the local and foreign developers is definitely getting more interesting with the many new projects in the pipeline competing for customers at some many different levels.

DEMAND After the fire at Catrina’s apartments, there is heightened fire safety concerns that will affect the demand of condomium both existing and in the pipeline, as buyers want more actions from the owners to prevent similar tragedy to happen in the future. The new projects would feature some amenities to ensure the safety of residents. Althought there is a concern about the safety in high-rise building; the Ho Chi Minh City market witnessed a sales record with number of units sold exceeding the new launch units, with the mid-range seeing the biggest net absoption at 20,000 units. In the upcoming quarters, the market is expected to have more demand for mid-range units, with a forecasted increase of 20% compared to 2017, and estimated to sell about 38,000 units.

Figure 9: Condominium, Primary Asking Price by Quarter (from 2014-2018) Source: Colliers International Research Source: Colliers International Research Figure 10: Condominium, Sold Units by Segments and Years Figure 11: Condominium, Supply by Segments, by Years (2010-2018F) Source: Colliers International Research OUTLOOK For the forseeable future, District 2 includes Thu Thiem, An Phu, and Thanh My Lai area would be a destination for many new major projects. Not to mention the plan to expand the Ho Chi Minh’s CBD and form statelite cities around Ho Chi Minh City. Therefore, District 9, Nha Be, Binh Chanh, and Can Gio districts would gain a lot of interest from local and international investors, most importantly, Vingroup, a powerhouse in residential segmentation, plan to develop an affordable housing project Vincity in District 9 possibly supplying 100,000 units by 2019 as stated on their project website.

Developers are shifting their focus to affordable segment where having strong demand from end-users.

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 14 Q1 2018 | HO CHI MINH CITY | CONDOMINIUM No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Masteri An Phu Thao Dien Investment District 2 2018 900 1,718 2 River Panorama phase 2 An Gia Investment and Creed Group District 7 2018 300 1,542 3 Garden Bay An Gia Investment District 7 2018 300 1,542 4 Tara Residence Song Ngoc Garment Co., Ltd District 8 2018 989 878 Sensation Thao Dien Capital Land District 2 2018 350 1,250 5 Waterina Suites Maeda-Thien Duc District 2 2019 86 2,644 6 Lavida Plus-Block A Quoc Cuong Gia Lai District 7 2019 380 1,419 7 Topaz Elite- Phoenix 1&2 Van Thai Land District 8 2019 1,003 969 8 HausNeo Ezland District 9 2019 568 990 9 Jamila- Block B Khang Dien District 9 2019 467 1,128 10 Saigon Intela LDG Binh Chanh 2019 1,068 793 11 Osimi Tower ANI Go Vap 2019 384 1,058 12 Tilia Residence Kepple Land, Gaw Capital- Tien Phuoc, Tran Thai District 2 2020 472 3,500 13 Lavita Charm Thuan Thanh Phat Thu Duc 2020 939 1,146 14 Mizuki Park (Condo Flora Mizuki Park 1&2) Hankyu Realty, Nishi Nippon Railroad và Nam Long 7 2024 576 1,100 * Excluding all kinds of tax and promotions The information is updated as at the end of Q1 2018 Table 6: Condominium, Significant new projects launched in the first quarter 2018

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 15 Q1 2018 | HO CHI MINH CITY | VILLA & TOWNHOUSE PERFORMANCE The first quarter of 2018 was a busy time for villas and semi-detached houses thanks to Vietnam being one of the most attractive destinations for foreign investors and a raft of housing laws introduced in 2015 that streamlined processes for foreigners to buy property in the country. A total of 1,573 units were sold during the January-March period, average 10-20 units sold per month, notably, most purchasers were still Vietnamese. The average price increased by 5-10% depending on the location and areas in the first quarter of 2018 compared to last quarter.

For primary market, the price kept on climbing with continued good demand from both owner-occupiers and investors. In addition, there is a price growth in secondary market, with considerable increases of 5-7% q-o-q recorded in some lower-priced projects.

SUPPLY In the last quarter of 2017; 1,300 dwellings were launched, adding to the stock of around 2,000. Most of the projects were located in the East and South of the city. Townhouses outnumber villas thanks to the more reasonable pricing. In terms of location, for the first time, Binh Chanh District emerges with 45% of share in the market, followed by District 9, District 2 and some other suburban areas. DEMAND Landed property remains to be one of the traditional investment channels given its potential long-term capital gain. Although condominiums have gained its popularity in recent years, landed property is still the preferred choice of investment.

There are two major groups of buyers in this market segment: while investors prefer products from new launches to take advantage of good initial pricing, end-users would seek projects with reputable developers, good construction progress and supporting facilities. OUTLOOK Until the end of 2018, it is expected that more than 38,000 dwellings will be added to the supply pipeline, mainly focusing on District 9. Due to the scarcity of land, new launches will decrease towards 2019. The lower-end segment will dominate and sales rates are likely to remain high thanks to the growing rental market with young adults seeking more independence rather than living as a big family like the last generation.

The primary sale price will follow upward trend in the midst of solid demand from both end-users and investors.

Figure 12: Villa&Townhouses, Selling Price on Land Area by District and Quarter Source: Colliers International Research Figure 14: Villa and Townhouse, New Launches by District Source: Colliers International Research Figure 13: Villa&Townhouse, Supply by Years Source: Colliers International Research District 7 13% District 9 64% District 12 9% Binh Tan 14%

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 16 Q1 2018 | HO CHI MINH CITY | VILLA & TOWNHOUSE No Name of Project Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Merita Khang Dien Khang Dien District 9 2017 131 2,200 2 Lucasta Khang Dien District 9 2017 119 1,025 3 Louis Garden Khang An District 9 2018 13 3,400 4 Lien Phuong Star Khang Dien District 9 2018 130 1,800 5 Valora Kikyo Nam Long District 9 2018 110 1,800 6 Park Riverside Premium M.I.K District 9 2018 100 790 7 Lavita Phase 2 Kien A Nha Be 2018 238 990 8 Khang An Residence Khang An Binh Tan 2018 45 1,050 9 Cityland Park Hills Cityland Group Go Vap 2018 94 2,000 10 Thang Long Home Nam Long District 9 2018 110 1,800 11 Van Xuan Dat Viet Van Xuan Group Binh Tan 2017 72 2,300 12 Citadel Trung Thuy Group District 7 2018 68 3,300 13 Rosita Garden Khang Dien District 9 2018 118 1,805 14 Dien Thuan Star Hill Dien Thuan Real Estate and Construction Co., Ltd District 12 2018 50 1,750 15 Mystery Villas Hung Thinh District 2 2019 240 2,196 16 Thao Dien Q2 FrasersCentrepoint Limited Districct 2 2021 18 3,000 17 Singa City Kim Oanh Group District 9 2021 431 800 * Excluding all kinds of tax and promotions The information is updated as at the end of Q1 2018 Table 7: Villa and Townhouse, Significant new projects launched in 2018

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 17 Q1 2018 | Accelerating success HO CHI MINH CITY | SERVICED APARTMENT PERFORMANCE First quarter of 2018, Ho Chi Minh City welcomed 1.98 million visitors, increased by 15.6% compare to the same quarter in 2017 which may have a bit of an impact on the short-stay serviced apartment demand. The occupancy in Grade A serviced apartments are 93%, increased by 0.8% compare to the last quarter. The average asking rent is USD 37.2/sqm increased by 11% q-o-q.

SUPPLY After the Carina’s incident, there were a lot of serviced apartment projects put on hold due to the public concerns about the safety in high-rise buildings.

On the other hand, for lodging services, there are about 350 hotels and hostel established in the first 3 months of the year increasing by 2%. Until 2020, the city will have 14 new projects adding another 3,500 rooms to the total supply. In the mean time, there are 300 new rooms waiting to be classified. DEMAND Demand from business and high-income travelers for serviced apartments continue to grow strongly thanks to the growing economy. 2018 is a promising year for the serviced apartment market in Vietnam largely due to the amount of online booking portals such as Airbnb & Booking.com. These allow serviced apartment operators to market themselves more effectively on a global scale for years to come.

OUTLOOK The market is expected to have high supply in 2-bedrooms apartment, meanwhile smaller sizes apartments are in shortage. Ho Chi Minh City is now a top destination for overseas professional in the area, and this is sustaining the demand in serviced apartments the coming 3 to 5 years. However, officetel (office building with apartments), a newer concept is in the market may influence the pricing of serviced apartment market in 2018 with many of them on offer now. Table 8: Serviced apartment, Significant Future Projects under Construction Source: Colliers International Research Figure 15: Serviced Apartment, Occupancy Rate Source: Colliers International Research Figure 16: Serviced Apartment, Average Asking Rent Source: Colliers International Research Project name District Total units Expected Completion Berkley Serviced Residence 2 85 Q3 2018 Ascott Waterfront 1 222 Q3 2018 Terra Royal 3 300 Q4 2018

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 18 Q1 2018 | HO CHI MINH CITY | SERVICED APARTMENT No. Project Name Address Location Completion Year Total Room Average Occupancy ARR(*) (**) 1 The Landmark 5B Ton Duc Thang District 1 1995 65 90.0% 32.0 2 Sedona Suites 65 Le Loi District 1 1996 89 98.0% 34.0 3 Somerset Chancellor Court 21-23 Nguyen Thi Minh Khai District 1 1996 172 90.0% 32.0 4 Nguyen Du Park Villas 111 Nguyen Du District 1 2004 41 95.0% 30.0 5 The Lancaster 22-22 Bis Le Thanh Ton District 1 2007 55 80.0% 40.0 6 Intercontinental Asian Saigon 39 Le Duan District 1 2009 260 98% 39.0 7 Norfork Mainsion 17-21 Ly Tu Trong District 1 1998 126 91.0% 30.0 8 Lafayette De Saigon 8 Phung Khac Khoan District 1 2010 18 100% 30.0 9 Diamond Plaza 34 Le Duan District 1 1999 42 90.0% 29.0 10 Saigon Sky Garden 20 Le Thanh Ton District 1 1998 154 85.0% 34.0 Grade A 1 Sherwood Residence 127 Pasteur District 3 2007 240 80.0% 40.0 2 Ben Thanh Luxury 172-174 Ky Con District 1 2010 88 90.0% 20.0 3 Vincom Center 45A Ly Tu Trong District 1 2010 60 50.0% 20.0 4 Nikko Saigon 235 Nguyen Van Cu District 1 2011 53 85.0% 34.0 5 Saigon City Residence 8A/3D2 Thai Van Lung District 1 2011 17 84.0% 37.0 6 Spring Court 1 Bis Phung Khac Khoan District 1 2011 14 70.0% 21.0 7 Saigon Domaine 1057 Xo Viet Nghe Tinh Binh Thanh 2001 45 60.0% 17.0 8 An Phu Superior Compound 43 Thao Dien District 2 2011 68 100.0% 22.4 9 Poonsa 3 Vo Van Tan District 3 2017 30 85.0% 31.0 10 Ibis Saigon Airport 2 Hong Ha Tan Binh 2017 20 90.0% 22.0 Grade B (*) USD/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge Table 9: Significant Serviced Apartment Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 19 Q1 2018 | HO CHI MINH CITY | INDUSTRIAL PERFORMANCE Fortunately, nationaly the industrial land market has gained momentum and has impacted the economy’s growth. Healthy rental demand continues to remain robust thanks to significant growth in terms of both industrial production and FDI. In the first three months, average rent was USD 143.4/sqm/term; up USD 1.2/sqm/term compared to the last quarter. Data collected in 2018 showed that Tan Thuan Export Processing Zone was the most expensive area in terms of prime industrial rents: the costs increased from USD 260/sqm/month as of the fourth quarter 2017 to USD 270/sqm/month early months 2018.The average occupancy rate this past quarter was 81.3% and seven industrial zones were fully occupied.

There were six industrial zones with occupancy rate above 97%. For a minimum leasable area from 1,000-5,000sqm, ready-built warehouses rent rates were mostly from USD 3.0-4.0 USD/sqm/month (excluding VAT and service charge). The lowest rent rate belonged to Tay Bac Cu Chi industrial park with USD 1.25/sqm/month and the highest was Tan Thuan Export Processing Zone with USD 6.5/sqm/month. SUPPLY Tan Thuan EPZ inaugurated its multi-storeyed workshop in 2018. The workshop was completed after three years of construction (2015-2018), under part of the multi-storeyed workshop model in the export processing zones and industrial parks, high tech areas.

The workshop was built with 8 floors and one basement covering an area of 2,290 sqm and aimed to save land resources and maximize land use efficiency. There is no other industrial park entering the market this quarter but until 2020 total supply is estimated to increase to about 3,000 hectares, up 85% from current supply. In terms of the number of IPs, 18 existing IPs will expand and about 12 new IPs will be operational in 2020. DEMAND Statistics from the HCMC Department of Science and Technology showed that until the second quarter of 2018, there have been nearly 50 companies in Ho Chi Minh City receiving the certificate for science and technology business.

Thanks to political stability, Ho Chi Minh City became the first locality to welcome big names like Intel, Samsung, Toshiba, Mercedes, Isuzu and Nidec; creating breakthroughs in production and development. More importantly, Vietnamese government continues to improve business conditions through reform and has included tax incentives in recent legislative updates; most notably Vietnam’s Law on Investment; to lower the cost of doing business within the country. Foreign investors, particularly those involved in slightly higher value-add production, should be able to use incentives to offset their temporary costs until regulatory reforms take hold, and to position themselves ahead of their competitors in the years ahead.

Figure 17: Industrial, Market Performance by District Source: Colliers International Research Figure 18: Industrial, Supply by District Source: Colliers International Research Source: Colliers International Research Table 10: Industrial, Future Supply Industrial Park Name District GFA (ha) Le Minh Xuan Industrial Park - phase 2 Binh Chanh 338 Le Minh Xuan Industrial Park - phase 3 Binh Chanh 242 Vinh Loc I - phase 2 Binh Chanh 56 Vinh Loc I - phase 3 Binh Chanh 200 Vinh Loc Industrial Park III Binh Chanh 210.3 Tay Bac Cu Chi Industrial Park - phase 2 Cu Chi 173 Hiep Phuoc Industrial Park - phase 3 Nha Be 1,000 Phong Phu Industrial Park Binh Chanh 148.4 Binh Chanh 19% District 9 10% Nha Be 19% Cu Chi 29% Others 24% 8

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 20 Q1 2018 | HO CHI MINH CITY | INDUSTRIAL Table 3: Significant Office Projects No Name of Industrial Park Location Distance to CBD (km) Total Area (ha) Total leas- able area (ha) Asking Rent (US$/sqm/ term) Occupancy LUR Term 1 Cat Lai Industrial Park (Cluster II) District 2 21 137 87 90 100.00% 2061 2 Tan Thuan Export Processing Zone District 7 6.4 300 204 260 99.56% 2041 3 Saigon Hi-tech Park P1 District 9 15 300 300 180 98.33% 2052 4 Tan Thoi Hiep District 12 16 28 20 144 100.00% 2049 5 Tan Binh Industrial Park(P1+2) Tan Phu 11 129 100 235 100.00% 2047 6 Vinh Loc Industrial Park Binh Chanh 15 203 131 250 99.77% 2047 7 Le Minh Xuan Industrial Park Binh Chanh 20 100 66 120 100.00% 2047 8 An Ha Industrial Park Binh Chanh 23 124 124 69 88.46% 2058 9 Le Minh Xuan III Binh Chanh 26 300 231 141 80.00% 2064 10 Binh Chieu Industrial Park Thu Duc 16 27 27 150 100.00% 2046 11 Linh Trung 2 Export Processing Zone Thu Duc 17 62 44 60 100.00% 2050 12 Linh Trung 1 Export Processing Zone Thu Duc 18 62 46 60 100.00% 2042 13 Tan Tao Industrial Park 1 Binh Tan 17 161 97 240 97.14% 2047 14 Tan Tao Industrial Park 2 Binh Tan 17 183 116 240 87.93% 2050 15 Hiep Phuoc Industrial Park 1 Nha Be 21 311 224 140 97.76% 2048 16 Hiep Phuoc Industrial Park 2 Nha Be 22 597 345 140 32.99% 2058 17 Dong Nam Industrial Park Cu Chi 30 343 287 63 98.26% 2058 18 Tay Bac Cu Chi Industrial Park Cu Chi 36.5 208 150 80 100.00% 2048 19 Tan Phu Trung Industrial Park Cu Chi 37 543 359 80 40.00% 2054 20 Automotive-Mechanical (Hoa Phu) Industrial park Cu Chi 40 99 67 80 69.80% 2057 OUTLOOK Fuelled by rapid growth and increased foreign direct investment (FDI), average rental rate is expected to rise faster as the market demand is growing.

Recently, industrial parks have outstanding development due to significant improvement in labor qualification and localization rate in hi-tech products which will secure a promising industrial market for the foreseeable future. In 2018, Ho Chi Minh City plans to build an industrial park to attract high technology enterprises and innovative enterprises in addition to the existing five start-up centers to be supported including City Department of Science and Technology, Vietnam National University, Ho Chi Minh City Hi-Tech Park, City Youth Union, Quang Trung Software Park. In addition, the city is investigating in formation of the creative city in the east of the city in District 2, 9 and Thu Duc in another 5-7 years.

Speculative developments without formal commitment from any tenant but a robust demand and a scarcity of suitable land for development are likely to secure a promising industrial market for the foreseeable future. Table 11: HCMC Industrial Park

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 21 Q1 2018 | HANOI | OFFICE PERFORMANCE The Hanoi office market is on track to recover after hitting rock bottom with the average occupancy rates dropping to only 70%- 80% a couple years ago. Now the office leasing market has improved significantly with occupancy rates averaging 92% and monthly rental at USD 32.5/sqm in 2018. These numbers are good signals to the office market in the year of 2018. An estimated 1% q-o-q rent acceleration for Grade A office buildings was recorded with the average net asking rent currently sitting at USD 27.8/sqm/month.

Grade B’s average asking rent also reported an upward adjustment of nearly 1.6% compared to the previous quarter at USD 16.3/sqm/month.

SUPPLY The limited availability of Grade A office space in Hanoi has contributed to the increase of rental rates by 3.5% in Q1 2018, meanwhile the occupancy rate has decreased to 93% with new project expects to open in the western of Hanoi increasing the total NFA. There have been no new office buildings so far in 2018 and until Q3 but one Grade B building has entered the market, the Eurowindow Office Building, adding 12,400 sqm office space to total NLA in Hanoi. Hoan Kiem District is the leading area for office leasing in Hanoi market, followed by Dong Da District.

DEMAND With regard to the demand for office space in Hanoi in first quarter 2018, the average occupancy rate increased by 17% quarter-on-quarter.

The rental rate for Grade A office is USD 30 sqm/month and Grade B is USD 17 sqm/month. The typical tenants are companies from investment banking, insurance and techonology. The market demand is increasing and the lack of space in the Grade A office sector is likely to be an incentive for landlords to increase the asking rent for upcoming quarters. OUTLOOK Hanoi and Ho Chi Minh City markets have the same disadvangtage in that they both lack Grade A office space and their CBD doesn’t have enough land of the right value to develop more new projects. This has led to developers in Hanoi and Ho Chi Minh City to look for land outside the CBD for pipeline development.

The demand continues to grow due to favorable economic conditions and more start-up companies being established in Hanoi. With the demand increasing and the lack of Grade A or B office space in Hanoi, the average rental rates are expected to go up.

Figure 19: Office, Average Asking Rent Source: Colliers International Research Figure 20: Office, Occupancy Rate Source: Colliers International Research Table 12: Office, Future Suppy Source: Colliers International Research Project name Grade NLA (sqm) Expected completion Comatce Tower B 43,100 Q1 2018 DSD Building B 6,860 Q1 2018 FLC Twin Tower B 35,960 Q2 2018 Vinacomin Tower B 103,100 Q4 2018

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 22 Q1 2018 | HANOI | OFFICE (*) USD/sqm/month (NLA) No Name Address Completion Year NLA (sqm) Service Charges (*) Occupan- cy rate Average net asking rent (**) 1 Central Building 31 Hai Ba Trung 1995 3,653 9.0 100% 33.0 2 International Centre 17 Ngo Quyen 1995 6,500 - 90% 24.0 3 Hanoi Tower 49 Hai Ba Trung 1997 9,000 7.0 100% 27.0 4 63 Ly Thai To Building 63 Ly Thai To 1998 6,753 included 100% 47.0 5 Sun Red River Building 23 Phan Chu Trinh 1999 13,459 7.0 75% 28.0 6 Vietcombank Tower 198 Tran Quang Khai 2000 19,563 included 100% 29.0 7 Opera Business Centre 60 Ly Thai To 2007 3,787 included 85% 24.0 8 Pacific Palace 83B Ly Thuong Kiet 2007 16,600 7.0 91% 29.0 9 Asia Tower 2 Nha Tho 2007 3,100 7.7 77% 35.0 10 Sun City Building 13 Hai Ba Trung 2007 6,400 - 100% 45.0 11 BIDV Tower 194 Tran Quang Khai 2010 10,120 7.0 95% 30.0 12 Sentinel Place Hang Da 2010 8,000 8.5 95% 45.0 13 Corner Stone 16 Phan Chu Trinh 2013 26,500 7.0 98% 30.0 14 Hong Ha Center 25 Ly Thuong Kiet 2013 11,000 5.0 100% 19.0 Grade A 1 Tungshing Square 2 Ngo Quyen 1996 8,306 5.7 89% 20 2 Melia Hotel 44B Ly Thuong Kiet 1997 8,500 - 89% 38.0 3 Prime Centre 53 Quang Trung 1998 7,600 - 100% 27.0 4 VIB Hai Ba Trung 59 Quang Trung 2006 3,000 - 68% 16.0 5 Capital Tower 109 Tran Hung Dao 2010 21,089 7.0 87% 24.0 6 Hanoi Tourist Building 18 Ly Thuong Kiet 2010 7,600 - 100% 24.0 7 Capital Building 72 Tran Hung Dao 2013 5,800 - 100% 25.0 8 Coalimex Building 33 Trang Thi 2013 5,071 5.0 79% 18.0 9 VID Building 115 Tran Hung Dao 2013 4,930 - 89% 23.0 10 Artex Port 31-33 Ngo Quyen 2014 4,725 - 100% 23.0 Grade B Table 13: Significant CBD Office Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 23 Q1 2018 | HANOI | RETAIL PERFORMANCE The property market for retail in Hanoi has had a slow start in the first quarter of 2018. The total supply remained unchanged at 960,000 sqm. Based on the location, Mid and the West of Hanoi are major areas in retail segmentation, accounting for 54% of the supply with the suburban area accounting for 40%. The average net asking rents across all segments (podium, shoping center & department store) decreased by 0.9% q-o-q, averaging at USD 28.5/sqm/month. The average vacancy rates increased by 0.8% in the suburban areas and in order to attract new tenants, landlords in the area have begun to offer more competitive rates.

Convenience stores and supermarkets are in a high demand in 2018, with big chains such as 7-11, Circle K, Family Mart, looking to expand constantly, reflecting the retail sectors overall positive outlook for the remainder of the year.

SUPPLY In 2018, the Hanoi retail market expects to welcome a total of 157,000 sqm of new space from 8 projects that are currently under-construction with shopping malls such as Vincom Lieu Giai (30,000 sqm) in Ba Dinh District and Discovery Complex (26,000 sqm) in Cau Giay District. There was no new shopping mall entering the market in the first quarter, thus the total supply remained the same as the first quarter in 2017. The current totat supply of approximately 960,000 sqm marks a 3% increase compared to the fourth quarter of 2017. Many big convenience store companies plan to develop new stores quickly with the existing space for grocery stores sitting at about 61,000 sqm.

The Cau Giay, Tu Liem, and Thanh Xuan districts are the major retail areas in Hanoi outside the CBD accounted for 40% of total supply. The rent in the CBD area slowly increased due to new projects entering the market. The average rental rate in first quarter of 2018 was USD 28.5 sqm/month.

DEMAND The demand for mixed used projects of retail and residential is expected to thrive, due to a high amout of supply in condominium sector. In general, the occupancy rate increased by 0.7% compared to the same quarter last year thanks to the increase in net absorption of 6,600 sqm this last quarter. Primarily through food and beverage operators and leisure operators wanted to expand their stores as a result of an increase in new residential clusters. OUTLOOK It is estimated that suburban retail supply will surpass that of the CBD due to land shortages in the city cenre of Hanoi. In 2018, the market is expected to receive about 30,000sqm of retail space outside the CBD.

Larger scale companies from Food & Beverage and Entertaiment sectors are expected to focus on development at prime locations with higher quality buildings. The average rental rate is expected not to change much in upcoming quarters due to the competition from e-commerce which is fast establishing with the younger generation. The demand for upcoming quarters is most likely to focus primarily on suburban areas due to new supply in these areas. The occupancy rate in CBD area is expected to decline in the longer run.

Figure 21: Retail, Rental Rates by Quarter Table 14: Retail, Significant Future Projects Source: Colliers International Research Source: Colliers International Research Figure 22: Retail, Occupancy Rates by Quarter Source: Colliers International Research Project Name District GFA (sqm) Expected completion FLC Twin Towers Cau Giay 25,000 Q1 2018 Vinhomes D'Capital Cau Giay 45,477 Q4 2018 Aeon Mall Ha Dong Ha Dong 200,000 Q4 2019 Lotte Ciputra Mall Tay Ho 200,000 2020

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 24 Q1 2018 | HANOI | RETAIL No Name of Project / Building Address Location Completion Year NLA (sq m) ARR (*) Occupancy Rate 1 Central Building 31 Hai Ba Trung Hoan Kiem 1995 550 75 100% 2 Hanoi Tower 49 Hai Ba Trung Hoan Kiem 1997 2,515 55 100% 3 63 Ly Thai To Building 63 Ly Thai To Hoan Kiem 1998 650 170 95% 4 ICC Building 71 Nguyen Chi Thanh Dong Da 2006 2,900 16 100% 5 Pacific Place 83b Ly Thuong Kiet Hoan Kiem 2007 2,300 67 100% 6 Opera Business Center 6b Trang Tien Hoan Kiem 2007 370 120 100% 7 Asia Tower 6 Pho Nha Tho Hoan Kiem 2008 300 107 100% 8 Sentinel Place 41A Ly Thai To Hoan Kiem 2010 700 45 100% 9 Sky City Tower 88 Lang Ha Dong Da 2010 5,400 65 100% 10 The Lancaster Hanoi 20 Nui Truc Ba Dinh 2013 3,123 37 93% 11 Madarin Garden Residential 1 Hoang Minh Giam Cau Giay 2013 11,000 25 98% Retail Podium 1 Vincom Center Ba Trieu - Tower A&B 191 Ba Trieu Hai Ba Trung 2004 17,700 93 80% 2 Vincom Center Ba Trieu - Tower C 191 Ba Trieu Hai Ba Trung 2004 10,974 80 99% 3 Ruby Plaza 44 Le Ngoc Han Hai Ba Trung 2007 2,400 35 100% 4 Syrena 51B Xuan Dieu Tay Ho 2008 4,153 33 99% 5 Trang Tien Plaza 24 Hai Ba Trung Hoan Kiem 2008 12,000 150 70% 6 Savico MegaMall 7-9 Nguyen Van Linh Long Bien 2011 43,500 25 96% 7 Vincom Center Long Bien KDT Vincom Long Bien 2012 29,000 25 83% 8 Indochina Plaza Hanoi 241 Xuan Thuy Cau Giay 2012 17,000 30 71% 9 Vincom Mega Mall - Royal City 72A Nguyen Trai Thanh Xuan 2013 181,317 35 70% 10 Vincom Mega Mall - Times City 458 Minh Khai Hai Ba Trung 2014 83,950 30 93% 11 Aeon Mall Long Bien 2 Co Linh Long Bien 2015 72,000 - 100% 12 Vincom Nguyen Chi Thanh 54A Nguyen Chi Thanh Dong Da 2015 65,328 65 98% 13 Vincom Mega Mall 19/7 Thuong Dinh Thanh Xuan 2016 150,000 95 85% 14 Mipec Long Bien 229 Tay Son Long Bien 2016 242,830 91 84% Shopping Centre 1 The Garden (Bitexco) Me Tri Tu Liem 2007 24,063 40 100% 2 Ho Guom Plaza Ha Dong Ha Dong 2013 23,380 25 95% 3 Lotte Department Store 54 Lieu Giai Ba Dinh 2014 21,480 50 100% Department Store (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT Table 15: Significant Retail Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 25 Q1 2018 | HANOI | CONDOMINIUM PERFORMANCE The Hanoi condominium market witnessed a sale of 6,600 units in the first quarter of 2018, increasing 4.8% y-o-y. The average selling price for all the condominium projects in Q1 2018 was USD 1,328/sqm, decreasing by 0.38 % q-o-q but increasing by 0.57% y-o-y. SUPPLY There were 8,700 units from 38 new projects launched in this quarter, a 4% decrease from the same quarter in 2017. 35,000 units are expected to enter the market by the end of 2018, a record high for the supply in condominiums.

Among all segments, the largest segment for Q1 2018 continued to be the mid-range condominiums, accounting for 67% of total new supply with 20,700 units. For the period of 2018-2020, the market in Hanoi expects to receive around 30,000 new units annually and expand to nearby area further from Hanoi CBD. DEMAND After the fire at a condominium building in Ho Chi Minh City, there was great concern regarding the fire code in the condominium sector. However, the demand in the Hanoi market is still strong; local buyers have great interests in buying condominiums in Hanoi still. Local buyers absorbed 93% of the total new supply launched in 2017.

In the next quarters, the developers will have strong influence in the Hanoi market with plans to develop new condominium in the city’s suburban areas such as Dan Phuong and Me Linh District. Japanese developers such as Sumitomo Corporation and Mitsubishi Corporation want to co-operate with local developers to build new projects with higher quality amenities with quality property management in Hanoi market. OUTLOOK As the concern of fire and safety code grows among buyers, developers will have to pay more attention to security and fire prevention system in condominium projects to ensure the safety of people living in there and to protect their investments.

The prices and flexible leasing term will attract foreigners in the upcoming years. The opening of new projects in the market will also give the buyers and renters more options. Figure 23: Condominium, New launches by Year and by Segments Source: Colliers International Research Figure 24: Condominium, Primary Asking Price by Segments, by Quarter Source: Colliers International Research Source: Colliers International Research Figure 25: New Launches by Segments, by Quarter (2013-2018)

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 26 Q1 2018 | HANOI | CONDOMINIUM Table 3: Significant Office Projects Table 3: Significant Office Projects No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 PentStudio CTX Holdings Tay Ho 2018 90 3,500 2 Tan Hong Ha Tower Tan Hong Ha Corp Thanh Xuan 2018 120 1,500 3 Samsora Premier Saigon-Hanoi Investment Corp. Ha Dong 2019 696 920 4 Vinhomes Greenbay Vingroup Nam Tu Liem 2019 600 1233 5 Hateco Apollo Xuan Phuong Hateco Nam Tu Liem 2019 1,300 793 6 The Emerald My Dinh Vinmefulland Nam Tu Liem 2019 600 1,100 7 Sunshine City Sunshine Group North Tu Liem 2019 790 1,277 8 Housinco Grand Tower Hanoi Investment, Con- struction and Business No.35 Thanh Tri 2019 412 1,100 9 D’.

El Dorado Tan Hoang Minh Tay Ho 2019 448 2,000 10 The Golden Amor Corporation 36 Ba Dinh 2019 240 1,800 11 6th Element Bac Ha Tay Ho 2019 1,176 1,200 12 Cosmo Tay Ho Elite Real Estate Company Tay Ho 2019 648 1,500 * Excluding all kinds of tax and promotions The information is updated as at the end of Q1 2018 Table 16: Condominium, Significant new projects launched in the first quarter of 2018

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 27 Q1 2018 | HANOI | VILLA & TOWNHOUSE PERFORMANCE In the first three months of 2018, Hanoi’s landed property market witnessed positive new launches with stable absorption. The average price of villas was approximately USD 4,000/sqm in the South (Hoang Mai) and West (Hoai Duc and Thach That). The price is significantly more expensive than the East (Dong Anh, Long Bien) and by about 50%. The major supply of villa and townhouses in Q1 2018 came from projects such as Thong Nhat Complex, Minori Village, Gamuda Dahilia, Him Lam Shophouse.

Those projects attracted a large number of customers due to appealing locations in urbanised areas resulting in high potentiality for strong development of businesses. SUPPLY In Q1 2018, the supply of landed property in Hanoi remained stable. Total supply of villas and townhouses in Hanoi in Q1 2018 was approrimately 42,000 units, increased by 1.7% q.o.q and 14% y.o.y. It is estimated that nearly 11,500 villas and townhouses will enter the market in Hanoi from Q2 2018 until the end of 2019. This primarily focuses on the East (Dong Anh, Gia Lam) and the West (Dan Phuong, Nam Tu Lien) of Hanoi.

The major projects will be coming from VinGroup. With the steady supply of new units, the secondary market is not expecting to have great gain if not remain the same.

DEMAND The market demand for villas and townhouses is expected to be extremely high in Hanoi in both primary and secondary market. This could be explained by robust economic growth which has led to an increase in disposable income. Investors with adequate financial ability are buying landed property rather than investing in condominiums. On the other hand, some projects offering reasonable prices also contribute to the motivation to buy landed property from reputable developers. Despite these factors, total transactions in Q1 2018 experienced a significant decline by 43% q.o.q and 30% y.o.y due to lower demand before and immediately after Lunar New Year which came pretty late this year in February.

The absorption rate was down by more than 10% compared to the previous quarter, even though that demonstrated a slight increase of 4.7% y.o.y. OUTLOOK With the improvement of infrastructure and transportation in the Eastern areas, it is predictable that various projects in the areas will be attractive to both investors and end-users. In the near future, Hanoi will welcome a wave of project completion which may affect the average prices of landed property. The competition of new projects will benefit customers in the short-term. Meanwhile in the long-term, Vietnam will continue to enjoy robust economic growth, increasing the demand for middle income residences and a constant rise in demand for landed property segment.

A slow down of transactions in the segment might indicate that both customers and investors are becoming more sensitive to market price and waiting for the best time to invest.

Figure 26: Villa and Townhouse, Supply by Quarter, Hanoi Source: Colliers International Research Source: Colliers International Research Figure 27: Villa & Townhouse, Asking Price on Secondary Market

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 28 Q1 2018 | HANOI | VILLA & TOWNHOUSE Table 3: Significant Office Projects Table 3: Significant Office Projects Table 3: Significant Office Projects No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Louis City La Vong Group Ha Dong 2018 599 2,800 2 The Mansions Vietnam International Township Development Jsc.

(VIDC) Park City 2018 146 4,800 3 The Eden Rose Vimedimex Thanh Tri 2018 233 2,500 4 Iris Home Gamuda Land Hoang Mai 2019 77 3,500 5 Hateco Apollo Xuan Phuc Hateco Nam Tu Liem 2019 34 2,200 * Excluding all kinds of tax and promotions The information is updated as at the end of Q1 2018 Figure 28: Hanoi District Map Source: Colliers International Research Table 17: Significant Villa & Townhouse projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 29 Q1 2018 | HANOI | SERVICED APARTMENT Table 3: Significant Office Projects PERFORMANCE There is a delayed supply of new Grade A and B serviced apartments due to safety corncerns after the Carina’s tragedy in Ho Chi Minh City. The occupancy rate as compared to previous quarter is recorded at 92% down by 0.2% for Grade A and 80% for Grade B down by 4.7% respectively. On the other hand, there is an increase in average asking rate for Grade A and Grade B thanks to sustainable demand. Average renting rate for Grade A serviced apartments were recorded at USD 43.04/sqm/month increased by 22% q-o-q, while Grade B’s average renting rate recorded at USD 29.3/sqm/month increased by 6% q-o-q.

SUPPLY In the first quarter of 2018, there were 11 new projects ready for the public, adding 5,530 units to the supply, an increase of 21% q-o-q, but a fall of 40% y-o-y. Bac Tu Liem and Nam Tu Lien Districts are the largest suppliers to the serviced apartment sector; around 24,000 units in total. Later this year, 20,000 units from 38 projects will enter the market; most of them are Grade B level. The west side of Hanoi has the highest rental rate at USD 46 sqm/month a month. It is worth noticing that developers in Hanoi tend to focus on smaller to average-scale units which are very popular especially for first time buyers.

DEMAND According to Hanoi Statistic Office, in the first two months, foreign direct investments (FDI) into Hanoi market recorded USD 3.88 billion. Many foreign companies plan to locate their headquarters in Hanoi leading to potential increase demand by international executives, traveling to and from Hanoi and or staying longer term. Demand for serviced apartments therefore will continue to be sustainable, especially in key districts. Serviced apartment tenants are generally from two groups: expatriate employees of multinational companies and those on business trips, and tourists. Among those, most of them are from Japan and Korea, the largestt group among other countries to lease long term for serviced apartments in Hanoi.

OUTLOOK The West Lake area continued to attract investors thanks to its close proximity to the city center, beautiful lake view and large land bank with two prime serviced apartment buildings Inter- continental Hanoi Westlake and Fraser Suites Hanoi opened in the decade of 2000s. Vinata Towers Project, a 200 serviced apartment units surrounding the CBD area will be launched by the end of the year, where the foreign community in Hanoi mostly resides. The competition between serviced-apartments and affordable hotels is getting more aggressive, especially as serviced apartments begin to offer daily rates.

However, the latter is almost exclusively for one-bedroom units as budget constraints limit demand for two-bedrooms or larger serviced apartments. Average asking rents are expected to decrease in the coming periods as landlords lower their rate to attract for more occupancy for short stay renters.

Figure 29: Serviced Apartment, Average Asking Rent by Quarter Source: Colliers International Research Figure 30: Serviced Apartment, Occupancy Rate Source: Colliers International Research

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 30 Q1 2018 | HANOI | SERVICED APARTMENT (*) USD/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge No. Project Name Address Location Total Units Average Occupancy ARR(*) (**) 1 Lotte Center Dao Tan, Cong Vi Ba Dinh 258 97% 43.0 2 Hanoi Daewoo 360 Kim Ma Ba Dinh 194 88% 28.0 3 Sofitel Plaza 1 Thanh Nien Ba Dinh 56 100% 38.0 4 Hanoi Somerset Grand 49 Hai Ba Trung Hoan Kiem 185 93% 35,0 5 Sun Red River 23 Phan Chu Trinh Hoan Kiem 46 85% 25,0 6 Pacific Place 83B Ly Thuong Kiet Hoàn Kiem 35 80% 23,0 7 Sedona Suites 96 To Ngoc Van Tay Ho 181 90% 34,0 8 Somerset West Lake 254D Thuy Khue Tay Ho 90 82% 30,0 9 Hanoi Lake View 28 Thanh Nien Tay Ho 26 100% 25,0 10 Intercontinental Ha Noi 13 Nghi Tam Tay Ho 25 88% 35,0 11 Fraser Suites Hanoi 51 Xuan Dieu Tay Ho 184 95% 40,5 12 Somerset West Point 2 Tay Ho Tay Ho 185 95% 36,0 13 Crown Plaza 36 Le Duc Tho Tu Liem 136 99% 35,0 14 Calidas E6, Pham Hung Tu Liem 378 99% 38,0 15 Somerset Hoa Binh 106 Hoang Quoc Viet Cau Giay 206 87% 31,0 Grade A 1 Rose Garden 170 Ngoc Khanh Ba Ðinh 96 80% 24,0 2 V-Tower 649 Kim Ma Ba Ðinh 36 90% 28,0 3 DMC Lake View 535 Kim Ma Ba Ðinh 66 85% 16,0 4 Hoa Binh Green 376 Duong Buoi Ba Ðinh 40 92% 22,0 5 Lancaster Hanoi 20 Nui Truc Ba Ðinh 31 85% 24,0 6 May Fair 34B Tran Phu Ba Ðinh 48 95% 17,0 7 Hanoi Lakes Residences 11-13 Nam Trang Ba Ðinh 10 100% 9,0 8 Skyline Tower 4 Ðang Dung Ba Ðinh 79 80% 31,0 9 Candle Hotel 287-301 Ðoi Can Ba Ðinh 69 74% 27,0 10 The City Residences 37 Phan Ðình Phùng Ba Ðinh 15 67% 15,0 11 Elegant Suites Hahoi 19B Ha Noi Hoan Kiem 39 80% 25,0 12 Palace de Thien Thai 2 Tho Nhuom Hoan Kiem 16 98% 23,0 13 Atlanta 49 Hang Chuoi Hai Ba Trung 50 90% 24,0 14 Times City 485 Minh Khai Hai Ba Trung 150 85% 19,0 15 Rainbow 7 Trieu Viet Vuong Hai Ba Trung 26 88% 14,0 16 Park View 9 Nguyen Binh Khiêm Hai Ba Trung 6 92% 11,0 17 Oriental Palace 33 Tay Ho Tay Ho 59 70% 30,0 18 Elegant Suites Westlake 10C Ðang Thai Mai Tay Ho 131 94% 27,0 19 Flower Village Hanoi 14 Thuy Khuê Tay Ho 131 90% 23,0 20 Swan Lake 3/61/31 Xuan Dieu Tay Ho 6 97% 17,0 21 Lakeside Garden 56 Xuan Dieu Tay Ho 8 62% 14,0 22 Dolphin 28 Tran Binh Tu Liem 70 70% 15,0 23 Jana Garden Terrace 6 Kim Ðong Hoang Mai 72 80% 22,0 24 Pan Horizon 157 Xuan Thuy Cau Giay 86 65% 30,0 25 My Way 4, 86 Alley , Duy Tân Cau Giay 39 93% 25,0 26 Royal City 72 Nguyen Trai Thanh Xuan 100 85% 17,0 Grade B Table 18: Significant Serviced Apartment Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 31 Q1 2018 | HANOI | INDUSTRIAL PERFORMANCE The first quarter of 2018 recorded a slight incrementally increase of 2.01% q-o-q in average rent, staying at USD 114.35/sqm/term owing to solid demand. Hoa Lac reported the lowest rent across all Districts, at around USD 85/sqm/term, while Hanssip has highest rate at USD 165/sqm/term. Average Land Use in the first 3 months is 34.5 years. Average occupancy rate was recorded at 84.6% up 2.01% on a quarterly basis. By location, most of the industrial zones in Hanoi are fully occupied, except for Hoa Lac Hi-tech Park with only 45% of occupancy rate which is the lowest among industrial zones mainly caused by a delay in developing and upgrading the park and Phu Nghia 2 with 67% of occupancy rate.

SUPPLY The total industrial stock in Hanoi is unchanged compare to the previous quarter. 11 operating IPs in Hanoi covers total land area of over 2,700 hectares with most of them coming from suburban districts such as Chuong My, Thach That, Dong Anh Districts, accounting for approximately 68% of the market supply. DEMAND Demand for industrial land around the country is expected to increase thanks to significant growth in terms of both industrial production and FDI. Occupancy rate is both industrial land and warehouse has significantly increased in Hanoi especially this year thanks to foreign direct investment (FDI) inflow to Vietnam from neighbor countries such as Japan, Taiwan, and South Korea.

Furthermore, the government has put in a lot of efforts to better the business environment for foreign investors to invest in industrial park with a plan to establish a foundation to make Hanoi a smart city by 2030.

OUTLOOK The demand for the industrial sector expects to increase in upcoming years with no new industrial park in Hanoi. The capital city is now home to 11 industrial parks with a total area of nearly 3,441 hectares. There are 89 industrial complexes in the city, 43 of which are operating stably and 46 others have just completed their infrastructure systems. In addition, Hanoi is focusing on improving wastewater treatment systems in industrial parks by 2020 within all local industrial parks and clusters and 1,300 craft villages are expected to have wastewater treatment stations. Figure 32: Industrial, Market Performance by District Source: Colliers International Research Figure 33: Industrial, Supply by District Source: Colliers International Research Table 19: Industrial, Future Supply Source: Colliers International Research Industrial Park Name District GFA (ha) Quang Minh II Industrial Park Me Linh 266 Phuc Tho Industrial Park Phuc Tho 74 Phu Xuyen Industrial Park Phu Xuyen 488 Thanh My - Xuan Son Industrial Park Son Tay 108 Soc Son Industrial Park Soc Son 340 Soc Son II Industrial Park Soc Son 204 Soc Son III Industrial Park Soc Son 180 Soc Son IV Industrial Park Soc Son 216 Thanh Oai II Industrial Park Thanh Oai 480 Habeco Industrial Park Thuong Tin 300 Ha Noi Hi-BioTech Park Tu Liem 200

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 32 Q1 2018 | HANOI | INDUSTRIAL Table 3: Significant Office Projects No. Name of Industrial Park Location Distance to CBD (km) Total Area (ha) Asking Rent (US$/sqm) Occupancy LUR Term 1 Sai Dong B (Phase I&II) Long Bien 11 97 125 100% 2046 2 Thang Long Dong Anh 16 302 95 100% 2047 3 Nam Thang Long Tu Liem 15 261 155 100% 2048 4 Hoa Lac Hi-Tech Thach That 39 549 50 40% 2048 5 Quang Minh Me Linh 24 344 130 95% 2052 6 Thach That Thach That 24 150 100 100% 2056 7 Dong Anh Dong Anh 19 470 100 95% 2057 8 Noi Bai Soc Son 31 116 145 90% 2058 9 Phu Nghia 1 Chuong My 24 170 95 100% 2058 10 Phu Nghia 2 Chuong My 24 238 95 66% 2058 11 Hanssip (phase 1) Phu Xuyen 44 72 120 30% 2060 Table 20: Hanoi Industrial Market Overview

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 33 Q1 2018 | DANANG | OFFICE PERFORMANCE After hosting the APEC summit last October, Da Nang is now considered a top destination for tourist and investments from domestic and foreign companies. Within the limited supply of Grade A offices, the average rental rate is USD 17.5/sqm/ month increased by 10.3% compare to the first quarter of 2017, meanwhile the average rental rate in Grade B offices was USD 16/sqm/month decreased by 1.9% due to new Grade B offices supply in last quarter. The occupancy rate in Grade A office is 89.3% decreased by 5.4% compared to same quarter in 2017.

At Grade B, the occupancy rate is 92%, increased by 6.7% compare to the previous quarter.

SUPPLY There has been no news for potential project in Grade A offices in 2018. On the other hand, Grade B welcomes two new buildings to market which are Fhome Building and Vietinbank Tower with total supply up 25,950 sqm. First quarter of 2018, Hai Chau District was the main area for office supply with 7 projects contributing approximately 40,700 sqm accounting for 58% of market share. Thanh Khe District accounts for 20% market share with total supply of 13,600 sqm from 2 projects. DEMAND The typical tenants for office space in Da Nang are companies in technology, financial services and construction industry and are either new FDI or new local companies with some expansion from established companies.

The common size for the offices is 200 sqm, typical SME office space.

OUTLOOK Da Nang left a good impression on international communities after it hosted the APEC summit in October 2017. Da Nang is getting popular for sure and office market expects the demand will increase in 2018 in Grade A sector mainly due to the lack of supply. Seeing that, Grade B buildings may receive some tenants originally set for a Grade A office but settle for a Grade B for the lack of Grade A option. The market forecasts the rental rate to increase and demand to remain stable thanks to the new industrial parks opening in nearby areas that companies generally keep a sales office off site and new companies opening offices in Da Nang.

Figure 34: Office, Market Performance as of Q1 2018 Source: Colliers International Research Figure 35: Office, Market Performance by Quarter Source: Colliers International Research Figure 36: Office, Supply by Grade Source: Colliers International Research

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 34 Q1 2018 | DANANG | OFFICE (*) USD/sqm/month (NLA) Source: Da nang Deparment of Planning & Investment ADMINISTRATIVE MAP OF DANANG CITY Table 21: Significant Office Projects No Name Address Completion Year NLA (sqm) Service Charges Occupan- cy rate Average asking rent (*) 1 Indochina Riverside Tower 74 Bach Dang, Hai Chau 2008 6,219 included 100% 18.0 Grade A 1 One Opera 115 Nguyen Van Linh, Hai Chau 2008 4,234 included 100% 12.9 2 Vinh Trung Plaza 253-255-257 Hung Vuong, Hai Chau 2008 5,200 included 96% 10.6 3 HAGL Plaza 1 Nguyen Van Linh 2008 4,000 included 95% 10.3 4 PVFC Building Lot A2.1, 30/4 Street, Hai Chau 2010 11,162 included 100% 10.1 5 Green Plaza 238 Bach Dang, Hai Chau 2010 4,400 included 90% 12.0 6 Thanh Loi Building 135 Nguyen Van Linh, Thanh Khe 2011 5,100 included 93% 10.1 7 Nguyen Van Linh Tower 1 Nguyen Van Linh 2013 51,30 include 87% 11.7 8 Post Office 155 Nguyen Van Linh, Thanh Khe 2014 8,500 included 92% 13.0 9 Petrolimex Tower 122, 2/9 Street, Hai Chau 2015 6,000 included 86% 9.2 Grade B 1 DanaBook 78 Bach Dang, Hai Chau 2008 3,500 included 100% 7.4 2 SPT Z85 Tran Hung Dao, Son Tra 2009 15,863 included 90% 7.0 Grade C

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 35 Q1 2018 | DANANG | RETAIL PERFORMANCE In the first quarter of 2018, the Da Nang retail market was 14% higher in revenue than the same period last year thanks to strong consumer demand which remained strong in the first quarter even after the lunar New Year festivities were over. The number of tourists to Da Nang this quarter is expected to reach 1.69 million, an increase of 35% q-o-q further fueling the retail demand. The average asking price remained relatively unchanged at USD 20.1/sqm/month from USD 20.19/sqm/month q-o-q, with Indochina Riverside Towers, Vinh Trung Plaza and Vincom Plaza Ngo Quyen having the highest average asking rent at USD 23/sqm/month.

In terms of occupancy rates, podiums and department stores enjoyed the highest at almost 100%, which is better than the occuupancy rate in shopping center at 95%. In general, the occupancy rate of the retail sector grew slightly and the occupany rate in Da Nang is higher than that of HCMC’s and Hanoi’s at the moment. SUPPLY In Q1 2018, no new retail building entered the market. Vincom Plaza Ngo Quyen with 36,800 sqm of supply equals to 49% of retail stock makes Son Tra District the largest retail space supplier, followed by Hai Chau and Thank Khe District with 48% and 3% respectively. The total retail stock of 79,731 sqm has seen a decrease since August 2017 when Big C Da Nang closed.

Shopping malls and supermarkets are expected to have 15 new projects by 2025 that will provide about 720,000 sqm of retail space.

DEMAND In Q1 2018, Da Nang’s total retail sale of goods and services was estimated at VND 13,400 billion, equivalent to an increase of 14% y-o-y. The demand for retail and hospitality development will continue to grow in the upcoming years. In addition to that, by 2020, Da Nang targets to welcome a total of 8.5 million visitors, including 2.5 million foreigners with an expected earning of 27,400 billion VND in revenue. OUTLOOK After hosting the APEC Summit, Da Nang has attracted tremendous attention from international and local tourists. The city’s potential for retail properties has made Da Nang a popular destination for developers and investors.

However, the retail market in Da Nang still has its limitations. The fashion segment faces the challenge of low average income per person, and the tourists’ preferences to spend on food and hotels. The food & beverage sector is still the major source of income for retail properties. Developers and investors need to be patient regarding the current market and wait for appropriate time to invest in Da Nang for this particular segment for the right return. Figure 38: Retail, Market Performance by Quarter Source: Colliers International Research Figure 37: Retail, Market Performance as of Q1 2018 Source: Colliers International Research Figure 39: Retail, Supply by District Source: Colliers International Research

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 36 Q1 2018 | DANANG | RETAIL Table 3: Significant Office Projects No Name of Project/Building Address Location Completion Year NLA (sq m) ARR (*) Occupancy Rate 1 Indochina Riverside Towers 74 Bach Dang Hai Chau 2008 5,251 23 100% 2 HAGL-Lake View Residences 72 Ham Nghi Thanh Khe 2012 7,200 12.0 100% Retail Podium 1 Parkson Vinh Trung Plaza 253-255-257 Hung Vuong Hai Chau 2011 8,000 23.0 100% Department Store 1 Big C Da Nang 255-257 Hung Vuong Thanh Khe 2007 11,760 under refurbishment 2 Da Nang Square 35 Thai Phien Hai Chau 2011 3,280 6.2 79% 3 Vincom Plaza Ngo Quyen 910A Ngo Quyen Son Tra 2015 36,800 23.0 100% 4 LOTTE Mart 06 Nai Nam Hai Chau 2016 19,200 18.3 100% (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT Table 22: Significant Retail Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 37 Q1 2018 | DANANG | CONDOTEL Figure 42: Condotel, Guaranteed Return by Project PERFORMANCE In major districts, average absorption rate reached 96.5%, equivalent to an increase of 1.5% q-o-q. The Ngu Hanh Son and Son Tra Districts are the most popular destinations for investment due to their locations next to the beaches. Some well-known condotels such as Hyatt Regency, Olalani Resort, Four Season, Fusion Maia Da Nang, and Vinpearl Riverfront reported high occupancy rates due to the increase of people coming to Da Nang.

The market for condotels became quieter after the Lunar New Year, partially because many investors are waiting for the government to improve and claify the legislature concerning condotels where there are obvious grey areas at the moment. Son Tra District is keeping the lead with the highest average selling price at USD 2,236/sqm same as pervious quarter. SUPPLY In 2018, the condotel supply expects to add another 20,000 rooms. Da Nang has made official plans to upgrade its infrastructure for major projects in the upcoming year. As a result, the supply of condotel in the city is expected to grow strongly.

This quarter saw the entry of two new condotel projects: Kim Long Ocean and Saia Complex. The Hai Chai, Son Tra, and Ngu Hanh Son districts are supplying the increased condotel in the Da Nang market. Han Riverside with 1,462 units is situated in the Hai Chai District and the complexes of Anh Duong-Soleil with 3,525 units, Times Square with 3,000 units and Hoa Binh Xanh with 1,440 units are all situated in the Son Tra District. Lastly, Empire City with 6,500 units is located in the Ngu Hanh Son District. Due to the amount of condotel projects planned for construction in Da Nang, it is and will remain the leader in the condotel market across Vietnam in the upcoming years.

DEMAND Da Nang has received a lot of attention as top city to visit in South East Asia. By 2020, Da Nang is expected to welcome more than 2.5 million international visitors and 8 million domestic visitors. With a high demand and limited supply of condotels and hotel in Da Nang, the occupancy rate is expected to stay at a high level. This aligns with the city’s plan to promote itself as a tourist city. The city of Da Nang is cautious in approving more projects even though the demand clearly substantiates the needs for even more to be considered.

OUTLOOK Although the condotel segment is a promising investment to investors, who most likely use the condotel as a vacation house and rent it out for others to enjoy while not in use, legal issues remain an obstacle to some degree.

Until the government releases new policies and regulations on owning a condotel, the market for Da Nang could remain stagnant. However, with a growth of 30% y-o-y in the hospitality industry, Da Nang has the potential to become a big market for condotels as the city upgrades its infrastructure and the government works towards improving the legislature about condotels and for foreign individual ownership. Figure 41: Condotel, Supply by District Source: Colliers International Research Source: Colliers International Research Figure 40: Condotel, Market Performance Source: Colliers International Research

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 38 Q1 2018 | DANANG | CONDOTEL Table 3: Significant Office Projects No Name of Project/Building Address Location Completion Year No. of units Average Selling Price (USD/sqm)* 1 F Home 16 Dang Tu Kinh Hai Chau Q1/2016 560 1,600 2 Ariyana Condotel Furama 105–107 Vo Nguyen Giap Ngu Hanh Son Q1/2016 1,320 2,534 3 Cocobay Truong Sa Ngu Hanh Son Q1/2016 1591 1,482 4 Vinpearl Riverfront Ngo Quyen Son Tra Q2/2016 736 2,203 5 Ocean Suites (Block A&B) Truong Sa Ngu Hanh Son Q2/2016 115 2,394 6 Wyndham Soleil Vo Nguyen Giap Son Tra Q3/2016 706 2,635 7 Hoa Binh Green Danang Le Van Duyet Son Tra Q3/2016 1,536 1,663 8 Naman Garden Truong Sa Ngu Hanh Son Q4/2016 99 2,325 9 Alphanam Luxury A1 - A6 Vo Nguyen Giap Son Tra Q4/2016 234 1,815 10 Vinpearl RiverFront Condotel Tran Hung Dao Q.

3 Q4/2018 736 1,732 11 Vinpearl Nam Hoi An Nam Hội An - Q1/2019 132 1,653 * Excluding all kinds of tax and promotions The information is updated as at the end of Q1 2018 Table 23: Significant Condotel Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 39 Q1 2018 | DANANG | VILLA PERFORMANCE Da Nang was named one of the 20 cleanest cities in the world. Following the hosting of APEC with the growth of the hospitality industry and the increasing number of investments in the villa segment, Da Nang could soon become a top desination for the villa market. In the first quarter of 2018, asking prices for Da Nang’s villas ranged from USD 834/sqm to USD 2,761/sqm, the price remained relatively unchanged q-o-q. In terms of average asking price per unit, Vinpearl Luxury Da Nang is the most expensive complex with an average price tag of USD 1.7 million per unit for a 390 sqm villa.

On the other hand, The Point Residences with a price tag of USD 324,000 per unit with an area of 325 sqm remains a favorite project for the middle-class among the affordable housing projects.

SUPPLY There was no new supply in the first quarter of 2018. The total supply of villas in Da Nang is estimated to be 1,000 units. This sector is relatively smaller than the condotel sector. The main supplier of villas, which holds 57% of the market share, continues to be Ngu Hanh Son District, followed by Son Tra District at approximately 43%. Till the end of 2017, the net absrobtion in Da Nang market was 80.5%. The price of furnished villa ranges from USD 650/sqm to USD 3,000/sqm. Da Nang expects to have another 70 units to enter the market by the end of this year.

DEMAND Due to the higher price of resort villas, the target clients for this segment are wealthier Vietnamese and foreign investors.

Those clients usually buy villas either as a long-term investment or vacation home. There seemed to be a plan to form functional satellite cities around Da Nang and the opening of a USD 4 bllion casino in Hoi An by the end of 2019 is expected to generate demand in the villa segment. The majority of villa buyers are from Ha Noi at 85% with only 5% from Ho Chi Minh City. The rest of the market shares are held by Vietnamese-Americans and foreigners who work in Vietnam. OUTLOOK As the commerce treaty comes into effect for the Da Nang economy in 2018, we expect the villa segment to grow steadily.

However, the increasing price of land due to the lack of space in Da Nang CBD; the increasing cost to build new projects, and the new policy on owning a house may slow down developers and investors in launching new projects upcoming.

Figure 43: Villa, Market Performance Source: Colliers International Research Ngu Hanh Son 57% Son Tra 43% Ha Noi 85% HCMC 5% Vietnamese residing abroad/Foreigners 5% Local provinces 5% Figure 44: Villa, Primary Supply by District Source: Colliers International Research Source: Colliers International Research Figure 44: Villa, Buyer Profile

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 40 Q1 2018 | DANANG | VILLA Table 3: Significant Office Projects Table 3: Significant Office Projects Table 3: Significant Office Projects No Name of Project/Building Developer Location Location Completion Year Number of units Asking Price (USD/sqm) 1 Euro Village 2 Sun Group Hoa Xuan Ngu Hanh Son - 54 834 2 Furama Villas Ariyana Corporation Vo Nguyen Giap Ngu Hanh Son 2009 131 2,761 3 Vinpearl Luxury Da Nang 1 VinGroup Truong Sa Ngu Hanh Son 2011 39 1,703 4 The Point Residences VinaCapital Truong Sa Ngu Hanh Son 2014 40 1,125 5 The Ocean Estates VinaCapital Truong Sa Ngu Hanh Son 2016 33 1,360 6 Euro Village Sun Group 27 Hoa Hong Son Tra 2017 175 1,976 7 Vin Pearl Ðà Nẵng Ocean Villas Vin Group 7 Bang Lang Long Bien 2017 225 2.,015 8 Quoc Bao Luxury Quoc Bao Ngo Quyen Son Tra 2019 178 1,325 * Excluding all kinds of tax and promotions The information is updated as at the end of Q1 2018 Table 24: Significant Villa Projects

©2018 Colliers International Research VIETNAM QUARTERLY KNOWLEDGE REPORT Page 41 Q1 2018 | COLLIERS INTERNATIONAL & CONTACT HO CHI MINH CITY Deutsches Haus, 3rd Floor 33 Le Duan Boulevard, Ben Nghe Ward, District 1 HCMC, Vietnam Tel: + 84 28 3827 5665 COLLIERS INTERNATIONAL  | VIETNAM HANOI Gelex Tower, Unit 904, 9th Floor 52 Le Dai Hanh Street, Hai Ba Trung District Hanoi, Vietnam Tel: +84 24 3265 6969 DAVID JACKSON General Director david.jackson@colliers.com +84 28 3827 5665 Colliers International is a leader in global real estate services, defined by our spirit of enterprise. Through a culture of service excellence and a shared sense of initiative, we integrate the resources of real estate specialists worldwide to accelerate the success of our partners.

We connect through a shared set of values that shape a collaborative environment throughout our organization that is unsurpassed in the industry. With more than 100 professionals in 3 offices in Vietnam, the team is market driven and has proven and successful track record with both international and local experience. From Hanoi, Danang to Ho Chi Minh City, we provide a full range of real estate services Publication Coverage Frequency Content Availability Knowledge Report/ Market Insights Vietnam Quarterly All market sectors Publicly available Knowledge Report/ Market Insights Ho Chi Minh City Quarterly All market sectors Publicly available Knowledge Report/ Market Insights Hanoi Quarterly All market sectors Publicly available Knowledge Report/ Market Insights Danang Quarterly All market sectors Publicly available Asia Pacific Office Report Asia Pacific including Vietnam Quarterly Office market Publicly available Vietnam Property Market Report Vietnam cities Quarterly All market sectors On subscription Development Recommendation Vietnam cities At request All market sectors On subscription For further information, please contact us: HOAN VO Research Analyst hoan.vo@colliers.com +84 28 3827 5665 ABOUT COLLIERS INTERNATIONAL 396 offices 68 countries 15,000 professionals and staff $2.60 billion in annual revenue 6 continents square meter under management 158 million

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