Hanoi Quarterly Report

Transcription

1 Market Insights from CBRE s Hanoi Quarterly Report CBRE RESEARCH & CONSULTANCY Presented by: Richard Leech Thanh Tran Executive Director Senior Manager CB Richard Ellis (Vietnam) Co., Ltd. January 19 th 2010 QUARTERLY REPORTS FOR HCMC & HANOI Economic Overview Current Rents and Prices Office Residential for Sale Retail Serviced Apartments Hotel Investment Construction Costs quarterlyreports@cbrevietnam.com Available in English or Vietnamese 2 CB RICHARD ELLIS VIETNAM

2 HANOI ECONOMIC OVERVIEW GDP growth: Q4/2009 : 10.3% y-o-y 2009 : 6.67% y-o-y; above the national average (5.32%) Industrial output in 2009: 9.4% y-o-y Hanoi attracted an estimated 340 FDI projects in 2009 total registered capital reached only US$500 million (equivalent of 10% of 2008 figure) Implemented FDI was US$650 million 3 CB RICHARD ELLIS VIETNAM HANOI ECONOMIC OVERVIEW Hanoi s CPI continued to drop, ending 2009 at 8.22% y-o-y International trade activities are still slow, export turnover in Hanoi down 7.8% for 2009, and imports down 17.4% Retail sales recovered in Q4, posting a 19.9% y-o-y increase in 2009 Tourists arrivals to Hanoi in 2009/compared to 2008: International : 1.03 million, down 11.7% Local : 6.7 million, up 1.8% 4 CB RICHARD ELLIS VIETNAM

3 HANOI INFRASTRUCTURE Major regional highways broke ground and made progress with Hanoi - Lao Cai, Hanoi - Thai Nguyen, and Hanoi - Hai Phong Highway all starting The Hanoi - Thai Nguyen highway started construction. This highway will cover 61 km, with 4 lanes and have a 100 km/h speed limit. Total investment is over VND 8,100 billion (US$ 438 million) The EX-10 package of Hanoi - Hai Phong highway started construction after the contract signing in July 2009 The A2 (Vinh Phuc to Phu Tho) construction package contract between VEC and Posco E&C was signed on 20 October CB RICHARD ELLIS VIETNAM HANOI INFRASTRUCTURE Vietnam Railway Department signed a MOU with a consortium of Korean corporations on a working plan for railway No.5 from southern West Lake to Ngoc Khanh and then along Lang - Hoa Lac Vietnam Railway Corporation has agreed in principle to remove the railway track on Long Bien Bridge. Future trains will travel along a railway bridge belonging to as yet to be built Yen Vien - Ngoc Hoi railway route (the Hanoi urban railway No.1 A pilot program for installing underground electrical lines is complete Thang Long Bridge was renovated in the fourth quarter 6 CB RICHARD ELLIS VIETNAM

4 RESIDENTIAL FOR SALE Le Van Luong Residential Cleve Mulberry Lane Canal Park A proposal to allow 20% of units in a project to be sold outside of trading floors. Base rate was raised to 8% & it could go higher in 2010 Current classification of condominium was heavily based on price with consideration of location, quality, brand E.g by price: luxury (>$2.500 psm), high-end ($1.200-$2.500 psm), mid-end ($900-$1,500 psm), low-end (<$900 psm) 7 CB RICHARD ELLIS VIETNAM RESIDENTIAL FOR SALE CAPITAL VALUES & DEMAND Land price: New land price framework (max VND81 mil psm) Will increase compensation costs for the primary developers should have a limited impact on secondary developer land costs because they re already substantially above the compensation land price framework Price fever in Nov in northern area of Hanoi Positive price movements in all segments: Highest q-o-q change in low-end: +15% Comparing to 2007: Big changes in High- & Low-end: +28% & +42% Luxury & Mid-end: just -7% & +5% For new projects, most buyers were only speculating in the short term and could not afford to hold the unit(s) through first payment. For well targeted projects, CBRE expects demand in 2010 will continue without any strong movement in prices. 8 CB RICHARD ELLIS VIETNAM

5 RESIDENTIAL FOR SALE SUPPLY Total number of units launched in 2009 was more than double the volume of either 2008 or 2007 Over 40% (6,587) of all new stock launched in 2009 came in the fourth quarter Significant launches: Mulberry Lane (towers E, D, B with 768 units) Le Van Luong Residentials (700 units) Indochina Plaza Hanoi (380 units) Berjaya s Canal Park (148 units) Megastar Vinh Hung (1,104 units) 2 towers in 409 Linh Nam, Hoang Mai Projects breaking ground (7,894 units) HUD s Green House, FLC Landmark, Inpyung s Cleve, The Pride, The Lancaster projects Projects handed over (2,328 units) 9 CB RICHARD ELLIS VIETNAM RESIDENTIAL FOR SALE OUTLOOK Initial estimates of project launches are conservative, with more possible for launching if market remains strong Foreign & JV projects will introduce concept of high-quality mid-range projects. The level of competition will bring actual quality closer to the pricing dictated by the market Limited lending and inflation could have an impact as the SBV is expected to raise rates in an effort to stem inflation Projects under US$1,500 psm will make up vast majority of units, although still expensive for a majority of the population 10 CB RICHARD ELLIS VIETNAM

6 OFFICE 11 CB RICHARD ELLIS VIETNAM OFFICE HIGHLIGHTS One Grade A office building, BIDV Tower, and three Grade B office buildings, Vinaconex Tower, CMC Tower, and Vinaconex No.9 came on stream this quarter, providing a total of 43,000 sm of lettable office space to the market Two office buildings broke ground, FLC Landmark Tower on Le Duc Tho Road on the 15th of October and Lotte Hanoi Centre (the new Hanoi City Complex) on the 22nd of October, estimated to supply 11,000 sm and 40,000 sm of net office floor area respectively Rental rates in both Grade A and Grade B office building dropped slightly by 2.3% to US$43.71psm and 1.18% q-o-q to US$25.89 psm respectively 12 CB RICHARD ELLIS VIETNAM

7 OFFICE The first inflow of Grade A office space since the beginning of 2008 caused the vacancy rate of Grade A buildings to increase significantly to 11% due to the new supply of 10,120 sm Vacancy rates of Grade B Buildings rose to 18.04%, increasing by 3.04% from last quarter The overall market s net absorption stood at 18,524 sm, 20% less than Q3 (23,122 sm) Huge new supply in the next two years: Keangnam (90,000 sm NFA), Grand Plaza (Charmvit) (45,000 sm NFA); EVN Tower (45,000 sm NFA); Capital Tower (23,000 sm NFA); Crown Complex (16,000 sm NFA) and more 13 CB RICHARD ELLIS VIETNAM OFFICE OUTLOOK The surplus supply has now reached all submarket. Real competition among buildings is occurring. More large companies, mainly local, will look to consolidate offices, expecting longer leases and favorable rentals New buildings will continue to rent at rates below comparable existing buildings New buildings may outperform existing offices in mid-term, but need to stabilize first If rentals continue to fall in new well located Grade A or B+ buildings, be aware of major movement when the rent saved actually covers the relocation cost 14 CB RICHARD ELLIS VIETNAM

8 RETAIL 15 CB RICHARD ELLIS VIETNAM RETAIL HIGHLIGHTS Retail sales rebound strongly: Nov 09: 18.7% y-o-y thanks to Promotion Month 2009 : 19.9% y-o-y Positive announcement/progress: Re-launch of Hanoi City Complex Restructuring of Trang Tien Plaza Grand Plaza launched leasing, roughly 50% occupied Vincom Galleries fully occupied after 4 months of operation Rentals stayed strong in CBD with new record expected in 2010 as demand grow and tenants contract expire. Local retailers continue expansion with F&B industry as the most aggressive, followed by electronics outlets opening in large renovated shophouses Improved occupancy rates: 100% in CBD; 69% in non-cbd 16 CB RICHARD ELLIS VIETNAM

9 RETAIL SUPPLY No new entrant in Q4, total stock remain steady Strong growth in shophouses renovations, F&B outlets seen as the largest group to expand 38,500 sm of retail space is expected to come online in CB RICHARD ELLIS VIETNAM RETAIL OUTLOOK Renovation of shophouses into modern retail shops will limit fast-paced rental growth Conversion of wet market into enclosed shopping centres will create a safer and more hygienic environment Trang Tien Plaza s restructuring can help improve its rental rate on par with other competitors Infrastructure delays will affect shopping habits Outside the CBD, newer shopping centers will stabilise as more local and mid-market brands take advantage of major population to the west and south of the city and lower rentals Xuan Thuy Tower Grand Plaza Bac Ha Plaza 18 CB RICHARD ELLIS VIETNAM

10 SERVICED APARTMENTS 19 CB RICHARD ELLIS VIETNAM SERVICED APARTMENTS HIGHLIGHTS On the 22nd Oct, Lotte Hanoi Centre (Hanoi City Complex) broke ground, expecting to supply roughly 260 units to the market in Grand Plaza Hanoi (Charmvit) will likely open their hotel late in 2010, offering potentially ~150 units in the Western submarket. The market-wide average asking rent increased by 3.8% q-o-q to US$29.70 psm per month. The overall vacancy rates stayed stable ~ 11%. New projects (those opening in 2008 or later) decreased their vacancy rates to 5.8%, while older projects had rates rise to 12.4%. Three bedroom and larger units continued to perform poorly, currently account for over 40% of vacant units. 20 CB RICHARD ELLIS VIETNAM

11 SERVICED APARTMENTS OUTLOOK Demand could grow with more businesses entering Hanoi New entrants to Vietnam and firms already in HCMC hoping to take advantage of growth in Hanoi Yet to see many large scale standard rental apartments (The Manor), but more buy-to-let will be available in 2010 Best serviced apartments already stabilized, newer projects or older buildings may continue to see rentals slip but could stabilize during 2010 Hanoi tenants stayed during recession but asked for rent adjustments or moved to cheaper buildings Fraser Suites Serviced Apartments Long-term look: few major projects plan to launch large, hotel-branded serviced residences from 2011 to 2014 (Charmvit, Crown Complex, Keangnam). Can tenants afford the premium? Further growth in FDI and expatriates is required 21 CB RICHARD ELLIS VIETNAM HOTELS 22 CB RICHARD ELLIS VIETNAM

12 HOTELS HIGHLIGHTS Tourist arrivals bouncing back: Local : 6.7 million, 1.8% y-o-y International : 1.03 million, 38.1 q-o-q New Supply: Best Western Muong Thanh Hanoi opened on Oct , providing 168 rooms to the market Holiday Inn announced first hotel in Hanoi, in place of 3- star Asean Hotel in Chua Boc Kinh Bac City won 5-star Lotus Hotel project Re-launch of Hanoi City Complex Expansion of more international flights, re-launch of local flights highlight the effort to boost tourism and investment Occupancy rates and RevPAR posted positive growth both on q-o-q and y-o-y across all market sectors, implying the sector is back on track Overall ADR fell by 3.49% against Q3 23 CB RICHARD ELLIS VIETNAM HOTELS OUTLOOK Tourist arrivals will improve in 2010 (the 1,000 th anniversary, recovery of global economy) helping to maintain strong occupancy seen at the end of 2009 Grand Plaza Hanoi Hotel CBD hotels could see ADR growth by year end with upswing in tourism and business travel More local brands will expand, taking advantage of strong domestic travel International budget flags will continue to expand in Hanoi, begin competing directly with developing local brands 2010 will mark the first large entrances in newly-developed areas. The ability to fill rooms should serve as a good measure for the capability of the western region to act as a full-fledged business district 24 CB RICHARD ELLIS VIETNAM

13 For further information and order details, please contact. THANK YOU!!! 2009 CB Richard Ellis, We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction. 25 CB RICHARD ELLIS VIETNAM