VIETNAM QUARTERLY KNOWLEDGE REPORT

Transcription

1 Q4 216 Accelerating success

2 TABLE OF CONTENTS Page ECONOMIC OVERVIEW... VIETNAM... HO CHI MINH CITY... HA NOI HO CHI MINH CITY MARKET OVERVIEW... OFFICE... RETAIL... CONDOMINIUM... VILLA & TOWNHOUSE... SERVICED APARTMENT... INDUSTRIAL HA NOI MARKET OVERVIEW... OFFICE... RETAIL... CONDOMINIUM... VILLA & TOWNHOUSE... SERVICED APARTMENT... INDUSTRIAL Cover Page: Saigon Skyline

3 LIST OF FIGURES Page Figure 1: Vietnam Exports - Imports in Figure 2: International Arrivals to Vietnam in Figure 3: FDI Capital of HCMC and Hanoi... 6 Figure 4: GDP Growth Rate of HCMC and Hanoi... 6 HO CHI MINH CITY MARKET OVERVIEW Figure 5: Office, Average Asking Rent... 7 Figure 6: Office, Occupancy Rate... 7 Figure 7: Retail, Market Performance by Year... 1 Figure 8: Retail, Total Supply by Year... 1 Figure 9: Condominium, Primary Asking Price Figure 1: Condominium, New Launches by Year Figure 11: Condominium, Sold Units by Segment and Year Figure 12: Villa and Townhouse, Selling Prices by Quarter Figure 13: Villa and Townhouse, Supply by Year Figure 14: Villa and Townhouse, Primary Stock by District Figure 15: Serviced Apartment, Occupancy Rate Figure 16: Serviced Apartment, Average Asking Rent by Grade Figure 17: Industrial, Market Performance by District Figure 18: Industrial, Supply by District LIST OF TABLES Table 1: Macroeconomic Indicators of HCMC and Hanoi... 6 Table 2: Office, Future Supply... 7 Table 3: Significant Office Projects... 8 Table 4: Retail, Significant Future Projects under Construction... 1 Table 5: Significant Retail Projects Table 6: Condominium, Significant new Projects launched in Q Table 7: Villa and Townhouse, Significant new Projects launched in Q Table 8: Serviced Apartment, Significant Future Projects under construction Table 9: Significant Serviced Apartment Projects Table 1: Industrial, Future Supply Table 11: Industrial, Market Overview... 19

4 HA NOI MARKET OVERVIEW LIST OF FIGURES Page Figure 19: Office, Average Asking Rent... 2 Figure 2: Office, Occupancy Rate... 2 Figure 21: Retail, Market Performance... Figure 22: Retail, Total Supply Figure 23: Condominium, Primary Sale Price Figure 24: Condominium, New Launches by Year Figure 25: Condominium, Sold Units by Segment and Year Figure 26: Villa and Townhouse, Supply by Quarter Figure 27: Villa and Townhouse, Supply by District Figure 28: Villa and Townhouse, Q-o-Q changes in Secondary Price Figure 29: Serviced Apartment, Average Asking Rent by Grade Figure 3: Serviced Apartment, Current Grade A&B supply Figure 31: Industrial, Market Performance by Distrtict... 3 Figure 35: Industrial, Supply by District... 3 LIST OF TABLES Table 12: Office, Future Supply... 2 Table 13: Significant CBD Office Projects Table 14: Retail, Future Supply Table 15: Significant Retail Projects Table 16: Condominium, New Projects Launched in Q Table 17: Villa and Townhouse, New Projects Launched in Q Table 18: Serviced Apartment, Future Supply Table 19: Significant Serviced Apartment Projects Table 2: Industrial, Future Supply... 3 Table 21: Hanoi Industrial Market Overview 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 TPP: Trans-Pacific Partnership Y-o-Y: Year on Year WTO: World Trade Organization

5 Q4 216 ECONOMIC OVERVIEW VIETNAM GDP Vietnam s GDP was estimated to grow by 6.2% in 216, driven mostly by industrial expansion and growth in construction and services. This year recorded a decrease in the country s economic growth rate compared to the growth of 6.68% in 215. The service sector grew by 7.57% y-o-y while the industrial and construction increased by 6.98% y-o-y. The whole year witnessed a big slowdown in agriculture-forestry-fishing with a modest growth rate of 1.36% y-o-y mainly due to natural disasters. Although 216 s GDP was below the 6.7% target set by the National Assembly, the country remained one of the strongest performers in the region. We expect next year s GDP to remain on a positive trajectory with our full year forecast standing at 6.5% on the back of increasing global integration and local production recovery. CPI The last month of 216 saw a slight increase of.73% m-o-m in CPI index, despite purchasing needs at the year end. For the whole year, average CPI rose by 2.7% y-o-y. Six out of eleven major goods and service groups saw price rises with the highest growth recorded in medicine and healthcare services, at 5.3%. Main reasons for the CPI hike in 216 were determined to be the government s upward price adjustment of healthcare services and natural disasters effects on crops. With the target CPI of 4% set by National Assembly, price adjustment methods should be implemented for key commodity groups such as healthcare services, electricity and water, as well as a close supervision process should be kept on the world oil price to prevent the domestic price from shooting up. FDI As of the end of 216, the country attracted 2,556 new foreign investment projects with total investment of both newly registered and supplementary capital reaching USD24.37 billion, representing an increase of 7.1% y-o-y in capital. Of the total, there are 1,225 already-operating projects raising their capital by more than USD5.7 billion. Investment in real estate accounted for 1.1%, which is equivalent to USD1.52 billion. South Korea was the largest foreign investor with USD5.5 billion, accounting for 36.6% of total capital, followed by Singapore and China with USD1.59 billion and USD1.26 billion, respectively. RETAIL SALES Vietnam s retail sales of goods and services reached USD156 billion, up 1.2% y-o-y. If the price factor was excluded, the growth rate would be 7.8% y-o-y, lower than the increase of 8.5% y-o-y in 215. By sector, retail sales of goods achieved USD118.4 billion, accounting for 75.9% of total sales, up 1.2% y-o-y. Retail sales of accommodation and catering services reached USD18.3 billion, accounting for 11.3% of total sales, representing an increase of 1.7% y-o-y. Retail sales of tourism services, comprising 1% of total sales, reached USD 1.5 billion, up 12% y-o-y. Retail sales of other services, accounting for 11.4% of total sales, were estimated at USD17.8 billion, equivalent to 9.3% increase y-o-y. INTERNATIONAL ARRIVALS In 216, Vietnam welcomed 1.1 million international visitors, equivalent to a significant increase of 26% y-o-y. Thanks to visa exemption policy for citizens from five European countries and various tourism marketing strategies, this is the first time the country attracted such a high number of international tourists, a twofold increase compared to the number of 21. Asian visitors took the lead with more than 7.2 million arrivals, mainly from traditional markets such as China, South Korea and Japan, comprising 72.5% of total visitors, followed by European visitors with 1.6 million arrivals and American tourists with.7 million arrivals, respectively. TRADE BALANCE In 216, Vietnam earned roughly USD175.9 billion from exports, reporting an increase of 8.6% y-o-y. Import turnovers reached USD173.3 billion, up 4.6% against the previous year. As a result, the whole country registered a USD2.6 billion trade surplus. Of the total, the domestic economic sector reported a trade deficit of USD21.2 billion with USD5 billion in exports and USD71.1 billion in imports. On the contrary, the FDI sector enjoyed a trade surplus of USD23.7 with export revenues of USD125.9 and import revenues of USD12.1. While the United States took the lead in export revenues with USD38.1 billion, China remained the country s largest import market with USD49.8 billion. By product, phones and phone parts, electronic goods, textile and garments, computers, machinery and equipment are the major foreign currency earners. Figure 1: Exports - Imports in Vietnam in 216 Figure 2: International arrivals to Vietnam in forecast Exports Imports Trade Balance International tourist arrivals Average 2 11, 1, 15 9, USD billion thousand arrivals 8, 7, 6, 5, 4, 3, 2, Source: General Statistics Office Colliers International Research 217 Colliers International Research Source: General Statistics Office Colliers International Research Page 5

6 Q4 216 ECONOMIC OVERVIEW HO CHI MINH CITY Table 1: Marcoeconomic Indicators of HCMC and Hanoi In 216, GRDP of Ho Chi Minh City achieved USD45.29 billion with the growth rate of 8.5% y-o-y. In particular, the service sector was the dominant contributor with USD24.8 billion, comprising 54.8% of the city s economy, followed by the industrial & construction sector and the agriculture-forestry-fishery sector, accounting for.84% and 28.76% respectively. Of the whole year, total newly registered and supplementary FDI achieved USD1.44 billion in which there were 177 supplementary projects, worth of USD529.2 million. Investment in real estate took the lead with 24 projects and USD357.4 million, accounting for 39.1% of total inflows. Cayman Islands was recorded as the biggest foreign investor in the city, with USD27.5 million in registered capital, accounting for 29.6%, followed by Japan (USD19.2 million) and Singapore (USD11.9 million). Retail sales achieved USD3.1 billion, up 9.1% y-o-y. Highest growth rates were seen in products which help to improve the quality of life and traveling demand such as motor vehicles, household appliances, building materials and gasoline. The city s export values reached USD31.8 billion, up 5.2% y-o-y. Garments, agricultural products and computers & electronic devices contributed the most to export values. The United States was the largest export market with nearly USD5.4 billion, up 5% y-o-y. Import values increased by 12.4% y-o-y, worth of USD37.85 billion, resulting in the city s trade deficit of USD6 billion. The top segments of import values were milk and dairy products, fuel, garment material, plastics and iron & steel. HCMC Hanoi GDP (billion) FDI (million) Retail sales (billion) Export (billion) Import (billion) Source: General Statistics Office Colliers International Research Figure 3: FDI Capital of HCMC and Hanoi USD million HCMC Hanoi 4, 3,5 3, 2,5 2, 1,5 1, HANOI In 216, Hanoi s GRDP achieved USD21.18 billion with the growth rate of 8.2%. The industrial-construction sector and the service sector had the highest growth rates, up 9% and 8.3% y-o-y respectively, while the agriculture-forestry-fishery sector saw a modest growth rate of 2.21% y-o-y. Of the whole year, the capital city s CPI increased 2.66% y-o-y. Out of 11 sectors in the CPI basket, food and transportation witnessed a slight fall in price. As of the end of 216, FDI inflows of both newly registered and supplementary capital reached USD2.8 billion, up 46.4% in number of projects and 164% in capital compared to the same period last year. Disbursed capital was USD1.2 billion. Retail sales of the capital city were up 8.8% compared to last year, reaching USD22.3 billion. In 216, the city achieved USD1.61 billion in export revenues and USD24.83 billion in import revenues, causing a trade deficit of USD14.22 billion in the whole year. The capital city welcomed 2.8 million international visitors in 216, equivalent to an increment of 19.9% y-o-y Source: General Statistics Office Colliers International Research Figure 4: GDP Growth Rate of HCMC and Hanoi HCMC Hanoi 14% 12% 1% 8% 6% Source: General Statistics Office Colliers International Research 217 Colliers International Research Page 6

7 Q4 216 HO CHI MINH CITY OFFICE PERFORMANCE Q4 216 witnessed an increase of 3.1% q-o-q in the average asking rent across all grades, recording at USD32.5/sqm/month. The market remained tight with average occupancy rate of 95.9%, marginally down.45ppts q-o-q but up slightly.4 ppts y-o-y. By segment, average rent for Grade A space was up 1.7% q-o-q, staying at USD41.1/sqm/month whilst Grade B s rental rates were up 5.7% q-o-q, at USD23.8/sqm/month. On a yearly basis, both Grade A and Grade B experienced significant rent growth of 14.2% and 13.6% respectively due to high demand and limited prime office space in 216. While Grade A s occupancy rate was slightly down 1ppt q-o-q but up 1ppt y-o-y to 95%, Grade B s occupancy stayed unchanged at 97% compared to both the previous quarter and the same period last year. Figure 5: Office, Average Asking Rent US$/sqm/month Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q SUPPLY The last quarter of 216 welcomed 33,84sqm NLA from the opening of Mapletree Business Centre and Ha Do Building, recording an increase of 12.8% in the newly launched stock compared to the same quarter last year. Currently, the city has a total of 11 Grade A buildings and 63 Grade B buildings, covering approximately 212,651sqm and 896,624sqm of net leasable space to the market respectively. By location, all Grade A and nearly 5% of Grade B are concentrated in the Central Business District (CBD). Clusters of Grade B buildings are also located in District 3, Tan Binh District and Phu My Hung New Urban Area in District 7. Figure 6: Office, Occupancy Rate Grade A % 7 Grade B DEMAND Tertiary industry is one of the key drivers of demand for office space as service sector businesses tend to be more labor intensive and less capital intensive. Indeed, by looking more closely at components of the city GDP over the past 6 years ( ), we find that there is a strong relationship between the service industry s contribution to the city s economy and the average occupancy rate with relative high correlation coefficient of.7. With HCMC government s plans to develop a service-led economy, targeting to increase the service sector by 1.17%-11% in the period of , the relationship between the service sector s expansion and the demand for office space is more likely to continue in the coming years. OUTLOOK Given the current construction status, it is expected that there will be 62,3sqm of new Grade A and 124,392sqm of new Grade B office space coming on line in 217. Up to 71,122sqm of such space will be located outside the CBD while 115,57sqm will be located within the CBD. Mature buildings in prime locations are forecasted to maintain good performance as the amount of new office space in the pipeline is limited and demand for high-quality office space in good locations continues. In contrast, office buildings in decentralized districts will face more pressure as the ample supply, raising concerns of falling rents and increased incentives. Furthermore, Novaland s purchase of Continental Tower and the transfer of ownership for Metropolitan building are expected to put further pressure on the city s market in the coming years. 6 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Table 2: Office, Future Supply Project name Grade NLA (sqm) Expected Completion Viettel Complex B 26,32 Q1 217 Waterfront Saigon B 8,822 Q1 217 Deutsches Haus A 22,3 Q3 217 Saigon Center phase 2 A 4, Q3 217 Thaco-Sala Residence B 78, Q3 217 The Khai B 11,25 Q Colliers International Research Page 7

8 Q4 216 HO CHI MINH CITY OFFICE Table 3: Significant Office Projects No Name Address Completion Year NLA (sqm) Service Charges (*) Occupancy rate Average asking rent (**) 1 Saigon Centre 65 Le Loi , % Saigon Tower 29 Le Duan , % Sunwah Tower 115 Nguyen Hue , % 4. 4 The Metropolitan 235 Dong Khoi , % Diamond Plaza 34 Le Duan , % Kumho Asiana Plaza 39 Le Duan 29 26, 8. 84% Bitexco Financial Tower 45 Ngo Duc Ke 21 37, % President Place 93 Nguyen Du 212 8, % Times Square Nguyen Hue , % 4. 1 Le Meridien 3C Ton Duc Thang 213 9, % Vietcombank Tower 5 Me Linh Square , % 37. Grade A 212, % VTP-OSIC 8 Nguyen Hue ,5 6. 1% Yo Co Building 41 Nguyen Thi Minh Khai , 3. 98% Somerset Chancellor Court NguyenThi Minh Khai ,2 5. 1% Central Plaza 17 Le Duan , % Harbour View Tower 35 Nguyen Hue , % 2. 6 Saigon Riverside Office 2A-4A Ton Duc Thang , 5. 99% Saigon Trade Center 37 Ton Duc Thang , % MeLinh Point Tower 2 Ngo Duc Ke , % Zen Plaza Nguyen Trai 21 11, % The Landmark 5B Ton Duc Thang 25 8, % Opera View Dong Khoi 26 3,1 7. 1% City Light 45 Vo Thi Sau 27 1, 5. 1% Petro Tower 1-5 Le Duan 27 13, % The Lancaster Bis Le Thanh Ton 27 7, 6.7 9% CJ Building 5 Le Thanh Ton 28 14, % Continential Tower Ham Nghi 28 15, 6. 99% Havana Tower 132 Ham Nghi 28 7, % Royal Center 235 Nguyen Van Cu 28 14, % Sailing Tower 51 Nguyen Thi Minh Khai 28 16, % TMS 172 Hai Ba Trung 29 4, 4. 1% A&B Tower 76 Le Lai 21 17, % Bao Viet Tower 233 Dong Khoi 21 1, % Green Power Tower 35 Ton Duc Thang 21 15, % Maritime Bank Tower 192 Nguyen Cong Tru 21 19, % Saigon Royal 91 Pasteur 21 5, % Vincom Center Le Thanh Ton 21 56, % Empress Tower 138 Hai Ba Trung , % Lim Tower 9-11 Ton Duc Thang , 6. 99% MB Sunny Tower 259 Tran Hung Dao, Co Giang , % Lim Tower 2 Vo Van Tan 215 8, % 24. Grade B 41, % 27.8 (*) US$/sqm/month (NLA) 217 Colliers International Research Page 8

9 Q4 216 HO CHI MINH CITY OFFICE SAIGON SKYLINE REVIEW- CBD HCMC GRADE A OFFICE BUILDINGS KUMHO ASIANA PLAZA 39 Le Duan, District 1 26,/4,62 $ 42.5 $ 8. DIAMOND PLAZA SAIGON 34 Le Duan, District 1 15,936/1,2 $ 41. $ 8. LE MERIDIEN 3C Ton Duc Thang, District 1 9,125/5 $ 35. $ 6. SAIGON TOWER 29 Le Duan, District 1 13,95/11 $ 44. $ 7.5 DEUTSCHES HAUS 3-5 Le Van Huu, District 1 THE METROPOLITAN 235 Dong Khoi, District 1 15,2/2,748 $ 45. $ 6. PRESIDENT PLACE 93 Nguyen Du, District 1 8,33/384 $ 39. $ 7. BITEXCO FINANCIAL TOWER 45 Ngo Duc Ke, District 1 37,71/1,627 $ 44.5 $ 8. VIETCOMBANK TOWER 5 Me Linh Square, District 1 41,25/565 $ 37. $ 7. TIMES SQUARE SAIGON Nguyen Hue, District 1 12,74/4 $ 4. $ 7. SAIGON CENTRE 65 Le Loi, District 1 11,65/ 155 $ 42. $ 7.5 SUNWAH TOWER 115 Nguyen Hue, District 1 2,8/ 128 $ 4. $ Colliers International Research Page 9

10 Q4 216 HO CHI MINH CITY RETAIL PERFORMANCE The year 216 recorded a significant rental growth of 12% y-o-y across the market. Being a hot spot for new international brands, the CBD remained its high average asking rents thanks to limited supply. New supply during the year stabilized rental rates of suburban districts. Improvement was seen in occupancy rate, up 2% y-o-y thanks to effective leasing strategies and stronger demand for retail space in the city. SUPPLY The last quarter of 216 welcomed the opening of Golden Plaza, adding approximately 15,sqm to the existing retail stock. Located in a strategic location of District 5 with four street frontages, the mall offers more than 6 kiosks with special considerations to fengshui design. This is the first center that combines both traditional and online sale for wholesale and retail. The total retail stock increased 13% y-o-y, reaching nearly 9,sqm. The majority of new supply in 216 was decentralized to suburban districts, where having large land bank and improving infrastructure. Figure 7: Retail, Market Performance by Year USD/sqm/month Average asking rent Occupancy rate F218F219F Figure 8: Retail, Total Supply by Year 1,6, 1,4, 1,2, 1.% 9.% 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% DEMAND With a population of more than 8 million people, an urbanisation rate of 82.5% and an average income per capita of approximately 3,65 USD, HCMC is the leading city in terms of total retail sales. In 216, the total value was USD3.1 billion, increasing by 9.1% compared to the same period last year, indicating a significant improvement in local buying power. The continued strong retail sales growth implies expanding demand for retail space in the city in the coming years. OUTLOOK Vietnam has become one of the most attractive destinations for retailers in South East Asia on the back of strong inflow of foreign direct investment, rising household spending, a young population and improving economic conditions. Likewise, Ho Chi Minh City s economic importance and status as retail hub continues to attract a strong development pipeline. There is currently approximately 3,sqm GFA of retail space under construction that will open for business in 217. Stronger competition from new openings is forecasted to push down rents and occupancy rates by 2% in the next two years. NLA (sq m) 1,, 8, 6, 4, 2, F218F219F Table 4: Retail, Significant Future Projects Under Construction Project name District NLA (sqm) Expected Completion Viettel Complex 1 6,4 Q1 217 Union Square 1 39,454 Q2 217 Leman CT Plaza 3 12, Q2 217 Thaco-Sala Residence 2 24, Q3 217 The Garden Mall 5 24, Q3 217 Xi Grand Court 1 6, Q4 217 Su Van Hanh Mall 1 96,152 Q4 217 Vinhomes Central Park Binh Thanh 44,25 Q Colliers International Research Page 1

11 Q4 216 HO CHI MINH CITY RETAIL Table Table 3: 5: Significant Office Retail Projects No Name of Project/Building Address Location Completion Year NLA (sq m) ARR (*) Occupancy Rate 1 Sheraton Saigon 88 Dong Khoi District % 2 The Manor 1 91 Nguyen Huu Canh Binh Thanh 26 2, 2 1% 3 Opera View Lam Son Square District , % 4 Caravelle Hotel 19 Lam Son Square District % 5 New World Hotel 76 Le Lai Street District , 9 1% 6 Hotel Continental Sai Gon Dong Khoi District % 7 Centre Point 16 Nguyen Van Troi Phu Nhuan 29 2, 22 93% 8 Saigon Pearl 92 Nguyen Huu Canh Binh Thanh 211 5, 25 88% 9 The Manor 2 91 Nguyen Huu Canh Binh Thanh 211 2,5 2 1% 1 The Oxygen Mall An Phu Ward District , 3 65% 11 Rex Arcade 141 Nguyen Hue District , 125 1% 12 ICON BFT 45 Ngo Duc Ke District , 9 99% 13 Kumho Asiana 35 Le Duan District ,83 5 1% 14 Saigon Airport Plaza 1 Bach Dang, Ward 2 Tan Binh 213 7, % 15 Imperia An Phu An Phu Ward District , % 16 President Place 93 Nguyen Du District % 17 Times Square Nguyen Hue District , 3 1% 18 Thao Dien Pearl 12 Quoc Huong District , % Retail Podium 69, % 1 Diamond Plaza 34 Le Duan District , 166 1% 2 Parkson Saigontourist Plaza 35 Le Thanh Ton Street District , 1 99% 3 Parkson Hung Vuong Plaza 126 Hung Vuong Street District , 6 97% 4 Parkson C.T. Plaza Tan Son Nhat, Truong Son Tan Binh 28 12, % 5 Parkson Flemington Le Dai Hanh District , 4 95% 6 Parkson Cantavil Premier Cantavil Premier District , % Department Store 16, % 1 Saigon Center 35 Nam Ky Khoi Nghia District , 1 1% 2 Vincom Center B 72 Le Thanh Ton District , 1 92% 3 Vincom Plaza 3/2 3C Ba Thang Hai District , 4 95% 4 Crescent Mall 11 Ton Dat Tien District , 43 85% 5 Lotte Mart Saigon South 469 Nguyen Huu Tho District , 4 99% 6 Lotte Mart Phu Tho 968 Ba Thang Hai District , % 7 Saigon Square Nam Ky Khoi Nghia District ,3-1% 8 Union Square 171 Dong Khoi District , Under renovation 9 Zen Plaza Nguyen Trai District , % 1 Taka Plaza 12 Nam Ky Khoi Nghia District , 7 1% 11 Superbowl Vietnam TSN A43 Truong Son Tan Binh 22 5,5 3 8% 12 Satra Pham Hung C6/27 Pham Hung District , % 13 An Dong Plaza 18 An Duong Vuong District , - 92% Shopping Centre 292, % (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT 217 Colliers International Research Page 11

12 Q4 216 HO CHI MINH CITY CONDOMINIUM Table PERFORMANCE 3: Significant Office Projects Market sentiment was improved in the last quarter of the year with nearly 12, successful transactions, up 55% compared to the previous quarter. The whole year witnessed a drop of 4% y-o-y in the number of sold units as competition was more intense by new entrants. Long-term market fundamentals remained positive with increasing genuine home buyers who can afford their own property thanks to rising income and supporting finance conditions. On the primary market, price appreciation was modest at 4% y-o-y as developers were more cautious in their pricing strategies in the midst of increasing new launches. Looking forward to 217, sale price is forecasted to move upward, ranging from 3%-7%, depending on each market segment. SUPPLY The year 216 witnessed a decline of 11% y-o-y in total new launches, prompting the market was cooling down from 215 boom. While mid-end segment still dominated new launches, high-end segment reduced their market shares by 13% y-o-y as developers began to shift their attention to lower-end market. Robust infrastructure development and large land bank in the east and south of the city are supporting market momentum in these two areas. It is expected that the trend will be ongoing on the back of the city s master plan toward 22. DEMAND Considered as potential target customers, the employed population, especially those with stable income, will support housing purchases. It was estimated that the labour force in Ho Chi Minh City reached 4.1 million people in 215, making up more than 5% of the total population. The percentage of trained labour increased from 4% in 25 to 72.3% in 215, and was forecasted to reach 8% by the end of 216. Figure 9: Condominium, Primary Asking Price USD/sqm Luxury High-end Mid-end Affordable Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q Figure 1: Condominium, New Launches by Year 5, 45, 4, 35, 3, units 25, 2, 15, 1, 5, F 218F 219F Figure 11: Condominium, Sold Units by Segment and Year OUTLOOK While the majority of high-end condo buyers tend to be investors looking to rent out their units or speculators, real massive housing demand are in the mid-end and affordable condo segments. It is observed that condo projects with prices below USD9 (VND2 million) per sqm have received positive feedbacks from the market, and apartments size ranging from 6 9 square meters, with prices ranging from USD35.6 thousand to USD62.2 thousand (VND8 million to VND1.4 billion) per unit have captured attention. Therefore, it is expected that many developers will shift their condo development towards mid-end segment to meet the market demand. units Luxury High-end Mid-end Affordable F 218F 219F 217 Colliers International Research Accelerating Page success 12

13 Q4 216 HO CHI MINH CITY CONDOMINIUM Table 6: Condominium, Significant new projects launched in Q4 216 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Summer Square GotecLand Vietnam District Dream Home Palace The Global Group District Republic Plaza Thuy Duong - Duc Binh Tan Binh ,7 4 Thu Thiem Garden Thu Thiem Corp. District Sun Tower N.H.O Khang Viet. District S Linh Đông - block D Thanh Truong Loc Cu Chi Him Lam Phu An Him Lam Land District Grand Riverside - phase 2 Hong Ha Corp District ,55 9 Park Vista Đông Mekong Nha Be Citi Soho Kien A Group District New launches in Q ,887 * Excluding all kinds of tax, promotions and management fee The information is updated as at the end of Q Colliers International Research Accelerating Page success 13

14 Q4 216 HO CHI MINH CITY VILLA & TOWNHOUSE PERFORMANCE The villa and townhouse segment performed well in 216 with a number of successful projects such as Palm Residence, Ha Do Centrosa, Lakeview City or Melosa Garden. The transaction volume reached 2,2 dwellings, with a growth rate of 2% y-o-y. On the back of ongoing demand and improving market sentiment, new launched projects increased their primary average asking price to 13% y-o-y. Similarly, price on the secondary market was up 1% y-o-y. Figure 12: Villa and Townhouse, Selling Prices by Quarter USD/sq m District 7 District 9 District 2 Others SUPPLY Launches were limited in the last quarter of 216 with only two new projects coming online, adding 37 dwellings to the primary market, down 45% q-o-q. However, 216 is the year for landed properties when new launches reached 3, dwellings, up 4% y-o-y. The eastern part of the city including District 2 and District 9 has been capturing attention of developers thanks to its large available land bank, upgraded infrastructure and a long-term vision of urban planning. Figure 13: Villa&Townhouse, Supply by Year 12, 1, 8, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Existing supply New supply units 6, DEMAND In recent years, the acceleration of city infrastructure development such as Metro lines, Thu Thiem bridges, new ring roads has enhanced connectivity of suburban districts with the CBD. Shorter commuting times, better transportation system and green living environment are key factors that encourage buyers of landed properties in the city outskirt. Ongoing infrastructure projects will continue to support growing demand for villas and townhouses in the future. 4, 2, Figure 14: Villa and Townhouse, Primary Stock by District OUTLOOK Looking forward to 217, selling price is forecasted to grow but on a slower pace at approximately 4-5% y-o-y as new projects will target at lower-end market segments in less developed locations of the city. District 12 5% Binh Chanh 4% District 1 4% District 7 6% Thu Duc 4% Others 5% District 2 37% Sale transactions will be stable thanks to solid demand from both end-users and investors while future supply pipeline is expected to decline after the market reached its climax in 216. Nha Be 18% District 9 25% 217 Colliers International Research Accelerating Page success 14

15 Q4 216 HO CHI MINH CITY VILLA & TOWNHOUSE Table 7: Villa and Townhouse, Significant new projects launched in Q4 216 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Serenity Sky Villas SonkimLand District ,-6, 2 VX home center Van Xuan District ,3 3 Dragon Parc Phu Long Nha Be , 4 PhoDong Village SCC District ,5 5 Lucasta Khang Dien District New launches in Q Colliers International Research Accelerating Page success 15

16 Q4 216 HO CHI MINH CITY SERVICED APARTMENT PERFORMANCE In the last quarter of 216, the average net asking rent across both Grades recorded at USD33.9/sqm/month, up 2.6% q-o-q and 9.8% y-o-y. While Grade A saw a slight drop of 2% q-o-q in asking rent, staying at USD37.9/sqm/month, Grade B s rent experienced a remarkable growth of 9% compared to the previous quarter, achieving USD29.9/sqm/month mainly due to the opening of a serviced apartment in District 3. By location, the CBD continued to record the highest average rent due to good location in conjunction with sufficient amenities and facilities. The city s serviced apartment market remained healthy with relatively high occupancy rate, at 91%, marginally down 1ppt both on a quarterly and yearly basis. SUPPLY Currently, there are 37 serviced apartments of all grades providing about 3,335 units in HCMC, mainly in District 1, District 3 and District 7. The market s only new supply last quarter was the Oakwood Apartments HCMC located in District 3, expanding the total stock by 2% q-o-q. Developed by Sonkim Land, the property provides 68 units with the interior inspired from Saigonese architecture in the period of 195s-197s. In terms of location, the CBD continued to be the most favored destination, contributing 44% of total supply. Serviced apartment developments are also clustered in District 3 and District 7 thanks to their convenient locations and availability of services targeting foreigners. DEMAND Several years ago, serviced apartment used to be seen as a narrowed market segment targeting only expatriates. However, the segment has been expanded due to rising demand from Vietnamese tenants who want to enjoy the flexibility, privacy and independence offered by serviced apartments. Demand for serviced apartments is also being pushed upward as an increasingly mobile workforce drives business travel and relocation activity. It is expected that the positive economic outlook, coupled with an increasing number of expatriates coming to Vietnam promise higher demand for serviced apartments in the coming periods. OUTLOOK By the end of 217, there will be some 987 units from four projects coming online. One project is located in the CBD while the other three are in decentralized districts. As the fierce competition between serviced apartments and buy-to-let apartments in the city, rental prices across two grades of the market are forecasted to soften. Limited future supply will allow the sector to continue to enjoy high occupancy in the coming years. Figure 15: Serviced Apartment, Occupancy Rate % Figure 16: Serviced Apartment, Average Asking Rent by Grade USD/sqm/month Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Table 8: Serviced apartment, Significant Future Projects under construction Project name District Total units Expected Completion Ascott Waterfront Q1 217 Saigon Center (phase 2) 7 2 Q3 217 Oakwood Residence Saigon & Richmond Residence Q4 217 Berkley Serviced Residence 2 85 Q4 217 Grade A Grade A Grade B Grade B Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Colliers International Research Accelerating Page success 16

17 Q4 216 HO CHI MINH CITY SERVICED APARTMENT Table 9: Significant Serviced Apartment Projects No. Project Name Address Location Completion Year Total Room Average Occupancy ARR(*) (**) 1 The Landmark 5B Ton Duc Thang District % Sedona Suites 65 Le Loi District % Somerset Chancellor Court Nguyen Thi Minh Khai District % Nguyen Du Park Villas 111 Nguyen Du District % The Lancaster Bis Le Thanh Ton District % Intercontinental Asian Saigon 39 Le Duan District % 36. Grade A % Norfork Mansion Ly Tu Trong District % Saigon Sky Garden 2 Le Thanh Ton District % Somerset HCM 8A Nguyen Binh Khiem District % Diamond Plaza 34 Le Duan District % Garden View Court 11 Nguyen Du District % Ben Thanh Luxury Ky Con District % 2. 7 Lafayette De SaiGon 8 Phung Khac Khoan District % Vincom Center 45A Ly Tu Trong District % 2. 9 Nikko Saigon 235 Nguyen Van Cu District % Saigon City Residence 8A/3D2 Thai Van Lung District % Spring Court 1Bis Phung Khac Khoan District % 21. Grade B % 25.6 (*) US/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge 217 Colliers International Research Accelerating Page success 17

18 Q4 216 HO CHI MINH CITY INDUSTRIAL PERFORMANCE Rents remained relatively stable on quarterly basis but fluctuated on yearly basis. More specifically, the average asking rent stayed at USD138.3/sqm/term, recording a nominal increase of.2% compared to the previous quarter but a significant growth of 15% compared to the same period last year. The increase was mainly due to higher asking rent of some IPs. Since no new IP entered the market in the last quarter of 216, the average Land Use Right term was 35.8 years, unchanged q-o-q. The average occupancy rate was 67.5%, down 2.5 ppts q-o-q but up.5 ppts y-o-y. There are eight fully occupied IPs out of 19 existing IPs. Cu Chi district remained its lowest average occupancy rate of 42.3%, whilst 5 districts were reported to have occupancy rates of 1%, namely District 9, 12, 2, Tan Phu and Thu Duc districts. For a minimum leasable area from 1,-5,sqm, ready-built factories charge USD2.5 USD4./ sqm/month (excluding VAT and service charge). SUPPLY The existing stock was unchanged compared to the previous quarter with 19 operating IPs, covering a total area of nearly 3,94 hectares. The leasable area is estimated to be 71% of total land area with nearly 2,8 hectares. Binh Chanh district remained the largest supplier with 77 hectares, accounting for more than 26% of the market share, followed by Cu Chi and Thu Duc districts. Le Minh Xuan (phase 2 and 3), Vinh Loc I (phase 2 and 3), Vinh Loc III, Phong Phu in Binh Chanh, Tay Bac Cu Chi (phase 2) in Cu Chi, Hiep Phuoc (phase 2) in Nha Be are some IPs that are under construction and expected to coming on stream in the coming years. DEMAND The fact that TPP ratification was deferred after the US presidential election won by Republican Donald Trump has raised concerns about foreign investment into Vietnam. Obviously, the lack of TPP will negatively affect some future investment, particularly in export and manufacturing industries. However, it is believed that foreign inflows will continue to be strong. Firstly, the country s macro-economics are stable with average annual growth rate 6%. Secondly, the government offers favorable policies that would help to attract more investments from foreign investors. Thirdly, labor costs are expected to be low, about half of China s and not likely to fluctuate in the short or medium term. As a result, demand for industrial space is expected to rise in the near future. OUTLOOK The future pipeline will expand with approximately 2,8 hectares from 8 new IPs entering the market in the coming years, up approximately 6% from the current stock. There is a fact that development of previous industrial zones in Ho Chi Minh City did not take into consideration high speed of urbanization, and thus contributing to bad traffic situation of the City. Demand for transportation facilities between factories/ enterprises in IPs and ports/airports are forecasted to increase in conjunction with rising demand for industrial properties. Therefore, the City government is now planning a number of new transportation projects to improve the city s infrastructure, making Ho Chi Minh City s industrial market more attractive to international firms. Figure 17: Industrial, Market Performance by District USD/sqm/term District 9 District 12 Cu Chi Binh Chanh Nha Be District 7 Tan Phu District 2 Thu Duc Figure 18: Industrial, Supply by District Cu Chi 31% Average asking rent Others 19% Table 1: Industrial, Future Supply Industrial Park Name Occupancy rate Binh Chanh 19% Nha Be 2% District 9 11% 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 2 Vinh Loc Industrial Park III Binh Chanh 21.3 Tay Bac Cu Chi Industrial Park - phase 3 Cu Chi 1, Hiep Phuoc Industrial Park - phase 2 Nha Be 597 Phong Phu Industrial Park Binh Chanh % 9% 8% 7% 6% 5% 4% 3% 2% 1% % 217 Colliers International Research Accelerating Page success 18

19 Q4 216 HO CHI MINH CITY INDUSTRIAL Table 3: Significant Office Projects Table 11: HCMC Industrial Market Overview No Name of Industrial Park Location Distance to CBD (km) Total Area (ha) Total leasable area (ha) Asking Rent (US$/sqm/ term) Occupancy LUR Term 1 Tan Thuan Export Processing Zone District % Tan Binh Industrial Park(P1+2) Tan Phu % Saigon Hi-tech Park P1 District % Vinh Loc Industrial Park Binh Chanh % Binh Chieu Industrial Park Thu Duc % Tan Thoi Hiep District % Linh Trung 2 Export Processing Zone Thu Duc % 25 8 Tan Tao Industrial Park 1 Binh Chanh % Tan Tao Industrial Park 2 Binh Chanh % 25 1 Linh Trung 1 Export Processing Zone Thu Duc % Le Minh Xuan Industrial Park Binh Chanh % Hiep Phuoc Industrial Park 1 Nha Be % Cat Lai Industrial Park (Cluster II) District % Hiep Phuoc Industrial Park 2 Nha Be % An Ha Industrial Park Binh Chanh % Dong Nam Industrial Park Cu Chi % Tay Bac Cu Chi Industrial Park Cu Chi % Tan Phu Trung Industrial Park Cu Chi % Automotive-Mechanical (Hoa Phu) Industrial park Cu Chi % 257 Total 3,916 2, % 217 Colliers International Research Page 19

20 Q4 216 HA NOI OFFICE PERFORMANCE The last quarter of 216 witnessed a fall in rents across all grades due to continued oversupply, staying at USD22.5/sqm/ month, down 1.7% q-o-q. Average net asking rent of Grade A declined 3% q-o-q to USD27.2/sqm/month while Grade B s rent remained relatively static at USD17.9/sqm/month. Average occupancy rate continued to show a downward trend because of an oversupply, standing at 78.7%, which was a decline of 4.5 ppts q-o-q. Grade A s occupancy rate was down 3 ppts to 8% while Grade B experienced a significant decrease of 6 ppts q-o-q, staying at 78%. The diminishing trend in both rents and occupancy rates is expected to continue in 217 since a huge gap exists between supply and demand in Hanoi s office marke. SUPPLY The last quarter of 216 recorded no new supply entering the market. The capital city currently has approximately 41, sqm NLA of Grade A and 77,sqm NLA of Grade B office buildings. On a yearly basis, the city saw a surge in supply in both Grade A and Grade B buildings with growth rates of nearly 14% y-o-y and 5% y-o-y, respectively. Despite an existing oversupply, it is predicted that a large amount of additional supply would be coming in the future as many office projects which were due for completion in 216 rescheduled their construction progress for 217. DEMAND Recently, the Federal Reserve decided to raise its key interest rate by a quarter point, which is forecasted to widely affect the global economy. Theoretically, once US rates rise, global investors are more likely to move their money out of emerging markets like Vietnam and back to less risky countries like US. Nevertheless, in the short and medium run, this small change will not be enough to dramatically affect capital flows, suggesting that the impact on property market and demand for office space as well will be limited. Economic recovery, coupled with improvements in business environment in previous years are expected to fuel the demand for establishing a new office or expanding current premises of foreign and domestic enterprises, proving a supportive landscape for the office market in Hanoi in the upcoming period. OUTLOOK By 217, the capital city s office market will welcome 8 new projects which are currently under construction, providing approximately 331,122 sqm of new space. Given the huge pipeline, the office market in Hanoi will remain as the tenantoriented market, indicating that rental rates will maintain their downward trend in the coming years. As rents and vacancy rates are continuing to come down, we will see tight competition between landlords in CBD and non-cbd areas. In order to attract more tenants, property owners need to apply appropriate marketing and pricing strategy as well as to maintain their properties with good management services. Figure 19: Office, Average Asking Rent US$/sqm/month Figure 2: Office, Occupancy Rate 1% 95% 9% 85% 8% 75% 7% 65% 6% 55% 5% Table 12: Office, Future Supply Project name Grade A Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Grade A Grade B Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Grade NLA (sqm) Expected completion Horison Tower B 8, Q1 217 Discovery Complex B 93,32 Q2 217 Comatce Tower B 43,1 Q2 217 Eurowindow Building B 16,592 Q3 217 Vinacomin Tower B 13,1 Q4 217 DSD Building B 6,86 Q4 217 Handi Resco Tower B 24,19 Q4 217 FLC Twin Tower B 35,96 Q Colliers International Research Accelerating Page success 2

21 Q4 216 HA NOI OFFICE Table 13: Significant CBD Office Projects No Name Address Completion Year NLA (sqm) Service Charges (*) Occupancy rate Average asking rent (**) 1 Central Building 31 Hai Ba Trung , % International Centre 17 Ngo Quyen ,5-9% Hanoi Tower 49 Hai Ba Trung , - 1% Ly Thai To Building 63 Ly Thai To ,753 included 1% Sun Red River Building 23 Phan Chu Trinh , % Vietcombank Tower 198 Tran Quang Khai 2 19,563 included 1% Opera Business Centre 6 Ly Thai To 27 3,787 included 98% Pacific Palace 83B Ly Thuong Kiet 27 16, % Asia Tower 2 Nha Tho 27 3, % Sun City Building 13 Hai Ba Trung 27 6,4-1% BIDV Tower 194 Tran Quang Khai 21 1, % Sentinel Place Hang Da 21 8, % Corner Stone 16 Phan Chu Trinh , % Hong Ha Center 25 Ly Thuong Kiet , 5. 93% 2. Grade A 144, % Tungshing Square 2 Ngo Quyen , % Melia Hotel 44B Ly Thuong Kiet ,5-9% Prime Centre 53 Quang Trung ,6-1% VIB Hai Ba Trung 59 Quang Trung 26 3, - 68% Capital Tower 19 Tran Hung Dao 21 21, % Hanoi Tourist Building 18 Ly Thuong Kiet 21 7,6-1% Capital Building 72 Tran Hung Dao 213 5,8-1% Coalimex Building 33 Trang Thi 213 5, % VID Building 115 Tran Hung Dao 213 4,93-89% Artex Port Ngo Quyen 214 4,725-1% 23 Grade B 76, % 28.6 (*) US$/sqm/month (NLA) 217 Colliers International Research Page 21

22 Q4 216 HA NOI RETAIL Table PERFORMANCE 3: Significant Office Projects Average net asking rents in 216 dropped 5% y-o-y, staying at USD38/sqm/month. While rents of the CBD recorded a nominal rise by 2% y-o-y, reaching USD81/sqm/month, those of non-cbd declined 6% y-o-y, staying at USD3/sqm/month. Due to weak purchasing power and considerable new supply, retail centers in Hanoi are suffering from increasing vacancy space. Average occupancy rates in 216 decreased 2%, staying at 87% across all segments. SUPPLY In Q4 216, three new retail centers, Vincom Center Pham Ngoc Thach, Vincom Plaza Bac Tu Liem and Trang An Complex entered the market, providing an additional 64,5sqm GFA. With a prominent retail mix of shopping, entertainment and F&B services, Vingroup has expanded its network across the capital city through its 6th and 7th shopping mall. Trang An Complex includes 1,5sqm GFA of retail space which has been fully occupied. After eight years of operation, Parkson Viet Tower was closed in December 216, withdrawing 11,sqm GFA. With the closure of two department stores within a two-year period, Parkson officially decided to leave Hanoi. Figure 21: Retail, Market Performance Rental rate Occupancy 1% 95% 9% 85% 8% 75% Figure 22: Retail, Total Supply CBD Non-CBD 8, 7, 6, 5, US$/sqm/month DEMAND According to a recent survey in Vietnam by Nielsen, as of Q3 216, Consumer Confidence Index in Viet Nam remained strong at 17 points, unchanged from the previous quarter and stayed among the top 1 most optimistic globally. Compared to neighboring countries, Vietnam s consumer confidence level ranked fourth out of six South East Asia countries, lagging behind the Philippines, Indonesia and Thailand, while other regional peers experienced below 1 points over the same period. The continued strong consumer confidence index may have positive impacts on retail sales and in turn spur demand for retail space in Hanoi. OUTLOOK There are a number of developments which were under construction, or being proposed, which include quality retail facilities that will provide more shopping centres over the coming years. A steady supply of new developments is expected to enter the market from 217 onwards, and overall the long-term outlook is positive on the back of improved economic growth and benefits from the liberalization of retail sector under conditions of Vietnam s WTO membership and the recent participation in the Trans-Pacific Partnership. sqm 4, 3, 2, 1, Table 14: Retail, Future Supply Project Name District GFA (sqm) Expected completion Horizon Tower Tu Liem 6,719 Q1 217 Discovery Complex Cau Giay 38,144 Q2 217 Ecolife Capital Nam Tu Liem 2, Q3 217 Artemis Thanh Xuan 27, Q3 217 Loc Ninh Singashine Chuong My 14,8 Q4 217 FLC Twin Towers Cau Giay 25, Q4 217 Handi Resco Thanh Xuan 4,769 Q4 217 Eco Green City Hoang Mai 7, Q Colliers International Research Accelerating Page success 22

23 Q4 216 HA NOI RETAIL Table 15: Significant Retail Projects No Name of Project / Building Address Location Completion Year NLA (sq m) ARR (*) Occupancy Rate 1 Central Building 31 Hai Ba Trung Hoan Kiem % 2 Hanoi Tower 49 Hai Ba Trung Hoan Kiem , % 3 63 Ly Thai To Building 63 Ly Thai To Hoan Kiem % 4 ICC Building 71 Nguyen Chi Thanh Dong Da 26 2, % 5 Pacific Place 83b Ly Thuong Kiet Hoan Kiem 27 2,3 72 1% 6 Opera Business Center 6b Trang Tien Hoan Kiem % 7 Asia Tower 6 Pho Nha Tho Hoan Kiem % 8 Sentinel Place 41A Ly Thai To Hoan Kiem % 9 Sky City Tower 88 Lang Ha Dong Da 21 5, % 1 The Lancaster Hanoi 2 Nui Truc Ba Dinh 213 3, % 11 Madarin Garden Residential 1 Hoang Minh Giam Cau Giay , % Retail Podium 29,88 92% 1 Vincom Center Ba Trieu - Tower A&B 191 Ba Trieu Hai Ba Trung 24 17, % 2 Vincom Center Ba Trieu - Tower C 191 Ba Trieu Hai Ba Trung 24 1, % 3 Ruby Plaza 44 Le Ngoc Han Hai Ba Trung 27 2, % 4 Syrena 51B Xuan Dieu Tay Ho 28 4, % 5 Trang Tien Plaza 24 Hai Ba Trung Hoan Kiem 28 12, 1 85% 6 Savico MegaMall 7-9 Nguyen Van Linh Long Bien , % 7 Vincom Center Long Bien KDT Vincom Long Bien , 2 7% 8 Indochina Plaza Hanoi 241 Xuan Thuy Cau Giay , 27 97% 9 Vincom Mega Mall - Royal City 72A Nguyen Trai Thanh Xuan , % 1 Vincom Mega Mall - Time City 458 Minh Khai Hai Ba Trung ,95 5 1% 11 Aeon Mall Long Bien 2 Co Linh Long Bien , 45 1% 12 Vincom Nguyen Chi Thanh 54A Nguyen Chi Thanh Dong Da , % Shopping Centre 539,322 97% 1 The Garden (Bitexco) Me Tri Tu Liem 27 24, % 2 Ho Guom Plaza Ha Dong Ha Dong , % 3 Lotte Department Store 54 Lieu Giai Ba Dinh , % Department Store 68,923 94% (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT 217 Colliers International Research Accelerating Page success 23

24 Q4 216 HA NOI CONDOMINIUM PERFORMANCE The year 216 recorded 2,9 successful transactions across all segments, down 1.9% compared to the previous year. Mid to high-end segments dominated sales with 9,7 and 6,8 sold units, accounting for 46% and 32% of market share respectively. Price growth on the primary market was at 3-5% y-o-y on average. Prices in high-end segments registered the strongest growth at 9% y-o-y while those in mid-end and affordable segments were static at 2% and 1% growth on yearly basis. SUPPLY The total number of newly launched units in 216 reached approximately 3, which were lower 1% than those of 215. By segment, mid-end and high-end segment recorded the highest number of new launches with more than 8% of total new supply. The luxury segment was revived with two new projects in the Westlake while the affordable segment significantly decreased in its stock. Large land bank and upgrading infrastructure enabled the West and South West to provide largest supply among other areas of the city. Figure 23: Condominium, Primary Sale Price US$/sqm Luxury High-end Mid-end Affordable $8, $7, $6, $5, $4, $3, $2, $1, $ Figure 24: Condominium, New Launches by Year 4 35 DEMAND Hanoi currently has a population of approximately 7.5 million, comprising 12.2% of the whole nation s population of 91.7 million people. The population growth rate is proportionally high compared to the country average of 1.7% between 21 and 215. The number of residents in the city is forecasted to continue to rise at a constant rate to an estimated figure of 7.9 million at the end of 22. Steady population growth is the main driver of the condominium market in the city. units F 218F 219F OUTLOOK Vingroup, a leading property developer, recently unveiled Vin City, a brand-new project aimed at providing affordable apartments in seven major cities and provinces throughout the country. To meet the demand of middle and low income buyers, more developers in Hanoi have begun to tap into this potential market segment. It is expected that the shortage of affordable housing will be resolved in coming years. Figure 25: Condominium, Sold Units by Segment and Year units Luxury High-end Mid-end Affordable 25, 2, 15, 1, 5, Colliers International Research Accelerating Page success 24

25 Q4 216 HA NOI CONDOMINIUM Table Table 3: 16: Significant Condominium, Office New Projects projects launched in Q4 216 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Tu Hiep Plaza Vinh Hanh Corp Thanh Tri Anland Complex Nam Cuong Corp Ha Dong ,1 3 Roman Plaza Hai Phat Corp Ha Dong , 4 The Legend Nguyen Tuan Dai Viet Tri Tue Thanh Xuan ,52 5 Sunshine Garden Sunshine Group Hai Ba Trung 217 1,278 1,15 6 Sunshine Boulevard Sunshine Group Thanh Xuan ,4 7 Sunshine Center Sunshine Group Nam Tu Liem ,3 8 Sunshine Riverside Sunshine Group Tay Ho ,6 9 Ha Noi Paragon VT Corp Cau Giay ,4 1 Sunshine Palace Sunshine Group Hoang Mai ,2 11 D.Capitale - C1, C6 Tan Hoang Minh Cau Giay 218 1,8 1,85 12 D.Eldorado 1 Tan Hoang Minh Tay Ho ,7 13 D.Eldorado 2 - Phu Thanh complex Tan Hoang Minh Tay Ho ,6 14 Rivera Park Long Giang Land Thanh Xuan ,25 15 The Golden Palm HDIS Nam Tu Liem ,5 16 An Bình City - block A2 Geleximco Thanh Xuan , 17 Legend Park VIG Nam Tu Liem ,8 New launches in Q ,556 * Excluding all kinds of tax, promotions and management fee The information is updated as at the end of Q Colliers International Research Page 25

26 Q4 216 HA NOI VILLA & TOWNHOUSE PERFORMANCE Thanks to improved year-end sentiment, the last quarter of 216 witnessed the highest transaction volumes in two years with more than 75 successful deals, up 129% compared to the previous quarter. By type of property, townhouses dominated sales activities with 64% of total transactions. Tu Liem and Ha Dong took the lead with nearly 5% of sales owning to their large land availability. Market secondary price saw a decrease of 2% q-o-q and 3% y-o-y, averaging at USD3,238.6 for completed properties. Cau Giay District had the highest average price, up 4.2% q-o-q. Meanwhile, most of other districts recorded a decline in price on the secondary market. SUPPLY The supply pipeline in the last quarter of 216 saw approximately 37 dwellings from 5 projects coming to the market. Ha Dong, Nam Tu Liem and Bac Tu Liem Districts were the dominant contributors, cumulatively accounting for more than 8% of the market share. Townhouse was the most popular product with 275 units, accounting for nearly 75% of total newly launched supply. Some of notable launches in Q4 216 were Belleville, Foresa Villa, Mai Son Du Parc and 24h Van Phuc. Figure 26: Villa and Townhouse, Supply by quarter units 36, 35, 34, 33, 32, 31, 3, 29, 28, 27, 26, Units Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q No. of Projects Figure 27: Villa and Townhouse, Supply by District Cau Giay 18% Ha Dong 31% No. of projects DEMAND While pricing is the most determinant element for buyers in affordable segment, the villa and townhouse segment targets affluent customers who initially focus their spending on improving living conditions. With the growing middle and affluent class in Vietnam, the demand for landed properties is expected to be on the rise. In addition, landed property is considered as an investment vehicle, which ensures the highest profitability possible and protects investors assets against currency devaluation. The preferred choice of landed housing among Vietnamese people is also supporting the segment. Bac Tu Liem 25% Figure 28: Villa and Townhouse, Q-o-Q changes in secondary price Market Average Price Q4 215 Nam Tu Liem 26% Q-o-Q changes OUTLOOK Given the current construction status, the market will see 8 projects coming online, providing some 268 units in the next coming years, with the number of townhouses expected to dominate the market share. The villa and townhouse performance in the Hanoi City market is predicted to remain strong in the short term owning to the positive sentiment in both demand and supply. Thanks to better land availability, landed property projects tend to be developed in suburban districts. The success of these projects is closely linked to infrastructure development. USD/sqm Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % 217 Colliers International Research Accelerating Page success 26

27 Q4 216 HA NOI VILLA & TOWNHOUSE Table 3: 17: Significant Office new projects Projectslaunched in Q4 216 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Roman Plaza Hai Phat Tu Liem , 2 24h Van Phuc Hai Phat Ha Dong ,3 3 Foresa Villa Tasco Nam Tu Liem ,4 4 Belleville Vimedimex Group Cau Giay ,2 5 Mai Son Du Parc Geleximco Bac Tu Liem ,2 New launches in Q * Excluding all kinds of tax, promotions and management fee The information is updated as at the end of Q Colliers International Research Accelerating Page success 27

28 Q4 216 HA NOI SERVICED APARTMENT Table PERFORMANCE 3: Significant Office Projects The market in the capital city saw a slight increase of 1ppt q-o-q in the average occupancy rate, staying at 85%, but also witnessed a slight decrease of 2% q-o-q in average rental rates, staying at USD26.1/sqm/month. On a yearly basis, the city s average occupancy rate remained unchanged, whilst the decline of average rental price was about 3.3%, equivalent to a drop of USD.9/sqm/month. By segment, Grade A s rent stayed unchanged q-o-q, at USD32/ sqm/month and its occupancy rate dipped slightly by 1ppt, at 84%. Grade B dropped 5% q-o-q in rents but climbed 3.5ppts in occupancy rates, staying at 84% and USD2.2/sqm/month respectively. SUPPLY The market, with no new supply last quarter, has 41 buildings providing 2,2 serviced apartments from studios to four-bedroom units and penthouses. By type of apartments, two-bedroom units continued to dominate the market share with more than 5% of total supply. The asking rent of this type of apartments usually falls into a range of USD1,6-USD2, per unit. In terms of location, Ba Dinh District was the largest source of supply in Hanoi serviced apartment, accounting for 28% of all units in the market, followed by Tay Ho District with 24% of total supply. DEMAND Serviced apartments can be seen as hybrid properties filling the gap between leased residences and hotel rooms as they offer flexibility, modern conveniences and value-added services to tenants. According to the General Statistics Office, the annual growth rate of international visitors to Vietnam is about 2% per year. The fact that serviced apartments are now more preferred by travelers as opposed to hotels due to their additional space and amenities will push upward pressure on demand for this sector. Figure 29: Serviced Apartment, Average Asking Rent by Grade USD/sq m/month Figure 3: Serviced Apartment, Current Grade A&B supply units ,5 4, 3,5 3, 2,5 2, 1,5 1, 5 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Table 18: Serviced Apartment, Future Supply Project Name Grade A Grade A Grade B Grade B District Expected units Expected completion Trang An Complex Cau Giay 42 Q1 217 OUTLOOK In the near to medium term, the market will see further supply expansion as developers rush to meet the high demand. There will be 571 units coming on stream in the next two years from one project located in Tay Ho District and the other two located in Cau Giay District. The facts that buy-to-let trend is becoming more popular and some hotels are converting part of them into serviced apartments will create more pressure on serviced apartment market, resulting in a more competitive playing field going forward. Somerset West Point Tay Ho 247 Q1 217 Somerset West Central Hanoi Cau Giay Colliers International Research Accelerating Page success 28

29 Q4 216 HA NOI SERVICED APARTMENT Table Table 3: 19: Significant Office Serviced Projects Apartment Projects No. Project Name Address Location Total Units Average Occupancy ARR(*) (**) 1 Hanoi Daewoo 36 Kim Ma Ba Dinh % Hanoi Somerset Grand 49 Hai Ba Trung Hoan Kiem 185 7% 3. 3 Sedona Suites 96 To Ngoc Van Tay Ho 181 9% Somerset West Lake 254D Thuy Khue Tay Ho 9 82% Sofitel Plaza 1 Thanh Nien Ba Dinh 56 1% Sun Red River 23 Phan Chu Trinh Hoan Kiem 46 96% Hanoi Lake View 28 Thanh Nien Tay Ho 26 1% Pacific Place 83B Ly Thuong Kiet Hoan Kiem 35 55% Intercontinental Ha Noi 13 Nghi Tam Tay Ho 25 88% Somerset Hoa Binh 16 Hoang Quoc Viet Cau Giay 26 87% Fraser Suites Hanoi 51 Xuan Dieu Tay Ho % Crown Plaza 36 Le Duc Tho Tu Liem % Calidas E6, Pham Hung Tu Liem % Lotte Center Dao Tan, Cong Vi Ba Dinh % Hanoi Club 76 Yen Phu Tay Ho 54 96% 29. Grade A 2,54 89% Oriental Palace 33 Tay Ho Tay Ho 59 88% 3. 2 Pan Horizon 157 Xuan Thuy Cau Giay 86 8% 3. 3 Rose Garden 17 Ngoc Khanh Ba Dinh 96 91% Jana Garden Terrace 6 Kim Dong Hoang Mai 72 83% 2. 5 V-Tower 649 Kim Ma Ba Dinh 36 1% DMC Lake View 535 Kim Ma Ba Dinh 66 82% Atlanta 49 Hang Chuoi Hai Ba Trung 5 92% Elegant Suites Hahoi 19B Ha Hoi Hoan Kiem 39 92% Hoa Binh Green No. 14, Ally 376 Buoi Ba Dinh 4 92% Times City 485 Minh Khai Hai Ba Trung 15 85% Royal City 72 Nguyen Trai Thanh Xuan 1 7% My Way 4, Alley 86, Duy Tan Cau Giay 39 93% Rainbow 7 Trieu Viet Vuong Hai Ba Trung 26 88% Dolphin 28 Tran Binh Tu Liem 7 93% Lancaster Hanoi 2 Nui Truc Ba Dinh 31 9% Elegant Suites Westlake 1C Dang Thai Mai Tay Ho % May Fair 34B Tran Phu Ba Dinh 48 95% Hanoi Lakes Residences Nam Trang Ba Dinh 1 1% Skyline Tower 4 Dang Dung Ba Dinh 79 8% 3. 2 Candle Hotel Doi Can Ba Dinh 69 74% Park View 9 Nguyen Binh Khiem Hai Ba Trung 6 1% Flower Village Hanoi 14 Thuy Khue Tay Ho 131 9% Palace de Thien Thai 2 Tho Nhuom Hoan Kiem 16 98% The City Residences 37 Phan Dinh Phung Ba Dinh 15 67% Swan Lake 3/61/31 Xuan Dieu Tay Ho 6 99% Lakeside Garden 56 Xuan Dieu Tay Ho 8 62% 14. Grade B 1,479 87% 22.6 (*) US/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge 217 Colliers International Research Accelerating Page success 29

30 Q4 216 HA NOI INDUSTRIAL PERFORMANCE Rental rates in Hanoi are generally lower compared to Ho Chi Minh City. Average asking rent in Q4 216 surged 2% on a yearly basis but remained stable on a quarterly basis, recorded at USD99.5/sqm/term. Remaining lease term is from 3-45 years. Nam Thang Long industrial park offered the highest asking rent at USD155/sqm/term. In spite of such a high rental rate, the 261ha industrial park was fully occupied. Rents of ready-built factory in Hanoi is USD /sqm/month,approximately 4% lower than those of Ho Chi Minh City. The average occupancy rate increased by 15ppts on both quarterly and yearly basis, reaching 77.3%. There are five out of 11 IPs fully occupied, namely Nam Thang Long, Phu Nghia 1, Sai Dong B, Thach That-Quoc Oai and Thang Long. Tu Liem and Long Bien are two districts in which IPs were 1% leased out. Figure 31: Industrial, Market Performance by District USD/sqm/term Tu Liem Soc Son Chuong My Average asking rent Me Linh Long Bien Occupancy rate Thach That Dong Anh Phu Xuyen 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % SUPPLY The total stock was unchanged compared to the previous quarter as there was no new supply in Q Currently there are 11 operating IPs in Ha Noi, covering total land area of over 2,7 ha. Chuong My, Thach That, Dong Anh districts are main suppliers to the market, comprising of approximately 54% of the market share. Figure 32: Industrial, Supply by District Others 32% Chuong My 15% Thach That 25% DEMAND Japan, China and Hong Kong are three leading investors at Hanoi s IPs, focusing on supporting industries, mechanical technology and electronics. The recent US interest rate hike is expected to bring some negative effects on foreign investment to emerging markets like Vietnam. However, with such a small change, this impact on capital inflows will be insignificant in the short run. Foreign manufacturing firms will continue to expand their operation and set up their factories in the country on the back of relative low labor costs and young dynamic workforce. Hence, demand for industrial properties in the coming years will continue to be strong. Dong Anh 28% Table 2: Industrial, Future Supply Industrial Park Name District GFA (ha) Quang Minh II Industrial Park Me Linh 266 Phuc Tho Industrial Park Phuc Tho 74 OUTLOOK The future IP supply in Ha Noi is relatively higher than in HCM City. By 22, it is estimated to have 14 new IPs, with about 6,1 ha of total land area, equivalent to a 25% increase against the current number. Recently, Ha Noi s government has agreed to switch functions and implement the relocation plan for many IPs in order to deal with the environmental pollution. As only 6% of industrial parks have wastewater treatment systems, most of wastewater is discharged directly into the environment. Thus, heavy metal concentrations in soil in some villages have exceeded the allowed standards. It is crucial that the establishment of industrial parks should pay attention to environmental issues sustainable development. Phu Xuyen Industrial Park Phu Xuyen 488 Thanh My - Xuan Son Industrial Park Son Tay 18 Soc Son Industrial Park Soc Son 34 Soc Son II Industrial Park Soc Son 24 Soc Son III Industrial Park Soc Son 18 Soc Son IV Industrial Park Soc Son 216 Thanh Oai II Industrial Park Thanh Oai 48 Habeco Industrial Park Thuong Tin 3 Ha Noi Hi-BioTech Park Tu Liem Colliers International Research Page 3

31 Q4 216 HA NOI INDUSTRIAL Table Table 3: 21: Significant Hanoi Industrial Office Projects Market Overview No. Name of Industrial Park Location Distance to CBD (km) Total Area (ha) Asking Rent (US$/sqm) Occupancy LUR Term 1 Nam Thang Long Tu Liem % Noi Bai Soc Son % Phu Nghia 1 Chuong My % Phu Nghia 2 Chuong My % Quang Minh Me Linh % Sai Dong B (Phase I&II) Long Bien % Thach That Thach That % Thang Long Dong anh % Hanssip (phase 1) Phu Xuyen % 26 1 Hoa Lac Hi-Tech Thach That % Dong Anh Dong Anh % 257 Total 2, % 217 Colliers International Research Page 31

32 VIETNAM RESEARCH & FORECAST REPORT About Colliers International 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. 52 offices in 67 countries on 6 continents With more than 1 professionals in 2 offices in Vietnam, the team is market driven and has proven and successful track record with both international and local experience. From Hanoi to Ho Chi Minh City, we provide a full range of real estate services The foundation of our services is the strength and depth of our experience. $2.3 billion in annual revenue 158 million square meter under management 16,3 professionals and staff COLLIERS INTERNATIONAL VIETNAM HO CHI MINH CITY 18HBT Building, 4th floor Hai Ba Trung Street, Ben Nghe Ward, District 1 HCMC, Vietnam Tel: HANOI Room A52, 5th Floor 68 Nguyen Du Street, Hai Ba Trung District, Hanoi, Vietnam Tel: Publication Coverage Frequency Content Availability Knowledge Report/ Market Insights Asia Pacific Office Report Vietnam Property Market Report Development Recommendation Vietnam Cities Quarterly All market sectors Publicly available Asia Pacific including Vietnam Quarterly Office market Publicly available Vietnam cities Quarterly All market sectors On subscription Vietnam cities At request All market sectors On subscription For further information, please contact us: DAVID JACKSON General Director david.jackson@colliers.com HA VO Research Manager ha.vo@colliers.com This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved. 217 Colliers International Research Accelerating success