HCMC Quarterly Report Q4/2012 Review and 2013 Outlook

Transcription

1 Market Insights from CBRE HCMC Quarterly Report Q4/2012 Review and 2013 Outlook Presented by: Dung Duong Senior Manager CB Richard Ellis (Vietnam) Co., Ltd. Tuesday, January 3, 2012

2 VIETNAM ECONOMY B R I G H T S I D E 20 Y-o-y Growth (%) in FDI realisation ODA disbursement Export Import Retail Sales and Services Overseas Remittance Int'l Arrivals -10 Source: General Statistics Office CPI ended at 6.8%, better than target of 8%, thanks to the tightening policy. Government s success in keeping price pressure down opens the door for monetary easing Base rate unchanged while rediscounting and refinancing rate are cut 1% further. Deposit interest rate cap decreased by 1% to 8% in an attempt to lower lending costs by reducing banks financing costs Trade balance posted a first year of surplus in the last 20 years. Many economic indicators saw an y-o-y growth of 2% to 18.3% except for FDI realisation. 2 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

3 VIETNAM ECONOMY C O N C E R N I N G GDP reached only 5.03%, lower than target of 5.5%. FDI disbursement drop by 5% y-o-y unavoidable in the midst of gloomy economy, both locally and internationally. Bad debts reached VND250 trillion, equal to 8.83 % of total debt (source: SBV) as a result of too high credit growth in VNIndex saw a downward trend from May to Nov but moved out of the trend in Dec as investors regained confidence on risky assets thanks to releases of better-than-expected CPI, trade balance, interest rates cut and sealed M&A deals between Vietnam s largest enterprises and strategic foreign investors. 3 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

4 HCMC OFFICE MARKET Q 4 M A J O R E V E N T S Grand opening of An Phu Plaza Launched date: 22st Nov, 2012 Developer: An Phu Corporation Offered office space: 10,905 sm GFA At the press time, 50% of office space has been leased out. Lim Tower, District 1 An Phu Plaza, District 3 Lim Tower is one of few projects that is fast approaching toward completion At the press time, about 60% total office space has been committed The building is estimated to complete in Q2/ CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

5 Net Vacant Space (sm) Average Asking Reent US$ psm per month HCMC OFFICE MARKET Q 4 H E A D L I N E S As stock has been absorbed gradually, average asking rent in both Grade A and B markets increased slightly. Vacant Space and Average Asking Rent Grade A & B 200,000 $26 150,000 $24 100,000 $22 The market-wide asking rent rose to US$21.2 psm per month, an increase of 1.5% q-o-q. 50,000 0 $20 $18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Vacant Space Asking Average Rent Asking Rent 5 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

6 HCMC OFFICE MARKET Q4 R E V I E W Rent increased softly Market continued to show the signs of bottoming as expected in the previous quarter. On average, the asking rent across both Grade A and Grade B increased nearly 2% Mature Grade A buildings held firm rents while younger ones started to increase their asking rent as their vacant space becoming limited. Grade B asking rent continued its soft upward trend in Q4; however at a slower increasing pace (by 0.8% q-o-q, much lower than the recorded number of 1.4% q-o-q in Q3), due to new supply in the review quarter. Vacancy reduced gradually Average vacancy rate for both Grade A and B slide to 12.7 % in Q4, a drop of 0.6 percentage points q-o-q. Demand came from new entrants, company expansion and relocation Pharmaceutical, legal, and oils & gas still enjoyed wealthy budget and played a major role in driving demand for new office spaces. Tendency of integrating offices in different locations into one location (as one anchor tenant) in order to save cost. 6 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

7 HCMC OFFICE MARKET 2013 F U T U R E S U P P L Y Target Handover Q1/2013 Q2/2013 President Place D1 Empress Tower D1 Times Square D1 Lim Tower D1 Le Meridien D1 Grade A Grade B Grade A Grade A Grade A Area: 9,100 sm NLA Area: 19,537sm NLA Area: 12,704 sm NLA Area: 22,000 sm NLA Area: 9,125 sm NLA 7 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

8 HCMC OFFICE MARKET O U T L O O K Given new launches of Empress Tower, President Place and Times Square, average asking rent in either Grade A or Grade B segment will not be able to maintain their upward trend in next few quarters 2013 is still the year of tenants New supply mostly comes from delayed projects which construction has been renewed rather than from newly invested projects. The market will not experience any significant movement in average rental rate as what happened in the period Pharmaceutical, education, legal and oil & gas continue to be the most active groups of tenant in the market. To retain the tenant lists, most landlords will provide higher incentives level rather than lower their rental rate. More tenant-benefits will be considered including longer fit-out period, free/reduce parking fee and more flexible leasing terms and conditions, discount for upfront payment, etc. 8 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

9 HCMC RESIDENTIAL FOR SALE Q 4 / M A J O R E V E N T S December 2012 Star Hill (Phase 2) launched in Phu My Hung NUA. October 2012 Hoang Anh Thanh Binh apartment developed by Hoang Anh Gia Lai launched in District 7. October 2012 My Phu 3 villa in Phu My Hung NUA officially launched. 9 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

10 HCMC RESIDENTIAL MARKET C O N D O M I N I U M S U P P L Y Condominium Launch by Year 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, Source: CBRE Condominium Completed by Year 10,000 8,000 6,000 4,000 2, Source: CBRE Q Q Q Q NEW LAUNCH: kept decreasing Q4 /2012: 18.5% q-o-q; 16.1% y-o-y to 893 units; 2012: 72.8% y-o-y to 3,441 units; Mid-end segment: 57.8% of new launches in Q4; Others launches from already launched projects: Leman CT Plaza, Sunrise City, Investco Babylon, Au Co Tower, Harmona, 27 Truong Chinh, Ehome 3; Stagnant market discouraged new developments; Developers refreshed projects by nominating trading floors for launching/ marketing; NEW COMPLETION: Q4/2012: 9.0% q-o-q; 14.1% y-o-y to 2,718 units; Mid-end segment made up the majority 56.7%; Slow construction progress owing to lack of capital; 2012: 17.2% y-o-y to 9,508 units; Results of completion delays in previous years; Managed to complete to attract buyers. 10 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

11 HCMC RESIDENTIAL MARKET C O N D O M I N I U M P R I C E Condominium Asking Price Change (q-o-q change) Source: CBRE Luxury High-end Mid-end Affordable 5% 2% -1% -4% -7% -10% Unsold Units 30,000 25,000 20,000 15,000 10,000 5,000 0 Source: CBRE PRICES: Decreased across all segments but NOT DIRECTLY as Q3: Price reductions through promotion, giving voucher, overseas holidays, gold, lending rate support, discount on upfront payment ; MARKET SENTIMENT Concerned about partial construction, pushing developers to continue construction; Pushing for best pricing causes developers and secondary bulk buyers to slash prices; Most transactions at mid-end and affordable segments true end-users; In the upper market: Most transactions at branded property good quality, from well-known developers: Star Hill (P1): over 70%; Star Hill (P2): ~60% out of units launched; Currently, HCMC has ~28,000 unsold units 11 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

12 HCMC RESIDENTIAL MARKET L A N D E D P R O P E R T Y Q4 R E V I E W Villa & Townhouse Supply by Year Launched Completed Source: CBRE Villa & Townhouse Completion by District District 7 District 9 District 2 Thu Duc District Others Branded property remained a bright spot: Projects developed by well-known developer and located in prime location still attracted buyers; My Phu 3 launched by Phu My Hung Corp. in early Q and sold rate reported over 70%; CT Group introduced its golf villas at the CT Sphinx project in Cu Chi District; Eastern districts (District 9 and Thu Duc) continued to be silent; A price reduction of 50%-60% q-o-q for selected units at a villa project in Thu Duc District; No new completion reported; Challenges ahead, esp. those at less attractive location; Source: CBRE 12 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

13 HCMC RESIDENTIAL MARKET O U T L O O K Unlikely to have significant turnaround in 2013 despite the Government s efforts to rescue the property market; Finance to continue being developers / investors major challenges; Price discounts with conditions to be continuing; Delayed completions and transferring projects expected to continue throughout the year; Expected major condominium launches in 2013: Delta River Tower The Prince Residence Metro Apartment Ehome 3 (Phase 2) District 1 Phu Nhuan District District 2 Binh Tan District ~182 luxury units ~233 high-end units 104 affordable units ~150 affordable units More competition from developments in neighboring provinces (Binh Duong, Long An) in the landed property. 13 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

14 HCMC SERVICED APARTMENTS Q 4 M A J O R E V E N T S Fraser Hospitality came to HCMC and introduced its new hotel residence brand - Capri by District 7, HCMC (175 Grade B units), which is ready to move in within January September 2012 An Phu Plaza (54 Grade B units) opened on Ly Chinh Thang Str., D.3 and its sole agent, CBRE, held the 1st Tenant s Night event in early December. November 2012 Q Residence (60 Grade C units) opened on Pasteur Street, D.3. October 2012 The Ascott Limited won a contract to manage the new Somerset Vista Ho Chi Minh City (100 Grade B units) and Vista Residences (168 units). 14 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

15 HCMC SERVICED APARTMENTS Q 4 H E A D L I N E Recent sharp decline (-9.3% q-o-q and % y-o-y) in Grade A asking rents secured a gain of 4.6 percentage points q-o-q in its occupancy. Average Asking Rents (US$/sm/month) Grade A Vacancy Grade B Vacancy $50 Grade A Rents Grade B Rents $40 $30 $ Source: CBRE 60% 50% 40% 30% 20% 10% 00% 15 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

16 HCMC SERVICED APARTMENTS Q 4 R E V I E W SUPPLY: Q4 welcomed two new serviced apartment projects: An Phu Plaza, District 3 Q Residence, District 3 Grade B, 54 units Grade C, 60 units Operating by CBRE Vietnam Operating by Cushman & Wakefield To keep established serviced recidences competitive, landlords become more flexible with: 10%-15% discount on asking rents and; Free car parking, daily breakfast or higher utility allowance. Avg. Asking Rent (US$/sm/month) Grade A Rents Grade B Rents $40 $35 $30 $25 $ Source: CBRE ASKING RENTS: Though Grade B rent increased by 1.0% q-o-q after continuously sliding for three quarters, it must be cautious to say it s the market s bottom as Grade A rents saw a sharp decline of 9.3% q-o-q. Grade A rents are revising downwards for 5 quarters in a row; 16 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

17 HCMC SERVICED APARTMENTS Q 4 R E V I E W Vacancy Rate (%) 60% Grade A Vacancy Grade B Vacancy 40% 20% 0% Source: CBRE VACANCY: With consecutive decrease of Grade A rents, its vacancy continued witnessing a larger decrease of 4.6 ppt q-o-q, currently at 10.6%. Grade B vacancy reported high (over 23%), due to the continued new supply throughout 2012 and the fierce competition from the buy-to-let substitutes. DEMAND: Tenants strategies seen in 2012 Manufacturing companies and international schools have been seen: Intergrating their expat staff into one serviced residence; Buying buy-to-let apartments in bulk for their expat staff instead of separate housing packages; 17 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

18 HCMC SERVICED APARTMENTS G U E S S P R O F I L I N G, C B R E E N Q U I R I E S Budget 41.1% $1k-2k 56.2% Asian 50.0% sm Sizing 79.6% 6mth-1yr 58.9% Serv. Apt. Stay Length Accommodation 18 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

19 HCMC SERVICED APARTMENTS O U T L O O K Projects kept delaying their grand opening and 2013 will see most-awaited launches, including: Capri by District 7, HCMC Somerset Vista Ho Chi Minh City Times Square District 7, 175 Grade B units District 2, 100 Grade B units District 1, 78 Grade A units Operating by Fraser Hospitality Operating by The Ascott Limited Developed by Times Square JSC 2012 witnessed major ground-breaking ceremonies, with expected completion beyond 2014: Saigon Centre, Phase 2 The One Ho Chi Minh City Saigon South Place Complex District 1, 200+ Grade A units District 1 District 7 Developed by Keppel Land To be operated by Sedona Suites Developed by Bitexco; with its hotel to be operated Developed by Mapletree and SCID. Its retail, SC VivoCity Shopping Mall, broke by Ritz Carlton ground in March 2012 and will generate demand and foot falls for next phases TREND OF NEW SUPPLY: From the traditional core (the CBD) to the decentralised area (District 2 and District 7) with an emerging expat community; Will place more pressure on the current high vacancy; International players (Fraser Hospitality, The Ascott Limited, Sedona Hotels International, Ritz Carlton, Mapletree, etc.) will bring in world-class experience for a better-shaped market; 19 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

20 VIETNAM INDUSTRIAL AND LOGISTIC R E V I E W SKER Historical Land Rates, Key Industrial Parks $800 $600 $400 $200 $0 Q1/2007 Q1/2009 Q1/2011 Q4/2011 Q4/2012 Lowest Highest NKER Historical Land Rates, Key Industrial Parks $300 $200 $100 $0 Q1/2007 Q1/2009 Q1/2011 Q3/2012 Lowest Highest Opening of new economic zones and industrial parks are halted. The existing IPs are under pressure to review its land usage and tenants implementation. To attract more tenants, developers at less favourable locations have been forced to decrease rent significantly. Land rental rate in key industrial parks remain steady or down slightly compare to 1H2012. Demand derived from expansion of F&B, FMCG, and Electronics firms such as Pepsi, P&G, Samsung and Nestle. 20 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

21 VIETNAM INDUSTRIAL AND LOGISTIC O U T L O O K Both international and local logistic service providers are in expansion across the country (Schenker, DHL, Kerry, vs Tan Cang Saigon, Vinafco, ) Third tier provinces such as Long An, Bac Giang, Hung Yen, continue attract traditional sectors like garments, footware. Electronics, F&B, and FMCG concentrate in second tier cities such as Binh Duong, Dong Nai, First tier cities such as HCMC, Hanoi and Danang capture majority share of the emerging industries including R&D, labs, software development and Business Processing Outsourcing. 21 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

22 HCMC RETAIL Q 4 / M A J O R E V E N T S Vincom Center A Pandora City SC Vivo City Opened on 10 Oct 2012; Currently operates at 95% committed occupancy Opened November 2012; Operating at 80% committed occupancy; Located in Tan Phu District The project is unique in the surrounding area. Ground breaking March 2012 Estimate GFA: 72,000 sqm Estimate NLA : 46,800 sqm Number of Floors: 1 basement & 5 levels Estimate Completion: 1H 2014 PowerBowl CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

23 Rental rate (USD/sm/month) Vacancy rate (%) HCMC RETAIL Q 4 H E A D L I N E S CBD SHOPPING CENTRE S AVERAGE ASKING RENTS INCREASED DUE TO THE OPENING OF VINCOM CENTER A. CBD Shopping centre Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Rental rate Vacancy rate * All rents are quoted on NLA, exclusive of VAT and service charges Source: CBRE 23 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

24 HCMC RETAIL Q 4 R E V I E W New supplies from Vincom Center A (District 1) and Pandora City (Tan Phu District) providing 78,000 sm retail GFA. Taking advantage of prime location, Vincom Center A has asking rents of the ground and first floor quoting 10% higher than the average of CBD shopping centres, leading to an increase of 2.6% q-o-q in CBD shopping centre s rental rates. It remains to be seen whether this rent is sustainable. The non-cbd shopping centre s rents increased slightly 0.8% q-o-q. Non-CBD department store s rent increased 2.5% q-o-q thanks to the increase in Parkson Hung Vuong, which has just changed layout and tenant mix last quarter. The deparment store is now more refresh with new branded retailers namely Mango, Mo&Co, DFML, JS. From and the new food court in the sixth floor. CBD department store s rent stayed stable during the quarter. Vacancy rate in department stores increased substantially in the review quarter, an increase of 5.5% q-o-q to 7.5% due to Parkson Flemington is struggling to attract tenants. Despite increase in total supply, vacancy rate in shopping centres has stayed unchanged q-o-q, which is an evidence to support retail demand with good location and careful project positioning. Net absorption was four times larger than that in Q3/ CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

25 HCMC RETAIL DEMAND More luxury retailers to enter the market as they expand across borders New entrance: Takashimaya, Aeon, NTUC Fair Price, SC Vivo City, and Payless Continued international-style retailing: fast-food chains set to expand Subway has announced the plan to open 10 shops in 2013, Burger King has had five stores by the end of 2012, Lotteria and KFC both strive to have 200 shops in the next years, Mc Donald, Starbucks and 7 - Eleven plan to enter Vietnam in CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

26 HCMC RETAIL 2013 OUTLOOK Monthly Household Expenditure F&B, daily necessities,fmcg and entertainment will continue driving the market. Vincom Center A: a strong evidence to support the need for prime retail space in District 1, HCMC; With a good location, proper tenant mix and layout, the market can still absorb new supply. Source: TNS, The Changing Reality of Retail, Nov CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013

27 To subscribe, please contact Q 4 / r e l e a s e d J a n 2 1, quarterlyreports@cbrevietnam.com THANK YOU 2012 CB Richard Ellis (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CB Richard Ellis (Vietnam) Co., Ltd. We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources and make no guarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful consideration of factors known to us for example only, and they may not represent current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis. 27 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE s HCMC QUARTERLY REPORT JANUARY 2013