Vietnam Property Market Brief. JLL Research 3Q16

Transcription

1 Vietnam Prperty Market Brief JLL Research 3Q16

2 Vietnam Prperty Market Brief 3Q16 Market Highlights Page Ecnmy f Vietnam 3 H Chi Minh City (HCMC) Office 5 Stable supply 5 Mderate demand 5 Rents keep n uptrend 5 Residential 6 High-level supply 6 Cnsiderable demand 6 Prices largely higher 6 Retail 7 Supply skyrckets 7 Demand sars 7 Rents slightly decline 7 Hani Office 8 Supply higher 8 Demand remains stable 8 Rents cntinue their upward trend 8 Residential 9 High-level supply 9 Cnsiderable demand 9 Price grwth mre cnsiderable q--q 9 Retail 1 Supply f Shpping Centre unchanged 1 Demand cntinues t fall 1 Dwntrend in rent cntinues 1 Glssary 11 Cver Picture: Part f the Takashimaya Shpping Centre P a g e 2

3 Sep-14 Nv-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nv-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Sep-15 Oct-15 Nv-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Vietnam Prperty Market Brief 3Q16 ECONOMIC HIGHLIGHTS Vietnam s ecnmy t brighten up: Vietnam s GDP recrded a 5.93% y--y increase in the first nine mnths f 216, lwer than the same grwth f 6.53% in the same perid f 215. Despite the slw grwth in the agriculture sectr, which was due t recent climate changes, ther sectrs have seen strng grwths during the perid. The prductin and manufacturing sectrs witnessed duble-digit grwths in 3Q16 thanks t the increase in freign investments, while the service sectr is psitively bsted by the rise in retail activities banking services. Nevertheless, the 6.7% GDP grwth target fr 216 still remains a challenge fr the ecnmy. Retail sales and internatinal arrivals increase: Vietnam s retail sales and service turnver increased 9.5% y--y in the first nine mnths f 216. Freign arrivals t Vietnam cntinued t recrd strng perfrmance, as the cuntry welcmed mre than 7.2 millin freign visitrs in the first nine mnths f 216, an increase f 25.7% cmpared t the same perid last year. China and Suth Krea remain the tp markets t the lcal turism, as the number f turists frm these tw cuntries rse sharply by 57.7% and 39.9% y--y respectively. Other markets als shwed psitive signs, recrding y--y increases f arund 1-2% during the perid. In additin, the visa-exempt plicy applied fr the five Eurpean cuntries was extended fr anther year until mid- 217 in rder t further bst the number f Western turists. FDI flw slws dwn: The cuntry attracted USD 16.4 billin in FDI YTD, resulting in a mderate y--y drp f 4.2%. The amunt includes USD 11.1 billin frm 1,82 newly registered prjects and USD 5.3 billin frm 851 added FDI prjects. Hwever, FDI disbursement was up 12.4% y--y, reaching USD 11. billin in the first nine mnths f 216. Suth Krea std firm as the biggest freign investr in Vietnam, with USD 5.58 billin in registered capital, accunting fr 34% f ttal FDI, fllwed by Singapre (USD 1.85 billin) and Japan (USD 1.71 billin). Majr new prjects include a USD 55 millin investment f int LG Inntek (Suth Krea) and anther USD 39 millin investment int Amata Lng Thanh (Thailand). % Real GDP Grwth (y--y) Quarterly GDP GDP ytd Surce: General Statistics Office, JLL Research Retail Sales vs. Internatinal Arrivals (ytd, y--y) % % Real Retail Sales Internatinal Arrivals Surce: General Statistics Office, VNAT, JLL Research Freign Direct Investment FDI (ytd) USD mil 24, 21, 18, 15, 12, 9, 6, 3, FDI Registered FDI Disbursement Surce: General Statistics Office, JLL Research Surce: Ministry f Planning and Investment, JLL Research P a g e 3

4 Sep-14 Nv-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nv-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Sep-14 Nv-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nv-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Sep-14 Nv-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nv-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Vietnam Prperty Market Brief 3Q16 CPI rises further in September: Vietnam s CPI in September 216 increased by.5% m--m and 3.3% y--y, which was the highest y--y grwth since 215. Amng the 11 grups f prducts and services, the highest increases were bserved in medical services and educatin with y--y grwth rates f 33.4% and 1.3%, respectively. In additin, increases were als recrded in mst f the ther nine categries, amng which the husing and cnstructin materials sectr displayed a medium grwth f 3.8% y--y. The nly exceptins were the transprtatin and telecmmunicatin sectrs, in which prices drpped by 5.7% and.7% crrespndingly. Overall, CPI f the first nine mnths saw a minr increase f 2.1% y--y, keeping at a lw level. CPI - Overall % % y--y m--m Surce: General Statistics Office, JLL Research Vietnam trade surplus reaches USD 2.8 billin: Accrding t the General Statistics Office (GSO), the cuntry is frecasted t recrd a trade surplus f USD 2.8 billin in the first nine mnths f 216, accunting fr 2.2% f exprt revenues. In the perid, Vietnam achieved USD billin in exprt revenue and USD billin in imprt value, up 6.7% and 1.3% y--y, respectively. The United States remained Vietnam s largest exprt market in the first nine mnths f 216 with USD 28.3 billin, up 14.5% y--y, fllwed by EU with USD 24.6 billin, up 9.5%, and China with USD 14.8 billin, up 19.1%. In additin, Vietnam s imprt value frm China witnessed a decrease f 1.8% y--y, standing at USD 36. billin. On the ther hand, imprts frm Krea increased by 9.4% t mre than USD 23. billin, succeeded by ASEAN at USD 17.1 billin, dwn 2.4%. Number f newly registered enterprises increases: The number f newly registered enterprises reached 81,451 in the first nine mnths f 216 with ttal registered capital f VND trillin, rising by 19.2% in the number f enterprises and 49.5% in the amunt f registered capital cmpared t the same perid last year. The average registered capital per newly established enterprise std at VND 7.7 billin, up 25.4% y--y. The number f enterprises that finished the prcedure fr disslving and terminating business activity since beginning 215 increased by 24.% t 8,635 enterprises, which was larger than the grwth in newly registered enterprises by a cnsiderable margin (5%). % CPI - Husing & Cnstructin Materials % y--y m--m Surce: General Statistics Office, JLL Research USD bil Merchandise Trade Balance % Actual Levels % f Merchandise Exprts Surce: General Statistics Office, JLL Research P a g e 4

5 Expected cmpletin year Vietnam Prperty Market Brief 3Q16 HCMC OFFICE Supply and Demand Supply / Demand Indicatr Grade A Grade B Grade C Ttal Ttal Stck (sqm) 192, , ,55 1,714,116 Occupancy Rate (%) N/A N/A Q--Q Change (bps) 19 2 Nte: Since 3Q16, Suburban prjects are re-classified int Grade B and Grade C sub-markets, which might cause minr changes in histrical data. Surce: JLL Research Stable supply In 3Q16, the supply in ffice fr lease market was stable with n new prjects cmpleted. Ttal HCMC ffice supply is likely t register minr changes until year-end. Mderate demand While Grade B s ccupancy rate slipped a little, Grade A s ccupancy recrded gd perfrmance with a rise f 19 bps q--q. Relcatin and new setup businesses were main drivers f ffice demand during the quarter. Asset Perfrmance Surce: JLL Research Ttal Stck Key Perfrmance Indicatr Grade A Grade B Grade C Ttal Average Grss Rent (USD/sqm/mnth) N/A N/A Average Net Rent (USD/sqm/mnth) N/A N/A Q--Q Change (%) Nte: Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Surce: JLL Research Average Net Rents by Grade Rents keep n uptrend The average net rents in Grade A and Grade B sub-markets cntinued their upward trends at a faster pace than in the previus quarter. Regardless f the slip in ccupancy levels, mre than half f landlrds f Grade B ffice asked higher rents. Over 4% f Grade A landlrds were quting higher rents as well. ' sqm 2, 1,5 1, 5 USD/sqm/mnth Q16 Grade A Grade B Grade C Grade A Grade B Outlk Supply t imprve Strng interest and pre-cmmitment have been bserved at Deutsches Haus and Saign Centre Phase 2 due t limited supply in the market. Demand t imprve Enquiries frm the FMCG, IT, insurance and financial industries will cntinue t drive demand in the cming quarters. The market is still cnsidered as the landlrd s market, and rents are expected t increase in the upcming quarters. Surce: JLL Research Supply - Under Cnstructin ' sqm Surce: JLL Research P a g e 5

6 Apartments Vietnam Prperty Market Brief 3Q16 HCMC RESIDENTIAL Supply and Demand Supply / Demand Indicatr Apartments Villas / Twnhuses [1] Cmpleted Supply (units) 84, 4,7 Uncmpleted Supply (units) [2] 64, 2,7 Unsld Inventry (%) [3] [1] Excludes land plt prjects. [2] Excludes planned prjects nt launched fr sale yet. Includes fully sld prjects. [3] The percentage f [2] that remains unsld at quarter-end. Surce: JLL Research High-level supply Ttal Stck (Cmpleted Supply) - Apartments Apartments: New supply ttaled 8,438 units in 3Q16, with the Affrdable units and Mid-end segments accunting fr 44.% and 37.%, respectively. 8, Affrdable Villas /Twnhuses: New launches reached 82 units, with thse priced at 6, Mid-end 4, USD 225, t USD 45, per unit respnsible fr mre than 7%. Premium 2, Cnsiderable demand Luxury Apartments: Take-up was 5.% higher q--q, at 8,133 units. The quarterly rati f units sld t newly-launched in many prjects averaged arund 65%. Villas / Twnhuses: Sales reached 814 units, an verall imprvement. Asset Perfrmance Market Segment Nte: Q--Q and Y--Y changes are adjusted t remve effects frm supply additins / remvals (i.e. changes are n a like-fr-like basis). Surce: JLL Research Prices largely higher Average Asking Price by Segment Primary market: Outlk Abundant supply fr 4Q16 Asking Price Primary Market Luxury accunts fr less than 1% f ttal stck Surce: JLL Research Asking Price Secndary Market Q--Q Y--Y Q--Q Y--Y Apartments 1.5% 7.4% 1.3% 7.5% Villas / Twnhuses 2.5% 6.8% 2.4% 8.5% Apartments: Prices were higher q--q acrss all markets, with the Affrdable segment registering the mst cnsiderable grwth, f 2.2%. Villas / Twnhuses: Prices cntinued their prevailing uptrend at 2.4% q- -q, mainly driven by District 9 and Nha Be District. Secndary market: Apartments: Price rises slwed, cmpared t recent quarters. Cmpleted prperties were increasingly under pressure frm the abundant supply. Villas / Twnhuses: Prices achieved the 11th cnsecutive quarter f grwth, actively supprted by increased investment sentiment. New supply f Apartments is expected t be 9,-12, units in 4Q16, cming in a wide range f sub-markets and prices. Arund 1,2-1,5 new Villa / Twnhuse units are expected in 4Q16, marking the cntinued expansin f District 9, District 2 and Nha Be District. Demand t respnd psitively t the expected supply Investment sentiment is likely t remain strng in the cming quarters, and cnsiderably s in the Villa / Twnhuse sectr. Prices shuld increase further. All Apartments Affrdable Villas / Twnhuses Surce: JLL Research Mid-end Premium Surce: JLL Research Luxury Average Primary Price Apartments Villas / Twnhuses Apartments Villas / Twnhuses Apartments Villas / Twnhuses 1, 2, 3, 4, Upcming Cmpletins USD/sqm Average Secndary Price 2, 4, units P a g e 6

7 Expected cmpletin year 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Vietnam Prperty Market Brief 3Q16 HCMC RETAIL Supply and Demand Supply/Demand Shpping Centre Bazaar Supermarket/Hypermarket Cnvenience Stre Ttal Stck (sqm) 818,45 38,85 285, 16,65 Occupancy Rate (%) N.A N.A Q--Q Change (bps) 2. N.A N.A Surce: JLL Research Supply skyrckets The grand penings f Saign Centre and AEON Binh Tan added a ttal f 111, sqm t the market, equivalent t a 15.7% q--q increase. Cnvenience stres remained an intense battlegrund between dmestic and freign retailers, with supply reaching 154,95 sqm in ttal. Demand sars Ttal net absrptin std at 99,6 sqm, mstly thanks t the high take-up rate in the tw newest shpping centers. Overall ccupancy rate drpped by 2 bps, dwn t 91.2%. Cntrary t the imprvement in ccupancy amng CBD prjects ( 2.2%), nn-cbd nes registered slight decreases during the quarter (.8%). Ttal Stck Shpping Centre ' sqm 1, Q16 CBD Nn-CBD Surce: JLL Research Asset Perfrmance Key Perfrmance Indicatrs Shpping Centre Bazaar CBD Nn-CBD Average Grss Rent (USD/sqm/mnth) Q--Q Change (%) Nte: Average grss rent, Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Surce: JLL Research Rents slightly decline Average Grss Rents Shpping Centre USD/sqm/mnth The market average fr grss rents std stable at 45.8 per sqm per 8 mnth, dwn 1.% q--q. 7 6 While the CBD sub-market saw a minr q--q increase in rents, the Nn- 5 CBD segment reprted a mderate fall during the quarter as sme tenants 4 3 mved ut. Outlk Supply t see few changes until year-end Accrding t the current cnstructin prgress f future prjects, there will be n new majr shpping centres cmpleted fr the rest f 216. Nn-CBD sectr: Affrdability > Luxury Higher ccupancy rate and ftfall are expected t prevail amng prjects ffering mre affrdable prducts, F&B and entertainment, cmpared t thse with mre luxury brands. Cnvenience stres t prsper Cnvenience stres are t remain an attractive gld mine fr bth lcal and freign retailers with mre stres planned in the upcming mnths. CBD Nn-CBD Surce: JLL Research Supply Under Cnstructin Shpping Centre ' sqm Surce: JLL Research P a g e 7

8 Expected cmpletin year 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Vietnam Prperty Market Brief 3Q16 HANOI OFFICE Supply and Demand Supply / Demand Indicatr Grade A Grade B Grade C Ttal Ttal Stck (sqm) 529, 962, 253, 1,744, Occupancy Rate (%) Q--Q Change (bps) Surce: JLL Research One new Grade B enters the market Ttal Stck One new Grade B building came n stream in 3Q16, adding arund ' sqm 2, sqm f ffice space t the Hani ffice market. 2, Ttal ffice stck reached mre than 1.7 millin sqm as at end-3q16, an 1,5 1, increase f 8.1% y--y. 5 Demand mderate ytd Net absrptin ttaled nearly 35, sqm in 3Q16, mainly driven by the Grade A Grade B Grade C large space fr internal use in the newly cmpleted building. Surce: JLL Research The Hani ffice market cntinued t see a trend f relcatin t newer ffice buildings, which ffered mre reasnable rents. Asset Perfrmance Key Perfrmance Indicatr Grade A Grade B Grade C Ttal Average Grss Rent (USD/sqm/mnth) Average Net Rent (USD/sqm/mnth) Q--Q Change (%) Nte: Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Surce: JLL Research Rents decline slightly The average rent declined slightly in all segments, by.6% q--q, but an increase in rents was seen in several buildings with gd leasing perfrmance. The wners f mre than 8% f ffice building kept their rents stable q- -q. USD/sqm/mnth Average Net Rents by Grade Outlk Supply t increase Mre than 67, sqm f new ffice space is expected t enter the market in 4Q16. Mst f the upcming prjects are lcated in the new CBD sub-market. Frm 217 t 219, the Hani ffice market is expected t welcme mre than 385, sqm f ffice space. Demand t increase Demand fr large, mdern ffice space frm bth lcal and internatinal tenants is likely t be seen in the market. Rents are expected t increase slightly in the cming quarters in line with the expected psitive demand. Grade A Grade B Grade C Surce: JLL Research Supply Under Cnstructin Surce: JLL Research ' sqm P a g e 8

9 Vietnam Prperty Market Brief 3Q16 HANOI RESIDENTIAL Supply and Demand Supply / Demand Indicatr Apartments Cmpleted Supply (units) 99, Uncmpleted Supply (units) [1] 59, Unsld Inventry (%) [2] 16.4 [1] Excludes planned prjects nt launched fr sale yet. Includes fully sld prjects. [2] The percentage f [1] that remains unsld at quarter-end. Surce: JLL Research Supply still abundant sld, fllwed by Thanh Xuan and Hang Mai Districts with 1,5 units each. Asset Perfrmance Market Segment Nte: Q--Q and Y--Y changes are adjusted t remve effects frm supply additins / remvals (i.e. changes are n a like-fr-like basis). Surce: JLL Research Outlk New supply in 3Q16 ttalled 7,854 units, dwn 6% q--q but up 5.% y--y. Of the ttal, nearly half were priced at mre than USD 1,2 per sqm. On a district-wide basis, Thanh Xuan and Nam Tu Liem Districts led the quarter s launch with arund 2, units each. Steady increase in demand Sales reached 8,15 units, a marginal increase frm 2Q16. Of the ttal, Midend and Affrdable prperties accunted fr 52% and 37%, respectively. In 3Q16, Nam Tu Liem District tpped ther sub-markets with 1,8 units Primary Market units 1, Ttal Stck (Cmpleted Supply) - Apartments Luxury accunts fr less than 3% f ttal stck Surce: JLL Research Secndary Market Q--Q Y--Y Q--Q Y--Y Apartments 1.8% 8.% 1.1% 5.3% Price increases cntinue Primary market Prices extended their prevailing uptrend, with the vast majrity f ttal primary supply registering increases in the range f 1-5%. The Premium segment reprted the highest grwth, f 3.6% q--q. Secndary market The uptrend cntinued but at a slwer rate than in recent quarters, at 1.1% q--q in 3Q16 versus the quarterly average f 1.5% since 1Q15. Sme cmpleted prjects, especially in the high-end segments, ffered lwer prices q--q, respnding t the recent increases in cmpetitin. Rising supply fr 4Q16 Mre than 11, new cmpletins are expected in 4Q16, nearly 7% f which will cme frm the Mid-end segment. New supply is expected t reach abut 1, units in 4Q16, with subsequent launches frm existing prjects respnsible fr 5-6%. Demand t shw imprvement Sales are likely t see new highs, fllwing expected increases in supply and supprted by bth investrs and wner-ccupiers. Prices are likely t cntinue rising ff the back f new launches and imprved cnditins. 8, 6, 4, 2, All Apartments Affrdable Mid-end Premium Surce: JLL Research Luxury Surce: JLL Research Average Asking Price by Segment Upcming Cmpletins Affrdable Mid-end Premium Luxury 1, 2, 3, 4, Average Primary Price USD/sqm Average Secndary Price 1, 2, 3, 4, units P a g e 9

10 Expected cmpletin year 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Vietnam Prperty Market Brief 3Q16 HANOI RETAIL Supply and Demand Supply/Demand Shpping Centre Prime Retail Space Supermarket/Hypermarket Cnvenience stre Ttal Stck (sqm) 98, 6, 154, 42, Occupancy Rate (%) N.A N.A Q--Q Change (bps) N.A N.A Surce: JLL Research Supply increases A new shpping center in Lng Bien District was cmpleted, adding arund 24, sqm f retail space t the Hani market. Ttal stck f Shpping Centre and Prime Retail Space segments in 3Q16 reached 914, sqm, an increase f 2.7% q--q. Tw supermarkets were als recrded t enter the retail market in the quarter with nearly 2, sqm. Demand psitive Psitive absrptin was recrded in 3Q16, mainly driven by the high ccupancy rate f the new supply. Weak purchasing pwer was seen in almst all existing shpping centres. Asset Perfrmance Key Perfrmance Indicatrs Shpping Centre Prime Retail Space CBD Nn-CBD Average Grss Rent (USD/sqm/mnth) Q--Q Change (%) Nte: Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Surce: JLL Research Rents cntinue t fall Outlk Supply expected t increase Average rents in the Shpping Centre and the Prime Retail Space segments declined slightly by.6% and 1.4% q--q, respectively. The wners f several shpping centres lwered their asking rents by single digit numbers t attract mre new retailers t fill the vacant space. Ttal stck is expected t increase 2.1% q--q in 4Q16 when the upcming prject in Dng Da District is cmpleted. The expansin f several freign retailers frm Japan, Thailand and Krea is likely t put pressure n the lcal retailers ver the next quarters. Rents t decline Rents are expected t decline ver the next quarter due t the versupply. Weak purchasing pwer will remain ne f the mst cnsiderable ' sqm 1, Surce: JLL Research Ttal Stck ytd Shpping Centre Average Grss Rents Shpping Centre USD/sqm/mnth 15 Surce: JLL Research Prime Retail space Supply Under Cnstructin Shpping Centre challenges t the retail market ' sqm Surce: JLL Research CBD Nn-CBD P a g e 1

11 Vietnam Prperty Market Brief 3Q16 Real Estate Glssary Vietnam Office Market Current supply The ttal amunt f cumulative ffice space (in NFA terms) that has been cmpleted at a given time. Future supply The ttal amunt f ffice space slated fr cmpletin in the future at a given time. Vacant space The ttal amunt f available ffice space that remains t be leased by prperty wner(s) at a given time. This excludes space available fr sub-lease by tenants (i.e. shadw space), space physically empty but already pre-leased r reserved, and space t be available fr lease in the future. Occupied space Current supply less vacant space. Net absrptin refers t the change in ccupied space frm quarter t quarter. Grss flr area (GFA) The ttal amunt f all cvered areas including clumns, walls, cmmn passageways, lift lbbies and tilets. Net flr area (NFA) The amunt f useable flr areas excluding clumns, walls, cmmn passageways, lifts, lbbies and tilets. Net lettable area r net leasable area (NLA) refers t the amunt f NFA that is available fr lease. Net rent The amunt f market rent receivable by landlrds after deducting utgings. Market practices: Net rents may be quted n an NLA r a GFA basis. Outgings The estimated csts set aside by landlrds fr building maintenance that are passed n t tenants in the frm f service charges r management fees. Market practices: Service charges / management fees may r may nt be quted separately frm net rents. Grss rent The ttal achievable rent t be brne by tenants including service charges / management fees. Grss rents equal net rents plus utgings. Market practices: Grss rents may be quted n an NLA r a GFA basis. Capital value The market value r prbable price f a prperty at a given time frm a valuatin pint f view. Yield The percentage return n prperty investment at a given time frm a valuatin pint f view. It is based n current market rents assuming full ccupancy. Grade A A Grade A prperty meets all f a set f criteria regarding its fferings t a typical sphisticated ccupier. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, amenities, management standards and technical specificatins. Grade B A Grade B prperty meets sme f a set f criteria regarding its fferings t a typical sphisticated ccupier. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, amenities, management standards and technical specificatins. Grade C A Grade C prperty meets a set f criteria regarding its fferings t a typical nn-sphisticated ccupier. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, amenities, management standards and technical specificatins. Cpyright 216 JLL Research P a g e 11

12 Vietnam Prperty Market Brief 3Q16 Real Estate Glssary Vietnam Residential Market Current supply The ttal amunt f supply available fr sale, either thrugh the primary market r the secndary market, regardless f cnstructin status. Future supply The ttal amunt f supply t be launched fr sale in the future. Cmpleted supply The ttal amunt f supply that has been physically cmpleted and handed ver fr ccupatin. Als knwn as existing supply. Uncmpleted supply The ttal amunt f supply that has nt been physically cmpleted and handed ver fr ccupatin. Includes supply under cnstructin and supply planned fr cnstructin. Als knwn as supply in the pipeline. Primary market That part f the market cmprising first-hand supply available fr sale frm develpers. Secndary market That part f the market cmprising secnd-hand supply available fr resale frm previus buyers. Launches The estimated amunt f new supply (in units) launched fr sale during a perid. Market practices: Many develpers chse t launch their prjects in phases which may r may nt be publicly annunced. Take-up The estimated amunt f supply (in units) sld during a perid. Includes sld units frm new supply in the perid and supply in previus perids. Market practices: Take-up may cmprise units sld via capital cntributins r sale and purchase agreements. Ttal inventry The ttal amunt f uncmpleted supply that has been launched fr sale. Primary asking price The stck-weighted average asking price in the primary market. Secndary asking price The stck-weighted average asking price in the secndary market. Luxury A luxury prperty meets all f a set f criteria regarding its fferings t a typical lcal wealthy husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f luxury prperties are lcated in r near the CBD f the city under review. Price range: > USD 3, per sqm, VAT excluded. Premium A premium prperty meets sme f a set f criteria regarding its fferings t a typical lcal wealthy husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f premium prperties are lcated in new urban areas utside the CBD f the city under review. Price range: USD 1,8 3, per sqm, VAT excluded. Mid-end A mid-end prperty meets all f a set f criteria regarding its fferings t a typical lcal middle-class husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f midend prperties are lcated within the inner districts f the city under review. Price range: USD 1, 1,8 per sqm, VAT excluded. Affrdable An affrdable prperty meets sme f a set f criteria regarding its fferings t a typical lcal middle-class husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f affrdable prperties are lcated in the uter districts f the city under review. Price range: < USD 1, per sqm, VAT excluded. Cpyright 216 JLL Research P a g e 12

13 Vietnam Prperty Market Brief 3Q16 Real Estate Glssary Vietnam Retail Market Current supply The ttal amunt f cumulative mdern (as ppsed t traditinal) retail space (in GLA terms) that has been cmpleted at a given time. This includes department stres, shpping centres, prime retail space, supermarket/hypermarket, bazaars and cnvenience stres. Specialty supermarkets such as electrnics r furniture are nt included in ur basket. Future supply The ttal amunt f mdern retail space slated fr cmpletin in the future at a given time. Vacant space The ttal amunt f available mdern retail space that remains t be leased by prperty wner(s) at a given time. This excludes space available fr sub-lease by tenants (i.e. shadw space), space physically empty but already pre-leased r reserved, and space t be available fr lease in the future. Occupied space Current supply less vacant space. Net absrptin refers t the change in ccupied space frm quarter t quarter. Grss leasable area (GLA) The ttal amunt f leasable flrs areas n which rentals and service charges are based, which may include cmmn areas used fr ft traffic. Grss rent The ttal achievable rent t be brne by tenants including service charges / management fees but excluding VAT. Rents are calculated by the average rents f leasable area fr single tenants in department stres, shpping centres and bazaars in HCMC. Market practices: Grss rents in the retail market are usually quted n a NFA basis. Cpyright 216 JLL Research P a g e 13

14 Vietnam Prperty Market Brief 3Q16 Real Estate Glssary Vietnam Serviced Apartment Market Current supply The ttal amunt f cumulative serviced apartment supply (in terms f number f units) that has been cmpleted at a given time. Future supply The ttal amunt f serviced apartment units scheduled fr cmpletin in the future. Vacant units The ttal number f available serviced apartment units that remain t be leased by prperty wner(s) at a given time. This excludes units physically empty but already pre-leased r reserved, and units t be available fr lease in the future. Occupancy rate Ttal stck less vacant units, divided by ttal stck. Net absrptin refers t the change in ccupied units frm quarter t quarter. Average rent The rent was based n lng-term cntract (3-6 mnths), includes service charges but excludes VAT. Market practices: Rents in the serviced apartment market are usually quted n a net lettable area (NLA) basis. Grade A A Grade A serviced apartment prperty is a prperty that ffers first-class facilities and services with a well-equipped fitness centre and a swimming pl, preferably utdr, excellent lcatin, first class prperty management quality by an internatinal peratr, excellent rm quality and large rm sizes. Grade A serviced apartments are als almst always rated five stars n Agda.cm. One Grade A serviced apartment prperty shuld have at least 4 units. Grade B A Grade B serviced apartment prperty generally has cmparable facilities and services t ther Grade A prperties in the same vicinity, but lacks ne r mre criteria identified abve fr Grade A prperties. One Grade B serviced apartment prperty shuld have at least 15 units. Grade C Grade C serviced apartment prperty usually satisfies the standard/typical facilities, and is lcated at less prminent lcatins than ther Grade A and Grade B prjects. One Grade C serviced apartment prperty shuld have at least 1 units Cpyright 216 JLL Research P a g e 14

15 Vietnam Prperty Market Brief 3Q16 Real Estate Glssary Vietnam Industrial Market Current supply The ttal area f perating industrial parks and prcessing znes at a given time, including leasable land area, leasable warehuse/ready-built factry area and ther types f area fr supprting facilities. Ttal leasable land area The ttal prepared land area fr lease at a given time. Ttal leasable warehuse/ready-built factry area The ttal area f leasable warehuse/ready-built factry at a given time. Vacant space The ttal amunt f available industrial land area that remains t be leased t tenants at a given time. This excludes space available fr sub-lease by tenants (i.e. shadw space), space physically empty but already pre-leased r reserved, and space t be available fr lease in the future. Occupied space Ttal leasable area less vacant space. Net absrptin refers t the change in ccupied space frm perid t perid. Net rent land area The amunt f market rent applied fr leasable land area that is receivable by landlrds after deducting utgings. Market practices: Net land rental fee is nrmally quted per sqm per lease term (ne lease term apprximately equals 5 years). Net rent - warehuse/ready-built factry The amunt f market rent applied fr leasable warehuse/ready-built factry area that is receivable by landlrds after deducting utgings. Market practices: Net warehuse rental fee may be quted per sqm per mnth. Outgings The estimated csts set aside by landlrds used fr maintenance that are passed n t tenants in the frm f service charges r management fees. Grss rental fee The ttal achievable rent t be brne by tenants including service charges / management fees. Grss rents equal net rents plus utgings. Future supply The ttal area f future industrial parks and prcessing znes accrding t the master plans f prvincial authrities. Cpyright 216 JLL Research P a g e 15

16 Vietnam Prperty Market Brief 3Q16 Vietnam Prperty Market Brief is a quarterly publicatin prviding market updates fr different real estate sectrs in different cities. It is part f the cmprehensive research package frm JLL Research that cvers Vietnam alng with ther majr cuntries in Asia Pacific: Publicatin Gegraphic Cverage Prduct Cverage Frequency Cntents Availability Vietnam Prperty Market Mnitr Vietnam All Quarterly Real estate headlines & news summary Publicly available Vietnam Prperty Market Brief Vietnam Prperty Market Reprt Asia Pacific Prperty Digest The Office Index The Residential Index Real Estate Intelligence Service Real Estate Daily Real Estate Transparency Index Vietnam cities All Quarterly Stck, vacancy, prices, rents Publicly available Vietnam cities All Quarterly Asia Pacific including Vietnam Asia Pacific including Vietnam Asia Pacific (Vietnam t be included) Asia Pacific including Vietnam Asia Pacific including Vietnam Glbal including Vietnam Investment grade Investment grade Investment grade Investment grade All All Stck, vacancy, prices, rents, prject-level data, maps Subscriptin-based Quarterly Stck, vacancy, prices, rents Publicly available Quarterly Stck-weighted rental value and capital value indices Publicly available Quarterly Capital value index Publicly available Quarterly Daily Every tw years Stck, vacancy, prices, rents, yields, ttal returns, frecasts Real estate headlines & news summary Cuntry transparency scres & rankings Subscriptin-based Subscriptin-based Publicly available Partner With the Best Real Estate Advisr Fr subscriptin details and enquiries, please cntact: Stephen Wyatt Trang Le Cuntry Head Manager, Research & Cnsulting Level 26, Saign Trade Center Level 26, Saign Trade Center 37 Tn Duc Thang, D1, HCMC, Vietnam 37 Tn Duc Thang, D1, HCMC, Vietnam ext ext 955 stephen.wyatt@ap.jll.cm trang.le@ap.jll.cm The infrmatin in this publicatin has been cmpiled frm varius surces deemed reliable. Hwever, n representatin r warranty is made t the accuracy theref. This publicatin may nt be reprduced in any frm r in any manner, in part r as a whle withut the written permissin f the publisher, JLL Vietnam, Ltd. P a g e 16