Vietnam Property Market Brief. JLL Research 1Q15

Transcription

1 Vietnam Prperty Market Brief JLL Research 1Q15

2 Vietnam Prperty Market Brief 1Q15 Market Highlights Page Ecnmy f Vietnam 3 H Chi Minh City (HCMC) Office 5 Supply cntinues slight increase 5 Overall vacancy rate scales dwn 5 Marginal rental decline 5 Residential 6 Large supply 6 Gd demand 6 Prices up in a grand manner 6 Retail 7 Rise in retail supply q--q 7 Slight decline in ccupancy rate 7 A slight decrease in retail rents 7 Hani Office 8 Supply remains stable 8 Demand increases slightly 8 Rent cntinues t decline 8 Residential 9 Increased supply 9 Demand nticeably strnger 9 Prices increase further 9 Retail 1 Supply stable 1 Demand mderate 1 Rents decline slightly 1 Glssary 11 Cver Picture: A part f Hani City. P a g e 2

3 Mar-13 May-13 Jul-13 Sep-13 Nv-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nv-14 Jan-15 Mar-15 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nv-14 Dec-14 Jan-15 Feb-15 Mar-15 Vietnam Prperty Market Brief 1Q15 ECONOMIC HIGHLIGHTS Vietnam s ecnmic grwth cntinues t accelerate in 1Q15: Vietnam achieved GDP grwth f 6.% in 1Q15, the highest first quarter rate during the perid. Hwever, the1q15 result was still lwer than the 7.% f 4Q14. In the natinal ecnmic verview, the agr-frestry and fisheries sectrs rse 2.1%, a small cntributin f.28 percentage pints t GDP grwth; the cnstructin and industry sectrs rse 8.4%, cntributing 2.82 percentage pints; and the services sectr rse 5.8%, cntributing 2.36 percentage pints. The Index f Industrial Prductin (IIP) als saw imprvement, with estimated grwth f 9.1% seen in March 215 frm a year ag. The IIP fr 1Q15 increased 9.1%, much higher than the 5.3% in 1Q14 and 4.9% in 1Q13. Retail sales increase but internatinal arrivals decline: Vietnam s retail sales and service turnver increased 9.2% y- -y in 1Q15. Vietnam received mre than 2. millin freign visitrs in 1Q15, a drp f 13.7% y--y. The number f internatinal visitrs t Vietnam each mnth has declined cnsecutively since June 214, and the drp f 23.4% in March 215 was the highest rate recrded during the perid. The reasns are ecnmic difficulties and the currency devaluatin in sme cuntries as well as lng-standing weaknesses in the Vietnam turism industry, such as expensive tur packages, utdated turism prducts, pr marketing campaigns, plluted envirnment and insufficient supprt infrmatin. % 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, JLL Research FDI disbursement surges in 1Q15: The disbursement f FDI increased 7.% t USD 3.5 billin in 1Q15. Vietnam attracted USD 1.83 billin frm newly registered and added FDI prjects in 1Q15, a 44.9% decline cmpared with 1Q14. Accrding t the Freign Investment Agency, the prcessing and manufacturing sectrs cntinued t attract the largest share f FDI, accunting fr USD 1.4 billin r 76.6% f the cuntry s FDI inflw. The real estate sectr saw the secnd largest share, with USD.2 billin, accunting fr 11.%. Of the 33 cuntries investing in Vietnam, Suth Krea cntinued t be the leading surce f FDI, with USD.49 billin in newly registered and expanded capital, accunting fr 26.7% f ttal FDI, fllwed by British Virgin Islands (USD.35 billin), Japan (USD.29 billin) and Hng Kng (USD.18 billin). 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 P a g e 3

4 Mar-13 May-13 Jul-13 Sep-13 Nv-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nv-14 Jan-15 Mar-15 Mar-13 May-13 Jul-13 Sep-13 Nv-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nv-14 Jan-15 Mar-15 Mar-13 May-13 Jul-13 Sep-13 Nv-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nv-14 Jan-15 Mar-15 Vietnam Prperty Market Brief 1Q15 CPI surges.2% in March: Vietnam s CPI in March 215 increased by.2% m--m after fur cnsecutive mnths f reductin. The higher fuel prices had pushed prices f three ut f 11 gds that are used t calculate the mnthly CPI increase, including restaurant and catering services (up.4%), cultural, entertainment and turism activities (up.2%) and husing and building materials (up.2%). The increase in gas prices since 11 March 215 has als cntributed t the surge in the CPI. This was the lwest level f increase in CPI fr a first quarter during the past decade, during which time the CPI increased between 4.8% and 16.6%. Gld prices drp: Gld prices drpped 1.6% m--m and 5.4% y--y in March, while US dllar prices increased.2% m--m and 1.3% y--y during the mnth. Vietnam sees trade deficit in 1Q15: Accrding t the General Statistics Office, the cuntry recrded a trade deficit f USD 1.8 billin in 1Q15. In 1Q15, Vietnam achieved USD 35.7 billin in exprt revenue and USD 37.5 billin in imprt value, up 6.9% and 16.3% y--y, respectively. FDI enterprises cntributed t the majrity f exprt value with apprximately 7.%. The EU was the cuntry s largest exprt market in 1Q15, accunting fr USD 6.9 billin in exprts, an increase f 14.2% cmpared with 1Q14. The largest surce f imprts was China, with USD 11.6 billin, a 31.5% rise frm the same perid last year. Vietnam remittances expect t rise in 1Q15: At the time f this reprt, details f verseas remittances t Vietnam fr 1Q15 have nt been released. Hwever, the number f remittances t H Chi Minh City in 1Q15 was arund USD 1.2 billin, an increase f 16% cmpared t the same perid last year and accunting fr 24% f the ttal figure fr 214. Accrding t the State Bank f Vietnam, the remittances are mainly fr business peratins and prductin purpses. % CPI - Overall y--y Surce: General Statistics Office, JLL Research m--m % CPI - Husing & Cnstructin Materials 1. y--y Surce: General Statistics Office, JLL Research USD bil m--m Merchandise Trade Balance % % % Actual Levels % f Merchandise Exprts Surce: General Statistics Office, JLL Research P a g e 4

5 Expected cmpletin year 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Vietnam Prperty Market Brief 1Q15 HCMC OFFICE Supply and Demand Supply / Demand Indicatr Grade A Grade B Grade C Suburban Ttal Ttal Stck (sqm) 155, 431, 481, 52, 1,569, Occupancy Rate (%) Q--Q Change (bps) Supply cntinues slight increase One Grade C building (Rbt Twer) was cmpleted, added 3,2 sqm f Ttal Stck space and pushing ttal ffice space up by.2% q--q. ' sqm 2, Cnstructin prgresses f mst buildings scheduled fr cmpletin in 215 1,5 were in final phase, and sme majr buildings were ready t be launched. 1, Overall vacancy rate scales dwn 5 Net absrptin rse nearly by 7,6 sqm, with a lwer q--q rate f increase Q15 wing largely t new vacant spaces in the Suburban sectr. Grade A Grade B Grade C Suburban Tenants were seen relcating t new prperties utside the CBD with reasnable rents and attractive incentives. Asset Perfrmance Key Perfrmance Indicatr Grade A Grade B Grade C Suburban Ttal Average Grss Rent (USD/sqm/mth) Average Net Rent (USD/sqm/mth) 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). Marginal rental decline The average net rent drpped by.4% q--q, with majr cntributrs being sme Grade B and Suburban buildings t fill up vacant spaces. Rents f verall market witnessed cntinuus decline, a 13% decrease cmpared t the same perid fr last five years. Average Net Rents by Grade USD/sqm/mth Outlk Supply t increase significantly in 215 Over 26, sqm f ffice spaces frm 1 prjects are expected t increase the stck ver the next three quarters. Majr develpment with large ffice space such as Vietcmbank Twer, Viettel Cmplex and Pearl Plaza will increase t the CBD and nn-cbd supply. Rents t fall in line with mre supply Rents are expected t cntinue in decrease due t the pressure frm future supply. Cmpetitin frm new ffice spaces and rents will drive leasing activities. Grade A Grade B Grade C Suburban Supply Under Cnstructin ' sqm P a g e 5

6 Apartments Vietnam Prperty Market Brief 1Q15 HCMC RESIDENTIAL Supply and Demand Supply / Demand Indicatr Apartments Villas / Twnhuses [1] Cmpleted Supply (units) 68, 3,8 Uncmpleted Supply (units) [2] 31, 5 Unsld Inventry (%) [3] 17.9% 22.6% [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. Large supply Ttal Stck (Cmpleted Supply) - Apartments Apartments: New supply in 1Q15 was up 3% q--q t nearly 6, units, units with cnsiderable expansin in the Mid-end and Premium segments. 8, 7, Affrdable Villas / Twnhuses: New supply was mstly subsequent launches at lwend prjects and ttalled 14 units, dwn 3.% q--q but up 1.% y--y. 3, Premium 6, 5, Mid-end 4, 2, Gd demand 1, Luxury Apartments: Sales reached 5,2 units, a recrd high. District 2 tpped 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). Prices up in a grand manner Average Asking Price by Segment Primary market: Outlk ther sub-markets, accunting fr nearly 4% f the quarter s vlume. Villas / Twnhuses: Sales std at the 4Q14 nine-year high f 17 units. Asking Price Primary Market Luxury accunts fr less than 1% f ttal stck Asking Price Secndary Market Q--Q Y--Y Q--Q Y--Y Apartments 1.9% 3.5% 1.4% 4.6% Villas / Twnhuses.1% -2.9%.7% 2.9% Apartments: Prices cntinued t trend upwards, at a higher rate q--q and with significant prject-based increases f arund 5-6%. Villas / Twnhuses: Chain-linked price changes were few, but the new supply was mstly quted at prices higher than at initial launch. Secndary market: Apartments: Prices were generally higher, with prperties shwing increases respnsible fr mre than 75% f ttal secndary supply. Villas / Twnhuses: Price uptrend cntinued but was belw last quarter s rate, with marked decreases seen in distant sub-markets. High-level supply t cntinue in the next three quarters Nearly 11, new Apartment units are expected between nw and end- 215, arund 3% f which will be in the Premium segment. By end-215, new launches f Villas / Twnhuses will cme mstly frm Districts 2 and 9, with an estimated supply f mre than 23 units. Strng demand t cntinue during 215 Mre quality supply and increased sales activity by develpers, alng with better credit terms fr hmebuyers, are likely t bst demand. Prices are expected t increase further. All Apartments Affrdable Mid-end Premium Villas / Twnhuses Apartments Villas / Twnhuses Apartments Villas / Twnhuses Apartments Villas / Twnhuses Luxury Average Primary Price 1, 2, 3, 4, Upcming Cmpletins 5, 1, 15, USD/sqm Average Secndary Price units P a g e 6

7 Expected cmpletin year 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Vietnam Prperty Market Brief 1Q15 HCMC RETAIL Supply and Demand Supply / Demand Indicatr Investment Grade Nn-Investment Grade CBD Nn-CBD Ttal Ttal Stck (sqm) 16, 335, 495, 46, Occupancy Rate (%) N.A. Q--Q Change (bps) N.A. Rise in retail supply q--q Vincm Thu Duc pened in February, added apprximately 22,5 sqm t Investment Grade supply, a 5% increase q--q. Nn-investment Grade sectr als witnessed ne new retail prject, Saign Square 3 in District 3 with a 1% increase q--q. Slight decline in ccupancy rate Demand in bth CBD and Nn-CBD sectrs are mderate with few changes in net absrptin recrded. Net absrptin f the Nn-CBD prjects always leads the retail market with gd market perfrmance even with large supply. Ttal Stck Investment Grade ' sqm Q15 CBD Nn-CBD Asset Perfrmance Key Perfrmance Indicatr Investment Grade CBD Nn-CBD Overall Average Grss Rent (USD/sqm/mth) Q--Q Change (%) 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). A slight decrease in retail rents The verall average grss rent recrded at USD 5.1 per sqm, slightly decreased by.2% q--q. The lw purchasing pwer at sme retail prjects in CBD sectr has led a slight decline in rent by.5% q--q. Outlk Ample new supply in 215 Over the next three quarters, Ttal Investment Grade supply is expected t increase by 123, sqm frm seven prperties. SC VivCity and Pearl Plaza are expected t be cmpleted in 215, adding nearly 59, sqm f space t the Nn-CBD retail stck. Mderate demand in the near future Cnsumers cntinued t tighten their budgets, prspects f better demand will increase with imprved ecnmic envirnment. Rents are likely t face mre pressure due t new supply and the current fluctuant market perfrmance. Average Grss Rents by Segment Investment Grade USD/sqm/mth CBD Nn-CBD Supply Under Cnstructin Investment Grade ' sqm P a g e 7

8 Expected cmpletin year 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Vietnam Prperty Market Brief 1Q15 HANOI OFFICE Supply and Demand Supply / Demand Indicatr Grade A Grade B Grade C Ttal Ttal Stck (sqm) 431, 847, 272, 1,55, Occupancy Rate (%) Q--Q Change (bps) Supply remains stable N new prject cmpleted in 1Q15, the ttal stck remains unchanged at mre than 1.5 millin sqm. Few prjects saw cnsiderable cnstructin prgress in 1Q15. Demand increases slightly Ttal net absrptin reached mre than 41, sqm in 1Q15, primarily driven by the Grade A segment. The market recrded mre leasing transactins f ver 1, sqm than in the previus quarter. Ttal Stck ' sqm 2, 1,5 1, ytd Grade A Grade B Grade C Asset Perfrmance Key Perfrmance Indicatr Grade A Grade B Grade C Ttal Average Grss Rent (USD/sqm/mth) Average Net Rent (USD/sqm/mth) 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). Rent cntinues t decline Average Net Rents by Grade The average rent cntinued t decline, but at a slwer rate q--q than in USD/sqm/mth 4Q14. Despite this, the decrease in the Grade A segment was mre cnsiderable in 1Q Sme landlrds in the CBD sub-market lwered their asking rents t 1 5 cmpete with newer buildings in the west f the city. Hwever, rents at mre than 8% f prjects were kept unchanged in 1Q15. Outlk Grade A Grade B Grade C Supply t be plentiful until end-215 Nearly 95, sqm f ffice space is expected t enter the market in 215, arund 95% f which will be frm Grade B buildings. Demand fr ffice space is likely t increase, driven by new Grade B buildings and Grade A prperties in the nn-cbd sub-market. Dwntrend in rent is likely t cntinue Oversupply and expected lw rents at new buildings will keep pressure n rents in existing prperties. The investment market is expected t remain active. Supply Under Cnstructin ' sqm P a g e 8

9 Vietnam Prperty Market Brief 1Q15 HANOI RESIDENTIAL Supply and Demand Supply / Demand Indicatr Apartments Cmpleted Supply (units) 67, Uncmpleted Supply (units) [1] 42, Unsld Inventry (%) [2] 13.9% [1] Excludes planned prjects nt launched fr sale yet. Includes fully sld prjects. [2] The percentage f [1] that remains unsld at quarter-end. Increased supply New launches ttalled 5,6 units, up 13.% q--q. The lw-priced segments remained dminant but nt as much as in the past tw years. Cnstructin prgressed well acrss the market. In additin, resumptin was seen in many lng-delayed develpments. Demand nticeably strnger 72%, versus the 65% in 4Q14 and the 58% fr whle year 214. Asset Perfrmance Market Segment Primary Market 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). Prices increase further primary market at discunts and with favrable payment terms. Outlk Supply t be abundant in the next three quarters Ttal Stck (Cmpleted Supply) - Apartments units 7, 6, 5, 4, 3, 2, 1, Luxury accunts fr less than 3% f ttal stck Secndary Market Q--Q Y--Y Q--Q Y--Y Apartments 1.9% 5.3% 1.7% 4.6% Sales were up 3.% q--q t 5,8 units, nearly half the 214 ttal. The trend t buy such units in bulk was increasingly apparent. In 1Q15, the rati f apartments sld t thse newly launched reached Primary market Prices were higher in all segments, with Mid-end develpments shwing the largest increase at 2.2% q--q. On a district-wide basis, cmmn grwth rates were 1-2% q--q. Secndary market Prices cntinued the uptrend witnessed since 2Q14, but at the cnsiderably higher rate f 1.7% q--q. Mst decreases in 1Q15 were in lng-standing buildings, which faced cmpetitin frm the newer cmpleted units that were ffered in the Mre than 21, new cmpleted apartments are expected in the rest f 215, nearly 8% f which were launched in 212 r earlier. New supply shuld remain at high levels until end-215, as t-be-launched units at current prjects alne are duble the 1Q15 number already. Demand t be strng during 215 Mre quality supply and increased sales activity by develpers, alng with better credit terms fr hmebuyers, are likely t bst demand. Prices are expected t increase further ver 215. All Apartments Affrdable Mid-end Premium Luxury Average Asking Price by Segment Upcming Cmpletins Affrdable Mid-end Premium Luxury 1, 2, 3, 4, Average Primary Price USD/sqm Average Secndary Price 5, 1, 15, 2, 25, units P a g e 9

10 Expected cmpletin year 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Vietnam Prperty Market Brief 1Q15 HANOI RETAIL Supply and Demand Supply / Demand Indicatr Investment Grade Nn-Investment Grade CBD Nn-CBD Ttal Ttal Stck (sqm) 2, 778, 798, 328, Occupancy Rate (%) N.A. Q--Q Change (bps) N.A. Supply stable Supply was stable in the Investment Grade segment but increased in the Nn-Investment Grade market, thanks t 25, sqm at Ha Binh Green City the city s first rent-free trading center fr lcal enterprises The Parksn Keangnam Hani Landmark Twer clsed in January 215. The reasn fr the clsure was that the business had suffered peratinal lsses since 211. Demand mderate The verall ccupancy rate reached nearly 85%, but the vacancy rates in several shpping centers in the nn-cbd sub-market increased. Purchasing pwer was still weak in spite f many attractive prmtins ffered t custmers by brands. Ttal Stck Investment Grade ' sqm 1, ytd CBD Nn-CBD Asset Perfrmance Key Perfrmance Indicatr Investment Grade CBD Nn-CBD Overall Average Grss Rent (USD/sqm/mth) Q--Q Change (%) 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). Rents decline slightly The average grss rents f Investment Grade retail space saw a decline f.7% q--q in 1Q15, standing at USD 27.5 per sqm per mnth. The average asking rent in the CBD sub-market was nearly fur times higher than in the nn-cbd sub-market. Outlk Supply t increase nticeably in 215 Stck in the Investment Grade segment will increase by 75,5 sqm when AEON Mall cmes n stream in 215. The Nn-Investment Grade segment expects arund 11,5 sqm f retail space frm Thang Lng Number One Centre ver the cming quarters. Rents are likely t decrease Abundant supply and mderate demand will put pressure n existing centres, which ffer high asking rents but experience vacant space. Rents at prime retail prperties in the city s cre CBD is expected t remain stable ver the cming quarters. Average Grss Rents Investment Grade USD/sqm/mth CBD Nn-CBD Supply Under Cnstructin Investment Grade ' sqm P a g e 1

11 Vietnam Prperty Market Brief 1Q15 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. Suburban A Suburban prperty is lcated in a nn-cbd r a nn-traditinal ffice zne, regardless f its ther physical attributes. Cpyright 215 JLL Research P a g e 11

12 Vietnam Prperty Market Brief 1Q15 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. 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. 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. 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. Cpyright 215 JLL Research P a g e 12

13 Vietnam Prperty Market Brief 1Q15 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. 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 flr area (GFA) The ttal amunt f all cvered areas including clumns, walls, cmmn passageways, lift lbbies, tilets and strage rms. Grss leasable area (GLA) The ttal amunt f leasable flr 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. Market practices: Grss rents in the retail market are usually quted n a NLA 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. Investment Grade A type f retail prperty deemed t be f sufficient quality and/r scale t be f interest t a typical institutinal investr. This includes department stres, shpping centres and prime retail space. The criteria fr grading retail prperties include age prfile, ease f accessibility, prperty management as well as the current and ptential scale f prduct fferings. Supermarket In the lcal cntext, a supermarket refers t any type f stand-alne retail utlet predminantly run by a single chained retailer that sells a variety f grcery and / r nn-grcery prducts. This includes supermarkets and hypermarkets that sell mixed prducts as well as thse that specialize in a prduct type (such as electrnics r furniture). This als includes whlesale / cash & carry stres, whse main target is business custmers, but are als accessible by retail cnsumers. Mst supermarkets are cnsidered nn-investment grade. Shpping Centre In the lcal cntext, a shpping centre refers t any type f retail prperty that has a mre diverse tenant mix than regular supermarkets. Besides anchred mixed retailers (e.g. department stres and supermarkets), a shpping centre ften includes a variety f specialist retailers (e.g. fashin & accessries, fd & beverages, cnsumer electrnics and ther cnsumer services). Mst majr shpping centres are cnsidered investment grade. Cpyright 215 JLL Research P a g e 13

14 Vietnam Prperty Market Brief 1Q15 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 cities All Quarterly Stck, vacancy, prices, rents Publicly available Vietnam Prperty Market Reprt Vietnam cities All Quarterly Stck, vacancy, prices, rents, prject-level data, maps Subscriptin-based Asia Pacific Prperty Digest Asia Pacific including Vietnam Investment grade Quarterly Stck, vacancy, prices, rents Publicly available The Office Index Asia Pacific including Vietnam Investment grade Quarterly Stck-weighted rental value and capital value indices Publicly available The Residential Index Asia Pacific (Vietnam t be included) Investment grade Quarterly Capital value index Publicly available Real Estate Intelligence Service Asia Pacific including Vietnam Investment grade Quarterly Stck, vacancy, prices, rents, yields, ttal returns, frecasts Subscriptin-based Real Estate Daily Asia Pacific including Vietnam All Daily Real estate headlines & news summary Subscriptin-based Real Estate Transparency Index Glbal including Vietnam All Every tw years Cuntry transparency scres & rankings Publicly available Partner With the Best Real Estate Advisr Fr subscriptin details and enquiries, please cntact: Jseph Yee Tram Nguyen Thu Nguyen Reginal Directr Assistant Manager, Research & Cnsulting Assistant Manager, Research & Cnsulting Level 26, Saign Trade Center Level 26, Saign Trade Center Level 26, Saign Trade Center 37 Tn Duc Thang, D1, HCMC, Vietnam 37 Tn Duc Thang, D1, HCMC, Vietnam 37 Tn Duc Thang, D1, HCMC, Vietnam ext ext ext 927 jseph.yee@ap.jll.cm tram.nguyen@ap.jll.cm thu.nguyen@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 14