vietnam ReaL estate quarterly KnOWLeDGe RepORt q4 2017

Transcription

1 vietnam REAL ESTATE quarterly KNOWLEDGE report q4 217

2 Table of Contents Page ECONOMIC OVERVIEW VIETNAM... 6 HO CHI MINH CITY... 7 HANOI... 7 DANANG... 7 HO CHI MINH CITY MARKET OVERVIEW... OFFICE... 8 RETAIL CONDOMINIUM VILLA & TOWNHOUSE SERVICED APARTMENT INDUSTRIAL HANOI MARKET OVERVIEW OFFICE RETAIL CONDOMINIUM VILLA & TOWNHOUSE SERVICED APARTMENT INDUSTRIAL DANANG MARKET OVERVIEW... OFFICE RETAIL CONDOTEL VILLA Cover Page: Deutsches Haus - Grade A Office Building, HCMC

3 LIST OF FIGURES Page Figure 1: Vietnam Exports - Imports in Figure 2: International Arrivals to Vietnam in Figure 3: GDP Growth Rate of HCMC, Hanoi and Danang... 7 Figure 4: FDI of HCMC, Hanoi and Danang... 7 HO CHI MINH CITY MARKET OVERVIEW Figure 5: Office, Average Asking Rent... 8 Figure 6: Office, Occupancy Rate... 8 Figure 7: Retail, Rental Rate by quarter Figure 8: Retail, Occupacy Rate by quarter Figure 9: Condominium, New Launches by Segment and Quarter Figure 1: Condominium, Sold Units by Segment and Quarter Figure 11: Condominium, Primary Asking Price Figure 12: Villa and Townhouse, Selling Prices on Land Area by District Figure 13: Villa and Townhouse, Transaction Volume by Quarter Figure 14: Villa and Townhouse, New Launches by District Figure 15: Serviced Apartment, Occupancy Rate Figure 16: Serviced Apartment, Average Asking Rent Figure 17: Industrial, Market Performance by District Figure 18: Industrial, Supply by District LIST OF TABLES Table 1: Macroeconomic Indicators of HCMC, Hanoi and Da Nang... 7 Table 2: Significant Projects under expected completion in Table 3: Significant Office Projects... 9 Table 4: Retail, Significant Future Projects under Construction Table 5: Significant Retail Projects Table 6: Condominium, Significant new Projects launched in Table 7: Villa and Townhouse, Significant new Projects launched in 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... 2

4 HANOI MARKET OVERVIEW LIST OF FIGURES Page Figure 19: Office, Average Asking Rent Figure 2: Office, Occupancy Rate Figure 21: Retail, Rental Rates by Quater Figure 22: Retail, Occupancy Rates by Quarter Figure 23: Condominium, Sold Units and Absorption Rate by Segment Figure 24: Condominium, New Launches Figure 25: Condominium, Sold Units by Segment Figure 26: Villa and Townhouse, Supply by Quarter, Hanoi Figure 27: Villa and Townhouse, Asking Price on Secondary Market Figure 28: Hanoi District Map Figure 29: Serviced Apartment, Supply by Quarter Figure 3: Serviced Apartment, Occupancy Rate Figure 31: Serviced Apartment, Average Asking Rent Figure 32: Industrial, Market Performance by Distrtict Figure 33: Industrial, Supply by District LIST OF TABLES Table 12: Office, Future Supply Table 13: Significant CBD Office Projects Table 14: Retail, Significant Future Supply Table 15: Significant Retail Projects Table 16: Condominium, Significant New Projects Launched in Q Table 17: Villa and Townhouse, Significant New Projects Launched in Q Table 18: Significant Serviced Apartment Projects Table 19: Industrial, Future Supply Table 2: Hanoi Industrial Market Overview... 32

5 DANANG MARKET OVERVIEW LIST OF FIGURES Page Figure 34: Office, Market Performance as of Q Figure 35: Office, Market Performance by Quarter Figure 36: Office, Supply by Grade Figure 37: Retail, Market Performance as of Q Figure 38: Retail, Market Performance Comparision among Key Cities Figure 39: Retail, Supply by District Figure 4: Condotel, Market Performance Figure 41: Condotel, Supply by District Figure 42: Condotel, Guaranteed Return by Project Figure 43: Villa, Market Performance Figure 44: Villa, Primary Supply by District Figure 45: Villa, Buyer Profile LIST OF TABLES Table 21: Significant Office Projects Table 22: Significant Retail Projects Table 23: Significant Condotel Projects Table 24: Significant Villa Projects... 4 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 Y-o-Y: Year on Year Exchange rate: USD/VND = 22,75

6 Q4 217 VIETNAM ECONOMIC OVERVIEW GDP 217 is considered a year of success in Vietnam as it has achieved and exceeded 13 economic targets set forth by the Government. GDP increased by 6.81%, exceeding the target set at 6.7%- the strongest GDP growth in the last six years. Recovered markets of agriculture, forestry and fisheries have significantly contributed to the country s growth as well as: 8% of industrial and construction sector, 7.44% of the service sector. The real estate sector grew by 4.7%, highest growth rate since 211, accounting for.21% of total GDP growth. By contrast, mining dropped 7.1% - the sharpest decline since 211. This decrease, on the other hand, shows a positive sign of less dependent economy on mineral exploitation. 218 forecast CPI and Inflation The average CPI in 217 is 3.53%, lower than the plan of 4%. This is the second year that Vietnam has managed to keep inflation close to its target. Accordingly, in 216 inflation of 4.75%, ensuring the target below 5% and in 217 is 3.52% - below the 4%. Foreign Direct Investment (FDI) Total FDI capital including newly registered, increased capital and equity capital of foreign investors is USD35.9 billion, up 44.4% over the same period in 216. This year recorded the highest disbursements at $ 17.5 billion, compared to $ billion in previous years and $ 15.8 billion in 216. FDI has been concentrated in 19 industries, of which the real estate business ranked third with USD 3.5 billion, accounting for 8.5% of total registered capital, behind the manufacturing, power generation and distribution. Among 115 countries and territories investing in Vietnam, Japan ranks first with total investment of $ 9.11 billion, accounting for 25.4% of total investment, followed by Korea and Singapore. RETAIL SALES Spurred by a rising middle class and influx of international retailers, in 217 Vietnam retail sales hit a record USD129.6 billion, an increase of 1.9% over 216. Currently, Vietnam s wholesale and retail sales account for 14% of GDP. Retail is one of the six largest sectors attracting foreign investment with the surge of Mergers and Acquisitions (M & A). INTERNATIONAL ARRIVALS Vietnam was ranked as the sixth out of ten fastest growing tourist destination in the world based on numbers of visitors. In 217, Vietnam welcomed more than 13 million international visitors, 3% increase compared to 216. The hospitality accommodation developed with more than 25, accommodations including 116 five-star hotels, 259 four-star hotels and 488 three-star hotels. TRADE BALANCE In 217, import-export value reached USD billion, export surplus of USD 2.7 billion with the turnover of USD billion. In particular, export turnover of agro-forestry and fishery products in 217 reached USD billion, an increase of 13% over the same period of 216. This is a new record in agriculture, forestry and fishery exports. Remittances & Real estate enterprises development Remittances reached USD 13.8 billion, 16% higher than 216, contributing a significant source of money to boost sales in the real estate market. More than 153, new companies are set up or return to operation of which real estate companies at the highest rate at with 62.% compared to 216. M & A in real estate M& A in real estate accounted for approximately USD 8 billion. Between the two major hubs of Hanoi and Ho Chi Minh City, the latter is preferred by investors, with greater transparency and opportunities. A range of large-scale transactions were undertaken by local investors namely Phat Dat Real Estate, An Gia Real Estate, Novaland, Sun Group and Vingroup. Some notable foreign investors include Mapletree, Keppel Land, Frasers Centrepoint, Hongkong Land, Lotte E&C. The residential segment was still the most active sector due to wider opportunities for M&A. Figure 1: Vietnam, Exports - Imports, 217 USD billion Exports Imports Trade Balance Figure 2: FDI in Vietnam, 217 billion USD Source: General Statistics Office Colliers International Research Source: General Statistics Office Colliers International Research Page 6

7 Q4 217 ECONOMIC OVERVIEW HO CHI MINH CITY HCMC s economy maintained a solid GRDP growth rate at 8.25%, higher than 8.5% in 216 thanks to the export resilience and sustainable growth in service sector. Service sector dominantly contributed USD 27.3 billion, comprising 58.3% of the city s economy, followed by the industrial & construction sector and the agriculture-forestry-fishery sector, at 24.8% and.81% respectively. Industrial sector stayed healthy with industrial production index (IIP) expanding by 7.9% compared to the corresponding period of last year. Export turnover recorded at USD35.5 billion, up 16.1% y-o-y and import turnovers of USD43.3 billion, up 13.6% y-o-y. Total newly registered and supplementary FDI achieved USD6.3 billion with 193 supplementary projects of USD million. Investment in real estate took the lead with 25 projects and USD1.9 billion, accounting for 43.4% of total inflows. Retail sales of the whole year reached USD4.7 billion, an increase of 11.3% in comparison to last year. Table 1: Marcoeconomic Indicators of HCMC, Hanoi and Danang 217 HCMC Hanoi Danang GDP growth rate (%) Index of Industry Product IIP (%) Retail Sales (USD billion) FDI (USD Billion) Source: General Statistics Office Colliers International Research Figure 3: GDP Growth Rate of HCMC, Hanoi and Danang HCMC Hanoi Danang 18% 16% HANOI Hanoi s economy grew positively with improvements in most economic indicators. GRDP of the whole year increased by 8.5%. The accumulated industrial production index (IIP) increased by 7.1%. Export turnovers reached USD 11.7 billion, an increase of 1.3% y-o-y, import turnovers at USD 29.8 billion, up 18.2% y-o-y. FDI of both newly registered and supplementary capital reached USD2.4 billion, up 22.5 % of capital and 12 projects compared to the same period last year. The retail sale in the whole year attained USD 24.7 billion, an increase of 11.2% y-o-y.. 14% 12% 1% 8% 6% 4% 2% Source: General Statistics Office Colliers International Research DANANG Da Nang s economy maintained strong momentum with GRDP growth rate at 7.3%. While industrial & construction and service sectors had steady growth rates, agriculture-forestryfishery sector slowed down versus the previous year due to unfavorable climate. Industrial production index (IIP) rose by 7.9% y-o-y, higher the index of 216 at 7.3%. A total retail sale of goods and services reached USD3.4 billion, an increase of 1.7% y-o-y. Consumption Price Index (CPI) was stabilized, reflecting the city authority s effective measures taken on inflation. Da Nang attracted USD116.1 million in FDI from 97 newly registered projects, much higher than that of USD18.1 million from 61 projects in 216. Tourism sector remained the spearhead industry with total domestic and international arrivals of 6.6 million, up 19% compared to the previous year. Figure 4: FDI of HCMC, Hanoi and Danang FDI No. of projects USD billion HCMC Hanoi Danang No. of projects Source: General Statistics Office Colliers International Research Page 7

8 Q4 217 HO CHI MINH CITY OFFICE PERFORMANCE Office market showed no sign of slowing down in Q4 217 with remarkable improvements in average net asking rates across both grades. Rents among Grade A spaces were up 11.7% y-o-y and 2.7% q-o-q, sitting at an average of USD45.9/sqm/month. Tenants sought rent relief and quality building options so landlords pushed rents upward. Landlords of Grade B buildings have also enjoyed the spillover effects from Grade A segment, which facilitates nearly 2.7% q-o-q increase in rents to USD22.2/sqm/month. However, Grade B s average rental rate was slightly down 3.7% on a yearly basis. Strong absorption in the last quarter kept the average occupancy rates sustainable for both Grade A and Grade B, recording at 94.3% and 88.5% respectively. While Grade A s occupancy rate stayed relatively unchanged q-o-q but slightly down 1ppt y-o-y, Grade B s occupancy rate moderately dropped around 1ppt compared to both the previous quarter and the same period last year. Figure 5: Office, Average Asking Rent USD/sqm/month Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q SUPPLY The last quarter of 217 welcomed Etown Central, a high-quality building in District 4 with 36,5 sqm NLA. Five new significant Grade A and Grade B buildings was launched in 217, adding more than 135,sqm NLA to the total office stock. The city currently has 11 Grade A buildings and 68 Grade B buildings, covering approximately 1,24,sqm net leasable area. Figure 6: Office, Occupancy Rate 1 Grade A Grade B DEMAND Ho Chi Minh City continues to be the top choice for companies in banking, service and processing outsourcing industry with significantly rising office space net take-up. The city s reliable workforce coupled with the number of upcoming infrastructure projects are seen to unlock the city s potential in office space, especially buildings located in outskirt districts, facilitating more widen and faster decentralization trend in the coming years. Emerging trend such as serviced office and co-working space have also bolstered demand for office amid growing popularity of shorter-term and transient usage underpinned by dynamic business conditions and remarkable changes in working behaviors. The most common size of serviced office and co-working spaces in the cities are from 3 to 1,sqm and they tend to be located in the CBD or CBD-fringe districts or in new urban areas. % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q OUTLOOK An estimated 5,sqm of new Grade A office space in prime locations of the CBD is likely to hit the market by the year 22, coming from 9 notable projects with 6 out of them under construction. Due to scarcity of high-quality buildings and consistently robust demand, market conditions generally appear to favor landlords with more bargaining power. Rental rates, consequently, are expected to remain high given the law of supply and demand. Nevertheless, conditions can vary significantly depending on location and building quality. New development of very high quality such as Deutsches Haus U.S LEED premium certified green building are likely to attract leading conglomerates and multinational corporations better as they provide a premium working environment. Table 2: Significant Projects under expected completion in 218 Project name Location Grade Estimated NLA Saigon One Tower District 1 A 36,75 The Spirit of Saigon District 1 A 43,5 Tax Plaza District 1 A 82,872 Page 8

9 Q4 217 HO CHI MINH CITY OFFICE Table 3: Significant Office Projects No Name Address Completion Year NLA (sqm) Service Charges (*) Occupancy rate Average net asking rent 1 Saigon Centre 65 Le Loi , % Saigon Tower 29 Le Duan , % Sunwah Tower 115 Nguyen Hue , % The Metropolitan 235 Dong Khoi , % Diamond Plaza 34 Le Duan , % mplaza Saigon 39 Le Duan 29 26, % Bitexco Financial Tower 45 Ngo Duc Ke 21 37, % President Place 93 Nguyen Du 212 8, % Times Square Nguyen Hue , % Vietcombank Tower 5 Me Linh Square , % Deutsches Haus 33 Le Duan Q , % 55. Grade A 1 VTP-OSIC 8 Nguyen Hue ,5 6. 1% Yo Co Building 41 Nguyen Thi Minh Khai , 5. 1% Somerset Chancellor Court Nguyen Thi Minh Khai ,2 5. 1% Central Plaza 17 Le Duan , % Harbour View Tower 35 Nguyen Hue , % Saigon Riverside Office 2A-4A Ton Duc Thang , 5. 1% Saigon Trade Center 37 Ton Duc Thang , % MeLinh Point Tower 2 Ngo Duc Ke ,6 6. 1% Zen Plaza Nguyen Trai 21 11, % The Landmark 5B Ton Duc Thang 25 8, 6. 97% 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, 5. 1% CJ Building 5 Le Thanh Ton 28 14, % Ruby Tower Ham Nghi 28 15, 6.5 1% 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, % 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. 1% MB Sunny Tower 259 Tran Hung Dao, Co Giang , % Le Meridien 3C Ton Duc Thang 213 9, % Etown Central 11 Doan Van Bo , % 23. Grade B (*) USD/sqm/month (NLA) Page 9

10 Q4 217 HO CHI MINH CITY OFFICE SKYLINE REVIEW- CBD HCMC GRADE A OFFICE BUILDINGS mplaza SAIGON 39 Le Duan, District 1 26,/1,42 $ 51.7 $ 6.5 DIAMOND PLAZA SAIGON 34 Le Duan, District 1 15,936/2,2 $ 41. $ 8. SAIGON TOWER 29 Le Duan, District 1 13,95/92 $ 45.2 $ 6. DEUTSCHES HAUS 3-5 Le Van Huu, District 1 25,62/1,4 $ 55. $ 7. THE METROPOLITAN 235 Dong Khoi, District 1 15,2/1, $ 45. $ 6. PRESIDENT PLACE 93 Nguyen Du, District 1 8,33/ $ 36. $ 7. BITEXCO FINANCIAL TOWER 45 Ngo Duc Ke, District 1 37,71/9-1,3 $ 44.3 $ 7. VIETCOMBANK TOWER 5 Me Linh Square, District 1 41,25/NA $ 38. $ 7. TIMES SQUARE SAIGON Nguyen Hue, District 1 12,74/1,45 $ 53.3 $ 7. SAIGON CENTRE 65 Le Loi, District 1 11,65/ 1,73 $ 43.8 $ 6.8 SUNWAH TOWER 115 Nguyen Hue, District 1 2,8/1,166 $ 47.7 $ 6. Page 1

11 Q4 217 HO CHI MINH CITY RETAIL PERFORMANCE The retail sector in Ho Chi Minh city in Q4 217 continued to develop along with the increased retail sale of Vietnam. The market performance is positive with the market entrance of new F& B and high-end fashion brands. The average asking rent in the CBD area (ground floor) in the last quarter stabilized at around USD11/sqm/month while a slight decrease of rental rate in the non-cbd at.1% q-o-q, averaged at USD35-39/sqm/month. In 217, the rental rate of the CBD area went up to 2% y-o-y whereas the non-cbd s rate decreased 3.5% y-o-y. The increase in rental rate in CBD area can be explained by no new supply and the on-going renovated Union Square which increase the scarcity in prime location. The occupancy rate witnessed the positive outcome with fully occupied CBD area and around 84% in non-cbd s area. SUPPLY In Q4, the total retail stock in Ho Chi Minh City was added with over 2, sqm NLA from the Garden Mall (previously named Thuan Kieu Plaza in District 5) and a retail podium of Viettel Complex (District 1). In 217, no new projects in the CBD was launched while 7 new projects are concentrated in the non-cbd supplying around 75, sqm NLA. So far, the total stock of retail in Ho Chi Minh city is over 1.1 million sqm. Among the new supply, the retail podiums take the dominant position. DEMAND Relatively low retail sale per capita and fierce competition among foreign and local retailers have created big potential for Vietnam retail market s growth. In period, Vietnam s retail trade growth is expected to reach about 11.9%/year with a market size of about USD179 billion by 22. Many foreign retailers and Vietnamese retailers are planning to open more stores in Vietnam, for example GS25 with 2,5 stores in the next 1 years; Japanese 7-Eleven with 1 stores in the next three years and 1, within 1 years. Toromart, the first unmanned convenience store with QR code technology payment with 2 new ones by the end of 218. Local retailers Vinmart+, Saigon Co-op have also geared up their expansion nationwide. Figure 7: Retail, Average Asking rent by quarter USD/sqm/month Figure 8: Retail, Occupancy Rate by quarter % Q3 215 Q4 215 Q1 216 Q2 216 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 OUTLOOK Thanks to strong inflow of FDI, rising household spending and improving economic conditions, Vietnam has become one of the most attractive destinations for retailers in South East Asia. Likewise, Ho Chi Minh City s economic importance and status as retail hub continues to attract a strong development pipeline. The supply will grow bigger in with nearly 64,sm NLA from 13 projects under construction. Most of the projects are located in non-cbd due to large land availability. 7 significant projects are soon completed namely The Spirit of Saigon, Vinhomes Central Park s commercial space (Binh Thanh District 59, sqm NLA) and Elite Mall (District 8 42, sqm NLA). Given the rapid expansion of both local and international retailers, rental rates and occupancy rates will follow upward trend in upcoming years. Table 4: Some significant future projects ( ) Project name District NLA (sqm) Expected Completion Su Van Hanh Mall 1 96, The Spirit of Saigon 1 35, 219 Union Square 1 48, 218 Vinhomes Central Park Binh Thanh 57, Estella Place 2 32,5 218 Sala Shopping Center 2 6, Elite Mall 8 42, 219 Page 11

12 Q4 217 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, 22 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 , 92 1% 6 Hotel Continental Sai Gon Dong Khoi District % 7 Centre Point 16 Nguyen Van Troi Phu Nhuan 29 2, 22 93% 8 mplaza Saigon 35 Le Duan District , % 9 Saigon Pearl 92 Nguyen Huu Canh Binh Thanh 211 5, 27 88% 1 The Manor 2 91 Nguyen Huu Canh Binh Thanh 211 2,5 22 1% 11 The Oxygen Mall An Phu Ward District , 3 9% 12 Rex Arcade 141 Nguyen Hue District , 13 1% 13 ICON BFT 45 Ngo Duc Ke District , 9 95% 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 Sunrise City - phase Nguyen Huu Tho District ,5 35 1% 19 Pearl Center 12 Quoc Huong District , 32 81% 2 Thuan Kieu Plaza 19 Hong Bang District , 35 9% Retail Podium 1 Diamond Plaza 34 Le Duan District , 166 1% 2 Parkson Saigontourist Plaza 35 Le Thanh Ton Street District , 9 98% 3 Parkson Hung Vuong Plaza 126 Hung Vuong Street District , 62 98% 4 Parkson C.T. Plaza Tan Son Nhat, Truong Son Tan Binh 28 12, % 5 Parkson Flemington Le Dai Hanh District , 37 92% 6 Parkson Cantavil Premier Cantavil Premier District , % 7 RomeA 117 Nguyen Dinh Chieu District , 8 8% Department Store 1 Saigon Center 35 Nam Ky Khoi Nghia District , 12 99% 2 Zen Plaza Nguyen Trai District , % 3 Superbowl Vietnam TSN A43 Truong Son Tan Binh 22 5, % 4 Lotte Mart Saigon South 469 Nguyen Huu Tho District , 4 99% 5 Vincom Center B 72 Le Thanh Ton District , 12 93% 6 Vincom Plaza 3/2 3C Ba Thang Hai District , 42 95% 7 Lotte Mart Phu Tho 968 Ba Thang Hai District ,5 4 99% 8 Crescent Mall 11 Ton Dat Tien District , 44 85% 9 Taka Plaza 12 Nam Ky Khoi Nghia District , - 1% 1 Satra Pham Hung C6/27 Pham Hung District , % 11 Union Square 171 Dong Khoi District , Under renovation Shopping Centre (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT Page 12

13 Q4 217 HO CHI MINH CITY CONDOMINIUM PERFORMANCE The last quarter witnessed an improvement in market sentiment and absorption rates. Limited newly launched projects caused a decline in the supply. 9. successful transaction in the quarter were recorded, an increase of over 2% q-o-q but a decrease of 27% y-o-y. As of the whole year 217, nearly 33, units were sold out. This number hit the record of biggest consumed units over the new launch during the last 5 years. Newly projects in the year have attracted a high sold rate ranging from 75% to 1% thanks to the prime location, investor s prestige and incentive sale policy. In terms of selling price, the quarterly average rate was at 1,56 USD/sqm, higher at 4.5% q-o-q but lower at 3.3% y-o-y. At yearly basis, the price increased at 3% compared to 216 at the medium of 1,556 USD/sqm. The mid-end segment price s growth rate is lower than that of the high-end segment due to the bigger new launch of mid-end segment compared to the newly launched high-end units in 217. Figure 9: Condominium, New Launches by Segment and Quarter units Luxury High-end Mid-end Affordable Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 1: Condominium, Sold Units by Segment and Quarter M&A of condominium projects increased. In 217, out of 27 projects dossiers which were submitted to get approval for transfer, many projects are in the condominium sector, such as the case of Keppel land of 2 sites in the South and District 9, Capital land bought over a project in the District 4. 14, 12, 1, Luxury High-end Mid-end Affordable SUPPLY The number of new projects launched in Q4 has increased by 11% with nearly 8.6 units, adding the new supply in 217 to reach 32, units and over 22, units of accumulated amount. Comparing to the supply last year, this year s influx is 15% lower. The mid-end sector continues to dominate the market with more than 6% of sold and supplied units Regarding to the location, District 7, Nha Be in the Southern HCM area and District 2 & 9 in the Eastern part of the city are the main sites for new projects. units 8, 6, 4, 2, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 11: Condominium, Primary Asking Price Luxury High-end Mid-end Affordable DEMAND It is forecasted that the demand for condominium in HCM city continues to raise due to some driving factors such as rapid urbanization rate, cultural changes in family tradition of living (no longer favored 3 generations under one roof tradition), increase of disposable income and changes in living style (more facilities). USD/sqm 4,5 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 Q Page 13

14 Q4 217 HO CHI MINH CITY CONDOMINIUM OUTLOOK According to the Report Emerging trends in Real Estate in Asia Pacific 218, in 217, only Ho Chi Minh stood out in the top positions in investment prospect rankings while other merging market cities as Bangalore, Jakarta and Manila decreased rating. With the prospect of ranking the fifth in investment and second in development in 218, Ho Chi Minh city will expect an outstanding growth as applicable on the condominium market. The supply pipeline will continue to grow with more than 5, units in the next two years, consisting of 24. units in 218 from 2 projects. Average selling price in 218 is expected to increase by 3%, with high-end and luxury segment showing increase of 5%, and mid-end and affordable segment increasing with a lower rate of 1.5%. The increase of price will be attributed by the adjusted land rental, fluctuated labor and construction cost, land scarcity The market will be expanded toward the surrounding areas due to the policy of decentralization of population in the CBD. The adjusted regulation on ownership will continue liberal access for the Vietnamese expatriates and foreigner to purchase the property in Vietnam. More foreigners are getting interest in working and staying in Ho Chi Minh city. The high-end and luxury segments will see a cautious pace of development and limited supply since more developers are shifting their focus to lower-end segments where having strong demand from end-users. Table 6: Condominium, Significant new projects launched in the second half of 217 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Masteri An Phu Thao Dien Investment District ,718 2 River Panorama phase 2 An Gia Investment and Creed Group District ,542 3 Garden Bay An Gia Investment District ,542 4 Tara Residence Song Ngoc Garment Co., Ltd District Waterina Suites Maeda-Thien Duc District ,644 6 Lavida Plus-Block A Quoc Cuong Gia Lai District ,419 7 Topaz Elite- Phoenix 1&2 Van Thai Land District , HausNeo Ezland District Jamila- Block B Khang Dien District ,128 1 Saigon Intela LDG Binh Chanh 219 1, Osimi Tower ANI Go Vap ,58 12 Tilia Residence Kepple Land, Gaw Capital- Tien Phuoc, Tran Thai District ,5 13 Lavita Charm Thuan Thanh Phat Thu Duc , Mizuki Park (Condo Flora Mizuki Park 1&2) 15 Thao Dien Q2 Hankyu Realty, Nishi Nippon Railroad và Nam Long Frasers Centrepoint Limited, Thao Dien Investment , , * Excluding all kinds of tax and promotions The information is updated as at the end of Q4 217 Page 14

15 Q4 217 HO CHI MINH CITY VILLA & TOWNHOUSE PERFORMANCE The last quarter of the year witness a vibrant growth in this segment since more capital tends to pump into this investment channel toward the end of the year. This contributed to the growth of the segment in the whole year 217. The number of successful transactions in the quarter was increased 25% q-o-q, adding up to the accumulated total sales in the whole year with 3, dwellings. The absorption rate is improved compared to the last quarter. In terms of price, it is observed that the price continues to glide up at 5-1% depending on the location and areas. The average primary price is over USD1,7/sqm while that of the secondary market almost doubled. The East and the South with large land stock continue to be the prime location. While more Vietnamese developers are investing in the East, the South is attracting more foreign and join-venture developers. Figure 12: Villa&Townhouses, Selling Price on Land Area by District USD/sq m Q1 214 Q2 Q3 Q4 Q1 215 District 7 District 9 District 2 Others Q2 Q3 Q4 Q1 216 Q2 Q3 Q4 Q1 217 Q2 Q3 Q4 SUPPLY In the last quarter of 217, 1,3 dwellings were launched, adding to the total newly launched stock of around 2,9 ones in the whole year. Most of the projects are located in the East and South of the city. Townhouses outnumber the villa thanks to the reasonable price and high liquidity. In terms of location, for the first time Binh Chanh district emerges with 45% of share in the market. Followed by District 9, District 2 and some suburban areas. DEMAND Although condominiums have gained its popularity in recent years, landed property is still the preferred choice of accommodation for the wealthy residents. For investors, landed property remains to be one of the traditional investment channels given its long-term capital gain. Groups of buyers in this market segment are normally categorized into 2 types. While investors prefer products from new launches to take advantage of good initial pricing, end-user customers would seek projects with reputable developers, good construction progress and supporting facilities. Figure 13: Villa&Townhouse, Transaction Volume by Quarter dwellings Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 OUTLOOK It is expected that more than 12, dwellings to be added to the supply pipeline in the next two years. Due to the scarcity of land, the new launches will tend to decrease towards 219. The Eastern and Southern part of the city will dominate the geographical location thanks to improved infrastructure and larger greenfield sites available. The primary sale price will follow upward trend in the midst of solid demand from both end-users and investors. Figure 14: Villa and Townhouse, New launches by Districts District 12 9% Binh Tan 14% District 7 13% District 9 64% Page 15

16 Q4 217 HO CHI MINH CITY VILLA & TOWNHOUSE Table 7: Villa and Townhouse, Significant new projects launched in 217 No Name of Project Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Merita Khang Dien Khang Dien District ,2 2 Lucasta Khang Dien District ,25 3 Louis Garden Khang An District ,4 4 Lien Phuong Star Khang Dien District ,8 5 Valora Kikyo Nam Long District ,8 6 Park Riverside Premium M.I.K District Lavita Phase 2 Kien A Nha Be Khang An Residence Khang An Binh Tan ,5 9 Cityland Park Hills Cityland Group Go Vap , 1 Thang Long Home Nam Long District ,8 11 Van Xuan Dat Viet Van Xuan Group Binh Tan ,3 12 Citadel Trung Thuy Group District ,3 13 Rosita Garden Khang Dien District ,85 14 Dien Thuan Star Hill Dien Thuan Real Estate and Construction Co., Ltd District ,75 15 Mystery Villas Hung Thinh District , Thao Dien Q2 Frasers Centrepoint Limited Districct , 17 Singa City Kim Oanh Group District * Excluding all kinds of tax and promotions The information is updated as at the end of Q4 217 Page 16

17 Q4 217 HO CHI MINH CITY SERVICED APARTMENT PERFORMANCE High volume of business travelers and tourists at the end of the year helped push up occupancy rates of serviced apartments in Q4 217, recording at 92.2% for Grade A and 85% for Grade B, equivalent to an increase of 1.2 ppts and 2. ppts on a quarterly basis. Landlords, therefore have taken advantage of the solid demand to raise their asking rents. More specifically, Grade A s average asking rent increased by 1.5% compared to the previous quarter and 5.2% y-o-y to a high level of USD39.9/ sqm/month, while an improvement of 1.3% q-o-q (equivalent to 1.1% y-o-y) was also witnessed in the Grade B s average asking rent, reaching USD3.3/sqm/month. SUPPLY The last quarter of 217 welcomed Sherwood Suites, a high-quality service apartment development with nearly 16 units in District 3, increasing the total stock by 4.1% compared to the previous quarter. The total existing stock comprises of more than 1,1 Grade A units and approximately 3,1 Grade B units, accounting for nearly 25% and 75% of the total market respectively. Due to limited land availability in the Central District, decentralization trend have increased with many new developments scattered in outlying districts such as District 2,7 and Tan Binh District. DEMAND According to the Travel and Tourism Competitive Index (TTCI) published by the World Economic Forum, Vietnam was ranked one of the most attractive destinations to develop a travel and tourism business across the Asia-Pacific region in 217. The Vietnam travel industry has boomed in the recent past thanks to the rise of budget airlines and accommodation options. The latter has expanded into an industry of its own and along with hotels, villas, bungalows and chalets, now serviced apartments can also be chosen from the list. In Ho Chi Minh City, the growing awareness of consumers regarding serviced apartments has continued to fuel demand for this sector as they offer a lot more privacy and freedom than hotels with monetary efficiency and more elaborate options such as kitchen, pool, laundry room, gym and even house-keeping services. Figure 15: Serviced Apartment, Occupancy Rate % Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 16: Serviced Apartment, Average Asking Rent USD/sqm/month Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q OUTLOOK An estimated 1,28 units of serviced apartment supply will enter the market by the end of 218. In spite of the fact that landlords have enjoyed favorable market conditions with high occupancy rates and steadily increasing rental rates, Ho Chi Minh serviced apartment market has seen increased competition from new buy-to-let apartments. The rivalry is forecasted to be more bitter in the next coming periods as rental apartments offer approximately a half or even a third of rents offered by serviced apartments in the same location. Additionally, with a huge amount of new condominium supply to be launched since 218, rents of buy-to-let will become more competitive and then the market is expected for bidding wars. Table 8: Serviced apartment, Significant Future Projects under construction Project name District Total units Expected Completion Saigon Center (phase 2) 7 2 Q1 218 Oakwood Residence Saigon & Richlane Residence 2 48 Q1 218 Berkley Serviced Residence 2 85 Q1 218 Ascott Waterfront Q3 218 Terra Royal 3 3 Q4 218 Accelerating Page success 17

18 Q4 217 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 % 3. 5 The Lancaster Bis Le Thanh Ton District % 4. 6 Intercontinental Asian Saigon 39 Le Duan District % Norfork Mainsion Ly Tu Trong District % 3. 8 Lafayette De Saigon 8 Phung Khac Khoan District % 3. 9 Diamond Plaza 34 Le Duan District % Saigon Sky Garden 2 Le Thanh Ton District % 34. Grade A 1 Sherwood Residence 127 Pasteur District % 4. 2 Ben Thanh Luxury Ky Con District % 2. 3 Vincom Center 45A Ly Tu Trong District % 2. 4 Nikko Saigon 235 Nguyen Van Cu District % Saigon City Residence 8A/3D2 Thai Van Lung District % Spring Court 1 Bis Phung Khac Khoan District % Saigon Domaine 157 Xo Viet Nghe Tinh Binh Thanh % An Phu Superior Compound 43 Thao Dien District % Poonsa 3 Vo Van Tan District % Ibis Saigon Airport 2 Hong Ha Tan Binh % 22. Grade B (*) USD/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge Page 18

19 Q4 217 HO CHI MINH CITY INDUSTRIAL PERFORMANCE As demand for quality available space continued to grow in Ho Chi Minh market, landlords have increased asking rental rates. The last quarter of 217 s average asking rental rate was USD142.2/sqm/term, up from USD1.2/sqm/term compared to the last quarter and equivalent to an increase of.9% q-o-q (or 2.8% y-o-y). Cu Chi and Thu Duc are 2 out of 1 districts owing industrial parks reported the lowest average asking rental rates around USD8-9/sqm/month, whist District 7 with Tan Thuan Export Processing Zone takes the lead at USD26/sqm/month. The average Land Use Right stayed at 35.8 years, unchanged q-o-q as there was no new IP coming on-line in Q The average occupancy rate in the last quarter was 75.4%, jumping approximately 4ppts q-o-q and 8ppts from this time last year. Seven industrial zones were fully occupied. For a minimum leasable area from 1,-5,sqm, ready-built factories charge USD4.-USD6./sqm/month (excluding VAT and service charge), up from around USD2/sqm/month one year ago. SUPPLY No new industrial park entered the market in the review quarter but in the whole year, Ho Chi Minh City welcomed one new industrial park, Le Minh Xuan III, adding up approximately 231 hectares to the total existing stock. Despite the delivery of one new industrial zone to the market, tenant demand is more likely to keep up with and even outpace the supply in the next coming years thanks to continuously healthy absorption. The existing stock is sitting at 2 operating IPs, covering a total leasable area of nearly 3,24 hectares. Cu Chi District remained the largest supplier with hectares, accounting for more than 29% of the market share, followed by Binh Chanh and Nha Be districts. Figure 17: Industrial, Market Performance by District USD/m 2 /kỳ cho thuê Quận 9 Quận 12 Củ Chi Bình Tân Bình Thạnh Figure 18: Industrial, Supply by District Others 24% Giá chào thuê Tỷ lệ lấp đầy Nhà Bè Quận 7 Tân Phú Quận 2 Thủ Đức Binh Chanh 19% District 9 1% 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % DEMAND The City Government continues to offer incentives for development in supporting industry in particular and promote industrial development in a comprehensive and sustainable manner. Recently, Department of Science and Technology has built a synchronous data system of enterprises in supporting industries, including foreign companies in order to help them easily associate and transfer technology. Additionally, Ho Chi Minh Export Processing and Industrial Zones Authority (HEPZA) also spends more than 2 hectares of land in Hiep Phuoc and Le Minh Xuan 3 Industrial Parks to build a specialized supporting industrial zone with various incentives to attract investors. These actions in accordance with promising national macro-economic outlook are expected to provide tailwind for supporting industry and fuel demand for warehouse and industrial space in the near future. OUTLOOK Approximately 2,3 hectares from 8 new IPs is expected to join the market by 225, increase more than 5% compared to the current stock. The average rental rate is expected to rise faster as a massive future supply pipeline will enter the market with high-quality facilities and more functional blocks, coupled with the fact that the absorption process of vacant industrial space is projected to be positive. Even though a majority of future industrial parks are speculative developments without formal commitment from any tenant, a robust demand and limited land availability are likely to secure a promising industrial market for the foreseeable future. Cu Chi 29% Table 1: Industrial, Future Supply Industrial Park Name Nha Be 19% 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 2 Cu Chi 173 Hiep Phuoc Industrial Park - phase 3 Nha Be 1, Phong Phu Industrial Park Binh Chanh Page 19

20 Q4 217 HO CHI MINH CITY INDUSTRIAL Table Table 3: 11: Significant HCMC Industrial Office Projects 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 Cat Lai Industrial Park (Cluster II) District % Tan Thuan Export Processing Zone District % Saigon Hi-tech Park P1 District % Tan Thoi Hiep District % Tan Binh Industrial Park(P1+2) Tan Phu % Vinh Loc Industrial Park Binh Chanh % Le Minh Xuan Industrial Park Binh Chanh % An Ha Industrial Park Binh Chanh % Le Minh Xuan III Binh Chanh % Binh Chieu Industrial Park Thu Duc % Linh Trung 2 Export Processing Zone Thu Duc % Linh Trung 1 Export Processing Zone Thu Duc % Tan Tao Industrial Park 1 Binh Tan % Tan Tao Industrial Park 2 Binh Tan % Hiep Phuoc Industrial Park 1 Nha Be % Hiep Phuoc Industrial Park 2 Nha Be % 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 Page 2

21 Q4 217 HANOI OFFICE PERFORMANCE The last quarter of 217 witnessed improvements in both rents and occupancy rates across all grades due to limited new supply and continuous strong demand. An estimated.8% q-o-q (or 6.8% y-o-y) rent acceleration of Grade A office buildings was recorded with the average net asking rent currently residing at USD29/sqm/month. Grade B s average asking rent also reported an upward adjustment of nearly 1.1% compared to the previous quarter and 1.2% compared to the same period last year to achieve USD18.1/sqm/month. Surge in demand for office space in the capital city also helped to push up the average occupancy rate across both grades. Grade A s occupancy rate was up 2.4ppts and 1ppt on a quarterly and yearly basis respectively, reaching 86%; while Grade B experienced an improvement of 1ppt q-o-q and nearly 2 ppts y-o-y, staying at 79.7%. Figure 19: Office, Average Asking Rent USD/sqm/month Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Grade A Grade B SUPPLY Q4 217 welcomed more than 16,5 sqm NLA office space from a Grade B building, Eurowindow Building located in Dong Da District, expanding the total existing stock by 1.4%. On a yearly basis, around 5,sqm NLA came on stream with growth rate of nearly 4.2%. The capital city currently has approximately 41,sqm NLA of Grade A space and 818,892 sqm NLA of Grade B space, accounting for 33% and 66% of total market share respectively. Limited Grade A supply is expected to be unveiled while nearly 19,sqm NLA of Grade B future supply is slated to be delivered by 218, interpreting an expected shortage of prime office space in the capital city in several upcoming years. Figure 2: Office, Occupancy Rate Grade A 1% 95% 9% 85% Grade B DEMAND Demand for office space in Hanoi is forecasted to remain sustainable on the back of prospect of strong economic growth and increased investment capital coming from both domestic and international developers who are trying to grab the remaining prime location in major cities quickly. Additionally, according to Vietnam Chamber of Commerce and Industry, Vietnam currently has more than 1,5 startups, showing a higher density of startups per capita than other famous Startup Nations such as China and India. The blooming base of startup culture has also contributed greatly to the office space demand. 8% 75% 7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q OUTLOOK Hanoi office market has shared the similar characteristics with their counterpart, Ho Chi Minh City with a decentralization trend occuring. Increase in absorption recorded in adjacent districts reflects the fact that high demand for office space has shifted to other neighbor areas due to scarcity of land and extremely high rental rates in the CBD as well as high-pace urbanization process and well established infrastructure. This geographic dispersion trend has also supported by the City Government incentives in order to diminish pressures on the CBD and stimulate developments in other submarkets. According to the city s master plan by 23 and a vision to 25, the Western part is defined as a nuclear city, administrative, economy and modern culture center, leading to mobility trend of many headquarters of ministries, health and education facilities from the CBD to this area. Table 12: Office, Future Suppy Project name Grade NLA (sqm) Expected completion Comatce Tower B 43,1 Q1 218 DSD Building B 6,86 Q1 218 FLC Twin Tower B 35,96 Q2 218 Vinacomin Tower B 13,1 Q4 218 Page 21

22 Q4 217 HANOI OFFICE Table 13: Significant CBD Office Projects No Name Address Completion Year NLA (sqm) Service Charges (*) Occupancy rate Average net asking rent (**) 1 Central Building 31 Hai Ba Trung , % International Centre 17 Ngo Quyen ,5-9% Hanoi Tower 49 Hai Ba Trung , 7. 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 85% 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. 1% 19. Grade A 1 Tungshing Square 2 Ngo Quyen , % 2 2 Melia Hotel 44B Ly Thuong Kiet ,5-89% 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 (*) USD/sqm/month (NLA) Page 22

23 Q4 217 HANOI RETAIL PERFORMANCE The property market for retail in Hanoi in the last quarter was assessed to be in a relatively healthy status with the moderate increase in supply, soft decrease in both demand and asking rent. The average net asking rents across all segments (podium, shopping center & department store) decreased by 2.% q-o-q, staying at USD32.83/sqm/month. The average occupancy rate improved by 3ppts, staying at 92%. Among the three segments, shopping malls recorded the strongest improvement then comes Department stores and retail podiums. More and more F& B and fashion brands continue to expand their market. H&M, Zara have opened their stores in Hanoi this year after their initial launch in HCM city. SUPPLY The total retail stock of the whole year 217 reached with over 1 million sqm NLA thanks to one new shopping center in Cau Giay district- Discovery Complex with over 4, sqm NLA and three retail podiums with 2, sqm which are put into operation in the last quarter. While the CBD is a prime location for both local and international luxury fashion, suburban districts are led by supermarkets, fast-fashion brands, F&B and entertainment services. Figure 21: Retail, Rental Rates by Quarter USD/sqm/month Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 Figure 22: Retail, Occupancy Rates by Quarter DEMAND This year marks 1 years of Vietnam s joining the World Trade Organisation. Having opened up to foreign goods and businesses, Vietnam has seen continued double-digit growth, led by a 31.5 per cent spike in 28. With the Association of Southeast Asian Nations Economic Community taking full effect in Jan, 218, Vietnam has eliminated nearly all tariffs on goods from within the region. Supermarkets and convenience stores are on the trend to replace the traditional markets, and the number of specialty shops selling organic vegetables is growing. Hanoi with the position of capital city continues to see the growth of modern retail channels like supermarkets and shopping centres although shopping online, Ecommerce is taking a robust growth in the young generation. % Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 OUTLOOK Hanoi will witness an abundant supply in the next 3 years with approximately 92, sqm GFA from 25 projects entering the market. In the year 218 only, 13 projects will provide 23, sqm NLA. A number of developments which are under construction or being proposed, which include quality retail facilities that will provide more shopping centres over the coming years. It is anticipated that large supply will put pressure on rental rates and occupancy rates but the overall long-term outlook for the retail market is optimistic on the back of improved economic situations and positive demographic shift. In terms of location, some retails centres are concentrated in District of Ba Dinh, Thanh Xuan- Ha Dong. The trend to expand to non-cbd is still taking off. Table 14: Retail, Significant Future Projects Project Name District GFA (sqm) Expected completion FLC Twin Towers Cau Giay 25, Q1 218 Vinhomes D'Capital Cau Giay 45,477 Q4 218 Aeon Mall Ha Dong Ha Dong 2, Q4 219 Lotte Ciputra Mall Tay Ho 2, 22 Page 23

24 Q4 217 HANOI 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 2,9 16 1% 5 Pacific Place 83b Ly Thuong Kiet Hoan Kiem 27 2,3 67 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 5,4 65 1% 1 The Lancaster Hanoi 2 Nui Truc Ba Dinh 213 3, % 11 Madarin Garden Residential 1 Hoang Minh Giam Cau Giay , 25 98% Retail Podium 1 Vincom Center Ba Trieu - Tower A&B 191 Ba Trieu Hai Ba Trung 24 17,7 93 8% 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 35 1% 4 Syrena 51B Xuan Dieu Tay Ho 28 4, % 5 Trang Tien Plaza 24 Hai Ba Trung Hoan Kiem 28 12, 15 7% 6 Savico MegaMall 7-9 Nguyen Van Linh Long Bien , % 7 Vincom Center Long Bien KDT Vincom Long Bien , 25 83% 8 Indochina Plaza Hanoi 241 Xuan Thuy Cau Giay , 3 71% 9 Vincom Mega Mall - Royal City 72A Nguyen Trai Thanh Xuan , % 1 Vincom Mega Mall - Times City 458 Minh Khai Hai Ba Trung , % 11 Aeon Mall Long Bien 2 Co Linh Long Bien , - 1% 12 Vincom Nguyen Chi Thanh 54A Nguyen Chi Thanh Dong Da , % Shopping Centre 1 The Garden (Bitexco) Me Tri Tu Liem 27 24,63 4 1% 2 Ho Guom Plaza Ha Dong Ha Dong , % 3 Lotte Department Store 54 Lieu Giai Ba Dinh ,48 5 1% Department Store (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT Page 24

25 Q4 217 HANOI CONDOMINIUM PERFORMANCE Hanoi condominium market recorded a vibrant quarter with approximately 9,5 successful deals, adding up to the total sale in 217 at 25,95 units, an increase of 22.4% compared to last year. Affordable to mid-end segments witnessed the high sold rates thanks to their reasonable prices with the growth rate of 4% and 37% respectively. No new luxury apartment was absorbed while high-end products sale dropped 8% compared to last year. On the primary market, developers have adjusted selling and offered incentive policy in the end of year. Therefore, selling prices recorded minor changes in the review quarter with the average price of approximately USD2,137/sqm across all segments, with the average prices in luxurious product at USD4,392/sqm, high-end unit at USD2,24/ sqm, mid-end and affordable products at, USD1,212, USD 74 respectively. SUPPLY Newly launched units in the fourth quarter of 217 reached approximately 9,5, adding to the whole year s supply at 35, units, an increase of 15% compared to 216. While high-end segment recorded modest supply, large amount of new supply from other segments reflected positive sentiment of developers towards lower-end products. In terms of location, the West and South dominated new launches with nearly 6% of the market share thanks to large land bank and upgrading infrastructure. DEMAND According to a survey, as of the Quarter 4, 217, in Hanoi, the number of buyers who were searching for apartment accounts for biggest proportion of 38%; landed property of 27%, land lot19%; townhouse of 6% and villa of 7%. This reflect the interest and demand of buyers including the end-users and investors. The city continues to welcome more immigrants and young labour force from rural and surrounding areas as job and educational opportunities are among the advantages that only big cities like Hanoi can offer. Looking for a long-term and stable settlement is still favored by Vietnamese people, especially the people in the North of Vietnam where stability in job and personal lives tend to be more important traditionally than in the South as Ho Chi Minh city. OUTLOOK As more affordable housing projects will be added to the future supply pipeline in upcoming years, sale price will not see a significant appreciation for this market segment. Non-urban districts such as Hoang Mai, Ha Dong, Dan Phuong and Gia Lam are being major hubs for lower-end residential products thanks to their large land availability. The existing gap between strong end-users demand and limited affordable supply is expected to be resolved in the next few years. The additional supply of affordable and middle-end products will help to provide the social security in housing for its residents but it also put Vietnam as a whole and Hanoi into the middle-income trap that is being discussed now. Vietnam and Hanoi will have to gain a sustainable growth momentum for a longer period to be able to exit the possible trapping situation. After that, the higher end products will have more way to surge in the long-run. Figure 23: Condominium, New launches by Year and by Segment Luxury High-end Mid-end Affordable 4, 35, 3, 25, units 1, 5, Figure 24: Condominium, Average Selling Price by Segment US$/sqm Luxury High-end Mid-end Affordable 8, 7, 6, 5, 4, 3, 2, 1, Figure 25: Condominium, Sold Units by Segment Luxury High-end Mid-end Affordable 3, 25, 2, units 2, 15, 15, 1, 5, Page 25

26 Q4 217 HANOI CONDOMINIUM Table 3: 16: Significant Condominium, Office Significant Projects new projects launched in the second half of 217 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 PentStudio CTX Holdings Tay Ho ,5 2 Tan Hong Ha Tower Tan Hong Ha Corp Thanh Xuan ,5 3 Samsora Premier Saigon-Hanoi Investment Corp. Ha Dong Vinhomes Greenbay Vingroup Nam Tu Liem Hateco Apollo Xuan Phuong Hateco Nam Tu Liem 219 1, The Emerald My Dinh Vinmefulland Nam Tu Liem ,1 7 Sunshine City Sunshine Group North Tu Liem ,277 8 Housinco Grand Tower Hanoi Investment, Construction and Business No.35 Thanh Tri ,1 9 D. El Dorado Tan Hoang Minh Tay Ho , 1 The Golden Amor Corporation 36 Ba Dinh ,8 11 6th Element Bac Ha Tay Ho 219 1,176 1,2 12 Cosmo Tay Ho Elite Real Estate Company Tay Ho ,5 * Excluding all kinds of tax and promotions The information is updated as at the end of Q4 217 Page 26

27 Q4 217 HANOI VILLA & TOWNHOUSE PERFORMANCE As usual, the last quarter in the year normally saw a growth in property market, especially the landed property since the purchasers got more money from different sources such as the oversea remittance, year-end bonus, commission and other investment channel. In the landed property market, townhouses gained a remarkable improvement in the review quarter with the sucessful transaction accounting for 5% in the segment. The rate of good sale belongs to the East (Dong Anh, Long Bien districts), up to 6% of revenue, then come the West part (Hoai Duc, Thach That.). Market secondary price saw an increase of more than 2% on a quarterly basis, averaging at USD3,399/sqm. SUPPLY The supply pipeline in the forth quarter of 217 welcomed 1,3 dwellings from 1 newly launched projects and 5 old projects, totaling the existing stock of over 4, ones.in terms of location, the West and South of Ha noi outnumbered the projects, providing over 12% of the market supply. Ha Dong district in the South West is weighing the market share with 24%. Hoai Duc district ranked the second position. Some of significant projects such as Marina Arc of Ecopark, Minori Village (Hai Ba Trung district), 319 Bo De (Long Bien); Khai Sơn Hill (Long Bien), Lakeside Splendora (Hoai Duc), Dai Kim (Hoang Mai). Figure 26: Villa and Townhouse, Supply by quarter, Hanoi units 45, 4, 35, 3, 25, 2, Dwellings No. of Projects , 6 1, 4 5, 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 27: Villa & Townhouse, Asking Price on Secondary Market Average secondary price Changes q-o-q 12 No. of projects 1 8 DEMAND The urbanization growth and potential infrastruction investment in the Eastern part of Hanoi such as Long Bien district has increasingly attracted the attention of high and middle- income residents to settle. In the near future, Ha Noi will invest 4 more bridges adding to the current 7 ones to connect the East and CBD. This will shorten the travelling time to 15-2 minutes and help increase the policy of relaxed population in the CBD. The demand for villas, townhouse will slightly increase along with the asking price. USD/sqm Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % OUTLOOK The first quarter of 218 is expected to be robust with many giant projects onboard as Gamuda Phase 4 Dahlia Homes, Him Lam Shophouse, Starlake second phase. More foreign investment will be likely to pump into this segment. The giant project of over 2, ha at 4 billion U.S.D of a Vietnamese- Japanese Joint venture BRG Group and Sumitomo in Dong Anh district is expected to create an outstanding impression in the market in the year to come. It is forecasted that sale price of landed properties will follow upward trend due to positive market sentiment, rising demand and better finishing quality. The price of townhouse will grow with faster speed than that of villa due to limited pipeline and possibility of making high profit. Decentralised districts such as Ha Dong, Hoai Duc, Quoc Oai, Dan Phuong, Chuong My, Dong Anh, Me Linh and Thach That are leading suppliers thanks to improving infrastructure, growing population and large greenfield sites. Page 27

28 Q4 217 HANOI VILLA & TOWNHOUSE Table 3: 17: Significant Office new projects Projectslaunched in the second half of 217 No Name of Project/Building Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Louis City La Vong Group Ha Dong ,8 2 The Mansions Vietnam International Township Development Jsc. (VIDC) Park City ,8 3 The Eden Rose Vimedimex Thanh Tri ,5 4 Iris Home Gamuda Land Hoang Mai ,5 5 Hateco Apollo Xuan Phuc Hateco Nam Tu Liem ,2 * Excluding all kinds of tax and promotions The information is updated as at the end of Q4 217 Figure 28: Hanoi District Map Page 28

29 Q4 217 HANOI SERVICED APARTMENT Table PERFORMANCE 3: Significant Office Projects The capital serviced apartment market continued to be on a positive trajectory with improvements shown in both average occupancy rate and average asking rent across Grade A and Grade B spaces. While Grade A s average rent slightly increased by.3% compared to the previous quarter and nearly 11% y-o-y to achieve USD35.5/sqm/month, Grade B s average rent stood at USD21.1/sqm/month, up 1.4% q-o-q and 4.5% y-o-y. Healthy rate was also reported in the occupancy with an average of 89% shown across both Grade A and Grade B thanks to sustainable demand. In particular, the average occupancy rate for Grade A serviced apartments was recorded at 92.9%, equivalent to an increase of.5ppt q-o-q and nearly 9ppts y-o-y, while Grade B s average occupancy rate increased by 1.ppt q-o-q but declined 1.9ppts compared to the same period last year, sitting at 84.1%. SUPPLY The last quarter of 217 recorded the remaining 1 units from Somerset West Point Hanoi entering into the market, expanding the total stock by 3% q-o-q. On a yearly basis, Hanoi serviced apartment market was more vibrant compared to their counterpart, Ho Chi Minh City with nearly 4 newly launched units from international brands, up more than 1% compared to the previous year. The current stock stands at approximately 4,4 units from 43 projects with diverse products from studio and four bedroom units and penthouse. Tay Ho District remained the main hub for residential products thanks to attractive lake view, close proximity to the CBD, large land bank and a large existing expatriate community here. DEMAND Vietnam is growing through a comprehensive economic transformation with large investment inflow from foreign companies, corporations and funds, raising demand for manpower or expertise from foreign countries for a certain period of time. Demand for serviced apartments therefore will continue sustainable, especially in key cities and help to bring additional revenue to the booming economy. Demand for serviced apartment is now split between expatriate employees of multinational companies for longer-term rentals and daily-rate business traveler and tourists. In terms of tenant profile, Asian employees such as Japanese and Korean are the largest market for longer-term rentals for serviced apartments. OUTLOOK There are approximately 4 planned and under construction serviced apartment units which will be clustered mostly around the CBD area, where the established expatriate community is. Serviced apartment market are facing with fierce competitions from mid-end and affordable hotels, especially service apartments offering daily rates as well as buy to let apartments in the context that Hanoi hotel supply is expected to grow exponentially in the coming years and the drastic increase in the popularity of rental condominiums. However, the latter competition is almost exclusively for one-bedroom units as budget constraints limit demand for two-bedroom or larger serviced apartments. Average asking rents therefore are expected to slightly drop in the coming periods as landlords tend to soften their rents for more customer attraction. Figure 29: Serviced Apartment, Supply by Quarter units Grade A Grade B 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 - Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 Figure 3: Serviced Apartment, Occupancy Rate Grade A Grade B 1% 9% 8% 7% 6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 31: Serviced Apartment, Average Asking Rent USD/sqm/month Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Page 29

30 Q4 217 HANOI SERVICED APARTMENT Table 18: Significant Serviced Apartment Projects No. Project Name Address Location Total Units Average Occupancy ARR(*) (**) 1 Lotte Center Dao Tan, Cong Vi Ba Dinh % Hanoi Daewoo 36 Kim Ma Ba Dinh % Sofitel Plaza 1 Thanh Nien Ba Dinh 56 1% Hanoi Somerset Grand 49 Hai Ba Trung Hoan Kiem % 35, 5 Sun Red River 23 Phan Chu Trinh Hoan Kiem 46 85% 25, 6 Pacific Place 83B Ly Thuong Kiet Hoàn Kiem 35 8% 23, 7 Sedona Suites 96 To Ngoc Van Tay Ho 181 9% 34, 8 Somerset West Lake 254D Thuy Khue Tay Ho 9 82% 3, 9 Hanoi Lake View 28 Thanh Nien Tay Ho 26 1% 25, 1 Intercontinental Ha Noi 13 Nghi Tam Tay Ho 25 88% 35, 11 Fraser Suites Hanoi 51 Xuan Dieu Tay Ho % 4,5 12 Somerset West Point 2 Tay Ho Tay Ho % 36, 13 Crown Plaza 36 Le Duc Tho Tu Liem % 35, 14 Calidas E6, Pham Hung Tu Liem % 38, 15 Somerset Hoa Binh 16 Hoang Quoc Viet Cau Giay 26 87% 31, Grade A 1 Rose Garden 17 Ngoc Khanh Ba Đinh 96 8% 24, 2 V-Tower 649 Kim Ma Ba Đinh 36 9% 28, 3 DMC Lake View 535 Kim Ma Ba Đinh 66 85% 16, 4 Hoa Binh Green 376 Duong Buoi Ba Đinh 4 92% 22, 5 Lancaster Hanoi 2 Nui Truc Ba Đinh 31 85% 24, 6 May Fair 34B Tran Phu Ba Đinh 48 95% 17, 7 Hanoi Lakes Residences Nam Trang Ba Đinh 1 1% 9, 8 Skyline Tower 4 Đang Dung Ba Đinh 79 8% 31, 9 Candle Hotel Đoi Can Ba Đinh 69 74% 27, 1 The City Residences 37 Phan Đình Phùng Ba Đinh 15 67% 15, 11 Elegant Suites Hahoi 19B Ha Noi Hoan Kiem 39 8% 25, 12 Palace de Thien Thai 2 Tho Nhuom Hoan Kiem 16 98% 23, 13 Atlanta 49 Hang Chuoi Hai Ba Trung 5 9% 24, 14 Times City 485 Minh Khai Hai Ba Trung 15 85% 19, 15 Rainbow 7 Trieu Viet Vuong Hai Ba Trung 26 88% 14, 16 Park View 9 Nguyen Binh Khiêm Hai Ba Trung 6 92% 11, 17 Oriental Palace 33 Tay Ho Tay Ho 59 7% 3, 18 Elegant Suites Westlake 1C Đang Thai Mai Tay Ho % 27, 19 Flower Village Hanoi 14 Thuy Khuê Tay Ho 131 9% 23, 2 Swan Lake 3/61/31 Xuan Dieu Tay Ho 6 97% 17, 21 Lakeside Garden 56 Xuan Dieu Tay Ho 8 62% 14, 22 Dolphin 28 Tran Binh Tu Liem 7 7% 15, 23 Jana Garden Terrace 6 Kim Đong Hoang Mai 72 8% 22, 24 Pan Horizon 157 Xuan Thuy Cau Giay 86 65% 3, 25 My Way 4, 86 Alley, Duy Tân Cau Giay 39 93% 25, 26 Royal City 72 Nguyen Trai Thanh Xuan 1 85% 17, Grade B (*) USD/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge Page 3

31 Q4 217 HANOI INDUSTRIAL PERFORMANCE The last quarter of 217 recorded a slight increment of 1.3% q-o-q and 2.8% y-o-y in average rent, staying at USD12.3/sqm/ term owning to solid demand from tenants. Thach That reported the lowest rent across all Districts, at around USD6.7/sqm/ term, while Bac Tu Liem was dominant with USD155/sqm/term. Average Land Use Right stood at 35.5 years. Average occupancy rate was recorded at 82.6%, up 1.1 ppts on a quarterly basis but a significant of 5.3 ppts on a yearly basis. By location, IPs in Bac Tu Liem and Long Bien were fully occupied in spite of relatively high rents in comparison with others, while those in Phu Xuyen ranked at the bottom with a low of 25% leased out. SUPPLY The total industrial stock in Hanoi remained stable compared to both the previous quarter and the same period last year with no new supply entering the market. 11 operating IPs in Hanoi covers total land area of over 2,7 hectares with most of them coming from outlying districts such as Chuong My, Thach That, Dong Anh Districts, accounting for approximately 54% of the market share. Figure 32: Industrial, Market Performance by District USD/m 2 /kỳ cho thuê Bắc Từ Liêm Sóc Sơn Chương Mỹ Giá chào thuê Figure 33: Industrial, Supply by District Tỷ lệ lấp đầy Mê Linh Long Biên Thạch Thất Chương Mỹ 15% Đông Anh Phú Xuyên 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % DEMAND Hanoi s manufacturing sector is showing signs of rebound in activity as the index of industrial production continued to record an expansion. The whole year number stood at 7.1% compared to the last year, indicating more robust business activities going forward. Additionally, the take-up rate is expected to increase from 218 onwards and tenant demand is expected to remain robust, underpinned by optimistic growth forecasts for the city s GDP, resilience in export volume and further improvements in the road infrastructure. Khác 32% Đông Anh 28% Thạch Thất 25% OUTLOOK 14 new IPs covering 6,1 hectares of total land area are slated to be delivered by 22, up approximately 25% compared to the current number. With the market promoting a business friendly environment and consistently solid demand from big-box tenants, we expect market fundamentals to remain healthy moving through 218. Hanoi also enjoys favorable geographical condition with close proximity to various northern industrial hubs such as Hai Phong, Hung Yen and Bac Ninh, making it a well-rounded candidate for tenants. In addition to new developments occurring, there are plenty proposed projects set to break ground in the near future. Table 19: Industrial, Future Supply Industrial Park Name District GFA (ha) Quang Minh II Industrial Park Me Linh 266 Phuc Tho Industrial Park Phuc Tho 74 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 2 Page 31

32 Q4 217 HANOI INDUSTRIAL Table Table 3: 2: 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 % Hoa Lac Hi-Tech Thach That % Thang Long Dong Anh % Dong Anh Dong Anh % Hanssip (phase 1) Phu Xuyen % 26 Page 32

33 Q4 217 DANANG OFFICE PERFORMANCE In Q4 217, Grade A and Grade B shared the average net asking rents of USD18/sqm/month and USD11.31/sqm/month respectively. As for Grade C, the average rental rate decreased again by.5% q-o-q, reaching at USD7/sqm/month. Demand for office space in Q4 217 has shown some changes compared to the previous Q3 217 as occupancy rates for all three grades did not remain at 1%. To be specific, occupancy rate of Grade A office dropped to 95% from 1%. Grade B s occupancy rate, even though did not change much, still went down.3% compared to Q SUPPLY No record of new potential project are noted to be opened anytime soon. At the moment, it is possible that either newly proposed future office projects have been put off indefinitely or new information has not been published to public. Grade A office buildings are still scarce since the supply is only Indochina Riverside Tower accountable for 4% market share. The Grade B and Grade C sectors account for 46% and 5% of market share respectively. Da Nang in Q4 217 continues to have Hai Chau district as the one main office location with 7 projects contributing approximately 4,7 sqm, which accounts for 58% of market share. Next on the list is Thanh Khe district with 2% market share for 13,6 sqm from 2 projects. DEMAND In the program of Developing the Business Community toward the year 212, Da Nang People s Committee has set the target of promoting the business community in both quantity and quality and quality-centric growth. The number of new enterprises will increase an average of 1%/year. In 217, the city had 13,338 enterprises in operation consisting of 61 State- owned ones, 12, 972 private companies and 35 FDI companies, 4 times increase compared to 26. In the period , the average annual growth of 15,8% of which the foreign invested enterprises at the highest growth at 23,15%/year. Demand for the office market in Da Nang was again recorded mostly steaming from international organizations operating in technology, financial services and construction related companies. It is expected that the demand for Da Nang s office space will be driven up thanks to encouraging actions offered by the city s authority, for example, financial support and administrative formalities cut. OUTLOOK In 217, the average asking rent for office space in Da Nang did not experience any major changes as office supply is still scarce in the city and demand is still growing stable. It is in forecast that rental rates for Grade A and Grade B will continue to be stable for the time being and Grade C office building will keep dropping their rates to attract more tenants. As for occupancy rates, although changes have been observed amongst the buildings in Grade B and Grade C categories, are still forecasted to move up after the hosting of APEC in Da Nang city which drives more attention to the city of Vietnam. Figure 34: Office, Market Performance as of Q4 217 USD/sqm/month Occupancy Rate Grade A Grade B Grade C Figure 35: Office, Market Performance by Quarter 1% 95% 9% 85% 8% 75% 7% Q2 215 Q3 215 Q4 215 Occupancy Rate Q1 216 Figure 36: Office, Supply by Grade G r ade C 16% Q2 216 Q3 216 Q4 216 Average Rent Q1 217 Grade A 6% G r ade B 78% Average Rent Q2 217 Q3 217 Q % 95% 9% 85% 8% 75% 7% USD/sqm/month Page 33

34 Q4 217 DANANG OFFICE Table 21: Significant Office Projects No Name Address (*) USD/sqm/month (NLA) Completion Year NLA (sqm) Service Charges Occupancy rate Average asking rent (*) 1 Indochina Riverside Tower 74 Bach Dang, Hai Chau 28 6,219 included 1% 18. Grade A 1 One Opera 115 Nguyen Van Linh, Hai Chau 28 4,234 included 1% Vinh Trung Plaza Hung Vuong, 28 5,2 included 96% 1.6 Hai Chau 3 PVFC Building Lot A2.1, 3/4 Street, Hai Chau 21 11,162 included 1% Green Plaza 238 Bach Dang, Hai Chau 21 4,4 included 9% Thanh Loi Building 135 Nguyen Van Linh, Thanh Khe 211 5,1 included 93% Post Office 155 Nguyen Van Linh, Thanh Khe 214 8,5 included 92% Petrolimex Tower 122, 2/9 Street, Hai Chau - 6, included 86% 9.2 Grade B 1 DanaBook 78 Bach Dang, Hai Chau - 3,5 included 1% SPT Z85 Tran Hung Dao, Son Tra 29 15,863 included 9% 7. Grade C Administrative Map of Danang City Source: Da nang Deparment of Planning & Investment Page 34

35 Q4 217 DANANG RETAIL PERFORMANCE In 217, the retail market in Da Nang achieved a positive growth along with the big event of being the host for APEC Summit and 6.6 million visitors, an increase of 1 million from the previous year. The retail s property s performance of the whole year was attributed by the improved level of the last quarter. The average asking rent of the sector as a whole increased to USD2.9/sqm/month from USD19.31/sqm/month, an increase of 4% q-o-q. Indochina Riverside Towers, Vinh Trung Plaza and Vincom Plaza Ngo Quyen still recorded the highest average asking rent prices at USD23/sqm/month. In terms of occupancy rates, podium and department store performed better than shopping centers this review quarter as they both achieved 1% occupancy rates. Overall, occupancy rates of retail sector increased slightly, helping to reach the yearly occupancy at 98%, higher than in Ho Chi Minh city and Hanoi. SUPPLY In Q4 217, no new retail supply was introduced into the market. Vincom Plaza Ngo Quyen with 36,8 sqm of supply space, which is equal to 49% of retail stock, still keeps Son Tra District remain as the largest supplier of retail space, followed by Hai Chau and Thank Khe District at 48% and 3% respectively. The total retail stock of 79,731 sqm, has seen a decrease since August because Big C Da Nang was closed due to some legal issues. In the future, supply of retail space in Da Nang s retail market is expected to grow strongly as a substantial amount of shopping centers and retail podiums projects are being revived. It is expected that from 218, 15 projects will provide about 72, sqm for retail sector. DEMAND In 217, Da Nang s total retail sale of goods and services was estimated at USD3.4 billion, equivalent to an increase of 1.7% y-o-y. The demand for retail sector s development will be paralleled by the demand for retail property. In addition to that, by 22, Da Nang targets to welcome a total of 8.5 million visitors, including 2.5 million foreigners, expected to be earning 27,4 billion VND in revenue. Therefore, the trend of increasing demand is forcasted to be feasible given the context of a little concern of abundant supply. Figure 37: Retail, Market Performance as of Q4 217 USD/sqm/month Retail Podium Department Store Shopping center Figure 38: Retail, Market Performance Comparison among Key Cities USD/sqm/month Average Rent Occupancy Rate 25 1% 1% 2 1% 99% 15 99% 99% 1 99% 5 99% 98% 98% Average rent Occupancy rate 6 1% 5 95% 4 9% 3 85% 2 8% 1 75% Danang HCMC Hanoi OUTLOOK Da Nang continues to be an attractive destination for international and local tourists. The city s promising future supply of retail spaces is considered necessary to attract attention of potential developers and retailers from around the world. In addition, as Da Nang is a tourist destination with increasing number of visitors, the expected presence of more retailers since 218, will help to capture this source of demand. However, the retail market in Da Nang still posses some limitations. Most of the retailers of good growth are in the Food & Beverage sector, fashion is not gaining a good profit as the local peole s income is at average level while the tourists won t be willing to spend much on shopping on high-end fashion items. It requires the retailers and retail property developers to take a thorough consideration on the market, especially in the indigenous local consumers. Figure 39: Retail, Supply by District Hai Chau 45% Thanh Khe 9% S on Tra 46% Page 35

36 Q4 217 DANANG RETAIL Table Table 3: 22: Significant Significant Office Retail Projects No Name of Project/Building Address Location Completion Year NLA (sq m) ARR (*) Occupancy Rate 1 Indochina Riverside Towers 74 Bach Dang Hai Chau 28 5, % 2 HAGL-Lake View Residences 72 Ham Nghi Thanh Khe 212 7, % Retail Podium 1 Parkson Vinh Trung Plaza Hung Vuong Hai Chau 211 8, 23. 1% Department Store 8, % 1 Big C Da Nang Hung Vuong Thanh Khe 27 11,76 refurbishment 2 Da Nang Square 35 Thai Phien Hai Chau 211 3, % 3 Vincom Plaza Ngo Quyen 91A Ngo Quyen Son Tra , % 4 LOTTE Mart 6 Nai Nam Hai Chau , % Shopping Centre (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT Page 36

37 Q4 217 DANANG CONDOTEL PERFORMANCE The year of 217 continued to record many positive movements in condo-tel market underpinned by impressive growth rate of tourism industry in Da nang. In primary market, average absorption rate reached 95%, equivalent to an increase of 5% on a quarterly basis. By Location, Ngu Hanh Son and Son Tra Districts with their large land bank and beautiful sea view continued to attract attention of potential investors as their average absorption rate achieved a high level of more than 95%. Some notable projects namely Hyatt Regency, A la carte, F Home, Ocean Suites, Naman Garden and Vinpearl Riverfront posted high selling rates in both primary and secondary market. The average primary price remained stable compared to the prior quarter but steady growth rate was recorded in average secondary price thanks to sustainable demand with limited newly launched supply. Son Tra District took the lead with the highest average selling price at USD2,236/sqm. SUPPLY The last quarter of 217 witnessed one notable project coming on line, The Sunrise Bay in Hai Chau District from a reputation developer Novaland, adding up 3 units to the total existing supply. The total condo-tel stock is sitting at approximately 7,4 units, mainly from Son Tra and Ngu Hanh Son District, two major suppliers. Ngu Hanh Son remained the status of the largest supplier with 48% of the primary share, followed by Son Tra at 46% and Hai Chau with 6%. Future supply appeared to be limited with only two new projects expected to add in the condo-tel segment from 218 onwards. Figure 4: Condotel, Market Performance Units Primary Stock Units sold Average primary selling price Son Tra Figure 41: Condotel, Supply by District Hai Chau 6% Ngu Hanh Son US$/unit DEMAND Considered as one of the most attractive destinations in Asia, Da nang welcomed more than 6.6 million visitors in 217, an increase of 1 million from the previous year. After the 217 APEC Economic Leaders Week in Da nang, local tourism has seen tremendous opportunities to prosper. Adding to that, more effective measures taken by the city Government to promote the city s MICE (Meetings, Incentives, Conference and Exhibition) tourism will provide tailwind to demand for condo-tel in this city. Ngu Hanh Son 48% Son Tra 46% OUTLOOK In spite of the fact that condotel segment has been promising, their rapid rate of development has been causing some concerns along with the unsolved debate on legal issues. Many developers have also been caught not declaring taxes on rental contracts when they lease the property to third parties. Additionally, while some developers have not declared the real functions of their units, others have provided misleading information about their ownership or guaranteed return to buyers, leading to further conflict between the developers and the buyers after agreements. The single investors therefore need to be more alert and approach more information before making any decision. Condotel market is expected to continue to burgeon around the country with units slated to be launched each year in two major destinations Da Nang and Nha Trang for the period , according to Ho Chi Minh Real Estate Association. Given the increasing popularity of this segment, the Government is trying to clarify the legality of condotels to ensure a healthy market in the near future. Figure 42: Condotel, Guaranteed Return by Project per year 12% 1% 8% 6% 4% 2% % Alphanam Luxury Ariyana Condotel Furama Cocobay Guatanteed return Wyndham Soleil Year Hòa Bình Green Nam An Garden Vinpearl Riverfront No. of year Page 37

38 Q4 217 DANANG CONDOTEL Table Table 3: 23: Significant Significant Office Condotel Projects Projects No Name of Project/Building Address Location Completion Year No. of units Average Selling Price (USD/sqm)* 1 F Home 16 Dang Tu Kinh Hai Chau Q1/ ,6 2 Ariyana Condotel Furama Vo Nguyen Giap Ngu Hanh Son Q1/216 1,32 2,534 3 Cocobay Truong Sa Ngu Hanh Son Q1/ ,482 4 Vinpearl Riverfront Ngo Quyen Son Tra Q2/ ,23 5 Ocean Suites (Block A&B) Truong Sa Ngu Hanh Son Q2/ ,394 6 Wyndham Soleil Vo Nguyen Giap Son Tra Q3/ ,635 7 Hoa Binh Green Danang Le Van Duyet Son Tra Q3/216 1,536 1,663 8 Naman Garden Truong Sa Ngu Hanh Son Q4/ ,325 9 Alphanam Luxury A1 - A6 Vo Nguyen Giap Son Tra Q4/ ,815 * Excluding all kinds of tax and promotions The information is updated as at the end of Q4 217 Page 38

39 Q4 217 DANANG VILLA PERFORMANCE Being the host city for APEC 217 conference, Da Nang real estate market has experienced major developments within a short period of time this second half of 217. As a part of hospitality properties sector, along with increasing amount of investments in condotels, villas market in Da Nang also sees differences compared to last quarter. Average primary asking prices for Da Nang s second-home villas range from the lowest at USD 834/sqm to the highest at USD 2,761/ sqm. In terms of average asking price per dwelling, Vinpearl Luxury Da Nang 1 remains the most expensive development at almost USD 1.7 million. The same situation is applied for The Point Residences which continues to be the most affordable second home villa project in the primary market at USD 324, per dwelling. Figure 43: Villa, Market Performance USD/sqm Sale Price Absroption 3, 2,5 2, 1,5 1, 5 - Euro Village The Point The Ocean Furama Euro Village 2 Residences Estates Villas Vinpearl Luxury Da Nang 1 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % SUPPLY As of 217, the total stock of villas in Da nang reached over 1, dwellings. This sector is still small as compared to the condotel sector. The main supplier of primary second-home villas, which holds 57% of the market share, continues to be Ngu Hanh Son District, followed by Son Tra District at approximately 43%. In the next five years, addition of over 2, second-home villa units is expected with most of the future stockpiles will still be heavily located in Ngu Hanh Son District and Son Tra Peninsula. Amongst the new supply of projects, the two which attract the most attention are InterContinental Da Nang Sun Peninsula and Ba Na Hills, both are Sun Group projects. The Sunrise Bay project by Novaland also has quite a fame in the future supply market with its mass number of 1,2 units. Figure 44: Villa, Primary Supply by District DEMAND Due to the high prices of resort villas, the target demographic is limited to wealthy Vietnamese and to a much lesser extent, foreigners. Villas are mainly purchased for long-term investment or vacation. As buyers are getting more sophisticated and demanding, hence the reputation of developer and management, international facilities and high potential rental rate are the additional factors that purchasers now consider. Demand for the second-home villa for sale segment mainly comes from Ha Noi and HCMC. Approximately 85% of purchasers are from Ha Noi, followed by HCMC with 5%. The remaining market share was occupied by Vietnamese residing abroad or foreigners and residents from nearby provinces. They buy the property for holiday and rent the dwellings out via the developer rental pool program which usually offer an 85% share of the unit after deducting operating expenses and applicable fees. Son Tra 43% Figure 44: Villa, Buyer profile Ngu Hanh Son 57% OUTLOOK The real estate market of Vietnam would continue to remain robust, despite the demise of the Trans-Pacific Partnership, adding that the Regional Comprehensive Economic Partnership (RCEP), involving China, as well as membership of ASEAN and the Viet Nam-EU Free Trade Agreement, would be important drivers for continued investment. Da Nang market will somehow be impacted as Vietnam as a whole. The demand and supply are predicted to be on the rise. However, in the long-run, due to the scarcity of big land bank, the supply will glide to a lower level. In the near future, there will be abundant supply of villas in Da Nang which will create more competitions among the developers, distribution agents. The sale policy and after-sale service will be promoted toward bringing rich purchasers different experience. The on-going innovated legal procedure on ownership will facilitate the absorption in this high-end segment with more doors for foreign buyers. Vietnamese Local provinces residing 5% abroad/foreigners 5% HCMC 5% Ha Noi 85% Page 39

40 Q4 217 DANANG VILLA Table 3: 24: Significant Office Villa Projects No Name of Project/Building Developer Location Location Completion Year Number of units Asking Price (USD/sqm) 1 Euro Village 2 Sun Group Hoa Xuan Ngu Hanh Son Furama Villas Ariyana Corporation Vo Nguyen Giap Ngu Hanh Son ,761 3 Vinpearl Luxury Da Nang 1 VinGroup Truong Sa Ngu Hanh Son ,73 4 The Point Residences VinaCapital Truong Sa Ngu Hanh Son ,125 5 The Ocean Estates VinaCapital Truong Sa Ngu Hanh Son ,36 6 Euro Village Sun Group 27 Hoa Hong Son Tra ,976 * Excluding all kinds of tax and promotions The information is updated as at the end of Q4 217 Page 4

41 Colliers International & Contact 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. With more than 1 professionals in 3 offices in Vietnam, the team is market driven and has proven and successful track record with both international and local experience. From Hanoi, Danang to Ho Chi Minh City, we provide a full range of real estate services 396 offices 68 countries 6 continents $2.6 billion in annual revenue 15, professionals and staff 158 million square meter under management Publication Coverage Frequency Content Availability Knowledge Report/ Market Insights Knowledge Report/ Market Insights Knowledge Report/ Market Insights Knowledge Report/ Market Insights Asia Pacific Office Report Vietnam Property Market Report Development Recommendation Vietnam Quarterly All market sectors Publicly available Ho Chi Minh City Quarterly All market sectors Publicly available Hanoi Quarterly All market sectors Publicly available Danang Quarterly All market sectors Publicly available Asia Pacific Quarterly Office market Publicly available including Vietnam Vietnam cities Quarterly All market sectors On subscription Vietnam cities At request All market sectors On subscription COLLIERS INTERNATIONAL VIETNAM For further information, please contact us: HO CHI MINH CITY Deutsches Haus, 3rd Floor 33 Le Duan Boulevard, Ben Nghe Ward, District 1 HCMC, Vietnam Tel: HANOI Gelex Tower, Unit 94, 9th Floor 52 Le Dai Hanh Street, Hai Ba Trung District Hanoi, Vietnam Tel: DAVID JACKSON General Director david.jackson@colliers.com AN NGUYEN Research Manager an.nguyen@colliers.com Page 41