Q MARKET INSIGHTS OFFICE SECTOR HANOI

Transcription

1 Q4 215 MARKET INSIGHTS OFFICE SECTOR In 215, Vietnam has benefited from stability in the macroeconomic Gross Domestic Product (GDP) in Q4 215 increased 7.1 year on year (y-o-y), bringing the overall GDP growth rate in 215 to 6.68 which is the highest growth rate since 28. The Consumer Price Index (CPI) increased nominally at.2 y-o-y in Q4 215 which resulted in a.63 increment over the whole year. Total retail sales and consumer services in the last three months of 215 Average occupancy across all grades improved to 88. s occupancy was 87, up 6. ppts q-o-q while s increased to 89, up 1.1ppts q-o-q. average net asking rents recorded a growth rate of 1 q-o-q, reaching USD29.2/sqm/month. In contrast, due to abundant supply, Grade B s dropped.7, sitting at USD17.6/sqm/month. By location, Midtown had the most impressive performance with both rent and occupancy improved 1.5 and 7.9ppts respectively. The supply pipeline remained unchanged in 215. Currently there are 141 office buildings, providing approximately 1,378,644 sqm NLA. By location, 43 of total s stock is located in the West with approximately 173,5sqm, followed by the CBD with 171,sqm, at 42 share. Grade B dominated the market with medium scale projects in Dong Da District. The market is expected 37,411 sqm NLA of TNR Tower to stock in early 216. Located on Nguyen Chi Thanh road in Dong Da District, the 3-storey new standard office building will provide large floor plate of approximately 2,2sqm which is easy for fitting out and operation. Given advantages in geographical location, human resources and fast economic growth speed, Hanoi is considered as an ideal destination for foreign investment. In 215, foreign investors have engaged in 352 projects in Hanoi, with the total capital of USD91.7 million. Due to the increase in disbursed FDI, demand for office space is growing steadily. By 217, approximately 167,sqm NLA will be added to the supply pipeline. The city center remains the most sought-after location for office tenants. However, due to limited available space in the CBD, suburban area is alternative options for those looking for large contiguous floor plates. Asking rents are forecasted to grow steadily as foreign direct investment will surge after the implementation of the Trans Pacific Partnership. Figure 1: Average Asking Rent by Grade US$/sqm/month Figure 2: Occupancy Rate by Grade Figure 3: Current Stock sq m Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1F Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1F 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, Grade C Q1 Q2 Q3 Q4 Q F. 216 Colliers International Research Colliers International is a global leader in commercial real estate services, with over 16,3 professionals operating out of more than 52 offices

2 Q4 215 MARKET INSIGHTS RETAIL SECTOR In 215, Vietnam has benefited from stability in the macroeconomic Gross Domestic Product (GDP) in Q4 215 increased 7.1 year on year (y-o-y), bringing the overall GDP growth rate in 215 to 6.68 which is the highest growth rate since 28. The Consumer Price Index (CPI) increased nominally at.2 y-o-y in Q4 215 which resulted in a.63 increment over the whole year. Total retail sales and consumer services in the last three months of 215 In 216, the market will experience abundant supply from Vin Group retail projects such as Vincom Exchange City in Tu Liem District or Vincom Starbowl in Dong Da District. On the consumer front, the opening of mega malls has transformed Hanoi retail landscape. This presents opportunities for food service and lifestyle brands to offer innovative products and services for increasingly sophisticated consumers. Figure 1: Market Performance Rental rate Occupancy US$/sqm/month The average net asking rents slightly improved due to higher rents offered at the new shopping center. While CBD rents remained stable at USD8/ sqm/mth, non-cbd increased 3.7 q-o-q to USD28/sqm/mth. Overall occupancy rate increased 5ppts q-o-q, reaching 89.3 thanks to strong leasing activities in new retail developments. 75 Figure 2: Occupancy Rate Q1 216F CBD Non-CBD Hanoi retail stock consists of 151 developments with more than 1 million sqm GFA. In mid of November 215, one new shopping center came online, adding an extra 55,4sqm GFA to the total stock. Located in Nguyen Chi Thanh street, a connection hub between Hanoi CBD with the new urban area in the West, Vincom Center Nguyen Chi Thanh provides one stop shop for city residents with retail outlets, entertainment facilities and food court. This is the fifth retail center developed by Vin Group in Hanoi. With a population of more than 9 million people, young workforce, increasing GDP per capita and positive economic outlook, Vietnam retail market is appealing to foreign retailers. Recent M&A transactions on retail centers have shown positive signs that international retailers are hoping to quickly penetrate to the domestic market. As the number of modern retail developments in Vietnam is smaller than that of neighbor countries, demand for retail space will be sustained, especially in large cities as Hanoi and Ho Chi Minh City F Figure 3: Total Supply sq m CBD Non-CBD 7, 6, 5, 4, 3, 2, 1, Q1 216 F 216 Colliers International Research Colliers International is a global leader in commercial real estate services, with over 16,3 professionals operating out of more than 52 offices

3 Q4 215 MARKET INSIGHTS CONDOMINIUM SECTOR In 215, Vietnam has benefited from stability in the macroeconomic Gross Domestic Product (GDP) in Q4 215 increased 7.1 year on year (y-o-y), bringing the overall GDP growth rate in 215 to 6.68 which is the highest growth rate since 28. The Consumer Price Index (CPI) increased nominally at.2 y-o-y in Q4 215 which resulted in a.63 increment over the whole year. Total retail sales and consumer services in the last three months of 215 The market saw an upward trend in both sales and transactions as both developers and buyers regained the confidence. Approximately 21, transactions have been made in 215, doubling the amount of the same period High-end and luxury segment continued to dominate the market, accounting for 32 of the market share. Price growth continued on moderate pace on both primary and secondary market. New projects have higher price of 3-5 y-o-y while high-end projects saw price rises of about 5 to 7 q-o-q. On the secondary market, price climbed.3 q-o-q and 1.1 y-o-y. The review quarter recorded more than 28, units coming online, increasing the total stock to 7 y-o-y. In term of supply by location, the South and CBD-fringe account for half of total new launches. With fast pace of urbanization and well-developed infrastructure, the West and South West, especially My Dinh area, has witnessed an increasing number of new residential projects, accounting for 46 of total launches. Demand for accommodation keeps growing on the back of low interest rate for home loan, young population, high marriage rate and increasing household income. Buyers tend to put more weight on projects with good facilities and landscape. In addition, the market is supported by revised Housing Law which allows property ownership for foreigners. Also, buy-to-let condominiums have become popular for property investors due to its attractive rental yield. As Lunar New Year is coming soon, developers are trying to speed up construction progress to hand over final products to their clients. The market sentiment is expected to be higher as buyers prefer to settle their transactions during the lunar year end. Hanoi supply pipeline will welcome approximately 24, units in 216. It is concerned that the authority should re-adjust the urban planning as high density of residential and commercial buildings in the city center have been putting high pressure on traffic. Public transportation should be utilised efficiently to reduce traffic jams in new residential urban area. Figure 1: Sales by Quarter and Segment Luxury High-end Mid-end Affordable Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 2: Changes in Secondary Prices by Quarter Figure 3: Launch Supply by Year sq m F. 216 Colliers International Research Colliers International is a global leader in commercial real estate services, with over 16,3 professionals operating out of more than 52 offices

4 Q4 215 MARKET INSIGHTS VILLA & TOWNHOUSE SECTOR In 215, Vietnam has benefited from stability in the macroeconomic Gross Domestic Product (GDP) in Q4 215 increased 7.1 year on year (y-o-y), bringing the overall GDP growth rate in 215 to 6.68 which is the highest growth rate since 28. The Consumer Price Index (CPI) increased nominally at.2 y-o-y in Q4 215 which resulted in a.63 increment over the whole year. Total retail sales and consumer services in the last three months of 215 Price growth is expected to be steady in 216 as there are good signs of market recovery. Landed properties with completed internal infrastructure and convenient accessibility will continue to attracted buyers. Savvy developers will focus on building projects with great facilities and landscape to cater higher demand from owner-occupiers. Figure 1: Q-o-Q Changes in Secondary price USD/sqm Market average price Q4 215 Q-o-Q changes Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q The year-end sentiment helped to boost more successful transactions and leverage sale price. For completed projects with comprehensive infrastructure, primary price growth is from 5 to 1. The average secondary price was USD3,214/sqm, up 1.4 q-o-q. By location, Ha Dong District recorded the highest price growth of 1 y-o-y. The supply pipeline this year has seen approximately 1,2 villas and townhouses introduced to the market. New projects are concentrated in Tay Ho, Ha Dong, Tu Liem, Thanh Xuan and Hai Bai Trung districts where having well-developed infrastructure and convenient accessibility to the city center. Notable launches in 215 included Park City, Gold Silk, Pandora Trieu Khuc and Gold Silk. For Vietnamese, buying a house during the year-end is to celebrate a prosperous working year and also to enjoy the Lunar new year in the new house. As year-end income normally increases, demand for housing at this time is highest in a year. Figure 2: Secondary Price by District USD/sq m Figure 3: Landed Property, Supply by Quarter projects Q3-215 Average Q4-215 Average Market average price Q4 215 Thanh Xuan Cau Giay Tay Ho Tu Liem Hoang Mai No. of Units Ha Dong Long Bien Thanh Tri No. of Projects Hoai Duc Gia LamMe Linh units Due to ongoing demand for decent homes with good facilities and improving infrastructure, the villa and townhouse market will perform well in terms of sale transaction volumes. 1 Q3 Q4 Q1 Q2 Q3 Q Colliers International Research Colliers International is a global leader in commercial real estate services, with over 16,3 professionals operating out of more than 52 offices in 67 countries. Colliers International delivers a full range of services to real estate users, owner and investors worldwide, including global corporate solutions, brokerage, property and asset, management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most

5 Q4 215 MARKET INSIGHTS SERVICED APARTMENT SECTOR In 215, Vietnam has benefited from stability in the macroeconomic Gross Domestic Product (GDP) in Q4 215 increased 7.1 year on year (y-o-y), bringing the overall GDP growth rate in 215 to 6.68 which is the highest growth rate since 28. The Consumer Price Index (CPI) increased nominally at.2 y-o-y in Q4 215 which resulted in a.63 increment over the whole year. Total retail sales and consumer services in the last three months of 215 In Q4 215, occupancy rate and average asking rate moved in opposite directions. Occupancy rate went up steadily 4 q-o-q to 86.4, while average rental rate decreased slightly 1 q-o-q to USD31.8. Middle-end and low-end can compete more freely and effectively with high-end units thanks to advancement of technology. Applications such as Airbnb allow owners of serviced apartments in middle segment to reach to potential customers more effectively. Majority of units are located in districts Cau Giay, Ba Dinh and Hai Ba Trung. Figure 1: Average Asking Rent by Grade USD/sq m/month Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 2: Occupancy Rate by Grade There are 3,239 units in Hanoi in which and B segments account for more than 9. More than 6 of serviced apartments are located in the CBD In 215, FDI inflows to the city reached USD1.4 billion which is equal to the amount of 214. Disbursed capital is US$1.1 billion, up 8 y-o-y. New big projects such as Samsung s Bac Ninh and Samsung s Thai Nguyen might increase significantly demand for serviced apartments in Hanoi. Besides, Hanoi and HCMC are home of large Korean and Japanese communities which estimate to be more than 8, people. 7 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Figure 3: Supply by Segment Grade C 5 According to Hanoi Real Estate Association (HREA) there will be more than 24, residential apartments to be on sales in 216. A certain percentage of these apartments will be leased out for tenants. This will create a big substitution for serviced apartments In addition, the new Law on Housing and Law on Real Estate Business allow foreigners to own property in Vietnam. Somehow the new laws may provide foreigners who stay in Vietnam in long term an alternative for renting a serviced apartment. 216 Colliers International Research Colliers International is a global leader in commercial real estate services, with over 16,3 professionals operating out of more than 52 offices

6 Q4 215 MARKET INSIGHTS INDUSTRIAL SECTOR In 215, Vietnam has benefited from stability in the macroeconomic Gross Domestic Product (GDP) in Q4 215 increased 7.1 year on year (y-o-y), bringing the overall GDP growth rate in 215 to 6.68 which is the highest growth rate since 28. The Consumer Price Index (CPI) increased nominally at.2 y-o-y in Q4 215 which resulted in a.63 increment over the whole year. Total retail sales and consumer services in the last three months of 215 Prices and occupancy rate are expected to increase steadily in the next 1-3 years In general, average salary of workers in Northern economic region is lower than those in the South. Consequently, there is a southward movement of employees to work in Ho Chi Minh City and its surrounding provinces. This leads to a shortage of workers in Northern economic region s IPs. Figure 1: Market performace USD/sq m/month Asking price Occupancy Rate In general, rental rates in Hanoi are lower than those in Ho Chi Minh city. Gross asking rent in Hanoi s IPs range from USD5- USD19/sqm/term and remaining lease term is from 3-45 years. Hoa Lac High- tech park has the lowest the city s gross asking rent which is at USD5-6/sqm./ term. The 55ha high tech park has only a modest occupancy rate of 18. Rent of ready- built factory- in Hanoi is about US$1.2/sqm/month which is 3 less than those in Ho Chi Minh city. The Northern Economic Zone including Hanoi and provinces Hung Yen, Hai Duong, Hai Phong, Vinh Phuc, Quang Ninh, Bac Ninh comprise 46 active IPs with total leasable 12,1ha. Hanoi has 12 IPs and more than 3,2ha of total area. Tu Liem Dong Anh Chuong My Me Linh Soc Son Phu Xuyen Thach That Long Bien Figure 2: Suppply by District Others 9 Tu Liem 9 Dong Anh 35 Me Linh 12 Chuong My 12 Thach That 23 China, Japan and Hong Kong (SAR) are three most popular investors at Hanoi s IPs. Popular investments are from industries such as intermediate goods, machinery, spare parts & accessories, electronics. Infrastructures are being developed to connect northern provinces with Hanoi which will significantly reduce time and costs of transportation and commercial traffic. Highways such as Ha Noi-Hai Phong, Ha Noi-Lao Cai, Ha Noi-Thai Nguyen will help enhance connectivity and increase the efficiency of the northern economic region. These will positively contribute to improve the occupancy rate and asking rate of IPs. In 22, there will be 14 more IPs to begin operating which would provide 6,1 hectares more to the market. The capital is projected to be home of 33 IPs with total area of 8, hectares by 23. Table 1: Future Supply Industrial Park Name District GFA (ha) Khu Chay Ung Hoa 1,18 Nam Phu Cat Quoc Oai 5 Phu Xuyen Phu Xuyen 488 Thanh Oai II Thanh Oai 48 Phu Nghia expansion Chuong My 46 North Thuong Tin Dong Anh 429 Soc Son VIP Soc Son Colliers International Research Colliers International is a global leader in commercial real estate services, with over 16,3 professionals operating out of more than 52 offices