vietnam quarterly KNOWLEDGE report

Transcription

1 vietnam quarterly KNOWLEDGE report q3 217 Accelerating success

2 Table of Contents Page ECONOMIC OVERVIEW... VIETNAM... HO CHI MINH CITY... HANOI... DANANG HO CHI MINH CITY MARKET OVERVIEW... OFFICE... 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: Ho Chi Minh City Skyline

3 LIST OF FIGures Page Figure 1: Vietnam Exports - Imports in 9M Figure 2: International Arrivals to Vietnam in 9M 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 8 Figure 5: Office, Average Asking Rent... 8 Figure 6: Office, Occupancy Rate Figure 7: Retail, Rental Rate by Years Figure 8: Retail, Occupacy Rate by Years 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 7 Table 1: Macroeconomic Indicators of HCMC, Hanoi and Da Nang... 8 Table 2: Significant Projects under expected completion in Table 3: Significant Office Projects Table 4: Retail, Significant Future Projects under Construction Table 5: Significant Retail Projects Table 6: Condominium, Significant new Projects launched in Q Table 7: Villa and Townhouse, Significant new Projects launched in Q Table 8: Serviced Apartment, Significant Future Projects under construction Table 9: Significant Serviced Apartment Projects Table 1: Industrial, Future Supply... 2 Table 11: Industrial, Market Overview...

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: Secondary Price by District, completed units, Q-o-Q Changes Figure 28: Villa and Townhouse, Asking Price on Secondary Market 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

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

6 Q3 217 ECONOMIC OVERVIEW VIETNAM GDP 217 forecast Vietnam s economy in the first 9 months of 217 continued to maintain a strong momentum with an impressive growth rate of 6.41% compared to the corresponding period last year. The 9 month growth rate is mainly contributed by the strongest third quarter growth since 211 with more than 7%, backed by solid expansion in the industrial, services and export sectors. This strong growth eases pressure on Vietnam to meet a target of 6.7% economic expansion this year. The agriculture-forestry-fishing sector continued to witness positive signs, achieving 2.78% of growth rate compared to the same period last year. Main drivers of the economy, the industry and services sectors also performed well, posting a growth rate of 7.17% and 7.25% y-o-y respectively. Generally, Vietnam is now tracking ahead of this year target with the majority sectors are expected to remain steady over the rest of the year. CPI The first nine months of 217 witnessed an increase of 3.79% y-o-y in the CPI mainly due to upward price adjustments of healthcare and education services. Additionally, price hikes in the world crude oil price, fuel, iron and steel recently have also contributed to the CPI growth. Apart from inflationary factors, the CPI was subdued by price deceleration coming from food sector, particularly showing in the plunge of pork price due to oversupply. Average core inflation rate in the first 9 months rose by 1.45% y-o-y but there were signs of flattening out thanks to the efficient and stable monetary policy. FDI The first nine months of 217 recorded 1,844 new foreign investment projects with total newly registered capital of USD14.6 billion, equivalent to an increase of 1.3% in the number of projects and 3.4% in the capital compared to the corresponding period last year. Additionally, 878 already-registered projects adjusted their capital by USD6.8 billion, bringing total newly registered and supplementary capital in the first nine months of 217 to USD21.3 billion, showing an increase of 29.7% y-o-y. Noticeably, Thanh Hoa province has emerged as a new attractive investment destination with the largest registered capital out of 63 cities and provinces, posting at USD3.1 billion, accounting for 21.6% the total country-wide capital. By country, Japan remained the dominant contributor with USD4.9 billion, making up of 33.7% of the total capital, followed by Singapore and South Korea. RETAIL SALES Vietnam s retail sales of goods and services in the first nine months of 217 reached more than USD128.5 billion, edging up by 1.5% compared to the same period last year. By sector, the retail sales of goods achieved USD96.2 billion, accounting for 74.9% of the total sales and up 1.5% y-o-y. Retail sales of accommodation and catering services also represented an impressive increase of 12% y-o-y, reaching approximately USD15.9 billion and constituting 12.4% of the total sales. For tourism services, the figure was recorded at USD1.19 billion, making up.9% of the total sales, up 14.4% y-o-y. An estimated USD15.1 billion in sales came into other services which accounted for 11.8% of the total sales and equivalent to an 8.9% increase y-o-y. INTERNATIONAL ARRIVALS The first nine months of 217 welcomed nearly 9.5 million international arrivals, showing an increase of 28.4% compared to the same period last year. Passengers carried by air and by road recorded at 8. million and 1.2 million, up 31.2% and 19.1% y-o-y respectively, while the figure for sea showed a drop of 6.2% y-o-y, staying at 1.2 million. Guests from Asia continued to dominate with 7.1 million, mainly from traditional markets such as China, South Korea and Japan. Inbound tourists from Europe and America also witnessed positive signs with the growth rates of 19% and 1.7% y-o-y respectively. Measures need to be efficiently taken for the purpose of luring international visitors to reach a target of 13 million arrivals in the whole year. TRADE BALANCE An estimated USD5 million trade deficit was registered over the first nine month period. Export volume reached USD154 billion, up 19.8% compared to the same period last year. Both domestic and FDI economic sectors recorded remarkable increases of 16.8% and 21%, reaching USD43.2 billion and USD11.8 billion, respectively. Import volume during the 9 month period was USD154.5 billion, up 23.1% y-o-y. The domestic and FDI economic sectors in import turnovers gained USD7.25 billion and USD11.35 billion with the growth rates of 1.7% and 2.7% respectively. Figure 1: Vietnam, Exports - Imports in 9M217 Figure 2: International arrivals to Vietnam in 9M217 International tourist arrivals Growth rate USD billion Exports Imports Trade Balance M217 million arrivals % 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% -5.% -5 Source: General Statistics Office Colliers International Research Source: General Statistics Office Colliers International Research 217 Colliers International Research Page 6

7 Q3 217 ECONOMIC OVERVIEW HO CHI MINH CITY Continuing the steady growing trend of the first half of the year, HCMC s economy in Q3 217 maintained a healthy growth of GRDP at 7.97% compared to the corresponding period last year, equal to USD34.1 billion while CPI stood at 4.4%. Service industries and the industrial and construction sector shared the same growth rate of 7.7% y-o-y, followed by the Agriculture-forestry-fishery sector with 6.2% y-o-y rate of expansion. Industrial production index (IIP) of 9 months of the year increased by 7.84%. As of Q3 217, the city recorded USD26.3 billion for export while import turnovers reached USD31.6 billion which created a trade deficit of USD5.3 billion. Compared to the same period last year 216, export and import were up by 15.7% and 16.9% respectively. Total newly registered and supplementary FDI for the last nine months achieved USD3.7 billion, in which there were 157 supplementary projects, worth of USD686.7 million. The total retail sales up to the review period of Q3 217 was able to reach USD29.7 billion, an increase of 1.82% in comparison to last year. HANOI For the last nine months of 217, Hanoi s economy continued to grow positively with improvements recorded in most economic indicators. Hanoi s noted CPI was up by 3.79% as compared to the same period last year. Nine month accumulated industrial production index (IIP) increased by 6.7%. As for a resulted trade deficit of USD13.4 billion, in Q3 217, statistics records show that export turnovers made a sum of USD8.6 billion as well as import turnovers finished 9 months of 217 with USD21.95 billion. Such turnovers are equal to 8.7% and 22.6% respectively for export and import. FDI admission of the city of both newly registered and supplementary capital although reached USD2.16 billion, down 4% compared to the same period last year. The capital made a total of USD17.8 billion in retail sales over the last 9 months of 217. Table 1: Marcoeconomic Indicators of HCMC, Hanoi and Danang Q3 217 HCMC Hanoi Danang GDP growth rate (%) Index of Industry Product IIP (%) Retail Sales (USD billion) CPI (%) Source: General Statistics Office Colliers International Research Figure 3: GDP Growth Rate of HCMC, Hanoi and Danang HCMC Hanoi Danang 14% 12% 1% 8% 6% Q3 217 Source: General Statistics Office Colliers International Research DANANG The growing trend continued to spread across Da Nang s economy for this Q3 217, making the estimated GRDP for the first nine months of 217 equal to a 7.9% growth y-o-y. According to the latest statistics recorded, Industrial production index (IIP) of Da Nang for the first nine months of 217 rose by 1.8% compared to the same period last year. Total retail sales of goods and services achieved was estimated to reach USD2.69 billion while another significant increase was recorded in export turnover with USD1.9 billion, up 11.8% y-o-y. If Da Nang did not appear to be an appealing and attractive investment destination a few years ago, this year 217, over the first nine months of the year, Da Nang gained almost USD62 million of FDI inflows, up 4 times compared to the same period last year, from 73 authorised projects. Tourism sector in specific, made a stable blast over the last nine months with the total number of both domestic and international arrivals to Da Nang reaching 5.1 million, up 23% y-o-y, in which the total number of foreign tourists increased by almost 5%. Figure 4: FDI of HCMC, Hanoi and Danang USD billion FDI No. of projects HCMC Hanoi Danang Source: General Statistics Office Colliers International Research No. of projects 217 Colliers International Research Page 7

8 Q3 217 HO CHI MINH CITY OFFICE PERFORMANCE In Q3 217, Ho Chi Minh s office market witnessed a significant improvement in average net asking rent across both grades, reaching USD26.9/sqm/month, up 1.1% q-o-q. Average net asking rent of Grade A surged to USD44.7/sqm/month from USD4.5/ sqm/month in the previous quarter, mostly due to extremely high asking rates quoted by two newly launched Grade A buildings, Deutsches Haus and Saigon Center (phase 2). Grade B average net asking rent was relatively flat over the review period thanks to stable supply, standing at USD21.6/sqm/month. The city s office market enjoyed healthy occupancy rates for both Grade A and Grade B, recording at 94.5% and 89.6% respectively. Thanks to buoyant pre-leasing activity, newly launched prime buildings such as Deutsches Haus and Saigon Center have been filling up quickly, boosting net absorption rates and then resulting in a rise in the average occupancy rate across the city. SUPPLY While Grade B supply remained unchanged, Grade A stock added up more than 65,sqm NLA from two prime buildings, Saigon Center (phase 2) and Deutches Haus. The city currently has 13 Grade A buildings and 66 Grade B buildings, covering approximately 1,23,5sqm net leasable area. An estimated 117,25 sqm of new office space is likely to hit the market in 218, coming from notable projects such as Thaco-Sala Residence, Etown Central and The Khai. These projects are all located in the outlying districts and classified as Grade B. The project Thaco-Sala Residence, an integrated, mixed use development of office, retail and residential space, is a notable project in Thu Thiem New Urban Area, District 2. Developed by the joint venture of Dai Quang Minh and Truong Hai Auto Corporation, the office component will provide approximately 78,sqm of Grade B office space to the market. Etown Central and The Khai, which are situated in District 4 and District 7 respectively, will offer total approximately 39,25sqm. DEMAND As the country s macroeconomic fundamentals remain stable, demand for prime office space in the city is expected to be sustainable. Additionally, according to Tholons Top 1 Outsourcing Destinations Rankings 216 report, Ho Chi Minh City is in the top emerging outsourcing locations with 18th ranking all over the world. Given the growing competitiveness of HCMC as a destination for players in the business processing outsourcing industry, multinational firms and tech companies, demand for office space is forecasted to stay strong over the coming years. OUTLOOK Despite high rents, many international companies in Ho Chi Minh City prefer offices in quality office buildings that are not only convenient but also can reflect or help lift their corporate image. Therefore, Grade A and high-quality buildings in prime location will be more sought-after, given increasing number of multinational companies in the city, resulting in rent acceleration for these buildings in upcoming periods. While efficient space, convenient accessibility, ample parking spaces are considered as basic requirements of tenants, different groups of tenants may have other specific requirements such as retail facilities or close proximity to the customers. Developers, therefore, need to identify their target tenants and their requirements to deliver products that suit their needs. Due to limited space availability and limited future stock, it is expected for rents to rise. 217 Colliers International Research Figure 5: Office, Average Asking Rent Figure 6: Office, Occupancy Rate % USD/sqm/month Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Table 2: Significant Projects under expected completion in 218 Project name Location Grade Grade A Grade B Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Estimated NLA Thaco-Sala Residence District 2 B 78, Etown Central District 4 B 28, The Khai District 7 B 11,25 Page 8

9 Q3 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 , % Le Meridien 3C Ton Duc Thang 213 9, % Vietcombank Tower 5 Me Linh Square , % Deutsches Haus 3-5 Le Van Huu Q , % 55. Grade A (**) 212, % 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 , % Lim Tower 2 Vo Van Tan 215 8, % 24. Grade B 42, % (*) USD/sqm/month (NLA) 217 Colliers International Research Page 9

10 Q3 217 HO CHI MINH CITY OFFICE SAIGON SKYLINE REVIEW- CBD HCMC GRADE A OFFICE BUILDINGS mplaza SAIGON 39 Le Duan, District 1 26,/1,42 $ 53.3 $ 6.5 DIAMOND PLAZA SAIGON 34 Le Duan, District 1 15,936/2,2 $ 41. $ 8. LE MERIDIEN 3C Ton Duc Thang, District 1 9,125/NA $ 33. $ 6. 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, $ 58.4 $ 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 $ 43.2 $ 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 $ 43.1 $ 6.8 SUNWAH TOWER 115 Nguyen Hue, District 1 2,8/1,166 $ 47.7 $ Colliers International Research Page 1

11 Q3 217 HO CHI MINH CITY RETAIL PERFORMANCE The average net asking rents across all segments increased by 5.3% q-o-q, reaching to USD55.3/sqm/month. While shopping malls and retail podiums increased their rents by 8% and 1% respectively over the quarter, department stores softened their rents by 1%, staying at USD63.7/sqm/month. The average occupancy rate remained stable at 93%. Among the three segments, department stores recorded the highest occupancy rate at 96%, followed by shopping malls at 93% and retail podium at 92%. Figure 7: Retail, Rental Rate by Years USD/sqm/month SUPPLY The total retail stock in Ho Chi Minh City remained unchanged with approximately 9,sqm NLA from 67 projects. Small and medium-sized shopping malls dominated the existing supply, accounting for 77% of market share. New supply until the rest of the year includes The Garden Mall in District 5 and Su Van Hanh Mall in District 1. The Garden Mall had soft launch in August 217 with a number of active stores and its grand opening would be in early November 217. Su Van Hanh Mall is under good construction schedule and is expected to complete by the end of this year. - Q3 Q4 Q1 Q2 Q3 Q Figure 8: Retail, Occupancy Rate by Years 1 98 Q1 217 Q2 217 Q % 94 DEMAND The grand opening of H&M s very first store in Vietnam was highly anticipated with thousands of young customers in early September. Located at Vincom Center Dong Khoi, the over 2, sqm flagship store spans over two levels, houses a selection of latest fashion and accessories for men, women, teenagers and kids. The positive response from Vietnamese customers for the well-known international fashion brand implies growing retail consumption in the local market which in turn will stimulate leasing demand for retail assets. OUTLOOK The supply pipeline will grow bigger in 218 with significant expected completions such as The Spirit of Saigon or Vincom Landmark 81. Rising population and large land availability are key drivers of future large-scale retail developments in non-urban districts. Given the rapid expansion of both local and international retailers, rental rates and occupancy rates will follow upward trend in upcoming years Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Table 4: Retail, Significant Future Projects Under Construction Project name District NLA (sqm) Expected Completion The Garden Mall 5 3, Q4 217 Su Van Hanh Mall 1 96,152 Q4 217 Union Square 1 48, 218 Vincom Landmark 81 Binh Thanh 59, 218 Crescent Mall Phase , 218 Estella Place 2 32,5 218 The Spirit of Saigon 1 35, Colliers International Research Page 11

12 Q3 217 HO CHI MINH CITY RETAIL Table Table 3: 5: Significant Office Retail Projects No Name of Project/Building Address Location Completion Year (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT 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% Retail Podium 83, % 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 118, % 1 Saigon Center 35 Nam Ky Khoi Nghia District , 12 99% 2 Zen Plaza Nguyen Trai District , % Superbowl Vietnam TSN A43 Truong Son Tan Binh 22 5, % An Dong Plaza 18 An Duong Vuong District , - 92% Saigon Square Nam Ky Khoi Nghia District ,3-1% Lotte Mart Saigon South 469 Nguyen Huu Tho District , 4 99% Vincom Center B 72 Le Thanh Ton District , 12 93% 3 Vincom Plaza 3/2 3C Ba Thang Hai District , 42 95% Lotte Mart Phu Tho 968 Ba Thang Hai District ,5 4 99% 4 Crescent Mall 11 Ton Dat Tien District , 44 85% 1 Taka Plaza 12 Nam Ky Khoi Nghia District , - 1% 12 Satra Pham Hung C6/27 Pham Hung District , % Union Square 171 Dong Khoi District , Under renovation Shopping Centre 292, % 217 Colliers International Research Page 12

13 Q3 217 HO CHI MINH CITY CONDOMINIUM Table PERFORMANCE 3: Significant Office Projects The number of sold units decreased by 24% q-o-q with more than 7, successful transactions in the review quarter due to limited new supply. The mid-end segment accounted for the largest proportion of sold units, equivalent to approximately 3,8 units. The high-end and affordable segment achieved 29% and 18% of total sold units respectively. Figure 9: Condominium, New Launches by Segment and Quarter Luxury High-end Mid-end Affordable The average primary price followed the downward trend, dropping by 3% q-o-q as many newly launched projects are of mid-end and affordable segments. While the high-end and affordable price increased by 5% and 2% q-o-q, the mid-end products softened their price by 3% q-o-q. units Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q SUPPLY Due to the effects of ghost month, newly launched projects remarkably dropped by 19% q-o-q with approximately 7,7 units. The mid-end and affordable segment continued to take the largest proportion in the new supply at 77%, followed by the high-end at 23% of total supply. In terms of location, the south of the city became the largest supplier in this quarter with notable projects such as Lavida Plus, River Panorama, Topaz Elite. Significant infrastructure development has driven the booming of residential projects in the east and the south in recent years. Figure 1: Condominium, Sold Units by Segment and Quarter units Luxury High-end Mid-end Affordable 14, 12, 1, 8, 6, 4, 2, DEMAND The city government has taken several initiatives to ramp up its infrastructure improvements. Amongst these, the planned and under-construction metro lines are expected to bring positive impacts to the real estate market. The lines will create new travelling routes, change transporting behavior from private vehicles to public transportation and create new development opportunities to areas near the lines. Demand for condominium projects in close proximity to these infrastructure networks will see high demand in coming years. OUTLOOK The supply pipeline will continue to grow with more than 5, units coming online in the next two years. More developers are shifting their focus to lower-end segments where having strong demand from end-users. Buyers will put more emphasis on finishing quality, supporting facilities and amenities as well as surrounding environment when choosing their homes. Ư Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Figure 11: Condominium, Primary Asking Price USD/sqm Luxury High-end Mid-end Affordable Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Colliers International Research Accelerating Page success 13

14 Q3 217 HO CHI MINH CITY CONDOMINIUM Table 6: Condominium, Significant new projects launched in Q3 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 ,146 * Excluding all kinds of tax and promotions The information is updated as at the end of Q Colliers International Research Accelerating Page success 14

15 Q3 217 HO CHI MINH CITY VILLA & TOWNHOUSE PERFORMANCE Successful transactions were down 3% q-o-q with more than 5 sold dwellings as buyers were cautious to close deals during the ghost month of August. The absorption rate is forecasted to be improved in the last quarter of the year on the back of positive market sentiment. New launches offer different price set to cater for various types of customers. On the primary market, the asking price was up 1% q-o-q. For some highly sought-after locations, the resell price can increase up to 3%. Figure 12: Villa&Townhouses, Selling Price on Land Area by District USD/sq m District 7 District 9 District 2 Others SUPPLY New launches consisted of 5 projects with more than 5 dwellings, down 13% compared to the previous quarter. The majority of new stock are of small to medium-scale and developed by local developers. Rosita Garden by Khang Dien and Sim City Premier by Nhat Hoang are two notable projects which achieved good absorption rates during its initial launches. The East continued to witness the expansion of landed properties in this quarter, accounting for 73% of total new supply. Townhouses have dominated the landed properties in the last two years and their products in suburban districts typically target middle-income buyers. Figure 13: Villa&Townhouse, Transaction Volume by Quarter dwellings Q Q2 Q3 Q4 Q1 215 Q2 Q3 Q4 Q1 216 Q2 Q3 Q4 Q1 217 Q2 Q3 4 2 DEMAND Being an economic center of Vietnam, Ho Chi Minh City has seen a surge in population in the last decade, from 6.5 million in 26 to 8.3 million in 216. Due to the rapid growth of HCMC s economy which leads to high demand for large numbers of semi-skilled workers, many people from other provinces are working and living in HCMC without registering with the local government. Therefore, the actual number of population is believed to be in excess of the official figures. The growing population is a key demand driver of landed properties. OUTLOOK It is expected that more than 1, dwellings to be added to the supply pipeline in the next two years. The eastern area including District 2, District 9 and Thu Duc District will maintain its reputation as the key supplier of villa and townhouse products thanks to improving infrastructure and large greenfield sites. 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% Q1 214 Q2 214 Binh Tan 14% Q3 214 Q4 214 District 9 64% Q1 215 Q2 215 District 7 13% Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q Colliers International Research Accelerating Page success 15

16 Q3 217 HO CHI MINH CITY VILLA & TOWNHOUSE Table 7: Villa and Townhouse, Significant new projects launched in Q3 217 No Name of Project Developer Location Completion Year Number of units Asking Price (US$/sqm) 1 Van Xuan Dat Viet Van Xuan Group Binh Tan ,3 2 Citadel Trung Thuy Group District ,3 3 Rosita Garden Khang Dien District ,85 4 Dien Thuan Star Hill Dien Thuan Real Estate and Construction Co., Ltd District ,75 5 SimCity Premier Nhat Hoang District ,46 * Excluding all kinds of tax and promotions The information is updated as at the end of Q Colliers International Research Accelerating Page success 16

17 Q3 217 HO CHI MINH CITY SERVICED APARTMENT PERFORMANCE HCMC s serviced apartment market recorded a quiet quarter with no significant changes recorded in occupancy rates and asking rents across all grades. For Grade A, while some landlords raised their asking rents thanks to their quality and amenity upgrade, others tended to soften their prices to attract more customers, resulting in rent stability with minor adjustments against the last quarter, staying at USD39.3/ sqm/month. Similarly, Grade B average asking rent remained relatively stable compared to the previous quarter, at USD29.9/ sqm/month. Overall, the average occupancy rate in HCMC s serviced apartment market recorded a slight decrease in Q3 217 due to weak performance of some mature projects. By segment, Grade A s average occupancy rate remained stable at 91%, while Grade B s average occupancy rate decreased by 2ppts q-o-q, staying at only 83%. Figure 15: Serviced Apartment, Occupancy Rate % Grade A Grade B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q SUPPLY Q3 217 recorded no new supply coming onboard, making total existing supply of serviced apartment in HCMC keep stable compared to the previous quarter. 39 existing projects of Grade A and Grade B are offering more than 3,9 rooms to the market with dominant contribution of more than 2,9 units from Grade B, accounting for approximately 75%. District 1 is home of all Grade A serviced apartments, while Grade B is sparsely located in both the CBD and outlying districts. DEMAND The demand for serviced apartments in Ho Chi Minh City has grown dramatically over the last several years, fuelled by improving product knowledge, understanding of benefits of serviced apartment among corporations and arrivals of major brands into the market. Besides local operators, international brands are rushing to cash in on this segment due to its lucrative return on investment. With the combination between all the comforts of home and the amenities of a five-star hotel, international brands offer alternatives for modern business executives by eliciting their demand for experience and luxury. OUTLOOK An estimated 1,28 units of future serviced apartment supply is scheduled to come onboard by 218 with some notable projects from prestigious international brands such as Ascott and Oakwood. In the context of rising prevailing of serviced apartments, hotel operators are increasingly seeking to include serviced apartments as part of their offerings. One bed-room and studio apartments are likely to be sought-after since more companies are tending to cut their budget on long-term assignments and relocations due to the recent slowdown in the global economy. Also, serviced apartments are more preferred by investors thanks to its high profit margins, stable cash flow, and high space efficiency, which provide investors more flexibility in their hospitality property investment. Figure 16: Serviced Apartment, Average Asking Rent USD/sqm/month Table 8: Serviced apartment, Significant Future Projects under construction Project name District Total units Expected Completion Saigon Center (phase 2) 7 2 Q3 217 Oakwood Residence Saigon & Richlane Residence Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Q4 217 Berkley Serviced Residence 2 85 Q4 217 Ascott Waterfront Q3 218 Terra Royal 3 3 Q4 218 Grade A Grade B Colliers International Research Accelerating Page success 17

18 Q3 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 % 29.8 (*) USD/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge 217 Colliers International Research Accelerating Page success 18

19 Q3 217 HO CHI MINH CITY INDUSTRIAL PERFORMANCE The third quarter of 217 recorded a significant rent acceleration of more than 19% q-o-q for industrial space in Ho Chi Minh City, staying at USD141/sqm/term due to limited new supply and increasing demand from manufacturing sector. This figure is estimated two times higher than that of neighboring provinces such as Long An, Dong Nai and Binh Duong owning to the city s well-established infrastructure and limited land bank. District 7 with Tan Thuan Export Processing Zone remained its highest asking rent of USD26/sqm/term, followed by Binh Tan (USD24/sqm/term) and Tan Phu (USD235/sqm/term), whist Cu Chi was reported to have the lowest rent of only 74USD/ sqm/term. Average Land Use Right term for all industrial zones was 35.8 years. Average occupancy rate of 2 existing industrial parks in the review quarter recorded at 71.4%. Seven industrial zones was fully occupied, namely Linh Trung 1, Linh Trung 2, Binh Chieu, Tan Binh, Le Minh Xuan, Cat Lai and Tan Thoi Hiep. Average rent for ready-built factories across all IPs was USD2.5/sqm/ month, but USD5-6/sqm/month can be charged in some notable industrial parks. Figure 17: Industrial, Market Performance by District Average asking rent Occupancy rate USD/sqm/term District 9 District 12 Cu Chi Binh Tan Binh Nha Be District 7 Tan Phu District 2 Thu Duc Chanh Figure 18: Industrial, Supply by District 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % SUPPLY HCMC s industrial market recorded no new supply coming on line in the review quarter. The existing stock remained stable compared to the previous quarter with 2 operating IPs, covering approximately 3,24 hectares of NLA. With the market share of nearly 29%, Cu Chi District is the dominant industrial supplier with 863 hectares. Binh Chanh and Nha Be Districts registered as the second largest contributors with the market share of more than 18% each. District 12 recorded the smallest proportion of a mere.65%, covering 19.8 hectares. Others 24% Cu Chi 29% Binh Chanh 19% Nha Be 19% District 9 1% DEMAND Based on the Global Competitiveness Report supplied by the World Economic Forum (WEF) recently, Vietnam has shown improvement of 5 spots in the global competitiveness, ranking 55th from 6th in 216 out of 137 countries in 217. Foreign investors, particularly those from Asia have been proactively responding to this positive trend, resulting in the expected rise of FDI in the coming periods. Additionally, manufacturing activities still appear to be increasing steadily in the country as of the third quarter of 217, which requires more industrial facilities and further underpin demand for industrial real estate. OUTLOOK Looking forward, the outlook for HCMC s industrial property market is believed to remain positive on the back of the macro-economic resilience, improvement in the country s competitiveness, rising FDI inflows and expansion of production in preparation for some ongoing FTAs. The city is expected to welcome more than 2,3 hectares of future industrial space in the next several years, focusing on high-tech industries, especially mechanical engineering, electronics and chemistry. Rents and occupancy rates will likely to improve in the coming quarters as rising construction prices will moderate generation of new supply, even with rising economic growth. Table 1: Industrial, Future Supply Industrial Park Name 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 Colliers International Research Accelerating Page success 19

20 Q3 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 Total 4, , % 217 Colliers International Research Page 2

21 Q3 217 HANOI OFFICE PERFORMANCE The third quarter of 217 recorded no significant changes in rents across both grades compared to the corresponding period last year owning to stable supply. Average net asking rents of Grade A remained generally stable, standing at USD28.8/sqm/ month and Grade B s rents marginally declined by.2% q-o-q, at USD17.9/sqm/month. Signs of recovery in Hanoi s office market were shown in the review quarter with improved average occupancy rate recorded. More specifically, while Grade A s occupancy rate remained healthy at 84%, Grade B experienced a steady rise of 1.5 ppts q-o-q, staying at 78.7%. Figure 19: Office, Average Asking Rent USD/sqm/month Grade A Grade B Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q SUPPLY The review quarter recorded no new supply entering the market across all grades. Currently, Hanoi has approximately 41,sqm NLA of Grade A and 82,3sqm NLA of Grade B office buildings. Dong Da and Ba Dinh Districts are becoming the city s office hubs thanks to well-established infrastructure and close proximity to the CBD. A strong pipeline with 25,sqm is expected to coming on line by the end of 22, mainly concentrated in Mid-town and the West due to large land bank in these areas. Figure 2: Office, Occupancy Rate Grade A 1% 95% 9% Grade B 85% DEMAND Demand for office space in Hanoi is projected to rise significantly as business environment is improving and more foreign enterprises are penetrating this market. Additionally, growth in information technology, finance, insurance, pharmaceutical, science and fast-moving consumer goods sectors will also fuel office-for-lease market. Noticeably, the review quarter witnessed the return of interest in the CBD with high level of enquiries. Thanks to its favorable location, close proximity to key commercial hubs and more reasonable asking prices compared to previous years, the CBD is forecasted to still draw attention from tenants in the next coming periods. OUTLOOK Due to limited amount of new office space in prime location, buildings with favorable sites are forecasted to maintain good performance. On the other hand, ample supply of future building in outskirt districts will lead to fierce competition in these areas. Building owners in outlying districts are more likely to offer contracts with flexible terms to attract tenants, putting continuously downward pressure on the asking rents over the upcoming periods. 8% 75% 7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Table 12: Office, Future Suppy Project name Grade NLA (sqm) Expected completion Comatce Tower B 43,1 Q4 217 Eurowindow Building B 16,592 Q4 217 DSD Building B 6,86 Q4 217 FLC Twin Tower B 35,96 Q2 218 Vinacomin Tower B 13,1 Q Colliers International Research Accelerating Page success 21

22 Q3 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 144, % 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 76, % 24.6 (*) USD/sqm/month (NLA) 217 Colliers International Research Page 22

23 Q3 217 HANOI RETAIL Table PERFORMANCE 3: Significant Office Projects The average net asking rents across all segments increased by 2.3% q-o-q, staying at USD33.5/sqm/month. While shopping malls recorded a rental growth of 4% q-o-q, reaching USD35.1/ sqm/month, retail podiums and department stores lowered their rates by 7% and 3% over the quarter, maintaining at USD24.7/ sqm/month and USD33.8/sqm/month respectively. The average occupancy rate improved by 6ppts, staying at 89%. Among the three segments, shopping malls recorded the strongest improvement of 7ppts, reaching to 87%. Department stores occupancy rates also had impressive rise to 95% while that of retail podiums experienced a slight increase of 1ppts q-o-q, reaching to 9%. Figure 21: Retail, Rental Rates by Quarter USD/sqm/month Q3 Q4 Q1 Q2 Source: Colliers International Research Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 SUPPLY In Q3 217, total retail stock remained unchanged with approximately 869,632qm NLA from 52 projects. Shopping malls dominate the supply, accounting for 76% of total stock, providing 664,29sqm NLA from 2 projects. Although retail podiums in mixed-use developments have become more popular, their total net leasing area is small at 127,295sqm from 28 projects. Department stores have the most modest leasing space of 78,47sqm from only 4 projects. 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. DEMAND There has been a demographic shift towards the younger and middle class population, with higher disposable income and stronger purchasing power driving the expansion of retail sales in the capital city. In addition, the growing urban population has fueled strong retail consumption and attracts both international and domestic retailers to the city. Hanoi will see more new entrants penetrating into its local market in the next few years which represents potential growth for retail assets. Figure 22: Retail, Occupancy Rates by Quarter % Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Table 14: Retail, Significant Future Projects Q4 216 Q1 217 Project Name District GFA (sqm) Q2 217 Q3 217 Expected completion Discovery Complex Cau Giay 38, Q4 217 FLC Twin Towers Cau Giay 25, Q1 218 OUTLOOK Hanoi will witness an abundant supply in the next 3 years with approximately 92,sqm GFA from 25 projects entering the market. There are 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. Vinhomes D'Capital Cau Giay 45,477 Q4 218 Aeon Mall Ha Dong Ha Dong 2, Q4 219 Lotte Ciputra Mall Tay Ho 2, Colliers International Research Accelerating Page success 23

24 Q3 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 29, % 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 539, % 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 68, % (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT 217 Colliers International Research Accelerating Page success 24

25 Q3 217 HANOI CONDOMINIUM PERFORMANCE Hanoi condominium market recorded a vibrant quarter with approximately 5,4 successful deals across all segments, equivalent to an increase of 35% q-o-q. Mid-end to high-end segments continued to see the high sold rates thanks to their reasonable prices with more than 4, units sold, accounting for 8% of the market share. No new luxury apartment was absorbed while affordable segment witnessed a moderate sales volume with nearly 1, units. On the primary market, developers offered relatively stable selling prices to prepare for upward price adjustments often occurring in the end of year. Therefore, selling prices recorded minor changes in the review quarter with the average price of approximately USD2,13/sqm across all segments. SUPPLY Newly launched units in the third quarter of 217 reached approximately 8,, an increase of 2.6% compared the previous quarter. While high-end segment recorded modest supply with more than 1,4 units, dropping their market share by 29.5% compared to the previous quarter, 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. Figure 23: Condominium, Sold Units and Absorption Rate by Segment units 5 3% High-end Mid-end Affordable Figure 24: Condominium, New launches 4, 35, 3, 25, units Sold Units Absorption rate 3,5 5% 3, 45% 2,5 2, 4% 1,5 1, 35% 2, 15, 1, DEMAND According to Vietnam population and housing census, household size of Vietnam decreased from 5.2 persons per household in 1979 to 3.7 persons per household in 214, declining by.7 person compared with This is in line with considerable changes in the Vietnamese family structure in which the concept of a nuclear family is becoming more prevalent. Young married couples prefer to live in their own homes to enjoy the privacy, rather than share their accommodation with parents. This trend will drive stronger demand for high-rise condominiums in the capital city. 5, M217 Figure 25: Condominium, Sold Units by Segment Luxury High-end Mid-end Affordable 25, 2, 15, 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. units 1, 5, M Colliers International Research Accelerating Page success 25

26 Q3 217 HANOI CONDOMINIUM Table 3: 16: Significant Condominium, Office Significant Projects new projects launched in Q3 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 * Excluding all kinds of tax and promotions The information is updated as at the end of Q3 217 Hanoi Investment, Construction and Business No.35 Thanh Tri ,1 217 Colliers International Research Page 26

27 Q3 217 HANOI VILLA & TOWNHOUSE PERFORMANCE Strong market momentum continued in the third quarter of 217 with the transaction volume reaching more than 6 dwellings, a two-fold increase compared to the previous quarter. The city s landed property market continued to witness decentralized trend with majority newly launched projects located in suburban districts such as Hoang Mai, Ha Dong and Thanh Tri. Market secondary price saw a decrease of more than 3% on a quarterly basis, averaging at USD3,33/sqm. Due to low selling price of newly launched projects, Ha Dong and Hoang Mai Districts recorded the largest price deceleration of 7% q-o-q each, dragging the market average price by 3% accordingly. The West Lake area had the highest average price thanks to convenient connectivity to the CBD, beautiful lake view and low construction density. Figure 26: Villa and Townhouse, Supply by quarter, Hanoi units Dwellings No. of Projects 4, 35, 3, 25, 2, 15, 1, 5, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q No. of projects SUPPLY The supply pipeline in the third quarter of 217 welcomed more than 1, dwelling from 5 projects coming to the market, an increase of 3.3% q-o-q compared to the existing stock. Ha Dong District with two large-scale projects was the dominant contributor, accounting for 68.4% of the market share. Currently, the total villa and townhouse stock in Hanoi was approximately 37, dwellings from 155 active projects with townhouse the most popular product. Notable newly launched projects include Louis City (599 units), The Mansions (146 units), The Eden Rose (233 units), Iris Home (77 units) and Hateco Apollo Xuan Phuong (34 units). DEMAND Hanoi population has seen a substantial growth in the last ten years, from 3.2 million in 26 to 7.3 million in 216. The capital city s population is the second largest in Vietnam, only behind HCMC. The large population base has led to solid demand for accommodation. As the Vietnamese prefer to buy villas and townhouses to retain their wealth, demand for assets attached to land will sustain in the long term. OUTLOOK 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. Figure 27: Secondary Price by District, completed units, Q-o-Q Changes USD/sqm Cau Giay Q2-217 Average Q3-217 Average q-o-q changes Figure 28: Villa & Townhouse, Asking Price on Secondary Market USD/sqm Tay Ho Bac Tu Liem Hoang Mai Average secondary price Changes q-o-q Ha Dong Long Bien Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % 2.% 1.%.% -1.% -2.% -3.% -4.% -5.% -6.% -7.% -8.% % 217 Colliers International Research Accelerating Page success 27

28 Q3 217 HANOI VILLA & TOWNHOUSE Table 3: 17: Significant Office new projects Projectslaunched in Q3 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 Q Colliers International Research Accelerating Page success 28

29 Q3 217 HANOI SERVICED APARTMENT Table PERFORMANCE 3: Significant Office Projects Q3 217 witnessed contrast between performance of Grade A and Grade B serviced apartments. While Grade A s average rent significant went up by 5.4% q-o-q to reach USD35.4/sqm/month, Grade B s average rent saw a steady fall of 1.4% compared to the quarter before, staying at USD2.8/sqm/month. Positive trend was also recorded in average occupancy rate for Grade A serviced apartments with improvement of 2.8 ppts q-o-q, achieving a healthy rate of 92.4%. To contrary, Grade B serviced apartments reported a significant plunge of nearly 5 ppts q-o-q to stay at 83.1% in the review quarter. SUPPLY The third quarter of 217 recorded a new project from a reputable brand coming on line, Somerset West Point Hanoi, adding up 185 units to the existing supply and expanding the total stock by 4.5% q-o-q. The remaining 1 units of this project will be unveiled in the next quarter. Being highly appreciated as one of the best serviced apartment in Hanoi with outstanding quality furniture and professional amenities, Somerset West Point is expected to contribute to raise brand awareness of Somerset brand in Vietnam. Currently, there are 43 serviced apartment projects of all grades, providing more than 4,29 units from studio to four-bedroom units and penthouses in Hanoi. In terms of location, Ba Dinh and Tay Ho Districts are major suppliers with more than 5% market share. DEMAND Hanoi, the capital city of Vietnam is showing its potential as a favorable investment destination for multinational corporations, embassies and international organizations, bringing a hope to a promising serviced apartment market over the next few years. This coincides with the statistical finding that FDI to the capital city increased in Q3 217, facilitating growth of demand for serviced apartments as normal practice. In terms of tenant profile, the main sources of demand coming from Japan and Korea owning to a large amount FDI inflow from these countries invested in industrial zones in suburban provinces such as Bac Ninh, Thai Nguyen, Hai Phong. 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 - Source: Colliers Q1 International 216 Q2 216 Research Q3 216 Q4 216 Q1 217 Q2 217 Q3 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 Q Figure 31: Serviced Apartment, Average Asking Rent Grade A Grade B 4 35 OUTLOOK An estimated 394 units of future supply is projected to be unveiled by 218. Under the pressure of future supply from the market, asking rents are expected to slightly drop in the coming periods, while occupancy rates in Hanoi serviced apartment market are forecasted to keep in stable due to sustainable demand. Additionally, buy-to-let model is becoming a new attractive investment channel, supported by its small amount of capital, flexibility and diverse options. This trend is forecasted to grow in the coming years, which is more likely to create more competition to the service apartment market. USD/sqm/month Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Colliers International Research Accelerating Page success 29

30 Q3 217 HANOI SERVICED APARTMENT Table Table 3: 18: Significant Significant Office Serviced Projects 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 % Sun Red River 23 Phan Chu Trinh Hoan Kiem 46 84% Pacific Place 83B Ly Thuong Kiet Hoan Kiem 35 83% Somerset West Point 2 Tay Ho Tay Ho % Sedona Suites 96 To Ngoc Van Tay Ho % Somerset West Lake 254D Thuy Khue Tay Ho 9 9% Hanoi Lake View 28 Thanh Nien Tay Ho 26 99% Intercontinental Ha Noi 13 Nghi Tam Tay Ho 25 87% Fraser Suites Hanoi 51 Xuan Dieu Tay Ho % Crown Plaza 36 Le Duc Tho Tu Liem % Calidas E6, Pham Hung Tu Liem % Somerset Hoa Binh 16 Hoang Quoc Viet Cau Giay 26 87% 33. Grade A 2, % Rose Garden 17 Ngoc Khanh Ba Dinh 96 8% V-Tower 649 Kim Ma Ba Dinh 36 9% DMC Lake View 535 Kim Ma Ba Dinh 66 85% Hoa Binh Green No. 14, Ally 376 Buoi Ba Dinh 4 92% Lancaster Hanoi 2 Nui Truc Ba Dinh 31 85% May Fair 34B Tran Phu Ba Dinh 48 95% Hanoi Lakes Residences Nam Trang Ba Dinh 1 1% 9. 8 Skyline Tower 4 Dang Dung Ba Dinh 79 8% Candle Hotel Doi Can Ba Dinh 69 74% The City Residences 37 Phan Dinh Phung Ba Dinh 15 67% Elegant Suites Hahoi 19B Ha Hoi Hoan Kiem 39 8% Palace de Thien Thai 2 Tho Nhuom Hoan Kiem 16 98% Atlanta 49 Hang Chuoi Hai Ba Trung 5 9% Times City 485 Minh Khai Hai Ba Trung 15 85% Rainbow 7 Trieu Viet Vuong Hai Ba Trung 26 88% Park View 9 Nguyen Binh Khiem Hai Ba Trung 6 92% Elegant Suites Westlake 1C Dang Thai Mai Tay Ho % Flower Village Hanoi 14 Thuy Khue Tay Ho 131 9% Swan Lake 3/61/31 Xuan Dieu Tay Ho 6 97% Lakeside Garden 56 Xuan Dieu Tay Ho 8 62% Oriental Palace 33 Tay Ho Tay Ho 59 7% Dolphin 28 Tran Binh Tu Liem 7 7% Jana Garden Terrace 6 Kim Dong Hoang Mai 72 8% My Way 4, Alley 86, Duy Tan Cau Giay 39 93% Pan Horizon 157 Xuan Thuy Cau Giay 86 65% Royal City 72 Nguyen Trai Thanh Xuan 1 85% 17. Grade B 1,479 84% 21.1 (*) USD/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge 217 Colliers International Research Accelerating Page success 3

31 Q3 217 HANOI INDUSTRIAL PERFORMANCE Average asking rents for industrial parks in Hanoi recorded an upward adjustment of 1.5% q-o-q in Q3 217, posting at USD11/ sqm/term. Similarly to HCMC, a new industrial rental price level has been established in Hanoi market due to solid demand and limited new industrial supply. This coincides with a significant increase in average occupancy rate across all industrial parks, showing at 81.5%, up nearly 4.2% ppts compared to the previous quarter. By district, Bac Tu Liem remained the domiant position as the highest industrial rent district with USD155/sqm/term, while Thach That reported the lowest rent at only USD6.7/sqm/term. Ready-built factories in Hanoi charge USD2.6/sqm/month on average. 1% of occupancy rates were seen in Bac Tu Liem and Long Bien Districts, whist Thach That and Phu Xuyen recorded largest vacant areas despite of lower rents. Figure 32: Industrial, Market Performance by District USD/sqm/term Bac Tu Liem Average asking rent Soc Son Chuong Me Linh My Long Bien Figure 33: Industrial, Supply by District Occupancy rate Thach That Dong Anh Phu Xuyen 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % SUPPLY With no new industrial zone coming on line in this quarter, the total stock remained unchanged compared to the previous quarter. Currently, there are total 11 industrial parks in the capital city, offering more than 2,7 hectares of land area. Dong Anh District contributes the largest proportion to the market share with 772 hectares, accounting for 28% of the total stock, whist the smallest proportion was recorded in Phu Xuyen with the 2.6% of the market share. Others 32% Dong Anh 28% Chuong My 15% Thach That 25% DEMAND Demand for industrial real estate in Hanoi is growing, supported by Vietnam s preparation to join international and regional trade agreements, cheap labor cost and generous tax incentives. Moreover, the average rent per sqm in Hanoi is much cheaper than other cities in Asia such as Guangzhou (China), Bangkok (Thailand), Jarkata (Indonesia). Significantly, demand for ready-built factory is forecasted to soar in the coming quarters thanks to rising demand from retailers, fast moving consumer goods companies and emergence of e-commerce. OUTLOOK An estimated more than 2,8 hectares of industrial space from 11 projects is planned to come on stream by 22. However, Hanoi is facing with challenge in preparing industrial facilities to keep up with rapidly increasing demand from processing and manufacturing activities as land bank is limited in existing industrial parks while almost all future supply is in clearance and compensation stage, which may delay the expected completion time. Due to shortage of supply and solid demand, rents and occupancy rates are expected to increase steadily in short and intermediate terms. 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 Colliers International Research Page 31

32 Q3 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 Total 2, % 217 Colliers International Research Page 32

33 Q3 217 DANANG OFFICE PERFORMANCE In the review quarter, the average net asking rents of both Grade A and Grade B remained the same at USD18/sqm/month and USD11/sqm/month respectively. The average rental rate of Grade C decreased by 2.8% q-o-q, staying it USD7.4/sqm/ month. Compared to Q2 217, demand for office space in Q3 217 has not shown much changes, in other words, demand stays the same as occupancy rates for both Grade A and Grade C offices are both 1%while Grade B also shares 94% occupancy rate with last quarter. SUPPLY The office market of Da Nang in Q3 217 continues to be relatively small in scale as there is no new office supply projects which has the potential to be opened in the near future. At present, all proposed future office projects are put on hold or they have not published new information 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. The largest office supplier is still Hai Chau district with approximately 4,7 sqm from 7 projects accounting for 58% of market share, followed by Thanh Khe district with 2% market share for 13,6 sqm from 2 projects. Figure 34: Office, Market Performance as of Q3 217 USD/sqm/month 2 Occupancy Rate Average Rent Grade A Grade B Grade C Figure 35: Office, Market Performance by Quarter Occupancy Rate Average Rent 1% 95% 9% 85% 8% 75% 1% 95% 9% 85% 8% 75% 7% USD/sqm/month DEMAND The market continued to see the majority of demand stemming from international organisations operating in technology, financial services and construction related companies. The demand for Da Nang s office space is expected to move upwards in the near future as the city s authority is encouraging more start-up business activities by offering financial support and cutting the red tapes. 7% Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Figure 36: Office, Supply by Grade Q3 216 Q4 216 Q1 217 Q2 217 Q OUTLOOK In general, the average asking rent for office space in Da Nang since Q1 217 has been quite stable which is mainly due to growing demand and scarce office space supply. It is forecasted that rental rates will keep increasing at the top end and keep remaining stable throughout the period as a method of Grade C building s landlords to attract tenants. Occupancy rates although change amongst the buildings within Grade B and Grade C group of buildings, are still predicted to increase since Grade A s vacancy is still unchanged. With demand being mainly driven by the software and IT industries, bright prospect is expected for Danang office market on the back of the corporation between the city and Japan on IT development in the next coming years. Grade C 16% Grade A 6% Grade B 78% 217 Colliers International Research Accelerating Page success 33

34 Q3 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 6,219-1% 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 44, % 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 19,363-95% Colliers International Research Page 34

35 Q3 217 DANANG RETAIL PERFORMANCE In general, the performance of Da Nang retail sector in Q3 217 is better than the previous quarter. The average asking rent of the sector as a whole increased to USD2.9/sqm/month from USD19.31/sqm/month which indicates an increase of 4% q-o-q. Retail spaces with the highest average asking rent prices are Indochina Riverside Towers, Vinh Trung Plaza and Vincom Plaza Ngo Quyen with price set 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 from 98.46% last quarter to 99.12%. SUPPLY In Q3 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. DEMAND The total retail sales of goods and services in July 217 achieved USD 282 million, an increase of 9.63% compared to the same period last year. Furthermore, as the supply of retail space has recently withdrawn 11,76 sqm, retail market is expected to be more beneficial for landlords on the back of limited supply and strong demand. Not only driven by existing retailers, demand is also forecasted to be driven high by international retailers which are attracted to Da Nang by its future development plans. Figure 37: Retail, Market Performance as of Q3 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 Figure 39: Retail, Supply by District OUTLOOK APEC 217 conferences are expected to shape and advert worldwide the image of Da Nang by more than 6, journalists participating in the event. As a result, 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. Hai Chau 45% Thanh Khe 9% S on Tra 46% 217 Colliers International Research Page 35

36 Q3 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 12, % 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 71, % (*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT 217 Colliers International Research Page 36

37 Q3 217 DANANG CONDOTEL PERFORMANCE Following the existing trend from the last 2 quarters, the condotel market in Q3 217 continued to experience a steady growing trend of the primary average absorption rate, reaching 9%, up 19% q-o-q. Hai Chau District continued to be the most sought after area as its average absorption rate achieved the record level of 1%. Despite the large primary stock supply, Son Tra District improved its average absorption rate to 92%. 1% selling rate is recorded for Hyatt Regency, A la carte, Fusion Suites, F Homes, Ocean Suites (both block A&B), Naman Garden and Vinpearl Riverfront. Average primary price decreased by 5% q-o-q as developers would like to push up absorption rates. Son Tra District replaced Ngu Hanh Son District to be the district with the highest average selling price per sqm at USD2,236 per sqm. Figure 4: Condotel, Market Performance Primary Stock Units sold Average primary selling price Units Son Tra Ngu Hanh Son USD/sqm SUPPLY In the review quarter, no new significant projects entered the market. The cumulative total stock of condotel units in Da Nang is currently 7,77 units. Condotel segment in Q3 217, same as Q2 217, continues to be the most vibrant segment of the market. Especially, two new projects to be launched in the last six months of 217 are expected to add in the condotel segment source of supply 1,2 units. Ngu Hanh Son, Son Tra and Hai Chau districts remain the ultimate destinations of large-scale luxury projects. Ngu Hanh Son District, this quarter, has gained the status of the largest supplier, accounting for 51% of the primary share, then followed by Son Tra district at 49%. Figure 41: Condotel, Supply by District Ngu Hanh Son 51% S on Tra 49% DEMAND The increasing trend of condotel supply throughout the first three quarters of 217 in Da Nang, has been driven by the strong wave of demand from investors to serve the purpose of hospitality for tourists coming before and after the APEC 217 conference in Da Nang. Additionally, with the expectation of increasing average selling price after the conference, developers are more confident to develop condotel projects specially in order to get ahead of the upcoming trend. OUTLOOK According to the current trend, tourism in Da Nang will continue to grow steadily in coming years therefore a substantial amount of new condotel supply projects to be developed is inevitable, in order to cope with the demand. Investors are advised to carefully conduct researches before investing in any condotel project as demand for such property is high but also seasonal. Moreover, as supply of condotels increases constantly, price bubbles should also be aware of in consideration process to mitigate the chance of overpaying for an investment. Figure 42: Condotel, Guaranteed Return by Project per year 12% 1% 8% 6% 4% 2% % Alphanam Luxury Ariyana Condotel Furama Guatanteed return Cocobay Wyndham Soleil Year Hòa Bình Green Nam An Garden Vinpearl Riverfront No. of year 217 Colliers International Research Page 37

38 Q3 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 Q ,897 2, Colliers International Research Page 38

39 Q3 217 DANANG VILLA PERFORMANCE With the advantage of 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 position as the most expensive development with asking price of almost USD 1.7 million, a slight increase as compared to Q 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. Primary market stock has a new addition of 54 units from Euro Village 2 project by Sun Group which makes the total number of units increase to 386 units. Even though Euro Village 2 has just been launched this quarter, its absorption rate is already 5% and expected to perform well in the future. Figure 43: Villa, Market Performance USD/sqm 3, 2,5 2, 1,5 1, 5 - Sale Price Euro Village The Point The Ocean 2 Residences Estates Absroption Furama Villas Figure 44: Villa, Primary Supply by District Euro Village Vinpearl Luxury Da Nang 1 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % SUPPLY In Q3 217, a new supply of 54 units from Euro Village 2 project, was added into the primary market of the second-home villa for sale sector. However, 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. Son Tra 43% Ngu Hanh Son 57% DEMAND Investors from Hanoi are still accounted for the largest portion of villa buyers in Da Nang with 85% of the market share, followed by HCMC at 5%. Purchases are also noted to be made by Vietnamese residents from local provinces, Vietnamese living abroad or even foreigners. Each category, at 5%, completes the circle of market share. It is worth noting that the surge in the number of Chinese tourists and investors has not shown any sign of slowing down as compared to the previous quarter. Figure 44: Villa, Buyer profile Overseas Vietnamese/Foreigners 5% HCMC 5% Local provinces 5% Ha Noi 85% OUTLOOK Being the host city of APEC 217 conference, Da Nang is expected to have its full potential exposed more internationally. Such an event is predicted to attract a new wave of investment to Da Nang real estate market as a whole and the second-home villa sector in particular. Moreover, according to widely spread news, since last year 216, the city s infrastructure has been re-examined and reviewed by the authorities and development projects have been carried out ever in order to draw more capital flows into Da Nang s still small in scale second-home villa market. 217 Colliers International Research Accelerating Page success 39

40 Q3 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 Q , Colliers International Research Accelerating Page success 4

41 VIETNAM RESEARCH & FORECAST REPORT 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 The foundation of our services is the strength and depth of our experience. 396 offices in 68 countries on 6 continents $2.6 billion in annual revenue 15, professionals and staff 158 million square meter under management COLLIERS INTERNATIONAL VIETNAM HO CHI MINH CITY 18HBT Building, 4th floor Hai Ba Trung Street, Ben Nghe Ward, District 1 HCMC, Vietnam Tel: HANOI Room A52, 5th Floor 68 Nguyen Du Street, Hai Ba Trung District, Hanoi, Vietnam Tel: Publication Coverage Frequency Content Availability Knowledge Report/ Market Insights Knowledge Report/ Market Insights Knowledge Report/ Market Insights Knowledge Report/ Market Insights 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 For further information, please contact us: DAVID JACKSON General Director david.jackson@colliers.com Asia Pacific Office Report Vietnam Property Market Report Development Recommendation 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 AN NGUYEN Research Manager an.nguyen@colliers.com This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved. 217 Colliers International Research Accelerating success