Hanoi Quarterly Report

Transcription

1 Market Insights from CBRE s Hanoi Quarterly Report Presented by: CBRE RESEARCH & CONSULTANCY Richard Leech Thanh Tran Executive Director Senior Manager CB Richard Ellis (Vietnam) Co., Ltd. April 12 th 2010 HANOI ECONOMIC OVERVIEW Hanoi s GDP growth in the first quarter was 8.7% y-o-y Hanoi s GDP growth significantly exceeded the national average GDP growth (5.83%). For 2010, Hanoi is on pace to achieve historic levels of annual GDP growth, ranging between 10-12%. Hanoi gained a total of US$30 million over 65 registered FDI projects this quarter. The average capital committed stood at $0.5 million per project, a record low level for the past three years. FDI capital disbursed from registered projects was US$50 million this quarter alone, showing continued interest from previous investors. 2 CB RICHARD ELLIS VIETNAM

2 HANOI ECONOMIC OVERVIEW Hanoi s imports surged by 53% y-o-y. Increase in import growth is mostly a result of rising prices of commodities on the world market, specifically construction materials, steel, petroleum products, fertilizer, etc Hanoi s exports increased by 3.8% y-o-y. Sectors seeing highest rates of export growth were footwear and leather products, computer components, rice, and garments and textiles Hanoi s CPI reached 9.58% this quarter, above the national average of 8.51% High CPI can be attributed to increases in seasonal spending during Tet holiday, rising energy costs and high prices of production inputs 3 CB RICHARD ELLIS VIETNAM HANOI INFRASTRUCTURE The Nhat Tan Noi Bai Road approved by Hanoi People s Committee to connect future T2 Station at Noi Bai Airport by way of the Nhat Tan Bridge. Reducing the distance to the airport by 10 km The Prime Minister gave the initial approval to build the first section of Ring Road 4 between National Road 32 to National Road 6. Construction will begin in October. The right half of the Lang - Hoa Lac and the overall road will allow traffic in Q CB RICHARD ELLIS VIETNAM

3 HANOI INFRASTRUCTURE Cat Linh Ha Dong Railway still clearing ground. Although construction was expected to start at the end of 2009 no progress yet In February, Thanh Xuan junction on Ring Road 3 allowed traffic through, signaling the completion of the first phase of Ring Road 3 In April, the second phase of Ring Road 3 will be ready to start construction. Ring Road 3 will include overhead highway running from Mai Dich to Linh Dam above the existing Pham Hung Road PPJ s Masterplan for Hanoi finalized in first quarter, vote for approval expected in May 5 CB RICHARD ELLIS VIETNAM CONDOMINIUM FOR SALE Le Van Luong Residential Cleve Mulberry Lane Canal Park 6 CB RICHARD ELLIS VIETNAM

4 CONDOMINIUM FOR SALE DEMAND Primary market: High demand for units priced at below US$1,000 psm Dang XA NUA (Gia Lam) low-cost housing (200 units) and CT5-Lot M-Tan Trieu (Thanh Tri) (812 units): sold out within short period from launch Lower demand for units priced at above US$1,500 psm Re-launch of several high-end projects due to slow rate of sales. Devaluation of VND makes prices (quoted in US$) even more expensive Secondary market: Reduced transaction volume across real estate transaction floors due to: Tet Holiday Fire at JSC 34 building (Le Van Luong) Higher interest rates More availability of land 7 CB RICHARD ELLIS VIETNAM CONDOMINIUM FOR SALE CAPITAL VALUES Primary market: 73% of new launches were within a price range of US$ psm, indicating a consumer preference for more affordable housing Secondary market: Insignificant price adjustments in all segments, < 3% in either direction Secondary Land prices: a price surge of up to 35% in Western Area, especially along Le Van Luong Lang Hoa Lac Street, and in the developing urban area of Ha Dong, due to: Steady progress in new infrastructure projects Good development progress in surrounding area (Charmvit, N05, Star City, HUD Tower, underground electrical system, etc.) Closure of gold trading floors, hence a possible shift to alternative investment channels Herd mentality 8 CB RICHARD ELLIS VIETNAM

5 CONDOMINIUM FOR SALE SUPPLY New supply of 5,067 units: By grade: 5% luxury, 0% high-end, 91% mid-end, 4% low-end By district: 53% in Hoai Duc, 18% in Ha Dong, 16% in Thanh Tri, 13% others Official launches Keangnam Hanoi Landmark Tower (Cau Giay, remaining units), FLC Landmark Tower (Tu Liem, 100 units), CT5-Lot M-Tan Trieu (Thanh Tri, 812 units), Dang Xa NUA (Gia Lam, 200 units) Projects broke ground Royal City (Thanh Xuan), Park City (Ha Dong, 896 units by 2014, 6,052 units by 2020), Businessman Tower (Ha Dong, 270 units), Eurowindow Multi Complex (Cau Giay, 90 units) Projects completed & handed over Part of Xa La NUA, My Dinh 1, Dich Vong 22.5 ha (N09B1), 335 Cau Giay 9 CB RICHARD ELLIS VIETNAM CONDOMINIUM FOR SALE OUTLOOK Future supply will have a greater focus on affordable housing, given limited existing supply while demand is large. Improved infrastructure & public transportation will allow more options for residential locations, creating more competition. Buyers will make decisions based on public facilities, services, and quality. In the short term, price in both secondary & primary market will remain stable. Speculators/investors still play an important role in almost all projects. 10 CB RICHARD ELLIS VIETNAM

6 OFFICE 11 CB RICHARD ELLIS VIETNAM OFFICE HIGHLIGHTS One Grade B office building came on stream this quarter, Capital Tower, adding up to 21,000 sm to the market Rental rates in Grade A office buildings dropped slightly by 3.55% q-o-q to US$ Grade B buildings saw a 3.5% rise in rent to US$ q-o-q, solely due to one Grade B office in CBD came on stream this quarter. Excluding this building, average asking rental remained unchanged at US$ Overall market vacancy rates for Grade A and Grade B buildings reached 18.27% with almost 80,000 sm of vacant space. 12 CB RICHARD ELLIS VIETNAM

7 OFFICE OUTLOOK Better quality projects in both the CBD and western districts in Now is best time to lease larger spaces in the CBD, since there are several buildings with high vacancy levels In western districts, vacancy will continue rising in 2010 and 2011, due to the opening of Hanoi Grand plaza in 2010 and Keangnam Landmark Tower in 2011 Excess supply seems to become a reality. Vacant space by the end of 2010 could reach over 150,000 sm Net absorption this quarter was only 8,000 sm, but improved absorption is expected through the rest of the year The achieved office rents will continue falling during 2010 and will not start rising until construction slows in next three years Long-term leases increasingly an option for companies with long-term plans in Hanoi 13 CB RICHARD ELLIS VIETNAM RETAIL 14 CB RICHARD ELLIS VIETNAM

8 RETAIL HIGHLIGHTS Hanoi s retail sales increased by 26.5% y-o-y, on par with growth in 2007 & Major announcements and progress: Royal City starts construction Big C opens in The Garden Kinh Bac Hanoi Tower introduced PICO Mall (retail podium in MIPEC Tower) to be open by end of 2010 No new projects launched, the market remains at 103,576 sm. Average Vacancy rate dropped by 3.4% q-o-q. CBD: 0% Non-CBD: 25%, 6% q-o-q Average rental rate: 2.13% q-o-q at US$46.30 psm. CBD: rental rates stabilised, averaging US$55.50 Non-CBD: rental rates declined slightly, averaging at US$35.12 psm per month, 2.25% q-o-q. 15 CB RICHARD ELLIS VIETNAM RETAIL SUPPLY No new supply, but expect more stock coming on stream in upcoming quarters Grand Plaza to be open in June, providing 18,000 sm of GFA By end of 2010, PICO Mall (retail podium of MIPEC Tower) to be open, providing roughly 26,000 sm of GFA New retail supply developed in non-cbd districts will continue to exceed supply added in the CBD and 2012 will bring significant new supply. Major projects include Indochina Plaza Hanoi, Savico Plaza, Ciputra Hanoi Mall, Keangnam Hanoi Landmark Tower, Mo Market Shopping Centre. 16 CB RICHARD ELLIS VIETNAM

9 RETAIL OUTLOOK ENT is still a barrier. Franchises and Distribution deals will remain popular for foreseeable future More real shopping centres opening over next three years. Available stock may put downward pressure on the rental rates, especially in the non-cbd area as new projects compete during stablisation Initial performance of Bac Ha Plaza (now changed to Fodacon Building) and Grand Plaza will be points of interest in the next quarter, highlighting the presence of the retail market in the two newly-developed areas Xuan Thuy Tower Grand Plaza Bac Ha Plaza 17 CB RICHARD ELLIS VIETNAM SERVICED APARTMENTS 18 CB RICHARD ELLIS VIETNAM

10 SERVICED APARTMENTS HIGHLIGHTS The average market-wide asking rent increased slightly by 2% q-o-q to US$ psm. However, the average rent still dropped 7.23% y-o-y. The self-managed and internationally managed buildings have seen rents increase by 1% and 3.9% q-o-q respectively. The overall occupancy rate improved to 94.45%. New projects (those opening in 2008 or later) continued to decrease their vacancy rates, dropping to 1.5% Older projects that opened before 2008 also had vacancy rates decrease to 6.9%. 19 CB RICHARD ELLIS VIETNAM SERVICED APARTMENTS OUTLOOK Demand is strong as the market saw an increase in enquiries for serviced apartments Most enquiries in this quarter were from Asian expatriates and from Japanese clients in particular. Increase in consumer s budgets allocated for accommodation. Expanding supply will require an increase in expatriate population growth to sustain good prices for the market Fraser Suites Serviced Apartments New projects this year include Charmvit s Grand Plaza and Crown Complex in the western submarket 20 CB RICHARD ELLIS VIETNAM

11 HOTELS 21 CB RICHARD ELLIS VIETNAM HOTELS HIGHLIGHTS Tourist arrivals: Domestic arrivals to Hanoi: 2.1 million, 3.8% y-o-y International arrivals to Hanoi: 270,000, 7.2% y-o-y; compared to the country s level: 1.35 mil.; 36.2% y-o-y Best Western terminates contract with Muong Thanh Hotel New Supply: Muong Thanh and Cau Giay officially ranked as 4-star and 3-star hotel respectively by VNAT. Silk Path (106 rooms) opens, expected to receive a 3 or 4- star flag (not included in the total stock) New campaign Vietnam Your Destination for the year 2010 launched, in which Impressive Vietnam Grand Sale 2010, one of seven important contents taking place in August and September are expected to boost tourism Average occupancy rates fell by 2.64% q-o-q but rose 6.55% y-o-y Average daily rate (ADR) fell 8.40% q-o-q, 10.48% y-o-y, to US$ CB RICHARD ELLIS VIETNAM

12 HOTELS OUTLOOK Grand Plaza Hanoi Hotel In 2010, a total of 1,160 rooms will open in Hanoi Crowne Plaza and Grand Plaza are both fitting out with openings expected by year end Accor announces its strategic expansion plan with the goal to double the number of rooms under their management in Vietnam by More international hoteliers are aggressively pursuing projects in Hanoi Tourism growth in Hanoi limited by issues regarding the airport. Problem will grow as tourism expectations increase 23 CB RICHARD ELLIS VIETNAM For further information and order details, please contact. quarterlyreports@cbrevietnam.com THANK YOU!!! 2009 CB Richard Ellis, We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction. 24 CB RICHARD ELLIS VIETNAM