CBRE VIETNAM, HCMC MARKET OVERVIEW Q4/2013 PRESENTED BY: GREG OHAN, DIRECTOR, VIETNAM

Transcription

1 CBRE VIETNAM, HCMC MARKET OVERVIEW Q4/2013 PRESENTED BY: GREG OHAN, DIRECTOR, VIETNAM NOVEMBER 19 TH 2013

2 CONTENTS HOW TO MAKE THE RIGHT DECISION? 1. Know The Market Overview of Vietnam Office Market 2. Know Your Business Key Considerations When Making an Office Relocation / Renewal Decision 3. Know the Future Outlook CBRE Predictions 4. Lim Tower & Hoa Lam Corporation Overview of Lim Tower Hoa Lam Corporation and Lim Tower 2 2

3 RECENT HEADLINES Increase 66% y-o-y ($19 billion) in FDI exceed the 2013 target ($18.13 billion), led by Japan (25%) VN ranks 99th on business-friendly list (90th in 2012, 78th in 2011) Gold price decreased to VND 36.6 mil/tael. Global gold down to US$1,286/ounce VN highest car 9m/2013, increasing 18% y-o-y, led by Toyota, Ford and GM Credit growth is expected to reach 11% - 12% in 2013 Haiyan Typhoon ravaged through the Philippines causing floods, storms and damage in central VN. Is the worst behind us? 3

4 1 KNOW THE MARKET

5 MARKET OVERVIEW - HCMC Q3 SNAPSHOT OFFICE GRADE A GRADE B GRADE C TOTAL Number of properties Total supply (GFA, sm) 329, , ,437 2,123,086 New supply (properties) Net absorption (NLA,sm) Q3/ ,000 20,802 27,720 Q-o-q change (%) 207.2% 10.1% 31.1% Y-o-y change (%) 104.1% 220.1% 180.3% Vacancy rate (%) 11.8%(*) 11.3% 11.5% Q-o-q change (pp) Y-o-y change (pp) Average asking rents (US$ psm per month) Q-o-q change (%) 3.0% 3.2% 2.9% Y-o-y change (%) 6.2% 8.2% 7.0% 5

6 $80 $60 $40 $20 MARKET OVERVIEW - HCMC RENT AVERAGE ASKING RENTS Grade A Grade B Average asking rent increases. Asking rent in the Grade A and Grade B segment risen by 3.0% q-oq and 3.2% q-o-q. $ GRADE A GRADE B Number of buildings GFA (sm) 329, ,718 Mature buildings are already raising rents whilst those in the next tier down, be A- or B+, are maintaining their rents. 6

7 Vacant Space (sm) Average Asking Rent (US$ psm per month) Vacant Space (sm) Average Asking Rent (US$ psm per month) MARKET OVERVIEW - HCMC RENT & VACANCY GRADE B VACANT SPACE AND AVERAGE ASKING RENTS GRADE B VACANT SPACE AND AVERAGE ASKING RENT 120, ,000 80,000 60,000 40,000 20,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Vacant Space Asking Rent 100,000 GRADE A VACANT SPACE AND AVERAGE ASKING RENTS GRADE A VACANT SPACE AND AVERAGE ASKING RENT $100 80,000 $80 60,000 $60 40,000 $40 20,000 $ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Vacant Space Asking Rent $0

8 Area (sm, NLA) Asking rent (US$/sm/month) MARKET OVERVIEW - HCMC GRADE A VS. GRADE B PERFORMANCE HCMC Office Market Performance Grade A & B Leased Area Vacant Area Asking Rent 1,000, , , , ,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q $25 $23 $21 $19 $17 $15 RENTS CONTINUE AN UPWARD TREND Increased slightly by 2.5% q-o-q to US$21.8 psm, p/mth Vacancy rate in Grade A market declining Vacancy rate in Grade B market rising slightly owing to new buildings launched over the last quarter 8

9 MARKET OVERVIEW - HANOI RISING NEW SUPPLY AND DECREASING OCCUPANCY RATES $50 Office Asking Rents Grade A Grade B 50% Office Vacancy Grade A Grade B $40 40% $30 30% $20 20% $10 10% $0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q ASKING RENT Grade A average asking rents decreased by 2.8% q-o-q while Grade B improved by 1.5% Grade A - downward pressure as Landlords are more competitive Grade B asking rents decreased by 14% and projected to continue VACANCY Grade A vacancy rate continued to decrease 2to 26.31% Grade B vacancy increased up to 34.7% due to the new supply of 4 grade B buildings Y-O-Y Grade A vacancy decreased 1.16 pp while Grade B increased sharply 15.5 pp 9

10 2 KNOW YOUR BUSINESS

11 TENANT PROFILING - HCMC ENQUIRIES BY ORIGIN - YTD 26% 26% Vietnam US Japan UK 6% 7% 7% 8% 19% Korea China Other Source: CBRE Strong occupier interest (26%) remains Vietnamese / local companies expanding and consolidating US continues to remain the largest foreign occupier group by country dominating enquiry levels followed by Japan and Korean based organization's respectively

12 TENANT PROFILING - HCMC ENQUIRY BY TRANSACTION YTD ENQUIRY BY INDUSTRY YTD 16% Technology Manuf acturing 20% Finance 35% Education 84% Retail 17% Relocation or extension New entrant Pharmaceutical Others 4% 5% 6% 13% Source: CBRE Demand driven by office occupiers seeking expansion / relocation Fringe / New CBD buildings have given occupiers flexibility to upgrade and consolidate. The focus 2H 2013 has been consolidation and taking advantage of limited / remaining cost effective opportunities in NEW buildings offering attractive packages to raise occupancy levels

13 TENANT PROFILING KEY FACTORS TO UNDERSTAND BEFORE MOVING 1. TYPE OF BUSINESS Industry type can define location E.g. Banking / Finance D1. Call centre non CBD 2. LENGTH OF TENANCY Current lease term length 3. REASON FOR MOVING Expansion? Consolidation? Cost Understanding current needs and whether 4. CURRENT REQUIREMENTS existing size / accommodation suitable. Current location, space, head count, expiry etc Headcount, location, space sqm, building grade 5. FUTURE REQUIREMENTS desired, operational date, operational hours, IT provider etc 6. PARKING No. of car and motorbike 7. BUDGET Monthly / p/sqm Security, Back Up Power, IT. Fire & Safety, 8. OTHER OPERATIONAL FACTORS Signage 13

14 TENANT PROFILING KEY FACTORS TO CONSIDER WHEN MOVING 1. FIT OUT Fit out : US$350 US$450 p/sqm 2. RE INSTATMENT Reinstatement : US$25 US$35 Grade A : US$6 - US$8 3. SERVICE CHARGE Grade B : US$5 - US$6 Grade C : US$3+ 4. FLOOR MEASUREMENT (Net or Gross) 5. SECURITY DEPOSITS 6. PAYMENTS TERMS 14 Gross: most common areas contained within the external walls Net: within a tenancy at each floor level measured from finishes 3 months rent +SC in cash held for the duration of lease, returned at expiry Quarterly in advance for rent +SC. Longer payment terms = lower rent 7. LEASE TERMS 2 5 years + (Negotiable) 8. PARKING COSTS 9. STANDARD OPERATING HOURS Cars: US$150 - US$250/lot/month Motorbikes: US$6 - US$20/lot/month Monday - Friday : 8.30am to 6.00pm Saturday : 8.30am to 1.00pm 10. LEASE DENOMINATION By law denominated in VND

15 MAJOR TENANTS WHO HAVE MADE THE MOVE YTD RELOCATIONS / NEW OFFICES IN Q4/2013 IT Pharma Consumer goods Pharma Pharma Pharma Finance Insurance Construction Securities Banking Conglomerate Sourcing operation 15 Electronics Construction Assurance Banking

16 3 KNOW THE FUTURE

17 ABSORPTION YTD HCMC REVIEW Net Absorption YTD Grade A 27,535 34,016 33,917 24,209 26,250 Grade B 48,140 97,744 85,367 39,921 55,058 Total 75, , ,284 64,130 81,308 Total supply YTD Grade A 134, , , , ,853 Grade B 356, , , , ,553 Total 491, , , , ,406 Net absorption in 2013 to increase by 25+ Vs Net absorption dominated by increased activity in Grade B

18 Gross Floor Area (sm) Gross Floor Area (sm) SUPPLY YTD - HCMC CURRENT & FUTURE SUPPLY 400,000 GRADE A OFFICE STOCK 300, , ,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Exisitng space New supply Total GFA 1,000, , , , , GRADE B OFFICE STOCK Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Existing supply New supply Total GFA

19 OPPORTUNITIES FOR TENANTS HCMC UPCOMING COMPLETED 2014 SUPPLY SGGP Building 21,700 sm GFA NTMK, D3 Vietin Bank Tower 24,315 sm GFA CBD Vietcombank Tower 55,000 sm GFA CBD Viettel Tower 65,971 sm GFA CMT8, D3 Q MB Sunny Tower 16,000 sm GFA CBD 19

20 SUPPLY PIPELINE - HCMC OUTLOOK HCMC Office Supply Forecast (Grade A & B), GFA sm 2013 to 2015 Existing Space - GFA (sm) New Space Come Online 1,600,000 Limited supply 175,346 sm 8 quarters 1,200, , ,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Source: CBRE 2013 AND THE FIRST HALF OF 2014 WILL END WITH STABILITY FOR OFFICE SEGMENT will require a strategic approach with major occupiers NOW planning and negotiating for expiries in mid to late Asking rents in mature buildings with quality asset management services will maintain good performance even though there will be additional new supply in the next few quarters as demand for high quality and good location office space continues. Flexible leasing terms and high quality services are still the keys to attracting or retaining tenants.

21 OPPORTUNITIES FOR TENANTS OCCUPANCY IN KEY OFFICE BUILDINGS Occupancy Area Occupancy Area Q (approx m2) Q (approx m2) Lim Tower D % % 5, President Place D % % 1, Bitexco Financial Tower D % 10, % 6, Kumho Asiana Plaza D % % Metropolitan D % % Sun Wah Tower D % 1, % 1, Diamond Plaza D % % 0.00 Saigon Centre D % % Saigon Tower D % % Me Linh Point Tower D % % A&B Tower D % % Green Power D % % Vincom Center D % 19, % 13, Centec Tower D % % 1, An Phu Plaza D % % 1, Saigon Trade Center D % 3, % 12, Maritime Bank Tower D % 2, % 4, CentrePoint PN 99.70% % E town TB 98.00% 1, % 2, Ree Tower 21 D % % TOTAL Q ,231 Q ,433

22 OPPORTUNITIES FOR TENANTS OCCUPANCY IN KEY OFFICE BUILDINGS Occupancy% Q vs Q % 80.00% 60.00% 40.00% 20.00% Q Q % 22

23 SMALL MEDIUM SIZED BUILDING PIPELINE - HCMC 23 CBRE is tracking 175 new mixed use office developments in key and fringe CBD Districts e.g. 1,3, Tan Binh and Phu Nuan

24 PLANNING FOR RELOCATION MAKING THE RIGHT MOVE In the HCMC CBD, Only 8 buildings (A and B Grade) can provide over 1,000 sqm contiguous space today. 5 of them are Grade A Lim Tower one of them. Only 4 buildings (A and B Grade) combined in the HCMC CBD have a floor plate over 1,000 sqm This means, VERY limited options for MNCs looking for seeking international standard, quality larger commercial buildings 50% of the 175+ NEW Small-Medium sized buildings are being built by SOEs and 50% are for owner occupation For any major occupier planning an occupancy solution, the opportunity is tightening with timing and planning early the key to achieving your occupancy solution 24

25 4 LIM TOWER & HOA LAM CORPORATION

26 LIM TOWER - OVERVIEW 26

27 LIM TOWER PRIME LOCATION Positioned at the corner of Le Thanh Ton and Ton Duc Thang street, the Building positioned at the gateway to District 1, is the largest Grade A office building to be completed in 2013 with a total area of over 34,000sqm, 34 floors, 550 parking spots within the building and additional parking also available in close proximity. 27

28 LIM TOWER MODERN & EFFICIENT The building design incorporates the latest architecture to create an environmentally and operationally efficient office building for Tenants Over 80% of the Building façade is covered by the latest Euro window double glazed UV protection glass Each levels features floor to ceiling glass, maximizes the best view in HCMC along with allowing additional natural light. The curtain wall glazing system at LIM reflects over 90% of external sound and heat. Saving operation cost and providing efficient and comfortable working environment. 28

29 LIM TOWER PROJECT OVERVIEW Developer Height Total Net leasable area Typical Net plate Ceiling height Total Parking Lift Mai Thanh Service Company Limited 34 levels (123m) & 2 basements; 30 floors for office 20,466 sqm Approx. 700 sqm 2.55 m (finishing to finishing) 6 levels for car and motorbike parking: 2 basements: car parking (150 lots), 3 rd 6 th floor: motorbike parking (950 lots) 9 high speed Thyssen Krupp lifts: Low zone: 4 passenger lifts (up to 20 th floor), High Zone: 4 passenger lifts (21 st floor 34 th floor) 1 service lift; 1600kg/lift Air-conditioning Centralized chiller AC system FCU/floor Security system 24 hour security and CCTV throughout Back-up power Provide 100% back-up power (2,000 KVA) Asking rent Please call Service charge $6 p/sqm Completion Q3 /

30 LIM TOWER PROJECT OVERVIEW Technique floor & Rooftop 21 st 34 th floors: Leasable area 7 th 20 th floors: Techcombank 3 rd - 6 th floor: Motorbike parking 1 st - 2 nd floors: leased by Techcombank 2 basements: car parking 30

31 LIM TOWER 2, 158 VO VAN TAN Q COMPLETION 31

32 LIM TOWER 2, 158 VO VAN TAN Q COMPLETION 32

33 OFFICE ENQUIRY HOTLINE THANK YOU 2013, CBRE, Group Inc. CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. About CBRE Group, Inc. CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at