CBRE HCMC Office Services 2010 Tenants Evening Part I:

Transcription

1 CBRE HCMC Office Services 2010 Tenants Evening Part I: 2010 Are we in for a happy ending? Tuesday 26th January 2010 Presented by: Mr. Chris Currie Associate Director Office Services

2 Market Overview Q supply has filled up quicker than previously thought Signs of companies revising 2010 headcounts upwards Vietnamese tenants financially strong and less risk averse CBRE Monthly enquiries are increasing Rents appear to be bottoming out after 2009 falls Pushback from some Landlords Sense of realism - Asking vs. Achievable now around 10% CBRE Absorption level of 154,000sm in 2009 Cluster of deals being done ~ US$30++ sm/month CB Richard Ellis Page 2

3 CB Richard Ellis Page 3 Recent headlines Asia strong

4 Indices 12 months VN Index January % Source: HSC Securities S&P 32% Source: FT.com CB Richard Ellis Page 4

5 Commodities YTD Vietnam Gold 40% Source: SJC NYMEX Crude 28% Source: FT.com CB Richard Ellis Page 5

6 The devaluing dong The hidden cost Vietnam Will Probably Devalue Dong 4% by Year-end Tamara Henderson, Australia & New Zealand Banking Group Ltd September, 2009 Currency Caps between 10 15% Advance Rent Payments at fixed exchange rates VND denominated lease agreements Date Exchange USD Effective VND % increase June VND 17, $25.00 $25.00 VND 444, January VND 18, $25.00 $25.96 VND 461, % December VND 20, $25.00 $28.11 VND 500, % For indicative purposes only forecast for 2009 and 2010 CB Richard Ellis Page 6

7 Asian Office Market Rent Cycle, Q As of Q Rental Growth Accelerating Rental Growth Slowing Jakarta Taipei Seoul J T S B Rents Falling Bangkok Rents Bottoming Out Kuala Lumpur K M Manila G Guangzhou S Singapore H Hanoi Tokyo T Bangalore HCM City Beijing B B Shang Mumbai hai S H M H Hong Kong New Delhi N NB. Markets do not necessarily move along the curve in the same direction or at the same speed. The rental cycle is intended to display the trend in net effective rents CB Richard Ellis Page 7

8 Major Buildings HTMC 2H 2011 Saigon Trade Center Centec Saigon Tower Kumho Asiana Plaza CT Group Building 1H 2011 Diamond Plaza Le Meridian 1H 2011 Metropolitan Vincom Tower 2H 2010 Existing Future SJC Tower Me Linh Point Saigon Centre Sun Wah Times Square 2H 2011 Bitexco Financial Tower 2H 2010 CB Richard Ellis Page 8 A&B Tower M&C Tower 2H 2011

9 Vincom Center Office Tower Fitting Out Q Commitment 20% Curtain Wall going up CB Richard Ellis Page 9

10 Bao Viet Fitting Out Q Commitment - 40% (Landlord Occupies) Finalizing exterior façade, windows going-in CB Richard Ellis Page 10

11 Bitexco Financial Tower Fitting Out April 2010 Commitment - 18% Curtain wall in-line with construction, up to the 45 th level (out of 68 Level) CB Richard Ellis Page 11

12 A&B Tower Fitting Out Q Commitment 47% Curtain Wall nearly completed CB Richard Ellis Page 12

13 HCMC Power Company Fitting Out Q Commitment - 30% (Landlord Occupies) Curtain Wall going up CB Richard Ellis Page 13

14 Occupancy Rates & Vacant Space in Major Buildings Occupancy Kumho 65% Metropolitan 98% Sun Wah Tower 98% Saigon Tower 89% Diamond Plaza 100% Saigon Centre 95% CENTEC 85% Me Linh Point Tower 98% Saigon Trade Center 85% Sailing Tower 100% Royal Centre 80% CentrePoint 60% Approximate TOTAL Available Net Vacant Space* 9,000 1,000 - GFA 1,000 - GFA 1,700 - GFA SGFA 4, , ,300 11,500 37,100sm Estimate only according to information obtained from landlords and agents CB Richard Ellis Page 14 * Unless otherwise stated

15 2010 Major New Supply Commitment Vincom Center 20% A&B Tower 47% HCMC Power Company 30%(LL Occupies) Bao Viet Building 40%(LL Occupies) The Flemington D11 0% Bitexco Financial Tower 18% Approximate new space Plus current vacant space Approximate TOTAL space available end 2010 Available Net Vacant Space* 51,600 9,000 13,700 7,000 21,806 30, ,028sm 37,100sm 170,000sm** Estimate only according to information obtained from landlords and agents Unless otherwise stated **Approx NET square metres CB Richard Ellis Page 15

16 Demand Which areas of the market Financials (Banks) / Insurance / Securities / Education / Oil & Gas / Software / Call Centre's CB Richard Ellis Page 16

17 HCMC Net Absorption of Office Space Net Take Up of Office Space (all grades) HCMC Net Absorption 156, ,000 GFA (sqm) 152, , , , , Source: CBRE (Vietnam) CB Richard Ellis Page 17

18 CB Richard Ellis Page 18 Regional Net Absorption

19 Current Asking Rents Current Asking Rents (excl. Service Charge and VAT) $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 CB Richard Ellis Page 19 Kumho Metropolitan Sun Wah Saigon Centre Saigon Tower Diamond Plaza Me Linh Point CENTEC Saigon Trade Center Sailing Tower Kumho Metropolitan Sun Wah Tower Saigon Centre Saigon Tower Diamond Plaza Me Linh Point CENTEC Saigon Trade Center Sailing Tower Kumho Metropolitan Sun Wah Tower Saigon Centre Saigon Tower Diamond Plaza Me Linh Point CENTEC Saigon Trade Center Sailing Tower Q Apr-09 Jun-09 Jan-10 Source: CBRE (Vietnam) *Buildings are not listed in any particular order within rental ranges. Kumho Metropolitan Vincom Center Sun Wah Tower Saigon Centre Saigon Tower Diamond Plaza Me Linh Point Bao Viet CENTEC A&B Tower Saigon Trade Center CentrePoint

20 GRADE B BUILDING CLOSING RENTS (NET AREA) Jun 2002 Apr 2005 Jul 2005 Dec 2006 Dec 2007 May 2008 Jan 2009 Jan 2010 Doubled and halved Low Zone Mid zone High Zone Notes: Rents excl SC & VAT CB Richard Ellis Page 20

21 Tenants View of the Office Market Strengths Increased Supply = Increased Options Better Quality Rents are down Flexibility Landlords Landlords are moving quickly Opportunities Consolidation Longer term leases / strata title Upgrade in quality / grade Newer, more efficient space Weaknesses Parking Quality of Amenities Infrastructure Access Efficiencies Threats Decreased Landlord leverage Rents increasing Demand outstripping supply Delays in completion CB Richard Ellis Page 21

22 Summary If demand exceeds 2009 levels, rents may pick up in 2011 Vietnamese tenants will continue to dominate the market More long term leases / strata titled office space Occupancy levels critical to leverage Realism takes hold Happy Ending you may not get it your own way! CB Richard Ellis Page 22

23 Quarterly Reports for Ho Chi Minh City and Hanoi Available for each city, in English or Vietnamese Covers: National and City Economic Overview Office Retail Hotel Residential for Sale Investment Serviced Apartments Construction Costs CB Richard Ellis Page 23

24 Over 300 markets in more than 50 countries 49 Thank You 33 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. CB Richard Ellis Page 24