SAVILLS VIETNAM HA NOI Over 22 years First to Market The most innovative Advisory Services in Viet Nam DA NANG 68,000 sqm Leased in 2016 US$ 200 mil 2016 residential sales Over USD 100M pa Number one for transactions Over 5.2 M sqm under Savills management HCMC 2
EVOLVING Modern retail supported by a large young population and an expanding economy 2nd highest urban population in the region and growing. Consistently high GDP growth. MYANMAR 35% 18.5 7.3 44% THAILAND 52% 35.8 2.9 3.1 LAOS 40% 2.7 7.3 PHILIPPINES 45.3 6.1 7.0 CAMBODIA 21% 3.3 7.0 6.7 MALAYSIA 75% 23.3 VIET NAM 34% 31.5 5.0 6.0 6.7 7.0 BRUNEI 78% 0.3-0.6 1.9 SINGAPORE 100% 5.6 1.9 0.6 INDONESIA 54% 141 4.9 5.0 Key 40% % Urbanisation 45.3 GDP Growth % Spending Consumption growth (%) 2016 Urban Population 2016 (Mil) Savills Vietnam 3
EVOLVING Low retail density with growth potential to catch regional peers. 0.89 0.75 0.65 0.64 0.44 0.17 0.13 Bangkok Singapore Beijing Kuala Lumpur Jakarta Ha Noi HCMC Retail Density (m 2 /pax) Source: Savills Overpriced, Unavailable? Shoppercations Affecting Performance Top ten APAC cities by tourist spend (US$ billion) 1 Singapore 15.4 2 Bangkok 12.7 3 Tokyo 11.1 4 5 Taipei Seoul 9.4 9.9 6 7 Bali Phuket 8.3 8.7 8 9 10 Kuala Lumpur Sydney Hongkong 6.6 6.8 7.3 20 HCMC 3.5 Source: Mastercard, 2017 Inbounds US$18 billion Vietnamese tourists overseas spend US$7.5 billion Source: GSO, 2017 Source markets 27% 15% Chinese South Korea International visitor yearly growth up: 18%. 7% Japan 6% 5% US Taiwan Source: GSO, 2017 4
Ha Noi & HCMC forecast. HCMC developing faster HA NOI 2% HCMC 13% Non CBD CBD 98% 87% Shopping centres dominate 8% 15% 15% 9% 14% 10% 6% Shopping Centre 16% 52% 57% 18% 27% Supermarket 45% 50% 27% Deparment Store 30% Others 2010 2010 2017 2017 High CBD premium supply US$35 15% 6% /m /mth US$53 /m2/mth 2 Vacant Occupancy 85% 94% HCMC HA NOI Abundant supply Abundant competition Annual average take up 2014-2016 70,000m2 Supply 2018-2020 Annual average take up 2014-2016 Supply 2018-2020 760,000m2 120,000m2 650,000m2 Savills Vietnam 5
EVOLVING Demographics, Globalisation & Technology Large, growing youth skewed labour force changing demand dynamics Tech users Internet user (% Pop) 20% 14% 22% 52% 9% 24% 2007 2016 Smartphone user (% Pop) 67% 38% 64% 2009 2025 Source: Ministry of Communication, 2017 0-14 15-59 60+ Increasing credit card use 9 Mil Source: GSO, 2016 Spare Time Online Source: Statebank, 2017 52% 48% 27% 24% 21% 12% 9% 2% Family Smartphone Friends Laptop/pc Sport & exercise TV Music Other Source: Infocus Mekong, 2017 Spare Cash Spend 41% 38% 37% 34% 32% Travel Fashion Entertainment Home Style Hi-tech Source: Nielsen, 2016 6
Globalization and international exposure encourages diversity and more brands 3% 9% 4 brands 17% 149 brands 38% Restaurant Special retail store Services Education 32% Manufacturing 2007 2016 Global brands eyeing Viet Nam. F&B, retail and services leading the charge. Source: National Office of Intellectual Property of Viet Nam Click & Buy Adapting to & loving online retail E-commerce diversifying 13,510 US$11 BIL US$4 BIL 647 682 90 13 13 93 20 2015 2020f 2013 2016 Source: VECITA, 2017 Online shop Online trading Online promotion Online auction Source: VECITA, 2017 Savills Vietnam 7
EVOLVING Consumption 2011-2016 18% 17% 13% 10% 10% 7% -2% Modern Grocery Leisure Lifestyle & Beauty Electronics Pharmacies Appareal Jewellery Convenience store density (,000/store) Source: Euromonitor, 2017 Vietnam 54.4 Phillipines 40.9 China 24.9 Australia 8.7 Malaysia 7.4 Thailand 6.9 Singapore 6.2 Hongkong 5.3 Newzealand 3.1 Taiwan 2.4 Japan 2.3 South Korea 2.1 Source: Savills, Nielsen & National statistics, 2016 Wanting More Source: Savills survey, 2017, sample size: 500 Theme restaurants Organic 23% greenhouse Art 16% Gallery 13% Pet park 15% Indoor Sport 11% Science Outdoor sport 11% Live Music 9% Museum 1% Clinic 1% 8
AWARD WINNING INTERNATIONAL RECOGNITION Best Property Consultancy in Viet Nam 8 consecutive years 2010 to 2018 Best Real Estate Agency in Viet Nam & APAC 8 consecutive years 2010 to 2017 Savills has topped the real estate agents/advisors in the 2017 UK Business Superbrand chart for the eighth consecutive year. Ahead of all industry competitors Savills retained its title as The Times Graduate Employer of Choice for Property for ninth consecutive year. Savills Vietnam 9
ECONOMIC RENT Sustainable retail development. When revenue exceeds gross occupancy cost. (GOC). OPERATING Population Disposable Income % Entertainment % Fixed Expanses Discretionary Spending Health % Categories Clothing % F&B DEVELOPMENT Total Selling Price Margin Construction Investment Cost Land Cost 10
Sales/ Revenue GOC Gross Occupancy Cost Insurance Tax Wages Rent AFFORDABLE RENT MARKET COMPARABLES AND BENCHMARKING A. $/m 2 B. $/m 2 C. $/m 2 $/m 2 NOI MARKET RENT Net Lettable Areas (NLA) x $/m 2 Rent (Net Operating Income) Net Operating Income (NOI) / % YIELD Savills Vietnam 11
OUR SERVICES Our services are delivered by people who combine entrepreneurial spirit and a deep understanding of specialist property sectors with the highest standards of client care. We help our clients to fulfil their real estate needs whatever and wherever they are. ADVISORY SERVICES Market Research General & Specific Economic and Demographic studies Conceptual Development Recommendations Feasibility Studies Highest and Best Use Study Development Review Valuation AGENCY Retail Office Industrial Project Sales and Marketing Strategy Residential Sales RESIDENTIAL International Sales Residential Leasing Landlord Representative PROPERTY MANAGEMENT Pre-Operations Management Consultancy Property & Asset Management Facility Management Residential - Commercial - Industrial Property Management Training HOTEL & LEISURE Operator Selection Management Agreement negotiation INVESTMENT Strategy Project Positioning Stakeholder Engagement Structuring Acquisition and Sales Please contact us for further information: Troy Griffiths Deputy Managing Director +84 (0) 933 276 663 TGriffiths@savills.com.vn Do Thu Hang Associate Director - Ha Noi +84 (0) 912 000 530 DThuHang@savills.com.vn Disclaimer: This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.