Office Snapshot Q1 216 Hanoi, Vietnam HANOI OFFICE Economic Indicators Market Indicators Grade A 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Grade A Overall Vacancy 24.3% 26.4% Grade A Net Absorption 9.3k 12.9k Under Construction 81.8k 5.k Grade A Average Asking Rent (/sqm/mo.) $3.27 $28.46 Grade A - Net Absorption/Asking Rent 25, $5 Economy With an impressive economic growth in 215, the government has set a more optimistic target of 6.7% in GDP growth and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% year-on-year, while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months accounting for 23% of the total investment. Market Overview Two new office buildings were delivered in first quarter 216, namely TNR Tower (Grade A) and Handico Tower (Grade B), adding over 65,6 square meters (sq.m.) of office space to the market. Currently, there are 17 Grade A and 67 Grade B office buildings, supplying over 1,185, sq.m. of office space to the market, registering an increase of 6% quarter-on-quarter and 9% year-on-year. 2, $4 15, 1, $3 5, $2-5, $1 21 211 212 213 214 215 216 Net Absorption, SQ.M Asking Rent, $ PSQ.M Grade A - Overall Vacancy 4% 35% 3% 25% 2% Historical Average = 22% 15% 1% 5% % 21 211 212 213 214 215 216 Average asking rent for both Grades in first quarter 216 trended downward on a yearly basis down by 6% for Grade A to VND635, per square meter per month (/sq.m./mo), equivalent to US$28.46/sq.m/mo; and down by 3% for Grade B to VND45,/sq.m./mo, equivalent to US$18.18/sq.m./mo respectively. This was mostly due to lower rents in the new projects. Due to substantial new supply delivered this quarter, Grade A experienced a significant fall in average occupancy rate by 6.3 percentage points quarter-on-quarter and 2.2 percentage points year-on-year, to reach 73.6%. Meanwhile, over 9% of Grade B office was occupied in this quarter, remaining stable quarter-on-quarter but registering a significant increase in occupancy rate by 8.3 percentage points year-on-year. Outlook Twelve new projects are expected to be completed this year, providing approximately 17,5 sq.m. of office space to the market. Most of these projects are located in the non-cbd and the Western area, contributing 54% and 44% to the new stock respectively. This implies a tendency to shift from the crowded CBD to nearby districts such as Dong Da, Ba Dinh, and especially to the West, such as Cau Giay and Tu Liem Districts. Half of these projects are currently in the fit-out stage.
Office Snapshot Q1 216 Hanoi, Vietnam SUBMARKET TOTAL BUILDINGS INVENTORY (SQM) VACANT AREA OVERALL CURRENT NET VACANCY RATE (%) ABSORPTION UNDER CONSTRUCTION AVERAGE ASKING RENT (US$/SQ.M/MO.) US$ SF/YR EURO SF/YR CBD Grade A 1 118, 8,47 7.2 2,13 5, 34.2 37.93 33.68 CBD Grade B 15 113,4 8,29 7.3 (53) 26.36 29.38 26.9 CBD Totals 25 231,36 16,76 7.2 1,6 5, 3.27 33.74 29.96 Non-CBD Grade A 3 18,3 6,59 55.9 14,32 29.63 33.3 29.33 Non-CBD Grade B 36 443,56 41,5 9.4 5,42 94,7 16.65 18.56 16.48 Non-CBD Totals 39 551,87 12,1 18.5 19,74 94,7 19.2 21.4 19. West Grade A 4 174,6 36,95 21.2 (3,6) 23.97 26.73 23.74 West Grade B 16 227,4 24,56 1.8 9,1 115,8 17.1 19.7 16.93 West Totals 2 42,1 61,5 15.3 5,4 115,8 2.9 22.39 19.88 HANOI TOTALS 84 1,185, 18,38 15.2 26,76 215,5 21.66 24.15 21.45 *Rental rates reflect gross asking $psq.m/year SUMMARY BY GRADE TOTAL BUILDINGS INVENTORY DIRECT VACANT VACANCY RATE (%) CURRENT NET ABSORPTION YTD NET ABSORPTION UNDER CNSTR AVERAGE ASKING RENT OVERALL (US$/SQ.M/MO.) AVERAGE ASKING RENT DIRECT (US$/SQ.M/MO.) Grade A 17 4,95 16, 26.4 12,85 12,85 5, 28.46 28.46 Grade B 64 784,37 74,36 9.5 13,9 13,9 21,5 18.18 18.18 Key Lease Transactions Q1 216 PROPERTY SQ.M TENANT TRANSACTION TYPE SUBMARKET Keangnam Hanoi Landmark Tower 2,5 Huawei Relocation West Sun Red River Building 1,3 ThyssenKrupp Real Estate Relocation CBD Lotte Center Hanoi 42 Oracle Relocation CBD Hong Ha Center 4 HIS Relocation CBD Significant Projects Under Construction Q1 216 PROPERTY SUBMARKET SQ.M COMPLETION DATE STATUS UDIC Complex West14,5 216 Fitting out MD Complex West18,5 216 Fitting out Thang Long Garden Tower West37,5 216 Under construction Vicem Tower West37,8 216 Under construction About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 Phuoc.Vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Retail Snapshot Q1 216 Hanoi, Vietnam 15, 13, 11, Economic Indicators Market Indicators Net Absorption/Asking Rent 9, 7, 5, 3, 1, HANOI RETAIL Overall Vacancy 2 months 215 2 months 216 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Overall Vacancy 18% 11.6% Net Absorption (1,716) 3,866 Overall Average Asking Rent (VND/sq.m/month) 3% 2% 1% 87, 95, Historical Average = 14% -1, 6 21 211 212 213 214 215 216 Net Absorption, SQ.M Asking Rent, thousand VND PSQ.M (*) Average rent on the ground level is used as a benchmark to represent the rent of each retail centre. All rents include Service charge and exclude VAT % 21 212 214 216 1,2 1, 8 Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% year-on-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview With no new retail centres entering the market in the first quarter of 216, overall supply remained stable quarter-on-quarter but still higher by 23% year-on-year, at over 866,3 square meters (sq.m.) of retail space from 49 projects. Non-CBD supply dominated the market, accounting for nearly 97% of the market as land available for development in the CBD remains limited. The overall market performance continued to experience gradual improvement, with vacancy rate down by 6 percentage points year-on-year but unchanged on a quarterly basis at nearly 12% in first quarter 216. There was an improvement in the CBD on both a quarterly and yearly basis, with vacancy rate down 3 percentage points quarter-on-quarter and 1 percentage point yearon-year to 2%, while Non-CBD reached 12%, down by 6% year-onyear but remained unchanged on a quarterly basis. The overall average asking rent saw a moderate decrease by nearly 1% quarter-on-quarter, but went up by 8.3% year-on-year, mostly due to the high rents offered by new projects, reaching VND95, per square meter per month (/sq.m./mo) or US$4.6/sq.m./mo. In terms of rent by location, the average rent in the CBD recorded at VND2,647,/sq.m./mo (US$118.7/sq.m./mo), triple those in the Non-CBD. Average rents in both locations remained stable on a quarterly basis, but down 6% and up 11% year-on-year, respectively. Outlook Over 175, sq.m. of new supply is expected to be completed in 216, of which nearly 3% of the total stock will comprise the two Vincom shopping centres in Cau Giay and Dong Da. No additional retail space in CBD is expected to be completed in 216. A large number of projects will also be concentrated in the Western area of Hanoi. With WTO commitments, FTA participation and the signing of TPP, the number of retailers into Vietnam is expected to rise in the future and consequently, intensify competition between domestic and foreign retailers.
Retail Snapshot Q1 216 Hanoi, Vietnam SUBMARKET TOTAL BLDGS INVENTORY VACANT AREA OVERALL VACANCY RATE CURRENT NET ABSORPTION UNDER CNSTR AVERAGE ASKING RENT (VND/SQ.M/MONTH)* Department Store 2 34, 1,32 4% 1,582, Shopping Center 21 748,29 95,1 13% 3,222 46,6 884, Retail Podium 26 84,4 4,44 5% 646 111,452 818, HANOI TOTALS 49 866,33 1,77 11.6% 3,868 517,512 921, SUMMARY BY LOCATION TOTAL BLDGS INVENTORY VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION AVERAGE ASKING RENT (VND/sq.m/month) CBD 13 24,9 2% 66 66 2,647, Non - CBD 36 842,24 12% 3,2 3,2 855, TOTAL 49 866,33 11.6% 3,86 3,86 921, Significant projects under construction Q1 216 PROPERTY LOCATION SQ.M STATUS COMPLETION DATE Vincom Pham Ngoc Thach Non-CBD 27, Under construction 216 Mipec Riverside Non-CBD 28, Fitting out 216 Vincom Green Stars Non-CBD 2, Under construction 216 Discovery Complex Non-CBD 25, Under construction 216 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 Phuoc.Vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Industrial Snapshot Q1 216 Hanoi, Vietnam HANOI INDUSTRIAL PARK Economic Indicators Market Indicators Net Absorption/Asking Rent Overall Vacancy 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Overall Vacancy 29.6% 27.8% Net Absorption ha 2.5 ha Under Construction 34 Average Asking Rent (VND/sq.m/term) 2,212, 2,475, 35 3 25 2 15 1 5-5 -1-15 212 213 214 215 216 4% 35% 3% 25% Net Absorption, ha Historical Average = 31% 2% 212 214 3,, 2,5, 2,, 1,5, 1,, 5, Asking Rent, VND PSQ.M Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% yearon-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview There was no change in the supply of industrial parks (IPs) in first quarter 216. Total net leasable area supplied by 11 IPs in Hanoi remained the same at more than 1,42 hectares, constituting around 78% of gross land area. Total available land for lease at the end of the first quarter was 395 hectares, accounting for approximately 28% of total supply. RBFs were not popular in Hanoi s IPs. The overall market performance continued to experience gradual improvement, with the average occupancy reaching well over 72% in first quarter 216, up 2 percentage points year-on-year. Seven out of 11 IPs (54% of the total stock) were fully occupied. Among the remaining IPs that still had vacant area at the end of this quarter, Hoa Lac Hi-tech Park recorded the highest vacancy rate (7%) with 346 hectares land available for lease. The average asking rent of IPs in Hanoi continued to be the highest compared to all other cities/provinces in the northern region of Vietnam (about 5% higher than that of Hai Phong and Bac Ninh), standing at VND2,475, per square meter per term (/sq.m./term), equivalent to US$111/sq.m./term in first quarter 216, slightly down 1% quarter-on-quarter but still up 12% year-on-year. Management fees for these IPs averaged at VND9,65/sq.m./month (US$.43/sq.m/month) [check if this is in term or month]. Nam Thang Long Industrial Park offered the highest rent at nearly VND4,171,/sq.m./term (US$187/sq.m./term). * ALL RENTS ARE ASKING RENTS AND VAT EXCLUDED Outlook An additional supply of about 6, hectares from 14 identified IP projects is expected to enter the market from now through 22, which is equivalent to 4% of current supply. By 23 with vision to 25, Hanoi will have 33 IPs with an area of 8, hectares in total. With labor costs increasing in China, foreign investment in IPs is expected to grow continually in the medium to long term as manufacturing companies shift their operations to Vietnam, particularly when the country has entered into FTAs, AEC and TPP.
Industrial Snapshot Q1 216 Hanoi, Vietnam SUBMARKET TOTAL IPs INVENTORY (ha) YTD LEASING ACTIVITY (ha) OVERALL VACANCY RATE YTD NET OVERALL ABSORPTION (ha) UNDER CONSTRUCTION (ha) NET RENT (VND/SQ.M/TERM) Chuong My 1 111 81 27% 2,341, Dong Anh 1 26 26 % 2,676, Gia Lam 1 78 78 % 3,79, Long Bien 1 32 32 % 3,568, Me Linh 1 24 24 % 3,568, Thach That & Quoc Oai 2 619 27 56% 2.5 1,66, Tu Liem 1 24 24 % 4,171, Soc Son 3 114 95 17% 34 3,83, HANOI TOTALS 11 1423 128 28% 2.5 34 2,475, Significant Future Projects PROJECT NAME AREA (ha) DISTRICT STATUS Soc Son Clean IP 34 Soc Son Under construction North Thuong Tin 43 Thuong Tin Site clearance Quang Minh II 266 Me Linh Site clearance Dong Anh IP 3 Dong Anh Planning Thanh My Xuan Son 1 Son Tay Planning About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 Phuoc.Vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Residential Snapshot Q1 216 Hanoi, Vietnam HANOI APARTMENT Economic Indicators Market Indicators Primary Market Performance Asking Prices of All Segments 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Primary supply 16,2 14,2 Net Absorption 35% 41% Overall Average Asking Price (mil. VND/sq.m) 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, 24 28.1 Grade A Grade B Grade C Primary stock Lowest asking price (VND/sq.m) Sold units Grade A Grade B Grade C Highest asking price (VND/sq.m) Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% yearon-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview The first quarter of 216 continued to see positive market momentum, reflected by strong launches across all Grades from both 24 new and active projects, with nearly 6,2 units launched. Grade B dominated the market with 68% of marketshare, followed by Grade C (3%) and Grade A (2%). The total primary supply in this quarter reached over 14,7 units. Transaction volume of all Grades fell 19% quarter-on-quarter due to the long Tet holiday but remained stable year-on-year; 74% of sold units were Grade B, followed by Grade C with 26%. Several Grade B projects registered impressive sales rate including Time City Phase II, Imperia Garden and Vinhomes Gardenia. Thanh Xuan District had the highest share of over 25% of total sales volume this quarter. Average price saw a significant increase on both a quarterly and yearly basis, by 6% quarter-on-quarter and 16% year-on-year, reaching VND28 million per square meter (/sq.m.) or US$1,25/sq.m. Grade A, with limited remaining stock, saw a marked decrease on both quarterly and yearly basis of nearly 1% quarter-on-quarter and 22% year-onyear due to price adjustment from one project, attaining VND47 million/sq.m. (US$2,87/sq.m.). The average price for Grade B stood at VND32 million/sq.m. (US$1,4/sq.m.), up nearly 3% quarter-onquarter but down 6% year-on-year. Price of Grade C increased to VND18.5 million/sq.m. (US$82/sq.m.), up nearly 8% quarter-onquarter and 1% year-on-year. * ALL PRICES ARE VAT EXCLUDED Outlook Market sentiment is expected to remain positive in 216, in terms of both the number of newly launched projects and sale performance as developers credibility improves with substantial support from banks and policies in favor of buyers. The Western area is expected to see the highest supply of apartments in 216. The mid to low-end segments will continue to dominate due to its liquidity. Care needs to be exercised to prevent excessive speculation from distorting the market.
Residential Snapshot Q1 216 Hanoi, Vietnam SUMMARY BY GRADE TOTAL PROJECTS INVENTORY NET ABSORPTION AVERAGE PRICE LEVEL* (mil VND/SQM) Grade A 4 27 6% 47 Grade B 38 9,6 44% 31.9 Grade C 35 4,3 45% 18.7 TOTAL 76 14,71 41% 28.1 Key launched projects Q1 216 PROPERTY MARKET APPROACH DISTRICT GRADE NO. UNITS LAUNCHED Park Hill Premium (T12) New launch Hai Ba Trung B 682 Goldmark Sapphire (2,4) Added Tu Liem B 346 Ecogreen City Added Tu Liem B 377 VOV Me Tri (CT2E) Added Tu Liem B 11 Comatce New launch Thanh Xuan B 3 Vinhomes Gardenia New launch Tu Liem B 1164 Gold Season New launch Thanh Xuan B 32 B1, B2 CT2 Linh Dam New launch Hoang Mai C 112 Gemek Premium Added Ha Dong C 576 The Golden An Khanh (32T) Added Hoai Duc C 286 Star Tower Added Thanh Xuan C 156 Him Lam Thach Ban New launch Long Bien C 187 Key future projects PROPERTY LOCATION EST. TOTAL UNITS STATUS COMPLETION YEAR FLC Twin Tower Cau Giay 486 Foundation 217 D'Le Roi Soleil Tay Ho 948 Foundation 217 Legend Tower Thanh Xuan 46 Under construction 217 Goldmark city - Phase 2 Tu Liem 2,68 Under construction 217 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 phuoc.vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Serviced Apartment Snapshot Q1 216 Hanoi, Vietnam Economic Indicators Market Indicators Net Absorption/Asking Rent Overall Vacancy 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) 25% 2% 15% 1% HANOI SERVICED APARTMENT (.61).86 Q1 15 Q1 16 Grade A Vacancy 18.5% 12.8% Grade A Average Rent VND78, VND695, Grade B Vacancy 22.9% 12.9% Grade B Average Rent VND49, VND474, 16 14 12 1 8 6 4 2-2 -4-6 211 212 213 214 215 216 Net Absorption, SQ.M Asking Rent, VND PSQ.M Historical Average = 16% 8, 7, 6, 5, 4, 3, 2, 1, 5% 211 212 213 214 215 216 Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% year-on-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview No new project entered Hanoi s serviced apartment market in first quarter 216. Overall, there are 12 Grade A projects and 19 Grade B projects supplying a total of 3,1 units. Grade A still takes up the larger share of total stock with nearly 1,94 units (62%). Serviced apartments are mainly located in Ba Dinh and Tay Ho Districts, accounting for 3% and 29% of the total supply respectively. There are a few international operators present in Hanoi with mainly Grade A projects such as IHG, Ascott Group, Fraser and Keppel Land Hospitality Overall market performance showed significant improvement year-on-year, up 7 percentage points but remaining stable quarter-on-quarter, with average occupancy reaching 87% in the first quarter of 216. Specifically, occupancy in Grade A reached 87.2%, up by 6 percentage points year-on-year, while that of Grade B improved by 1 percentage points to 87.1%. Overall average rent showed a slight decrease on both a quarterly and yearly basis, by 2%, to VND612, per square meter per month (/sq.m./month) or US$27.4/sq.m./mo. Asking rent of Grade A averaged at VND695,/sq.m./mo (US$31.2/sq.m./mo), down 2% both on a quarterly and yearly basis, while that of Grade B was down 2% quarter-on-quarter and 3% year-on-year to VND474,/sq.m./mo (US$21.2/sq.m./mo). * ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED Outlook In 216, Hanoi s serviced apartment market is likely to welcome only one new project, namely Novotel Suites Hanoi in Cau Giay district with 1 units. This will be the first project of this brand in Hanoi. The market will experience more competition from future Grade A buy-to-let apartments besides the current over-supply status. Therefore, the asking rents are expected to remain stable or slightly decrease in order to maintain occupancy.
Serviced Apartment Snapshot Q1 216 Hanoi, Vietnam SUMMARY BY GRADE TOTAL BLDGS TOTAL UNITS VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION AVERAGE ASKING RENT OVERALL* AVERAGE ASKING RENT DIRECT* Grade A 12 1,936 12.8% 15 15 VND695, VND695, Grade B 18 1,167 12.9% -17-17 VND474, VND474, * All Rents are asking rents, with service charge included and VAT excluded Significant Projects Under Construction Q1 216 PROPERTY EST. NUMBER OF UNITS LOCATION DEVELOPER EXPECTED COMPLETION DATE Novotel Suites Hanoi 1 Cau Giay NCX Hanoi Investment JSC 216 Somerset West Point 2 Tay Ho Golden Villa Ltd. Co. 217 Somerset West Central Hanoi 252 Cau Giay Handico Thuy Duong JSC 217 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 Phuoc.Vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Office Snapshot Q1 216 Ho Chi Minh City, Vietnam HCMC OFFICE Economic Indicators Market Indicators Grade A Net Absorption/Asking Rent 4Q TRAILING AVERAGE Grade A Overall Vacancy 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Grade A Overall Vacancy 6.4% 8.7% Grade A Net Absorption 34.9k (4.4)k Under Construction 221.6k 184.5k Grade A Average Asking Rent 35% 3% 25% 2% 15% 1% $45.94 $46.1 35, $56 3, $54 25, 2, $52 15, $5 1, $48 5, $46-5, $44 211 212 213 214 215 Q1 216 Net Absorption, SQM Historical Average = 14% Asking Rent, $ PSQM 5% 211 212 213 214 215 Q1 216 Economy With impressive economic growth in 215, the Government has set a more optimistic target of 6.7% in GDP growth and CPI to be well under control at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% yearon-year (y-o-y); implemented FDI was estimated to have reached US$1.5 billion, up 15.4% y-o-y. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first 2 months, accounting for 23% of total investment. Market Overview No new office building entered the market in Q1 216, however, one Grade B building converted over 3,2 sq.m of space into office for lease. Currently, there are 1 Grade A and 48 Grade B office buildings, providing approximately 193,8 square meters (sq.m.) and 74,6 sq.m. of space to the market respectively. Average occupancy of Grade A saw a moderate decrease by 2 percentage point (ppt) by quarter and remained stable by year, at 91%. As a result, Grade A net absorption was recorded at minus 4,44 sq.m. Grade B occupancy reached 95%, unchanged by quarter but rose 1 ppt y-o-y, enjoying an unbroken upward trend in the last 11 quarters. Occupancy for non-cbd Grade B buildings remained slightly higher than those in the CBD over the last seven quarters, reached 96%, whilst those in the CBD achieved 95%. In terms of rents, the average rents of both grades remained stable on a quarterly basis, at around VND1,28, per square meter per month (/sq.m./mo), equivalent to US$46.1/sq.m./mo. for Grade A, and VND613,2/sq.m./mo (US$27.5/sq.m./mo) for Grade B. However, on a yearly basis, Grade A rent softened by 1% whilst Grade B remained unchanged. The decrease was mostly due to the lower rent offered by the new project. The average rent for CBD was 4% higher than in the non-cbd. 1/12 buildings that recorded an increase in average rent by year were in the CBD area. Outlook Over 51, sq.m. of new supply of both grades is expected to be completed in 216. Low historical standards as well as a limited supply of large spaces will keep rents stable with moderate increases likely by the end of the year. The balance of power is generally still with the tenants as occupiers continue to look for ways to reduce costs by renegotiating with their existing landlords or relocating to alternative more cost-efficient buildings.
Office Snapshot Q1 216 Ho Chi Minh City, Vietnam SUBMARKET TOTAL BUILDINGS INVENTORY UNDER CNSTR OVERALL VACANCY RATE (%) CURRENT NET ABSORPTION YTD CONSTRUCTION COMPLETION AVERAGE ASKING RENT (US$/SQ.M/MO.) US$ SF/YR EURO SF/YR CBD A Grade 1 193,8 184,56 8.7 (4,4) 46.1 51.39 45.63 CBD B Grade 31 423,75 3, 5.2 (1,7) 31.86 35.49 31.52 Non CBD B - Grade 17 28,86 111,9 3.9 88 2.98 23.38 2.76 TOTALS 58 898,4 326,5 5.6 (4,6) 31.52 35.14 31.2 *Rental rates reflect gross asking $psqm/month SUMMARY BY CLASS TOTAL BUILDINGS INVENTORY DIRECT VACANT VACANCY RATE (%) CURRENT NET ABSORPTION YTD NET ABSORPTION UNDER CNSTR AVERAGE ASKING RENT OVERALL (US$/SQ.M/MO.) AVERAGE ASKING RENT DIRECT (US$/SQ.M/MO.) Class A 1 193,8 16,9 8.7 (4,4) (4,4) 184,56 46.1 46.1 Class B 48 74,6 33,1 4.7 (19) (19) 141,9 27.52 27.52 Key Lease Transactions Q1 216 PROPERTY SQ.MTENANT TRANSACTION TYPE SUBMARKET Vincom Center 1,45 Halotiki Expanding CBD Pearl Plaza 1,2 JTI Relocation Non-CBD Vietcombank Tower 8 Chicilon Media Relocation CBD Continental Tower 7 Servier (Vietnam) Pharmaceutical Company Relocation CBD MB Sunny 5 Yamaha Motor Vietnam Relocation CBD Significant Projects Under Construction Q1 216 PROPERTY SQ.M MAJOR TENANT COMPLETION DATE SUBMARKET HQC Royal Tower 22,5N/A 216 Non - CBD SGGP Building 16,94N/A 216 Non - CBD Hai Quan Tower 3,N/A 216 CBD Saigon Center Phase 2 4,N/A 217 CBD Deutsches Haus 24,9N/A 217 CBD Mapletree Business Center 3,N/A 217 Non - CBD E.Town Central 35,N/A 217 Non CBD About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 phuoc.vo@ap.cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources cons idered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Retail Snapshot Q1 216 Ho Chi Minh City, Vietnam HCMC OFFICE Economic Indicators Market Indicators Net Absorption/Asking Rent 4Q TRAILING AVERAGE Overall Vacancy 2% 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Overall Vacancy 9.3% 8.4% Net Absorption 22.k sq.m 36.1k sq.m Average Asking Rent (per sq.m. per month) 15% 1% 5% VND1,297k Historical Average = 13% VND1,261k 9, 1,6, 8, 7, 1,5, 6, 5, 1,4, 4, 1,3, 3, 2, 1,2, 1, 1,1, -1, 1,, 211 212 213 214 215 216 Net Absorption, SQM Asking Rent, VND PSQM (*) Average rent on the ground level is used as a benchmark to represent the rent of each retail centre. All rents include Service charge and exclude VAT % 211 212 213 214 215 216 Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% year-on-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview Two shopping centres, namely Vincom Plaza Go Vap and Vincom Plaza Le Van Viet, were completed in the first quarter of 216 adding more than 44, square meters (sq.m.) of retail space to the market. This resulted in a net increase of total stock by 4% quarter-on-quarter and 22% year-on-year. Currently, there are 131 retail centres in the city with a total area of approximately 1.1 million sq.m. District 1 remains the most concentrated retail market in the city, accounting for more than 16% of total supply. Overall occupancy remained stable on a quarterly basis, but was up 1 percentage point year-on-year, to 92%. The two aforementioned new completions achieved a high occupancy rate at above 8%. The recent trend of high profile investments from retailing giants into Non-CBD areas, establishing large shopping centres and offering aggressive rents, has paid off with a higher occupancy rate at 93%. This is in contrast to the CBD, which saw occupancies remaining unchanged quarter-onquarter, but down 5 percentage points year-on-year to 86%, due mainly to the partial renovation of a big shopping centre in District 1. Average rents continued to trend downwards on both a quarterly and yearly basis, downed 3% quarter-on-quarter and 6%year-on-year to VND1.26 million per square meter per month (/sq.m./mo), or US$56.6/sq.m./mo. due to lower rents at the new projects. All new projects over the last four quarters were in the non-cbd area. Rents in the CBD remained stable on a quarterly basis, but fell moderately by 1% year-on-year, to VND2.37 million/sq.m./mo (US$15/sq.m./mo.). This is 2.5 times higher than in the secondary area and triple those in the suburban area. Outlook Over 15, sq.m. of new supply is expected to enter the market by 216. While demand for CBD retail space is expected to remain high, limited land for development means that significant future projects will mainly be located in the non-cbd areas. These will mostly be in the south and west where much of the infrastructure and residential developments have been established. Easing tariffs under the TPP, together with the further liberalization of the retail sector under the provisions of the WTO, is expected to enhance Vietnam's potential to international retailers.
Retail Snapshot Q1 216 Ho Chi Minh City, Vietnam SUMMARY BY TYPE TOTAL BLDGS INVENTORY VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION AVERAGE ASKING RENT (VND/SQ.M/MO.) Retail Podium 1 31,52 13.3% 1,97 1,97 811,88 Department Store 9 126,87 6.% 1,244, Shopping Centre 24 566,87 8.% 36,4 36,4 1,187,3 Bazaar 7 34,49 1.% (1,88) (1,88) 3,259, Supermarket 77 28,29 - - - - Wholesale Centre 4 66, - - - - TOTAL 131 1,16, 8.3% 36,5 36,5 1,261,2 SUMMARY BY LOCATION TOTAL BLDGS INVENTORY VACANCY RATE CURRENT NET ABSORPTION YTD NET ABSORPTION AVERAGE ASKING RENT (VND/SQ.M/MO.) CBD 3 191,85 14% 81 81 2,372, Non - CBD 11 914,18 7% 35,69 35,69 956,5 TOTAL 131 1,16, 8.3% 36,5 36,5 1,261,2 Significant Projects Under Construction Q1 216 PROPERTY SQ.M COMPLETION DATE SUBMARKET Lotte Mart Go Vap 4, 216 Non CBD Aeon Mall Binh Tan 64, 216 Non - CBD Saigon Centre 2 55, 216 CBD About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 phuoc.vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources cons idered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Industrial Snapshot Q1 216 Ho Chi Minh City, Vietnam HCMC OFFICE Economic Indicators Market Indicators Net Absorption/Asking Rent 4Q TRAILING AVERAGE Overall Vacancy 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Overall Vacancy 29% 28.1% Net Absorption 5 ha 17.4 ha Under Construction 1, ha 1, ha Overall Average Asking Rent (/sqm/term) 8 7 6 5 4 3 2 1 4% 35% 3% 25% VND2,696k VND2,88k 212 213 214 215 216 Net Absorption, ha Historical Average = 33% 2,9, 2,8, 2,7, 2,6, 2,5, Asking Rent, VND PSQM 2% 212 213 214 215 216 Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% yearon-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview No new supply was delivered during the quarter. Currently, there are 18 operating IPs covering a total area of nearly 3,63 hectares. The leasable area is estimated to be about 62% of the total land area, while the average remaining LUR years is 35. The performance of the IP market in HCMC remained stable on both a quarterly and yearly basis with average occupancy rate increasing moderately by 1 percentage point both on a quarterly and yearly basis, to 72%. The majority of the established IPs reported robust occupancy rates of above 9%. Average asking rents in this quarter stood at approximately VND2,88, per square meter per term (/sq.m./term), equivalent to US$126/sq.m./term, remaining stable both on a quarterly and yearly basis. This rent was about two times higher than that in the neighboring provinces, such as Binh Duong and Dong Nai. Ready-Built Factory rents for areas of about 2, 3, sq.m. ranged from US$2.5 US$3.5 per square meter per month. * ALL RENTS ARE ASKING, EXCLUDING VAT Outlook The total increase in industrial land in HCMC up to 23 is projected at approximately 3, hectares, increasing by some 85% from the current stock. Twelve new IPs are expected to be added to the 18 that are currently in operation by 22. However, the majority of future projects are still in the clearance and compensation stage; construction progress is expected to be protracted; and only three of these projects are in under-construction stage. With the TPP and other free trade agreements that Vietnam has participated in recently, coupled with stable economic conditions, favorable government policies and low labor cost, Vietnam will attract more investments from foreign manufacturers as they shift their operations to Vietnam. With demand for industrial land on the rise, this segment will remain a compelling investment.
Industrial Snapshot Q1 216 Ho Chi Minh City, Vietnam SUBMARKET TOTAL IPs INVENTORY (HA) YTD LEASING ACTIVITY (HA) OVERALL VACANCY RATE UNDER CNSTR (HA) NET RENT (VND/SQM/TERM) District 2 1 72 72 % VND2,23, District 7 1 195 193 1% VND5,797, District 12 1 22 22 % VND2,221, Binh Tan District 2 321 321 % VND4,971, Tan Phu District 2 92 92 % VND4,459, Thu Duc District 3 11 11 % VND3,931, Nha Be District 2 56 315 38% 6 VND2,64, Binh Chanh District 2 19 11 42% 24 VND2,12, Cu Chi District 4 753 378 5% 17 VND1,52, TOTAL 18 2,26 1,612 28% 1, VND2,88, *Rental rates reflect asking $psqm/term Projects under construction Q1 216 PROPERTY HECTAREDISTRICT STATUS Le Minh Xuan Phase 3 242 Binh Chanh Under Construction Tay Bac Cu Chi Phase 2 173 Cu Chi Under Construction Hiep Phuoc Phase 2 597 Nha Be Under Construction About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 phuoc.vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources cons idered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Residential For Sale Snapshot Q1 216 Ho Chi Minh City, Vietnam 22, 16,5 11, Economic Indicators Market Indicators 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Overall Absorption Rate 35% 38% Overall Average Price Overall Primary supply/asking Prices Q1 216 5,5 HCMC OFFICE '- Primary Stock/Price Range by Grade Q1 216 14 12 1 8 6 4 2 VND24,97k VND33,3k 15 211 212 213 214 215 216 Primary Stock, UNITS Grade A Grade B Grade C Primary Stock, UNITS Highest Price (MIL VND/SQM) * ALL PRICES ARE VAT EXCLUDED Aksing Price, MIL VND/SQM Lowest Price (MIL VND/SQM) 9, 7,5 6, 4,5 3, 1,5 35 3 25 2 Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% year-onyear; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview There was a decrease in new supply in the first quarter of 216 across all Grades, totaling over 8,4 units from both new and active projects, of which more than half are concentrated in the Eastern region. As of first quarter 216, there are nearly 21,2 available units for sale across all Grades in the primary market, of which Grade B accounted for 4%, while Grade A and Grade C contributed around 33% and 27% respectively. In this quarter, Districts 2, 7 and Binh Thanh continued to dominate the market, accounting for around 52% of the total primary supply. Transaction volume fell in the residential market, registering a decline of nearly 1% year-on-year, but rose 6% quarter-on-quarter. Districts 2,7, 8 and Binh Thanh led the market, accounting for nearly a half of total absorbed units in the quarter. Binh Thanh District continued to outperform the rest of the other districts, making up 22% in total transaction volume. All Grades recorded an increase in price level on a yearly basis, mostly due to the higher prices offered at new projects. Average price of Grade B and Grade C increased by 2% and 14% year-on-year respectively but fell by 1% and nearly 3% quarter-on-quarter to VND3.6 million per square meter (/sq.m.) or US$1,37/sq.m. for Grade B and VND18.8 million/sq.m. (US$846/sq.m.) for Grade C; Grade A s price was up on both a quarterly and yearly basis, to VND48.5 million/sq.m. (US$2,176/ sq.m.)., up 3% quarter-on-quarter and 7% year-on-year. Outlook Small to medium-sized apartments are expected to be the most sought after. Future supply will largely be in strategic locations which offer easy access to the CBD such as Districts 2, 4, 7 and Binh Thanh District. Projects located along the first metro line are attracting more interest. Buying activity is expected to benefit from lower home loan interest rates with longer tenures from banks as well as flexible payment terms from developers. Sentiment in the city s residential market is expected to continually improve in the short to medium term.
Residential For Sale Snapshot Q1 216 Ho Chi Minh City, Vietnam SUMMARY BY GRADE TOTAL PROJECTS INVENTORY NET ABSORPTION AVERAGE PRICE LEVEL* (MIL VND/SQM) Grade A 27 7, 34% 48.5 Grade B 52 8,38 42% 3.6 Grade C 54 5,8 35% 18.8 TOTAL 133 21,2 38% 33.3 Significant Projects Launched In Q1 216 PROPERTY LOCATION EXPECTED COMPLETION DATE UNITS LAUNCHED MARKET APPROACH Vinhomes Dong Khoi District 1 Handed 78 New launch Sadora Apartment District 2 217 62 New launch Sarica Condominium District 2 217 175 New launch De Capella District 2 217 17 New launch M-one Saigon District 7 217 38 New launch Avila District 8 217 285 New launch I-home District 9 217 3 New launch Western Dragon Binh Tan 217 2 New launch Vinhomes Central Park Binh Thanh 217 1,3 Added Riva Park District 4 217 22 New launch Saigon Mia District 8 218 825 New launch Dream Home Palace District 8 218 65 New launch Scenic Valley 2 District 7 218 185 New launch Botanica Premier Tan Binh 218 16 New launch Diamond Lotus Lake View Tan Phu 218 3 New launch Kris Vue District 2 218 13 New launch 9 view District 9 218 56 New launch Toplife Tower District 1 218 84 New launch Madison District 1 218 48 New launch Significant Projects Under Construction Q1 216 PROPERTY EST. NUMBER OF UNITS LOCATION DEVELOPER EXPECTED COMPLETION DATE Vinhomes Central Park 1, Binh Thanh VinGroup 217 The Goldview 1,95 District 4 Saigon Garment Match JSC 217 M one Saigon 963 District 7 Thao Dien Investment 217 Hung Phuc Residence 544 District 7 Phu My Hung 218 About Cushman & Wakefield Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43, employees in more than 6 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms in the world with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), tenant representation and valuations & advisory. To learn more, visit or follow @Cushwake on Twitter. Phuoc Vo Director Valuations & Research Room 16, Level 14, Vincom Centre 72 Le Thanh Ton, District 1, HCMC Tel: +84 8 3823 7968 Fax: +84 8 3823 7969 phuoc.vo@cushwake.com Copyright 216 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources cons idered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
Serviced Apartment Snapshot Q1 216 Ho Chi Minh City, Vietnam HCMC SERVICED APARTMENT Economic Indicators Market Indicators 2 months 15 2 months 16 CPI (%).64 1.3 Inward FDI (billion US$) 1.19 2.8 Trade balance (billion US$) (.61).86 Q1 15 Q1 16 Grade A Vacancy 4.% 7.8% Grade A Average Rent VND644k VND669k Grade B Vacancy 1.5% 5.3% Grade B Average Rent VND467k VND476k Economy Having achieved an impressive growth rate in 215, the government set a more optimistic GDP growth target of 6.7% and CPI at below 5% in 216. As of February 216, total inward FDI into Vietnam reached US$2.8 billion (both newly registered and adjusted), up 135% year-on-year; while implemented FDI was estimated to have reached US$1.5 billion, up 15.4% year-on-year. The manufacturing and processing industry, which accounted for 71.2% of total registered capital, attracted the largest share. Singapore was the leading investor with newly registered FDI in the first two months, accounting for 23% of total investment. Market Overview No new projects for either Grades entered the market in the first quarter of 216. The remaining units from Reverie Saigon are still under renovation. In addition, two projects in the CBD have been completed and are awaiting for inauguration Ascott Waterfront Saigon and New Pearl Residence. Currently, the market comprises 7 units from eight Grade A buildings and 2,29 units from 23 Grade B buildings. Those in District 1 make up 44% of the total supply. Net Absorption/Asking Rent 4Q TRAILING AVERAGE 2 58, 16 56, 12 54, 8 52, 4 5, 48, -4 46, 211 212 213 214 215 216 Net Absorption, units Asking Rent, VND PSQM Overall Vacancy 25% 2% 15% Historical Average = 14% 1% 5% 21 211 212 213 214 215 216 * ALL RENTS ARE ASKING RENTS, WITH SERVICE CHARGE INCLUDED AND VAT EXCLUDED Grade B continued to see gradual improvement with average occupancy rising on both a quarterly and yearly basis, up nearly 2 percentage points quarter-on-quarter and 5 percentage points year-on-year to 95%. Meanwhile, Grade A had a softer performance, with occupancy down moderately by 1 percentage point quarter-on-quarter and nearly 4 percentage points year-on-year to 92%, largely due to the seasonal fluctuation in short term leases. District 1 has traditionally outperformed due to its prime location, accessibility and full range of facilities. However, lower occupancy at the new project proved a drag as overall occupancy in the district fell to 93%, while non-cbd occupancy reached 95%. Average rents of both Grades experienced moderate increases on year. Grade A rose by 1% quarter-on-quarter and 4% year-on-year, to VND669, per square meter per month* (/sq.m./mo), equivalent to US$3./sq.m./mo, mainly due to the ending of the promotion period of the new project. Grade B s rent was stable quarter-on-quarter but up 2% yearon-year, standing at VND476,/sq.m./mo. (US$21.3/sq.m./mo). Rents of 1-bedroom units are showing signs of an increase in majority of the projects in the CBD, indicating increasing demand for such room types in the area. Outlook Over 6 units from six projects are expected to enter the market by 216, of which more than 6% will be in District 1 as the CBD continues to be the preferred location of developers. Under the Trans Pacific Partnership Agreement and the Vietnam-EU Free Trade Agreement, Vietnam s economic outlook remains positive which will drive prospects n the serviced apartment market.