Vietnam Prperty Market Brief JLL Research 4Q16
Market Highlights Page Ecnmy f Vietnam 3 H Chi Minh City (HCMC) Office 5 Supply increases 5 Mderate demand 5 Rents g up slightly 5 Residential 6 Increased launching activity acrss the markets 6 Gd sales mmentum cntinues 6 Price rises still cnsiderable 6 Retail 7 Supply remains cmparatively cnstant 7 Demand imprves slightly 7 Rents increase marginally 7 Industrial 8 Supply increases mderately 8 Demand stabilises 8 Rents sar 8 Hani Office 9 Supply stable 9 Demand psitive 9 Rents decline marginally n a quarterly basis 9 Residential 1 Plentiful supply 1 Strng demand 1 Prices mve n upward trend 1 Retail 11 Supply increases 11 Demand still driven by new supply 11 Rents sften further 11 Glssary 12 Cver Picture: Part f the H Chi Minh City Page 2
ECONOMIC HIGHLIGHTS Vietnam s ecnmy grws 6.7% in 4Q16: Vietnam s GDP grwth was 6.7% in 4Q16, lwer than the rate f 7.% in the same perid f last year and in whle-year 216 increased t just ver 6.2%, belw the gvernment s target f 6.7%. Hwever, this result is cnsidered a relatively psitive trend despite the impact f harsh climatic, envirnmental disasters and vlatile geplitics thrughut the year. There was a decline in agriculture and mining, while ther sectrs saw mderate grwths The manufacturing sectr recrded a substantial increase f 11.9%, thanks t the strng increase in freign investment. Als, the service sectr grew cnsiderably, accunting fr 4.9% f the structure f the natinal ecnmy due t the leap in retail sales and in the number f internatinal turists. Retail sales and internatinal arrivals sar: Vietnam s retail sales and service turnver increased by 1.2% y--y by endyear. Ttal freign arrivals t Vietnam reached a peak f mre than 1 millin, up apprximately 26% cmpared t the previus year. In terms f visitrs natinality, China and Suth Krea remained the majr surce markets with high grwth rates in arrivals f 51.4% and 38.7% y--y, respectively. Other markets als shwed psitive signs, particularly Hng Kng with a dramatic increase f 67.5% cmpared with the last year, thanks t the visa-exempt plicy, which was applied fr 1 cuntries in Asian and 7 ther cuntries wrldwide until end- 219. In additin, the electrnic visa system fr freign visitrs will cme int frce starting frm early 217, and this is expected t expand the number f internatinal turists t abut 11.5 millin next year. % Real GDP Grwth (y--y) 1. 8. 6. 4. 2.. 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 11 12 13 14 15 16 Quarterly GDP GDP ytd Surce: General Statistics Office, JLL Research % Retail Sales vs. Internatinal Arrivals (ytd, y--y) % 12. 35. 1. 25. 8. 15. 6. 4. 5. 2. -5.. -15. Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nv-16 Dec-16 Real Retail Sales Internatinal Arrivals Surce: General Statistics Office, VNAT, JLL Research FDI flw up substantially: As f end-216, Vietnam attracted ttal FDI registered capital f arund USD 24.4 billin, increasing 7.1% cmpared t the same perid f last year. FDI disbursement was recrded at USD 15.8 billin, up 9.% y--y. Suth Krea was the largest crss-brder investr in Vietnam, with USD 7.4 billin in registered capital, accunting fr 29.% f ttal FDI, fllwed by Japan with USD 2.59 billin and Singapre with USD 2.42 billin. Ntable new prjects included a USD 55 millin investment in LG Inntek Hai Phng (Suth Krea), a USD 315 millin investment in a seaprt and industrial park cmplex in Quang Ninh (Singapre) and a USD 39 millin investment in Amata Lng Thanh (Thailand). USD mil 27, 24, 21, 18, 15, 12, 9, 6, 3, Dec-14 Feb-15 Freign Direct Investment FDI (ytd) Apr-15 Jun-15 Aug-15 FDI Registered Oct-15 Dec-15 Feb-16 Surce: General Statistics Office, JLL Research Apr-16 Jun-16 FDI Disbursement Aug-16 Oct-16 Dec-16 Page 3
CPI rises further in December: Vietnam s CPI in December 216 increased.2% m--m and 4.7% y--y. Of the 11 grups f prducts and services in the basket, the highest grwth was in medical prducts and services with an increase f 77.6% y-y. Increases were als recrded in educatin and in fd and catering services, with rises f 12.5% and 2.87%, respectively cmpared with the same perid in 215. Of the ther categries, the husing and cnstructin materials sectr illustrated a slight grwth f.2% m--m and 2.5% y--y. Overall, CPI fr the whle year saw an increase f 2.7% y--y, r.4% per mnth n average. Vietnam trade surplus reaches USD 2.7 billin: Accrding t the General Department f Vietnam Custms, the cuntry recrded a trade surplus f ver USD 2.7 billin during 216. Vietnam recrded USD 175.9 billin in exprt and USD 173.3 billin in imprt revenues, up 8.6% and 4.6% frm the preceding year, respectively. In terms f exprts in 216, the United States was the largest market, taking USD 38.1 billin, up 14.% y--y, fllwed by the EU with USD 34 billin, up 1.% y--y. In additin, the value f imprts shwed an increase f 4.6% ver the last year, f which USD 49.8 billin, up.5% y--y came frm China, and Suth Krea was the secnd largest surce f imprts, grwing by 14.6% t USD 31.7 billin. Number f newly registered enterprises cntinues t increase: As f end-216, the ttal f newly registered enterprises reached the enrmus number f mre than 11 thusand enterprises with a ttal registered capital f VND 891.1 trillin, an increase f 16.2% in number and f 48.1% in the amunt f registered capital cmpared t 215. Overall, the increases were spread ver every type f business activity in bth the number f new enterprises and the register capital. At the same time, the number f enterprises that finished the prcess fr disslving rse by 31.8% y--y t 12,478 and the number f enterprises that terminated business std at 6,667, a decease f 15.2% frm 215. 6. 3.. % Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 CPI - Overall Oct-15 y--y Dec-15 Feb-16 Apr-16 m--m Surce: General Statistics Office, JLL Research Jun-16 Aug-16 Oct-16 % CPI - Husing & Cnstructin Materials 5.. -5. Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 y--y Dec-15 Feb-16 Apr-16 m--m Surce: General Statistics Office, JLL Research USD bil 1.5.5 -.5-1.5 Dec-14 Feb-15 Apr-15 Jun-16 Merchandise Trade Balance Jun-15 Aug-15 Actual Levels Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Aug-16 Oct-16 Oct-16 % f Merchandise Exprts Surce: General Department f Vietnam Custms, JLL Research % Dec-16 Dec-16 Dec-16 1..8.6.4.2. -.2 -.4 % 1.5 1..5. -.5-1. -1.5 % 1.. -1. -2. -3. Page 4
HCMC OFFICE Supply and Demand Supply / Demand Indicatr Grade A Grade B Grade C Ttal Ttal Stck (sqm) 192,179 771,627 785,37 1,748,842 Occupancy Rate (%) 95.3 93.6 N/A N/A Q--Q Change (bps) 54 211 Nte: Since 3Q16, Suburban prjects are re-classified int Grade B and Grade C sub-markets, which might cause minr changes in histrical data. Supply increases In 4Q16, there were tw new ffice buildings entered t the market, including ne Grade B prperty and ne Grade C prperty. These tw prjects added mre than 32,sqm space t HCMC ffice-fr-lease market. Ttal stck as at end-4q16 std at apprximate 1.75 millin sqm. Mderate demand Grade A prjects cntinued shwing gd perfrmance in terms f leasing activity. Average ccupancy rate in Grade A sub-market increased 54 bps q--q. New supply was the main reasn average ccupancy rate fell in Grade B stck, dwn 211 bps cmpared t the previus quarter. Asset Perfrmance Nte: Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Rents g up slightly Average net rents in Grade A and Grade B ffice market cntinued an upward trend but at a mdest rate than the previus quarter. Overall rent is up.6% q--q in 4Q16. Rental gap between CBD and nn-cbd prjects in Grade B sub-market narrwed dwn frm USD 11.9 t USD 11.6. Ttal Stck ' sqm 2, 1,5 1, 5 211 212 213 214 215 216 Key Perfrmance Indicatr Grade A Grade B Grade C Ttal Average Grss Rent (USD/sqm/mnth) 46.3 27.4 N/A N/A Average Net Rent (USD/sqm/mnth) 38.7 22. N/A N/A Q--Q Change (%).2.8 USD/sqm/mnth 6. 4. 2.. Grade A Grade B Grade C Average Net Rents by Grade Grade A Grade B Outlk Supply imprves Under-cnstructin prjects witnessed gd prgress with target cmpletin dates n schedule. Ttal ffice stck will see little change until 2H17. Demand imprves Strng leasing pre-cmmitments have been bserved in the tw upcming Grade A prjects, Deutsches Haus and Saign Centre Phase II. Rents are expected t cntinue its upward trend fr the next quarter Nte: Future prjects frecast fr 219 are in prpsed status. Expected cmpletin year 217 218 219 Supply - Under Cnstructin 5 1 15 2 ' sqm Page 5
HCMC RESIDENTIAL Supply and Demand Supply / Demand Indicatr Apartments Villas / Twnhuses [1] Cmpleted Supply (units) 94, 5, Uncmpleted Supply (units) [2] 62, 3,3 Unsld Inventry (%) [3] 13.6 21.2 [1] Excludes land plt prjects. [2] Excludes planned prjects nt launched fr sale yet. Includes fully sld prjects. [3] The percentage f [2] that remains unsld at quarter-end. Increased launching activity acrss the markets Villas / Twnhuses: Sales ttaled 772 units, the secnd highest since 2. Asset Perfrmance Nte: Q--Q and Y--Y changes are adjusted t remve effects frm supply additins / remvals (i.e. changes are n a like-fr-like basis). Price rises still cnsiderable Primary market: Average Asking Price by Segment Apartments: Price rises cntinued, with the gd market sentiment All Apartments encuraging develpers cnfidence in their pricing strategy. Affrdable Mid-end Villas / Twnhuses: Price increases were cnsiderable, especially Premium amng prperties priced at arund USD 22,-USD 44, per unit. Luxury Secndary market: Villas / Twnhuses Apartments: Price grwth sftened cmpared with recent quarters, with 1, 2, 3, 4, the slwdwn mre cnsiderable in cmpleted prperties. Average Primary Price Average Secndary Price Villas / Twnhuses: Prices were largely higher, with nearly 8% f ttal secndary supply seeing price increases by arund 2-4% q--q. Outlk Apartments: New supply in 4Q16 ttaled 8,874 units, up 5.% q--q and with the Mid-end segment leading market share with nearly 7%. Villas /Twnhuses: New launches increased 14.% q--q standing at 934 units, with the majrity f activity cming frm District 2, District 9 and Nha Be. Gd sales mmentum cntinues Apartments: Take-up reached 9,91 units, up 12.% q--q. Of the ttal, the Affrdable and Mid-end segments accunted fr mre than 8%. Ttal Stck (Cmpleted Supply) - Apartments units 1, 8, Affrdable 6, Mid-end 4, Premium 2, Luxury 211 212 213 214 215 216 Luxury accunts fr less than 1% f ttal stck Market Segment Asking Price Primary Market Asking Price Secndary Market Q--Q Y--Y Q--Q Y--Y Apartments 1.% 6.5% 1.3% 6.8% Villas / Twnhuses 4.7% 12.5% 2.7% 1.3% Apartments USD/sqm Large pipeline supply fr 217 New supply f Apartments may exceed the 216 ttal but mve twards a mre sustainable mde with the expansin f the lwer-end segments. Mre than 2,5 new Villa / Twnhuse units are expected during 217, with the city s eastern areas dminating activity. Sales grwth t remain psitive in the cming year Owner-ccupiers will becme mre imprtant as a sales driver, and this, cupled with the strng investr demand, will bst future sales. Price uptrend is expected t cntinue in 217. 219 218 217 Apartments Villas / Twnhuses Apartments Villas / Twnhuses Apartments Villas / Twnhuses Upcming Cmpletins 2, 4, units Page 6
HCMC RETAIL Supply and Demand Supply/Demand Shpping Centre Bazaar Supermarket/Hypermarket Cnvenience Stre Ttal Stck (sqm) 814,435 37,85 297,5 184,8 Occupancy Rate (%) 91.1 92. N.A N.A Q--Q Change (bps) 22 3 N.A N.A Supply remains cmparatively cnstant The supply f high-grade shpping centres leveled ut cmpared with the previus quarter, due t n new prjects. Cnvenience stres remained an attractive segment fr retailers, with active stre penings frm majr players reaching ver 184,8 sqm. Demand imprves slightly The ccupancy rate rse t 91.1%, increasing 22 bps q--q and 26 bps y- -y. CBD prjects experienced a lwer take-up rate q--q (87.%), while nn-cbd prjects prduced a better perfrmance with 92.6%. Ttal net absrptin was recrded at 1,829 sqm, mstly ccupied by new tenants in suburban districts. Ttal Stck Shpping Centre ' sqm 1, 8 6 4 2 211 212 213 214 215 216 Asset Perfrmance Key Perfrmance Indicatrs Shpping Centre Bazaar CBD Nn-CBD Average Grss Rent (USD/sqm/mnth) 71. 37.6 15 Q--Q Change (%).7.5 2. Nte: Average grss rent, Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). CBD Nn-CBD Rents increase marginally The verall grss rent averaged USD 46.3 per sqm per mnth, a slight increase f arund.3% q--q and.43% y--y. The average grss rent in the CBD sub-market grew t.7% q--q, wing t limited space in the existing supply. The nn-cbd segment rent was substantially dwn during the quarter (.5%) in rder t fill vacant space. Outlk Supply t escalate cnsiderably Future supply will add significant amunts f space t the HCMC retail market. In particular, Vincm Centre Landmark 81 is expected t pen in 218 with a ttal leasable area f abut 46,345 sqm. Nn-CBD sub-market is becming mre attractive Thanks t lwer rents and mderate ftfall with increase in residential supply and better quality infrastructure, further retail develpments is expected in Nn-CBD area. Cnvenience stres cntinue t upsurge Cnvenience stre is a favurable channel fr bth lcal and freign retailers with aggressive expansin strategies t increase stres in the next quarters. Average Grss Rents Shpping Centre USD/sqm/mnth 8 7 6 5 4 3 3Q14 4Q14 1Q15 Expected cmpletin year 2Q15 CBD 3Q15 4Q15 1Q16 2Q16 Nn-CBD 3Q16 Supply Under Cnstructin Shpping Centre 217 218 219 4Q16 2 4 6 8 1 ' sqm Page 7
SOUTHERN REGIONAL INDUSTRIAL Supply and Demand HCMC Dng Nai Binh Dung BR-VT Tay Ninh Binh Phuc Ttal Area (ha) 3,895 9,882 9,843 7,498 4,629 1,177 Ttal Leasable Land Area (ha) 2,57 6,682 6,771 4,812 3,257 768 Occupancy Rate (%) 75% 74% 88% 51% 71% 82% Supply increases mderately In 4Q16, the existing supply fr industrial segment in the Suthern regin std at mre than 36,925 ha, lcated mstly in Dng Nai and Binh Dung prvinces. Ttal rentable space amunted t 24,861 ha, accunting fr apprximately 67% f the whle area, with the average length f lease remaining frm 24 t 49 years. Demand stabilizes The verall take-up rate in the market was recrded at arund 73%, with the majrity f tenants that manufacture and prcessrs f varius gds such as electrnic prducts, and cmmunicatins equipment. Asset Perfrmance Ttal Leasable Area and Occupancy Rate % 1% 8% 6% 4% 2% % Key perfrmance indicatrs HCMC Dng Nai Binh Dung BR-VT Tay Ninh Binh Phuc Average Land Rent (USD/sqm/lease term) 138.1 74.5 65.4 53.8 45.7 27.3 Average Factry Rent (USD/sqm/mnth) 3.4 3.6 3.3 3. 2.7 2.2 8 6 4 2 ' ha HCMC Dng Nai Binh Dung Ttal leasable area BR-VT Tay Ninh Binh Phuc Occupancy Rate Rents sar The average land lease rent in the Suthern regin reached USD 69.8 per sqm ver the term f the lease. HCMC net average land rents were highest at USD 138.1 per sqm ver the lease term, due t the prime lcatin and abundant wrkfrce, while industrial parks in suburban areas achieved arund USD 45 75. Factry asking rents in the Suthern market averaged abut USD 3 per sqm per mnth, and the highest rental fees f USD 5-USD 6 in sme ntable industrial znes in HCMC and Dng Nai. Outlk Supply t bst in the future Industrial space in the Suthern prvinces is expected t welcme abut 15, ha in the next three t five years. Demand t surge vigrusly Occupancy rates are predicted t be n a cnsiderable upturn, thanks t strnger demand fr industrial prperties by dmestic and crss-brder investrs as part f the wave f industrial relcatin, mst ntably frm China. Ec-industrial parks with advanced technlgies are expected t prvide substantial industrial space in the upcming perid. 15 1 Average Land and Factry Rents USD/sqm/mnth 5 Average Land Rental Fee 4, 2, Future Supply Reginal Master Plan (Until 22) ha 6, HCMC Dng Nai HCMC Dng Nai Binh Dung BR-VT Binh Dung Tay Ninh Binh Phuc Average Factry Rental Fee 4. 3. 2. 1. BR-VT Tay Ninh Binh Phuc Page 8
HANOI OFFICE Supply and Demand Supply / Demand Indicatr Grade A Grade B Ttal Ttal Stck (sqm) 529, 962, 1,491, Occupancy Rate (%) 84.9 88.1 87. Q--Q Change (bps) 115 1 7 Supply stable N new Grade A & B ffice prjects were cmpleted in the quarter, keeping the ttal Grade A & B ffice stck unchanged at nearly 1.5 millin sqm as f end 216. Demand is psitive Net absrptin f Grade A & B segments was nearly 16, sqm in 4Q16, mainly cntributed by recently cmpleted buildings. Due t the limited supply in the cre CBD sub-market, trend t relcatin t the fringe and nn CBD areas cntinues t see in the Hani market. Asset Perfrmance Key Perfrmance Indicatr Grade A Grade B Ttal Average Grss Rent (USD/sqm/mnth) 28.5 18.5 22. Average Net Rent (USD/sqm/mnth) 22.5 13.7 16.9 Q--Q Change (%) -.6 -.2 -.2 Nte: Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Rents decline marginally n quarterly basis The average grss rent f the Grade A & B segments decline marginally Average Net Rents by Grade by.2% q--q, yet still increase slightly by,1 % cmpared t the same USD/sqm/mnth quarter last year, reach t USD 22. per sqm per mnth. Marginal increase in rents started t be witnessed at buildings having high ccupancy rate. Outlk Supply t sar in future Mre than13, sqm f new Grade A & B ffice space is expected t cme n stream in 217. During 218-19, Hani ffice market will welcme additinal 375, sqm ffice space frm a number f large scale prjects. Slight sign f imprvement in rent Average market rent is expected t be stable r even slightly increase thanks t rent imprvement in high-ccupancy buildings and higher rent level ffered by new prjects entering the market. Enquiries fr relcatin and expansin purpses are expected t increase ver the next year, driven by bth lcal and internatinal cmpanies. Ttal Stck ' sqm 2, 1,5 1, 5 21 211 212 213 214 215 216 3 25 2 15 1 5 Expected cmpletin year 4Q14 1Q15 217 218 219 2Q15 Grade A 3Q15 Grade A 4Q15 1Q16 Grade B 2Q16 Supply Under Cnstructin 3Q16 Grade B 4Q16 1 2 3 ' sqm Page 9
HANOI RESIDENTIAL Supply and Demand Supply / Demand Indicatr Apartments Cmpleted Supply (units) 111, Uncmpleted Supply (units) [1] 56, Unsld Inventry (%) [2] 17. [1] Excludes planned prjects nt launched fr sale yet. Includes fully sld prjects. [2] The percentage f [1] that remains unsld at quarter-end. Plentiful supply New launches in 4Q16 reached 9,21 units, up 17.% q--q, and increased the 216 ttal t 35,314, mre than triple the annual average f 23-15. Cmpleted supply ttalled mre than 111, units as at end-216, half f which came frm Ha Dng, Hang Mai and Nam Tu Liem districts. Strng demand Sales vlume in 4Q16 increased 18.% q--q and 11.% y--y, t stand at 9,444 units. Of the ttal, Affrdable units accunted fr nearly 4%. Bac Tu Liem, Hang Mai, Ha Dng and Nam Tu Liem districts led the sales with an average f 1,55 units sld per sub-market during 4Q16. Nte: Q--Q and Y--Y changes are adjusted t remve effects frm supply additins / remvals (i.e. changes are n a like-fr-like basis). Prices mve n upward trend Average Asking Price by Segment Primary market Prices marked their 11 th All Apartments cnsecutive quarter f increase since 2Q14, with the quarterly grwth rate averaging 1.6%. Affrdable Mid-end Mid-end prices mved at the fastest pace, f 2.3% q--q, with sme Premium prjects launched during the year seeing large increases f 4-6%. Luxury Secndary market 1, 2, 3, 4, USD/sqm Price rises in 4Q16 slwed dwn cmpared t recent quarters, with the Average Primary Price Average Secndary Price Premium segment seeing quite a few prjects reprting decreases. Prices f cmpleted prjects in 4Q16 were.8% higher than in 3Q16, versus the rate f 1.8% q--q at under-cnstructin develpments. Outlk Large pipeline supply fr 217 New cmpletins may reach mre than 35, units in 217, up 5.% y--y. Of the ttal, mre than half are expected t be Mid-end units. New supply may remain at high levels in 217, with increased launching activity expected in the Affrdable and Mid-end segments. units 12, 1, 8, 6, 4, 2, Ttal Stck (Cmpleted Supply) - Apartments Luxury accunts fr less than 1% f ttal stck Asset Perfrmance Primary Market Secndary Market Market Segment Q--Q Y--Y Q--Q Y--Y Apartments 1.7% 7.9% 1.% 4.9% Demand t remain cnsiderable Gd sales rates are still expected fr 217, increasingly supprted by the significant demand fr lwer-end units fr wner-ccupatin. Price grwth shuld remain psitive in 217. 217 218 219 211 212 213 214 215 216 Upcming Cmpletins Affrdable Mid-end Premium Luxury 1, 2, 3, 4, units Page 1
HANOI RETAIL Supply and Demand Supply/Demand Shpping Centre Prime Retail Space Supermarket/Hypermarket Cnvenience stre Ttal Stck (sqm) 938, 6, 154, 45, Occupancy Rate (%) 76.5 1 N.A N.A Q--Q Change (bps) 119.2 2,972.3 119.2 Supply increases The Hani retail market welcmed tw new shpping centers in the quarter, adding nearly 46, sqm t the market. Meanwhile, a department stre with mre than 15, sqm f retail space was clsed in December. Ttal stck in the Shpping Centre and Prime Retail Space segment in 4Q16 reached 944, sqm, an increase f 2.7% q--q. Number f mini marts and cnvenient stres cntinued t increase. Demand is mainly driven by new supply Net absrptin was psitive in 4Q16, mainly driven by the new supply. Bth f the tw new shpping centers achieved high ccupancy rates f mre than 9% when pening. Weak purchasing pwer cntinued in almst all existing shpping centres. Ttal Stck ' sqm 1, 8 6 4 2 211 212 213 214 215 216 Shpping Centre Prime Retail space Asset Perfrmance Key Perfrmance Indicatrs Shpping Centre Prime Retail Space CBD Nn-CBD Average Grss Rent (USD/sqm/mnth) 1 28. 47.6 Q--Q Change (%). -.3 -.7 Nte: Q--Q and Y--Y changes are adjusted t remve the effects f supply additins / remvals (i.e. changes are n a like-fr-like basis). Rents sftening further Average Grss Rents Shpping Centre The average rents cntinued t decline slightly in bth Shpping Centre USD/sqm/mnth 15 and the Prime Retail Space segments, by.3% and.7% q--q, 1 respectively. 5 The rental gap f Shpping Centre segment between the CBD and nn- CBD sub-market were still high, the average rent in the CBD area was mre than three times higher than the figure in the nn-cbd area. CBD Nn-CBD 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Outlk Supply is expected t rise Mre than 26, sqm f retail space is expected t cmplete ver the next tw years, raising Hani ttal retail stck by 27.6% in cmparisn with the current supply. The lcal develpers wned the majrity f the upcming retail prjects. Rents t decline An abundant new supply in the pipeline will impse dwnward pressure n Hani retail rent ver next tw years. Expected cmpletin year Supply Under Cnstructin Shpping Centre 217 218 4 8 12 16 2 24 28 ' sqm Page 11
Real Estate Glssary Vietnam Office Market Current supply The ttal amunt f cumulative ffice space (in NFA terms) that has been cmpleted at a given time. Future supply The ttal amunt f ffice space slated fr cmpletin in the future at a given time. Vacant space The ttal amunt f available ffice space that remains t be leased by prperty wner(s) at a given time. This excludes space available fr sub-lease by tenants (i.e. shadw space), space physically empty but already pre-leased r reserved, and space t be available fr lease in the future. Occupied space Current supply less vacant space. Net absrptin refers t the change in ccupied space frm quarter t quarter. Grss flr area (GFA) The ttal amunt f all cvered areas including clumns, walls, cmmn passageways, lift lbbies and tilets. Net flr area (NFA) The amunt f useable flr areas excluding clumns, walls, cmmn passageways, lifts, lbbies and tilets. Net lettable area r net leasable area (NLA) refers t the amunt f NFA that is available fr lease. Net rent The amunt f market rent receivable by landlrds after deducting utgings. Market practices: Net rents may be quted n an NLA r a GFA basis. Outgings The estimated csts set aside by landlrds fr building maintenance that are passed n t tenants in the frm f service charges r management fees. Market practices: Service charges / management fees may r may nt be quted separately frm net rents. Grss rent The ttal achievable rent t be brne by tenants including service charges / management fees. Grss rents equal net rents plus utgings. Market practices: Grss rents may be quted n an NLA r a GFA basis. Capital value The market value r prbable price f a prperty at a given time frm a valuatin pint f view. Yield The percentage return n prperty investment at a given time frm a valuatin pint f view. It is based n current market rents assuming full ccupancy. Grade A A Grade A prperty meets all f a set f criteria regarding its fferings t a typical sphisticated ccupier. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, amenities, management standards and technical specificatins. Grade B A Grade B prperty meets sme f a set f criteria regarding its fferings t a typical sphisticated ccupier. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, amenities, management standards and technical specificatins. Grade C A Grade C prperty meets a set f criteria regarding its fferings t a typical nn-sphisticated ccupier. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, amenities, management standards and technical specificatins. Cpyright 216 JLL Research Page 12
Real Estate Glssary Vietnam Residential Market Current supply The ttal amunt f supply available fr sale, either thrugh the primary market r the secndary market, regardless f cnstructin status. Future supply The ttal amunt f supply t be launched fr sale in the future. Cmpleted supply The ttal amunt f supply that has been physically cmpleted and handed ver fr ccupatin. Als knwn as existing supply. Uncmpleted supply The ttal amunt f supply that has nt been physically cmpleted and handed ver fr ccupatin. Includes supply under cnstructin and supply planned fr cnstructin. Als knwn as supply in the pipeline. Primary market That part f the market cmprising first-hand supply available fr sale frm develpers. Secndary market That part f the market cmprising secnd-hand supply available fr resale frm previus buyers. Launches The estimated amunt f new supply (in units) launched fr sale during a perid. Market practices: Many develpers chse t launch their prjects in phases which may r may nt be publicly annunced. Take-up The estimated amunt f supply (in units) sld during a perid. Includes sld units frm new supply in the perid and supply in previus perids. Market practices: Take-up may cmprise units sld via capital cntributins r sale and purchase agreements. Ttal inventry The ttal amunt f uncmpleted supply that has been launched fr sale. Primary asking price The stck-weighted average asking price in the primary market. Secndary asking price The stck-weighted average asking price in the secndary market. Luxury A luxury prperty meets all f a set f criteria regarding its fferings t a typical lcal wealthy husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f luxury prperties are lcated in r near the CBD f the city under review. Price range: > USD 3, per sqm, VAT excluded. Premium A premium prperty meets sme f a set f criteria regarding its fferings t a typical lcal wealthy husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f premium prperties are lcated in new urban areas utside the CBD f the city under review. Price range: USD 1,8 3, per sqm, VAT excluded. Mid-end A mid-end prperty meets all f a set f criteria regarding its fferings t a typical lcal middle-class husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f midend prperties are lcated within the inner districts f the city under review. Price range: USD 1, 1,8 per sqm, VAT excluded. Affrdable An affrdable prperty meets sme f a set f criteria regarding its fferings t a typical lcal middle-class husehld. These criteria are bradly cncerned with the prperty s verall prfile, lcatin, facilities, amenities, and management standards. A majrity f affrdable prperties are lcated in the uter districts f the city under review. Price range: < USD 1, per sqm, VAT excluded. Cpyright 216 JLL Research Page 13
Real Estate Glssary Vietnam Retail Market Current supply The ttal amunt f cumulative mdern (as ppsed t traditinal) retail space (in GLA terms) that has been cmpleted at a given time. This includes department stres, shpping centres, prime retail space, supermarket/hypermarket, bazaars and cnvenience stres. Specialty supermarkets such as electrnics r furniture are nt included in ur basket. Future supply The ttal amunt f mdern retail space slated fr cmpletin in the future at a given time. Vacant space The ttal amunt f available mdern retail space that remains t be leased by prperty wner(s) at a given time. This excludes space available fr sub-lease by tenants (i.e. shadw space), space physically empty but already pre-leased r reserved, and space t be available fr lease in the future. Occupied space Current supply less vacant space. Net absrptin refers t the change in ccupied space frm quarter t quarter. Grss leasable area (GLA) The ttal amunt f leasable flrs areas n which rentals and service charges are based, which may include cmmn areas used fr ft traffic. Grss rent The ttal achievable rent t be brne by tenants including service charges / management fees but excluding VAT. Rents are calculated by the average rents f leasable area fr single tenants in department stres, shpping centres and bazaars in HCMC. Market practices: Grss rents in the retail market are usually quted n a NFA basis. Cpyright 216 JLL Research Page 14
Real Estate Glssary Vietnam Industrial Market Current supply The ttal area f perating industrial parks and prcessing znes at a given time, including leasable land area, leasable warehuse/ready-built factry area and ther types f area fr supprting facilities. Ttal leasable land area The ttal prepared land area fr lease at a given time. Ttal leasable warehuse/ready-built factry area The ttal area f leasable warehuse/ready-built factry at a given time. Vacant space The ttal amunt f available industrial land area that remains t be leased t tenants at a given time. This excludes space available fr sub-lease by tenants (i.e. shadw space), space physically empty but already pre-leased r reserved, and space t be available fr lease in the future. Occupied space Ttal leasable area less vacant space. Net absrptin refers t the change in ccupied space frm perid t perid. Net rent land area The amunt f market rent applied fr leasable land area that is receivable by landlrds after deducting utgings. Market practices: Net land rental fee is nrmally quted per sqm per lease term (ne lease term apprximately equals 5 years). Net rent - warehuse/ready-built factry The amunt f market rent applied fr leasable warehuse/ready-built factry area that is receivable by landlrds after deducting utgings. Market practices: Net warehuse rental fee may be quted per sqm per mnth. Outgings The estimated csts set aside by landlrds used fr maintenance that are passed n t tenants in the frm f service charges r management fees. Grss rental fee The ttal achievable rent t be brne by tenants including service charges / management fees. Grss rents equal net rents plus utgings. Future supply The ttal area f future industrial parks and prcessing znes accrding t the master plans f prvincial authrities. Cpyright 216 JLL Research Page 15
Vietnam Prperty Market Brief is a quarterly publicatin prviding market updates fr different real estate sectrs in different cities. It is part f the cmprehensive research package frm JLL Research that cvers Vietnam alng with ther majr cuntries in Asia Pacific: Publicatin Gegraphic Cverage Prduct Cverage Frequency Cntents Availability Vietnam Prperty Market Mnitr Vietnam All Quarterly Real estate headlines & news summary Publicly available Vietnam Prperty Market Brief Vietnam Prperty Market Reprt Asia Pacific Prperty Digest The Office Index The Residential Index Real Estate Intelligence Service Real Estate Daily Real Estate Transparency Index Vietnam cities All Quarterly Stck, vacancy, prices, rents Publicly available Vietnam cities All Quarterly Asia Pacific including Vietnam Asia Pacific including Vietnam Asia Pacific (Vietnam t be included) Asia Pacific including Vietnam Asia Pacific including Vietnam Glbal including Vietnam Investment grade Investment grade Investment grade Investment grade All All Stck, vacancy, prices, rents, prject-level data, maps Subscriptin-based Quarterly Stck, vacancy, prices, rents Publicly available Quarterly Stck-weighted rental value and capital value indices Publicly available Quarterly Capital value index Publicly available Quarterly Daily Every tw years Stck, vacancy, prices, rents, yields, ttal returns, frecasts Real estate headlines & news summary Cuntry transparency scres & rankings Subscriptin-based Subscriptin-based Publicly available Partner With the Best Real Estate Advisr Fr subscriptin details and enquiries, please cntact: Stephen Wyatt Trang Le Cuntry Head Manager, Research & Cnsulting Level 26, Saign Trade Center Level 26, Saign Trade Center 37 Tn Duc Thang, D1, HCMC, Vietnam 37 Tn Duc Thang, D1, HCMC, Vietnam +848 3911 9399 +84 8 3911 9399 ext 9484 stephen.wyatt@ap.jll.cm trang.le@ap.jll.cm The infrmatin in this publicatin has been cmpiled frm varius surces deemed reliable. Hwever, n representatin r warranty is made t the accuracy theref. This publicatin may nt be reprduced in any frm r in any manner, in part r as a whle withut the written permissin f the publisher, JLL Vietnam, Ltd. Page 16