Vietnam Research & Forecast Report | Q42013 (EN)

4Q 2013 | VIETNAM OVERVIEW

vietnam

KNOWLEDGE Report

www.colliers.com/vietnam

Vie tnam Propert y Marke t At a Gl ance

Table of Contents
Economy of Vietnam
• Vietnam’s economy shows signs of recover
• Positive changes in real estate market regulations
• Increase foreign shares in local banks
Ho Chi Minh City’ s Economic Update
Ho Chi Minh City Infrastructure Update
Hanoi’ s Economic AND INFRASTRUCTURE Update
Ho Chi Minh City Property Market
Office
• Market Overview
• Market Insight
• Forecast
Retail
• Market Overview
• Market Insight
• Forecast
Residential
• Market Overview
• Market Insight
• Forecast
SOUTHERN INDUSTRIAL Market
Hanoi Property Market
Office
• Market Overview
• Market Insight
• Forecast
Retail
• Market Overview
• Market Insight
• Forecast
Residential
• Market Overview
• Market Insight
• Forecast

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VIETNAM | 4Q 2013 | ECONOMIC UPDATE

Vietnam’s economy shows signs of recovery
Forecast

VIETNAM

2013

Y-o-Y

2014F

GDP Growth

5.42%

0.39%



Registered FDI (US$ billion)

21.6

54.5%



Exports (US$ billion)

132.2

15.4%



Imports (US$ billion)

131.3

15.4%



CPI

6.6%

-2.6%



Total retail sales (VND billion)

2,618

12.6%



International Visitors (million)

7.57

10.6%



Base Rate

9%

1.56%



Exchange Rate

21,070

1.1%



VN-Index

504.63

22%



Positive changes in real estate market regulations

Gold Price (VND million/ tael)

34,780

-24.4%



> > In 2013, the new Land Law was officially approved by the

Source: Colliers International

VIETNAM’ S CPI MONTH-ON-MONTH

> > The inflation rate is expected to reach around 7% in 2014
given higher targeted growth rate of 5.8% and loosen of
public investments.
> > It is necessary to keep increasing the growth rate at an
appropriate inflation rate.
> > Restructure of banking system and state-owned groups
remain hot spots of the economy in 2014.

National Assembly.
> > Condominium inventory has decreased more than 26% to
that in the first quarter of 2013, mainly in the small- and
medium-sized at affordable apartment segment.
> > The average price of all sectors throughout 2013 slightly
rose but still are 10% - 30% lower than the peaks gained in
2008 - 2010.
>> Throughout 2013, the total investment capital of the real estate
projects continued increasing to US$951 million in 2013.

Source: GSO, Colliers International

REGISTERED & DISBURSED FDI

Increase foreign shares in local banks
> > The Government issued Decree 01/2014 on lifting foreign
ownership cap in local credit institutions.
> > A single foreign strategic investor can hold up to 20% of
stake in local banks, up from the current 15%.
> > Total ownership of foreign investors cannot exceed 30%
of chartered capital of a commercial bank in Vietnam.


> > The new Land Law is expected to have a practical impact on land ownership, land recovery, compensation for site clearance, resettlement and the establishment of independent agencies for land appraisal.
> > One of the main causes of the economic turmoil is local banking system with major issues in bad debt and liquidity. And
the increase in foreign shares is expected to support recapitalization and restructure of local commercial banks.
> > However, 20% of stake does not provide efficient control for foreign investors to get involved in the restructure process.
Then the local banking system will not experience big impacts from merger and acquisition activities during this year.

P.1 | Colliers International

HO CHI MINH & HA NOI | 4Q 2013 | ECONOMIC UPDATE

HCMC economy is stable with bright prospect in 2014
Forecast

HO CHI MINH CITY

2013

Y-o-Y

2014F

GDP Growth

9.3%

0.1%



>> In 2014, HCMC will shift FDI attraction to green


1.55

28.6%



technology, hi-technology, and capital-intensive

Exports (US$ million)

26.5

-6.0%



sectors, while discourage polluted FDI projects and

Imports (US$ million)

25.8

14.9%



firms employing obsolete technologies regarding

CPI

3.7%

-0.37%



improvements of the Investment Law and Enterprise

Total retail sales (VND billion)

606.9

12.6%



Law.


4.1

8.1%




Ha Noi City set lowest FDI target in the past 2 years
HA NOI

2013

Y-o-Y

2014F

GDP Growth

8.25%

0.15%



of almost US$1.02 billion, or about 87.2% of the


1.02

-7%



annual target.

Exports (US$ million)

10.3

0.2%



>> Hanoi city also set a goal of attracting US$1.3

Imports (US$ million)

23.6

-3.7%



billion in FDI in 2014, despite failing to meet its

6.37%

0.08%



annual FDI targets over the past two years.

1.8

15.2%



CPI

>> Last year, Ha Noi city attracted registered FDI


HCMC - HANOI CPI GROWTH BY MONTH

HCMC - HANOI GDP GROWTH RATE




HO CHI MINH CITY | 4Q 2013 | INFRASTRUCTURE

Convenient access and fluent traffic flow
SAIGON BRIDGE 2 PARALLELED WITH EXISTING ONE

Despite gloomy economic condition in Vietnam and
tighten policies in public investment, there has been
n o t a b l e i n f r a s t r u c t u r e i m p r o v e m e n t s i n 2 0 1 3 i n H CMC .
> > Finishing of 6 flyover bridges at major traffic nodes scattered all
over the city.
>> Saigon Bridge 2 completed after 18 months of construction, 3
months earlier than schedule.

Source: Public Domain, Colliers International

FLYOVER BRIDGES COMPLETED IN HCMC IN 2013

>> The opening of the 1st phase of Tan Son Nhat - Binh Loi - Outer
Ring Road.
>> HCMC-Long Thanh-Dau Giay expressway also finally opened since
commencement in 2009.
The open of vital infrastructure projects is expected to improve
traffic connectivity between the city and its fringe.

Future infrastructure developments
Tunnels at An Suong (District 12) and Thu Duc (Thu Duc District)
crossroads are being processed to enhance infrastructure at the city
entrance. Besides, the city agencies also boost development of the

HCMC - LONG THANH - DAU GIAY EXPRESSWAY

Urban Drainage System (sponsored by World Bank). This historically
is one of the biggest issues facing.
Regarding priority projects of the city, construction on the proposed
Metro Rail and Bus Rapid Transit has resumed after prolonged delay
due to obstacles in site clearance and compensation. Meanwhile, Thu
Thiem new urban area re-starts construction of 4 internal roads
which are scheduled to complete in 2016.


Market Insight

PHASE 1 OF TSN - BINH LOI - OUTER RING ROAD

> > Though the effectiveness of flyover projects is controversial, the
endeavour of local officials is undoubted. Six more bridges are
planned to be built in 2014 are hoped to provide more visible
results in reducing traffic congestions beside short construction
time and low capital investment advantage.
>> HCMC Authority is encouraging private investment to infrastructure
in PPP scheme.
>> Phu My Bridge connecting District 2 and District 7 is an example


of a PPP developments.


HO CHI MINH CITY & HANOI | 4Q 2013 | INFRASTRUCTURE
MASTER PLAN OF INTERNAL ROADS @ THU THIEM

> > E x p e c t e d t o re p l a c e ex i s t i n g B u i l d - O p e ra t i o n -Tra n s f e r
( B OT ) a n d B u i l d -Tra n s f e r ( BT ) fo r m s , t h e PPP s c h e m e
re q u i re s i n c re a s i n g re s p o n s i b i l i t y a n d i n vo l ve m e n t o f
t h e g ove r nm e n t i n s h a r i n g d i ff i c u l t i e s i n s i t e c l e a ra n c e ,
co m p e n s a t i o n a n d m a i n t e n a n c e o f t h e p ro j e c t s i n o rd e r
t o e n h a n c e co n s t r u c t i o n p rog re ss a n d q u a l i t y.
> > The government has approved the “Master plan of Economic
and Society development of HCMC to 2020, vision to 2025”
that administratively subdivide the city into 6 areas including
city center, Thu Thiem new urban area and 4 other suburbans.
Regarding economic sections, there will be urban and suburban
zones, industrial zones, ecological tourism zones, agricultural
zones and reservation zones.
>> This is expected to encourage development of current investors
and attract interest of potential developers with identified master

Source: Public Domain

plan and apparent investment policies.

Hanoi speed up most of its under-construction or pending projects
NEW MASTER PLAN OF TU LIEM DISTRICT

The highlight points in the old CBD are Ring Roads 1 and 2. The construction of
O Cho Dua – Hoang Cau path has been boost in order to open before Lunar New
Year, whereas the clearance plan for O Dong Mac – Nguyen Khoai path has been
approved. The resettlement payment was expected to finish in Q4/2013 so that the
clearance would start at the beginning of 2014.
Besides, the Song Lu – Ton That Tung path connecting Nga Tu So and Nga Tu Vong
was also under construction whistle the site clearance was hastened.
In the new expansion area of Hanoi, the National Road No.5 Prolong is one of the
focusing projects with numerous support from Hanoi’s People Committee.
In December 2013, Hall E, the expansion of T1 terminal at Noi Bai International
Airport, was inaugurated to catch up with the rapid increasing of travelers during
Tet holiday while the construction of T2 terminal was also speed up.


>> In December 2013, Hanoi’s People Committee has approved the establishment of the two districts named Bac Tu Liem and Nam Tu
Liem which are divided from Tu Liem district.
>> From a suburban one, Tu Liem has been split into two urban districts. The Bac Tu Liem is the North of the current Tu Liem, covering
an area of 4,355 ha with a population of approx. 320,000 people. It contains nine current communes of Tu Liem and a part of Cau
Dien town which would be reassigned into 13 wards. The Nam Tu Liem is the South of current Tu Liem, covering 3,227 ha and having
a population of 233,000 people. The current communes (of Tu Liem) now belonging to Nam Tu Liem would be divided into 10 wards.


HO CHI MINH CITY | 4Q 2013 | PROPERTY MARKET

HCMC Property Market Overview

HO CHI MINH CITY | 4Q 2013 | OFFICE MARKET
2013 2014F*

Stability in top-tier buildings
>> The median rentals of Grade A office buildings in HCMC gained 3%

Average asking rent





while occupancy rate also rised 3% q-o-q.
>> After a reduction in rents offered of 2.3%, Grade B developments

Occupancy rate





experienced similar growth rate in occupancy.
>> In 2014, the market will receive gradual supply. Around 75,000 net
sq m. of commercial office space will enter the market, from Grade

Supply



GRADE A PERFORMANCE, 4Q 2013



A and top-tier Grade B projects.

Market Insight
> > L a n d l o rd s o f G ra d e B d e ve l o p m e n t s w i l l n e e d t o a pp l y
v a r i e t y o f s t ra t e g i e s i n c l u d i n g p r i c i n g a n d re n ov a t i o n
i n o rd e r t o re t a i n ex i s t i n g t e n a n t s . T h o s e b u i l d i n g s a re
u n d e r p re s s u re i n d i s t i n g u i s h t h e m s e l ve s f ro m h u g e
G ra d e C s u p p l y w i t h a gg re s s i ve p r i c i n g s t ra t e g i e s .
>> Office developments will need to continue offering distincted incentives


GRADE B PERFORMANCE, 4Q 2013

such as prestigious location and provide added values to their buildings
as competitive advantages. International management, iconic design
and special building features and effective rentals are needed in
building owners strategies.
>> An example can be seen in President Place being the first LEED
(Leadership in Energy and Environmental Design) Gold building in
town. Green building is actually not a new concept but still get low
aweness from local market.


PRESIDENT PLACE: LEED GOLD BUILDING

> > Although most of the current green certificate application is
for sales and marketing strategies, actual energy efficiency and
cost savings will soon be demand drivers allowing for long term
savings to building owners and their tenants.

Forecast
>> It is expected that Grade A developments will maintain and increase
rental rates; with a steady gain of 2% to 3% quarterly.
>> Meanwhile, occupancy rate is expected to fluctuate moderately.
>> The 8% increase in total floor areas from future supply in 2014
is expected to get efficient take-up from current market demand.
Premium location and extensive floor plan are preferable elements
of these new buildings.
Source: USGC


HO CHI MINH CITY | 4Q 2013 | OFFICE MARKET

HCMC Office Market Overview
1

Saigon Centre

65 Le Loi

Completion
Year
1996

2
3
4
5
6
7
8

Saigon Tower
Sunwah Tower
The Metropolitan
Diamond Plaza
Kumho Asiana Plaza
Bitexco Financial Tower
President Place

29 Le Duan
115 Nguyen Hue
235 Dong Khoi
34 Le Duan
39 Le Duan
45 Ngo Duc Ke
93 Nguyen Du

1997
1997
1997
1999
2009
2010
2012

13,950
20,800
15,200
15,936
26,000
37,710
8,330

6.0
6.0
6.0
8.0
8.0
8.0
6.0

100%
90%
95%
98%
98%
85%
92%

37.0
42.5
41.3
41.0
51.3
34.0
33.0

9
10

Times Square
Lim Tower

22-36 Nguyen Hue
9-11 Ton Duc Thang

2012
2013

9,000
29,265

7.0
6.0

60%
88%

50.0
28.0

187,841

6.9

91%

38.9

No

Name

Address

Grade A

NLA
(sq m)

Service
Charges (*)

Occupancy
rate

NFA asking rent
(*)

11,650

6.5

92%

40.0

1
2
3
4
5
6
7

OSIC
Yoco Building
Somerset Chancellor Court
Central Plaza
Saigon Riverside Office
Saigon Trade Center
Harbour View Tower

8 Nguyen Hue
41 Nguyen Thi Minh Khai
21-23 Nguyen Thi Minh Khai
17 Le Duan
2A-4A Ton Duc Thang
37 Ton Duc Thang
35 Nguyen Hue

1993
1995
1996
1997
1997
1997
1997

6,500
5,000
3,200
6,094
10,000
31,416
8,000

6.0
5.0
5.0
5.0
5.0
6.0
6.0

99%
100%
98%
100%
98%
97%
93%

20.0
16.0
21.0
26.0
20.0
23.0
20.0

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

MeLinh Point Tower
Zen Plaza
Bitexco Office Building
The Landmark
Opera View
Indochina Park Tower
Petro Tower
City Light
The Landcaster
Gemadept Tower
Fideco Tower
Havana Tower
Sailing Tower
Royal Center
TMS
Bao Viet Tower
Green Power Tower
Vincom Center
Saigon Royal
A&B Tower
Maritime Bank Tower
Empress Tower

02 Ngo Duc Ke
54-56 Nguyen Trai
19-25 Nguyen Hue
5B Ton Duc Thang
161-167 Dong Khoi
4Bis Nguyen Dinh Chieu
1-5 Le Duan
45 Vo Thi Sau
22Bis Le Thanh Ton
5 Le Thanh Ton
81-85 Ham Nghi
132 Ham Nghi
51 Nguyen Thi Minh Khai
235 Nguyen Van Cu
172 Hai Ba Trung
233 Dong Khoi
35 Ton Duc Thang
68-70-72 Le Thanh Ton
91 Pasteur
76 Le Lai
192 Nguyen Cong Tru
138 Hai Ba Trung

1999
2001
2003
2005
2006
2006
2007
2007
2007
2008
2008
2008
2008
2008
2009
2010
2010
2010
2010
2010
2010
2012

17,600
11,037
6,000
8,000
3,100
2,145
13,304
10,000
7,000
14,000
15,000
7,326
16,910
14,320
4,000
10,650
15,600
56,600
5,340
17,120
19.596
19,538

6.5
6.0
5.5
6.0
7.0
4.0
5.0
5.0
5.0
6.5
6.0
6.0
5.0
5.0
4.0
6.0
6.0
5.0
4.0
6.0
5.0
5.0

100%
98%
100%
82%
95%
96%
99%
98%
100%
100%
99%
99%
99%
100%
100%
100%
96%
72%
100%
99%
98%
87%

24.0
20.0
22.0
16.0
26.0
10.0
30.0
15.0
24.0
23.0
20.0
21.0
25.0
19.0
23.0
21.0
22.0
25.0
19.0
28.0
19.0
26.0

364,396

5.5

93.5%

22.6

Grade B
* US$/ sq m/ month (on net area)


HO CHI MINH CITY | 4Q 2013 | RETAIL MARKET
MARKET PERFORMANCE, 4Q 2013

Hesitation from new supply as of idle period
Domestic consumer demand slump because of uncertainty of the
economic condition and unpromising figures. All three retail segments
including retail podium, department store and shopping mall witnessed
drop in rentals and occupancy rate during last quarter. The average rent
of retail podium decreased 5% while that of department store also


MARKET PERFORMANCE BY SECTOR, 4Q 2013

slided 4% q-o-q.
Occupancy rate of retail podium and shopping centers fall to 81%.
Owners of shopping centers also kept soften asking rents to prevent
downward tendency in occupancy, which staying at 86%.

Market Insight
> > New spaces at Thao Dien Pearl, Imperia An Phu and City Garden
will be available during first quarter of 2014. In fact, owners of

MARKET SUPPLY, 4Q 2013

the completing developments have to delay opening until obtaining
sufficient take-up spaces.

Suffered sales revenue put pressure on rentals
>> Retail sales revenue suffers throughout the year except daily consumption
goods with strong expansion of F&B and convenient store chains regardless
overall downturn of the market.
> > Landlords of CBD retail developments stay strong to current
high asking rentals while witness increase of vacant rate over

time. The pricing strategy is supported by limited number of

PARKSON CANTAVIL PREMIER OPEN IN DECEMBER 2013

new projects in coming quarters, especially in CBD areas. In
contrast, owners of non-CBD are getting pressure in rents
adjustment to soften increasing vacancy rate.

Forecast
>> The market is expected to be back in lull period after Lunar New
Year although Year End Promotion Programs has gained significant
foot traffics and boost sales of retail places recently.
> > In 2014, retail segment is expected to grow at a slow pace
upon moderate recover of the economy. Operators of shopping
malls and department stores need to adjust pricing strategy

to anticipate tenants from moving out to shophouses on high
streets at affordable rates.


HO CHI MINH CITY | 4Q 2013 | RETAIL MARKET

HCMC Retail Market Overview
No

Name of Project /
Building

Address

Location

Completion Year

NLA
(sq m)

Average Rental
(US$/sq m/month)

Occupancy Rate

1

Hotel Continental Saigon

132-134 Dong Khoi

District 1

2000

200

90

100%

2

Caravelle Hotel

19 Lam Son Square

District 1

2000

150

90

90%

3

New World Hotel

79 Le Lai

District 1

2000

1,000

40

100%

4

Sheraton Saigon

88 Dong Khoi

District 1

2002

750

125

100%

5

Opera View

Lam Son Square

District 1

2006

1,260

85

100%

6

The Manor 1

91 Nguyen Huu Canh

Binh Thanh

2006

2,000

22

100%

7

Saigon Pearl

92 Nguyen Huu Canh

Binh Thanh

2009

5,000

20

60%

District 1

2010

2,000

120

90%

Binh Thanh

2010

2,500

20

80%

8

Rex Arcade

141 Nguyen Hue

9

The Manor 2

91 Nguyen Huu Canh

10

Bitexco Financial Tower

45 Ngo Duc Ke

District 1

2011

8,000

40

96%

11

The Vista Walk

Ha Noi Highway

District 2

2012

5,000

18

55%

12

President Place

93 Nguyen Du

District 1

2012

800

45

67%

13

Times Square

22-36 Nguyen Hue

District 1

2013

9,000

90

72%

14

Saigon Airport Plaza

1 Bach Dang

Tan Binh

2013

7,623

14

80%

50,323

59

81%

Retail Podium
1

Diamond Plaza

34 Le Duan

District 1

1999

9,000

83

100%

2

Zen Plaza

54-56 Nguyen Trai

District 1

2001

6,817

52

100%

3

Parkson Saigon Tourist

35 Le Thanh Ton

District 1

2002

17,000

90

100%

4

Parkson Hung Vuong

126 Hung Vuong

District 5

2007

24,000

60

70%

5

Kumho Asiana Plaza

35 Le Duan

District 1

2009

6,830

35

100%

6

Parkson Flemington

Le Dai Hanh

District 11

2009

26,000

40

85%

7

Parkson Paragon

Nguyen Luong Bang

District 7

2011

7,500

40

65%

8

Parkson C.T Plaza

Truong Son

Tan Binh

2012

12,235

40

99%

9

Parkson Cantavil Premier

Ha Noi Highway

District 2

2013

17,815

40

80%

127,198

57.8

86%

Department Store
1

Saigon Center

65 Le Loi

District 1

1996

3,500

75

100%

2

City Plaza

230 Nguyen Trai

District 1

2000

5,250

25

100%

3

Superbowl Vietnam - TSN Truong Son

Tan Binh

2002

5,500

22

55%

4

Tax Center

135 Nguyen Hue

District 1

2003

7,000

75

100%

5

An Dong Plaza

18 An Duong Vuong

District 5

2004

18,000

40

99%

6

Saigon Square 1

77-89 Nam Ky Khoi Nghia

District 1

2006

1,300

167

100%

7

Nowzone

Nguyen Van Cu

District 1

2008

9,000

35

95%

8

Lotte Mart Saigon South

Nguyen Huu Tho

District 7

2008

24,000

35

100%

9

Saigon Square 2

7-9 Ton Duc Thang

District 1

2009

1,400

75

75%

10

Vincom Center B

72 Le Thanh Ton

District 1

2010

45,000

62.5

80%

11

Maximark 3/2 Extension

3/2 Street

District 10

2010

25,000

40

85%

12

Lotte Mart Phu Tho

Le Dai Hanh

District 11

2010

24,500

30

85%

13

Crescent Mall

Nguyen Van Linh

District 7

2011

45,000

30

80%

14

Satra Pham Hung

Pham Hung

District 8

2011

11,528

15

55%

15

CMC Plaza

79B Ly Thuong Kiet

Tan Binh

2011

18,000

10

60%

16

Taka Plaza

102 Nam Ky Khoi Nghia

District 1

2011

1,000

90

100%

17

Union Square

Dong Khoi

District 1

2012

38,000

72.5

85%

349,062

44.8

81%

Shopping Centre


HO CHI MINH CITY | 4Q 2013 | RESIDENTIAL MARKET

Market is stable from gain of buyer’s confidence
2013 2014F*

Primary market





Secondary market






than that in 4Q 2012.



Supply

>> Average price of High-end projects gained 11% q-o-q though it is still 2% lower

>> Mid-end apartment’s median price went flat during last quarter while increasing
5% y-o-y. Affordable condominiums remained active at average asking price of
US$740 per sq m.
>> Asking price of secondary market slightly dropped 2.5% q-o-q.
During last quarter, construction resumed at some projects in CBD

Sold rate





PRIMARY MARKET PERFORMANCE BY SEGMENT, 4Q13

fringe like New Pearl and Leman CT Plaza (D3) while Petroland
Apartment (D2) and Cong Hoa Garden (Tan Binh) stand mute. A
stream of Mid-end developments were also launched including Him
Lam Cho Lon (D6), Sunny Plaza (Go Vap), Him Lam Riverside (D7) and
Lexington Residence (D2). There was no new High-end supply in 4Q.
Last quarter witnessed approximately 2,800 apartments being
handed-over, mostly from Mid-end segment in suburban areas


as well.

SECONDARY MARKET PERFORMANCE BY DISTRICT

Generally, end-user buyers were major demands of the market with
selective criteria in construction progress, project’s facilities and
amenities.

Market Insight
> > Primary market experienced stability at all three segments
including High-end, Mid-end and Affordable in last quarter
of 2013.

LEXINGTON RESIDENCE LAUNCHED IN 4Q 2013

> > In 4Q, Affordable projects dominated either supply and demand
numbers with new-phase releases of four projects; mostly located
in suburban areas; after achieving good take-up rate from initial
launch.
> > Asking price of secondary market slightly dropped as individual
investors received strong pressure from promotion programmes
of primary developers. However market confidence is gaining
steadily with increase in enquiries and actual transactions.
>> Local officials are expected to apply new measures to support the
recovery of the property market in 2014 including suggestion of
50% VAT (Value Added Tax) reduction for property transactions.



HO CHI MINH CITY | 4Q 2013 | RESIDENTIAL MARKET

Aggressive inventory sales tactics to cope with pipeline of new projects
>> Given high remaining stocks, the developers aggressively focus on monthly tactics to boost sales in more professional and convinced
methodologies but not daily spamming emails and cold calls. Discount, Flexible payment term, Move-in Condition (paying 30%-50%
upfront), Financial support, Free of Management and Parking Fee are common sale strategies although pricing remains a decisive
factor.
> > The disbursement rate of 1.56% after six months reflects moderate effect of the VND30 trillion capital package
in motivating the property market.
>> Stakeholders in the market expect more specific instructions from local authorities in effectively implement any monetary.

Forecast

Strong market segmentation driven by supply - demand impacts in 2014
>> The market is expected to be driven by supply and demand effects under tight management of the government. It is reflected
that local officials is trying to support with improved measures instead of driving the market.
>> Major issues of the market next year will be fulfil accommodation needs of local buyers and encourage distinctive segmentation
of the market. Recently released Affordable Housing Schemes is expected to enhance financial supports for this segment as well
as set a price cap to match local average income. Detailed guidance on apartment’s size, price and eligible purchasers will also
be instructed for better application of the 30 trillion package.

HCMC Residential Market Overview
No
1

Name of Project

Address

Location

Launched
Year

Grade

Total units

Average asking
price (*)

High-end

270

2,000

Xi Riverview Palace

190 Nguyen Van Huong

District 2

2008

2

Cantavil Premier

Ha Noi Highway

District 2

2010

High-end

200

1,690

3

Canh Vien 3

Nam Vien Area, PMH

District 7

2011

High-end

116

1,905

4

C.T Leman Plaza

117 Nguyen Dinh Chieu

District 3

2011

High-end

200

4,200

5

Star Hill

Commercial Area, PMH

District 7

2012

High-end

351

1,950

6

The Vista (Tower 4)

Ha Noi Highway

District 7

2013

High-end

141

1,525

7

The Prince Residence

Nguyen Van Troi

Phu Nhuan

2013

High-end

282

2,100

422 Dao Tri

District 7

2010

Mid-end

3,125

1,450

High-end developments
1

Everrich 2

2

Thao Dien Pearl

12 Quoc Huong

District 2

2010

Mid-end

450

1,200

3

Saigon Airport Plaza

1 Bach Dang

Tan Binh

2011

Mid-end

242

1,300

4

Tropic Garden

Nguyen Van Huong

District 2

2012

Mid-end

388

1,000

5

Happy Valley

Nguyen Van Linh, PMH

District 7

2012

Mid-end

818

1,400

6

Sunrise City (Central + North)

Nguyen Huu Tho

District 7

2013

Mid-end

1,500

1,350

Mid-end developments

* US$/ sq m.


SOUTHERN AREAS | 4Q 2013 | INDUSTRIAL MARKET

South-East Region is preferred location of Industrial Parks in Southern area
LOCATION MAP OF IPS/EPZS IN SOUTHERN AREAS

> > The Southern Key Economic Region (SKER) including
South-East and South-West Region
>> Total numbers of Industrial Parks (IPs) and Export Processing
Zones (EPZs) in Southeast Region is 147
>> Total numbers of IPs/EPZs in Mekong Delta is 43
>> Most of the IPs/EPZs in the SKER is located in Ho Chi Minh City,
Dong Nai, Binh Duong, Ba Ria-Vung Tau, Tay Ninh and Long An
provinces

Market Insight
>> Developers of the IPs/EPZs in the SKER are attracting investors
in service sectors such as education, healthcare, sports, housing
for low-income people and resorts
> > Infrastructure (bridges, roads, harbor, clean water supply,
and environment treatment); high-technology industries
and environmental-friendly technology are also preferred
tenants of the developments.
> > Many foreign investors are facing many challenges including
administrative procedures, poor infrastructure and lack of
skilled workforces.
>> Government agencies and business associations therefore need
to coordinate to provide more effective policies and practices in
order to attract more investors.

Southern Industrial Market Overview
No

Name of Development

Location

Area
(hecta)

Warehouse Rental

Occupancy Rate

1

Tan Binh

Tan Binh + Tan Phu District

128

3-4

100%

2

Linh Trung 1

Thu Duc District

62

3-4

100%

3

Tan Tao

Binh Chanh District

380

3

87.7%

4

Tan Thuan

District 7

300

4

81%

5

Le Minh Xuan

Binh Chanh District

100

3

100%

6

Vinh Loc

Binh Chanh District

203

3-4

100%

7

Cu Chi Western North

Cu Chi District

208

2-3

100%

8

Hien Phuoc 1

Nha Be District

311

3-4

92%

9

Cat Lai 2

District 2

124

3.5

89%

10

Dong Nam

Cu Chi District

287

2-3

27%

* US$/ sq m.


HANOI | 4Q 2013 | PROPERTY MARKET

Hanoi Property Market Overview

HANOI | 4Q 2013 | OFFICE MARKET

Hanoi Office market is driven by tenant powers
CURRENT SUPPLY BY GRADE, 4Q 2013

During 4Q 2013, pipeline of new projects kept average rentals in
downward tendency. There is not yet any sign of the market hitting
rock bottom as price keep falling for the last 2 years.
In Q4 2013, Grade A office sector show some signs of recovery. The
average occupancy of the Grade A offices was about 75%, slight
increase than that of the previous quarter. Year-on-year rent rate
reduced 17% maintained stable occupancy rate despites the steady


GRADE A OFFICE PERFORMANCE

increase in supply.
Given high occupancy rate of 90%, landlords of Grade A building in
current CBD held high rent rates.
>> In Q1 2014, the market supply would be increase by approximately
124,000 sq m. in NLA of which 73,000 sq m. from B-graded EVN
Tower and 51,000 sq m. from A-graded PVI Tower.
>> In the middle of 2014, Lotte Centre Hanoi will be available, adding
another 45,000 sq m. to Grade A office segment. This shall put
more pressure on those in both the existing and new CBD.


FUTURE SUPPLY BY DISTRICT

>> Because of that huge increasing number of supply, the office market
would still belong to tenant.

Forecast
>> The rental gap between current and new CBD areas outweight
the fitting out and relocating costs. Hence tenants will continue
to move out of buildings within the existing CBD areas to higher
quality and less expensive options in outlying districts which is
considered as new CBD including Cau Giay and Tu Liem District.
FUTURE SUPPLY BY STATUS

> > During this year, landlords of office buildings in existing CBD
areas still face difficulties in retaining current tenants as well
as attracting new ones.
> > Office buildings are at piercing competition to be cheaper yet
maintain good quality and services.
>> Although current pricing strategy of Grade A buildings is supported
by sufficient take-up rate, it is flexible in negotiation that achievable
rentals are deducted from “rent-free period” and longer fitting out
time.



HANOI | 4Q 2013 | RETAIL MARKET

Market plunged in Old CBD areas
SUPPLY BY TYPE, 4Q 2013

The launching of Vincom Mega Mall Times City made both
average occupancy and rental of retail market plunged in
Q4 2013. The decline in price mainly comes from the mass
launching of new space and the re-launching of retail space
within the existing CBD. Both of them have offered much more
competitive rentals to attract tenants.
Retail space within CBD was grey as high asking rates even though
the luxury and mid-end retailers were suffering slump period. Early
termination or closure of tenants occured at all malls.


MARKET PERFORMANCE

However, in the outer CBD, the retail market was at booming
as developers trying to cover up their presence within low- and
middle-income segment.

>> The average market rent was recorded at approximately US $53/ sq
m., a decrease of 10% q-o-q or approximately 20% y-o-y.
>> The occupancy rate was about 83%, declining by 7.1 percentage
point q-o-q.

MARKET SUPPLY

> > The average monthly rent of shopping centre is higher than
that of department store; i.e. US $53.2 and US $46.4 per sqm.
respectively.
>> Average rent of retail podium reached US $80.7 per sqm per month.
>> Regarding occupancy rate, the highest number belongs to department
store (88.7%), whereas retail podium and shopping centre were occupied
by around 82.6% and 80.8% accordingly.


Forecast
>> We expect a market influence from re-launch of MIPEC tower in 1Q 2014 and open Lotte Center Hanoi in 2Q 2014 by Lotte Mart that
provide strong retail spaces between the Old and New CBD areas.
>> Regardless difficulties from low market demand, we could expect that retail market segment will recover faster than any other
real estate sector as International retailers are targeting Vietnamese large population and new trendy lifestyle.
>> As Vietnam’s agreement to join WTO, the regulations are getting loosen gradually to welcome FDI firms coming to join the market
with less restrictions and more incentives M&A across all sectors are opening door for more hypermarket, food chain to make their
presence one way or another.


HANOI | 4Q 2013 | RESIDENTIAL MARKET

The Trillion stimulus package getting effective
MARKET PERFORMANCE, 4Q 2013

According to Colliers’ recent survey, 30% of projects in the market are
under construction, others 31% on planning and vacant land status and
remaining 39% delayed. Most of the future supply are in Tu Liem, Cau
Giay and Ha Dong District.
The major primary supply in this quarter comes from Hai Ba Trung
district, with considerable price and quantity from Minh Khai Street.
Hoang Thanh Tower, a luxury project pushed up the asking price in
the area.


PRIMARY MARKET PERFORMANCE, 4Q 2013

During the crisis, many projects have ceased construction leading
to demoralize market trust and confidence. However, projects with
banks’ support in debt restructuring and finance management have
resumed construction and obtained increase in sales.
>> Average asking price of the primary market dropped from US$752
to 728 per sq m., a slight decrease of 3% from last quarter.
>> Affordable apartments are priced in range of US$650 - 700 per sq
m. while the Mid-end segment reached US$1,100 per sq m.


SECONDARY MARKET PERFORMANCE, 4Q 2013

>> The secondary market also dropped 1.1% in asking price.
> > Ha Dong and Tu Liem areas with affordable projects pricing at
US$ 868 per sq m. on average are leading in supply number of
apartments.
> > In Q4 2013, the VND 30,000 Billions stimulus package seems to
be more active with over 1,700 approved cases valued total of VND
1,881.4 billions.
> > Overall, the asking price in both Primary and Secondary markets
show slight decrease but there are sign of hitting rock bottom and


MARKET SUPPLY, 4Q 2013

bouncing back.

Forecast
> > In December 2013, the banks actually lend out 758.7 billion,
an increase of 61% from November. The number is not only
impressive in volume but also showed a significant break
through in the whole process that expected to get a boost
in buyer’s confidence. We expect positive impacts on both
developers and buyers from disbursement of the 30-trillion
package this year.
>> In 2014 more postponed projects are expected to be restarted.



HANOI | 4Q 2013 | PROPERTY MARKET

Hanoi Office Market Overview
No

Name of Project

Developer

Location

Completed
Year

NLA
(sq m.)

Average asking
price (*)

2008

20,000

18

1

Viet Tower

Hoa Binh Trading & Investment JSC

2

EVN Tower

EVN

11 Cua Bac, Ba Dinh

2012

45,621

30

2 Dai Co Viet, Hai Ba
Trung

2013

4,279

17

1 Thai Ha, Dong Da

3

Pacific Building

NCX

4

VID Tower

30/4 Tourism & Trading JSC

115 Tran Hung Dao,
Hoan Kiem

2013

4,136

21

5

63 Le Van Luong

319 Group

63 Le Van Luong,
Trung Hoa, Cau Giay

2013

12,254

18

Location

Completed
Year

NLA
(sq m.)

Average asking
price (*)

11 Cua Bac, Ba Dinh

2012

4,385

45

2 Tran Hung Dao, Hoan
Kiem

2012

2,300

35


Hanoi Retail Market Overview
No

Name of Project

Developer

1

EVN Tower

EVN

2

Hong River Tower

Thien Duc Services JSC

3

63 Le Van Luong

319 Group

63 Le Van Luong,
Trung Hoa, Cau Giay

2013

20,728

45

4

Mo Market Shopping Mall

Vinaconex

459C Bach Mai, Truong
Dinh, Hai Ba Trung

2013

24,223

45

5

CTM Building

CTM

139 Cau Giay

2014

5,000

45

Hand-over
Period

Total units

Average asking
price (*)

2Q 2014

324

600


Hanoi Residential Market Overview
No

Name of Project

Developer

Location
Xa La, Phuc La, Ha
Dong Urban Area

1

Nam Xa La (Phuc Ha Tower)

IPACO

2

Hyundai Hillstate

Hyundai RNC Ha Tay

To Hieu, Ha Cau, Ha
Dong

1Q 2014

928

1,200

3

HEI Tower

Ha Noi Electric Investment JV

Nguy Nhu, Kontum,
Thanh Xuan

1Q 2014

300

1,300

4

136 Ho Tung Mau

Vinaconex 7

Ho Tung Mau, Cau
Dien, Tu Liem

4Q 2014

360

730

5

Berriver Long Bien

Hanco 9

Nguyen Van Cu, Long
Bien

2Q 2014

324

1,270


KNOWLEDGE REPORT | 4Q 2013 | VIETNAM

About Colliers International
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enterprise.
Through a culture of service excellence and a shared sense of initiative, we integrate the
resources of real estate specialists worldwide to accelerate the success of our partners.
We connect through a shared set of values that shape a collaborative environment throughout
our organization that is unsurpassed in the industry.
With more than 100 professionals in 2 offices in Vietnam, the team is market driven and
has proven and successful track record with both international and local experience.
From Hanoi to Ho Chi Minh City, we provide a full range of real estate services
• Research

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