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January 2012
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Times Square
CBRE Vietnam
Vietcombank Tower
VietinBank
BIDV Tower
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CBRE Vietnam
Hospitality
Ritz Carlton, St. Regis, Mandarin Oriental, Shangri-La and Four Seasons to enter market within the next 5 years
Retail
Refurbished retail areas appear (Saigon Square #3) Shipyards moving towards development Growth of mini-malls due to lack of land (< 3,000 sm) Larger retail areas coming up outside of traditional areas District 5 (Tan Da Shopping Center), and Binh Duong (Becamex New City)
CBRE Vietnam
Change in asset class as gold dips and people moved in other directions
Developers
Marketing spend TRIPLES as developers search for new ways to sell / lease their units Increased use of technology in property building management systems, CRM systems Local companies seek capital through IPOs and more sophisticated financial structures Some residential developers will convert units for sale to units for lease due to unsold units in completed buildings, or instituting rental pools (guarantees) Demand for data centres grows due to the continuing movement online, as our businesses become more immediate with wi-fi, smart phones and iPads. Developers prepared to deliver with the requirements needed to support these trends will profit.
CBRE Vietnam | Page 6
CBRE Vietnam
6.2%
12% 22.9% US$62.7 bil US$80.7 bil VND17.8 mil
(Dec. 31, 2008, up 7.2% y-o-y)
5.3%
12.75%
Down from 21% in Q3
6.8%
16%-17.0%
(Late 2010)
5.91
22% - 25%2 18.58%1 US$96.3 bil US$105.8 bil VND41.8mil4
(Dec. 30,2011. up 15.8% y-o-y)
6.3 3
N/A 12.1% 3 US$105.4 5 US$113.3 5
9.2%
(Dec10: 11.8%)
N/A
17,400
(Dec. 31, 2008)
19,500
(Dec. 31, 2010) Devalued by 5.4% vs. Dec. 2009
21,036
(Dec.31, 2011) Devalued by 7.9% vs Dec. 2010)
21,7357
21,275
(Dec. 31, 2011)
N/A
Committed FDI
US$71.7 bil
US$22.6 bil
US$14.7 bil 1
(US$845.6 mil real estate)
US$15 - 16 bil 6
Implemented FDI
US$11.7 bil
US$10 bil
US$11 bil
US$11 bil1
N/A
Source: Historical data by GSO, 1GSO , 2SBV, 3 IMF, 4 SJC, 5 World Bank, 6 Ministry of Investment, 7Oxford Economics
CBRE Vietnam | Page 7
CBRE Vietnam
4.9%
1.6%
5.0%
9.0%
4.9%
5.9%
6.3%
5.3%
3.9%
5.0%
5.6%
3.2%
18.6%
5.4%
US$53.00
US$51.80 US$50.50 US$52.18 US$51.88 US$52.17
2.2% higher than regional average
US$52.72
Trade Balance
-$55.4 bn
$27 bn
$48.3 bn
$111.9 bn
$47.1 bn
-$9.5 bn
$38.2 bn
Source: Oxford Economics, Vietnamese General Statistics Office, World Bank, Goldprice.org, goldpricethai.com, pecunix.com
CBRE Vietnam
2012
Vietnam
Thailand Singapore China Malaysia Indonesia
GDP (% y-o-y)
CPI (% y-o-y)
10% 8%
5.8
4.5 3.3 8.1 4.9 6.2
11.5 3.6
2.9 2.8 3.5 2.8 5.0
2000 Q1
2001 Q1
2002 Q1
2003 Q1
2004 Q1
2005 Q1
2006 Q1
2007 Q1
2008 Q1
2009 Q1
2010 Q1
2011 Q1
2012 Q1
World
Western Europe
Asia-Pacific
United States
Source: Oxford Economics. Note: GDP growth for Vietnam in 2012, The World Bank, IMF and ADB range between 6.1% 6.5%.
CBRE Vietnam | Page 9
CBRE Vietnam
2013 Q1
CPI figure
Dec. 2010: 11.8% y-o-y Dec. 2011: 18.13% y-o-y 2011: 18.58% y-o-y
Time Before 15-Dec-09 14-Jan-10 21-Feb-10 27-May-10 8-Jun-10 9-Aug-10 24-Feb-11 29-Mar-11 26-Aug-11 A95 16,800 16,450 16,900 17,490 16,990 16,900 19,800 21,800 21,300 A92 Chg Pct. Chg 16,300 15,950 (350) -2.15% 16,400 450 2.82% 16,990 590 3.60% 16,490 (500) -2.94% 15,990 (500) -3.03% 16,400 410 2.56% 19,300 2,900 17.68% 21,300 2,000 10.36% 20,800 (500) -2.35%
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4
2 2010p 2011p 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Real estate Processing Manufacturing Industry Construction Hotels and restaurants Others
Source: Ministry of Planning & Investment
Others
CBRE Vietnam
CBRE Vietnam
1,400
Index
400 350
Trading value
Source: FPT Securities
CBRE Vietnam | Page 13
CBRE Vietnam
Source: ADB
CBRE Vietnam | Page 14
CBRE Vietnam
The magic from Trinh Ducs performance in the Rugby World Cup is overshadowed by: Quy Phuc is expected to win the gold in 100 m freestyle Anh Tuan is expected to win the gold in <56 kg weightlifting Ha Thanh is expected to win the gold in the floor exercise
Source: vov.vn; giadinh.net.vn; tuoitre.vn ; 1star1objet.fr
CBRE Vietnam | Page 15
CBRE Vietnam
4 3
2
1
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Vietnam
HCMC
Tourism arrivals by country 2011 China 1,416,804 South Korea 536,408 Japan 481,519 US 439,872 Cambodia 423,440 Taiwan 361,051 Australia 289,762 Malaysia 233,132 France 211,444 Thailand 181,820 Others 1,438,779
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Car Sales
Nguyen Van Linh the automobile hub, further growth expected; Kia New Morning VND357,000,000 (US$17,000); Entry Level Mercedes VND1,500,000,000 (US$70,000);
100%
90% 80% 79% 82%
$80000.0
$60000.0 $40000.0 $20000.0 $.0 2007 2008 2009 2010 11M/2011
70%
60%
50%
40% 30% 34% 34% 22% 7% Mekong (Fiat, Ssangyong, PMC) VMC (BMW, Mazda, Kia) GM Daewoo 2% VinaStar (Mitsubishi) Mercedes-Benz Vietnam Visuco (Suzuki) Toyota
20%
10%
0%
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CBRE Vietnam
CBRE Vietnam
Metro lines
The expected cost of Metro Line 1 has almost doubled, with progress in compensation. Tramway Line No. 1 is being restructured into a Bus Rapid Transit (BRT) system at reduced cost.
Air
Da Nangs new airport terminal opens! Prime Minister Dung officially approved Long Thanh International Airports master plan. The airport has an area of 5,000 hectares with investment capital of US$6.7 billion for the first phase. Vietjet Air, a new private airline, started operation. (1 Airbus, 2 on order).
CBRE Vietnam | Page 20
CBRE Vietnam
2012 Infrastructure
Roads:
Construction of the four main roads in the Thu Thiem new urban area will start in July, 2012 Completion is expected 2015. East West Highway
Bridge:
Saigon Bridge No. 2, with four lanes, will start constructed in April, 2012, and will take 22 months to be completed.
Bus system:
In 2012, the city will focus on improving the bus system and services, implementing solutions to improve the backbone of the citys transportation.
CBRE Vietnam
267 86 44 311
245 33 53 268
43 18 28 134
22 7 12 10
16 4 37 22
35 11 19 32
13 5 6 9
HCMC
Hanoi
Vung Tau
Hai Phong
166 42 25 142
88 24 32 104
15 6 17 19
15 6 5 3
6 3 10 5
19 1 8 14
7 3 2 5
CBRE Vietnam
190
Local Currency
140
$60.0 $40.0
$20.0 $.0
90
Manila Bangkok KL Taipei Seoul HCMC Hanoi Shanghai Beijing Singapore Tokyo - Pudong Hong Kong
40 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Vietnam Singapore
Source: STR &
$1200.0 $1000.0 $800.0 $600.0 $400.0 $200.0 $.0 Manila Bangkok HCMC Hanoi Taipei Singapore Shanghai KL Beijing Tokyo Hong Kong
CBRE Vietnam
Office - Rents
Grade A Rents (US$ psm)
$60 $50 $40
$30
$20
2009 2010 2011
$10
2009 2010 2011
$10
2009 2010 2011
CBRE Vietnam
Office - Vacancy
Vacancy Grade A Grade B Grade C 3 year 23.4 pt 14.4 pt -2.6 pt 1 year -14.6 pt 3.3 pt -1.9 pt 1 quarter -6.1 pt -0.7 pt -0.1 pt
Grade A Vacancy
40% 30% 20% 10%
0%
2009
2010
2011
Grade B Vacancy
20% 15% 10% 5%
0%
2009
2010
2011
Grade C Vacancy
20% 15% 10% 5%
0%
2009
2010
2011
CBRE Vietnam
Office - Absorption
NET ABSORPTION BY GRADE
Grade A Grade B Grade C
80,000 70,000
60,000 50,000 40,000 30,000 20,000 10,000 0 -10,000 -20,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009
NET ABSORPTION BY YEAR
250,000
200,000 150,000 100,000 50,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011
2010
2011
CBRE Vietnam
$4,200
$4,100
Luxury Mid-end
High-end Affordable
$4,000 $2,000
$0
2007
2008
2009
2010
2011
$730
$710 $690 $670 $650
Q1
Q2
2009
Q3
Q4
Q1
Q2
2010
Q3
Q4
Q1
Q2
2011
Q3
Q4
CBRE Vietnam
Luxury
High-end
Mid-end
Affordable
8,000
6,000 4,000 2,000
0
Q1 Q2 2009 Q3 Q4 Q1 Q2 2010 Q3 Q4 Q1 Q2 2011 Q3 Q4
Luxury
High-end
Mid-end
Affordable
Total
CBRE Vietnam
7,000 6,000
Resolution 11
Q1
5,078 launches 2,229 sales
Q2
4,926 launches 1,390 sales
Discount Headlines
2012
Death, Discount or Opportunity ?
Q4
Q3
More incentives to stimulate sales
Property sector, the most attractive investment channel, but more cautious to invest in 1-3 years (survey by Grant Thornton Vietnam)
Doc. 8844 /NHNN-CSTT: Remove 4 real estate groups out of the nonproductive outtsatnding loan category
CBRE Vietnam | Page 29
CBRE Vietnam
A Villa ($350,000)
A Townhouse ($90,000)
A2
A1 A B
1%
10% 9% 47%
22,845
4,341
2,170 1,519 1,411
10
19 28 30
17
33 47 51
31
62 89 96
79
158 225 242
81
161 230 248
21
41 59 64
11,423
7,996 7,425 2,856
C
D E F
21%
9% 3% 1%
543
326 271 109
77
129 155 387
133
221 265 664
249
415 498 1,244
630
1,051 1,261 3,152
645
1,075 1,290 3,225
166
276 332 829
1,713
1,428 571
Figures consider the major cities of HCMC and Hanoi; Assumes that 19% of household income is saved; Generalised, as assumes no mortgages/family contributions though majority of purchases are still without a mortgage;
CBRE Vietnam
Retail
The past 18 months has seen shopping centre rentals create a buzz;
2012, we expect department store rentals to come back to the forefront: Lack of quality space in the CBD; Still a softening on rents 2012, shopping centre rentals in the CBD to remain soft; Saigon Centre phase 2, the CBD retail hub on the horizon; First new supply in CBD with department store;
$80
$60 $40
$20
$0
CBRE Vietnam
Retail
New Brands
New retail entrant - Index Living Mall, District 4: Single retailer operating 7,000sm Homeware and furnishings Success will be key for other similar concepts NEW BRANDS 2011: Luxury brands: Christian Louboutin, Chanel, Burberry, Cartier, Ralph Lauren Cosmetic: Dior, Chanel, M.A.C Fashion: GAP, DKNY, Warehouse, LYN Around Accessories: Coach, Charles David Fast food: Subway, Burger King, Domino Pizza Baskin Robbins Ice-cream re-enter
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Hotels 2012
Occupancy and RevPAR both showing signs of growth in 2011.
Coastal markets such as Phu Quoc, Nha Trang and Da Nang showed a higher RevPAR growth rate than HCMC:
RevPAR (US$/room/night)
60 55 50 45 40
35
30
25
20 2009 2010 2011F
HCMC
Da Nang
Phu Quoc
Nha Trang
Phu Quoc continues to lead the coastal market with 20% y-o-y increase in RevPAR, expected to be an attractive destination for investors in 2012.
The operation of new Da Nang International Airport terminal in December,2011 facilitates more direct international flights to Da Nang from locations such as Seoul and Kuala Lumpur.
CBRE Vietnam
Flight Schedule
=> 18 flights to Phu Quoc per day, compared to just 10 flights in 2010
From HCMC HCMC Rach Gia Hanoi Can Tho Total Airlines Vietnam Airlines Air Mekong Vietnam Airlines Air Mekong Vietnam Airlines Day of Service Ten times daily Five times daily Once daily Once daily Once daily 18 flight per day Capacity per flight (pax) 68 90 68 90 68 Max. pax per day 680 450 68 90 68 1,288 Max. pax per year 248,200 164,250 10,608 32,850 10,608 466,516
Day of Service Four times daily Three times daily 1 flight every 10 days 07 flight per day
CBRE Vietnam
Hotels 2012
Internationally operated 5-star hotels see faster development progress than there 3-star siblings. New supply from the Nikko, the Grand expansion, Times Square, Le Meridien, and Eden A totals over 1,300 new rooms
RevPAR (US$/room/night)
120 100
80
60 40
20 0
2007 2008 2009 2010 2011F
5-star
4-star
3-star
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Da Nang market continues to perform with 60% of the 40 villas launched at The Point sold within three months
No construction expected in 2012 without pre-sales Projects away from the coast see action too WTC leasing (anchors already signed) and Azura to complete Q2
CBRE Vietnam
Both from Asia and the West Hanoi: employees in the Embassies
Vietnam will be the 11th most common destination of companies sending staff on
international assignments up to 2013. Therefore, this is likely to ensure that the demand for accommodation from companies sending staff into Vietnam is likely to remain strong in the next three years.
--- Trends in Managing Mobility Survey 2010, ECA International
40% 20% 0%
Q1/2011
Q2/2011
Q3/2011
Q4/2011
TOP DEMAND!
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Ready Built Factory rental rates come down as more supply than ever before. With the increasing profile of industrial in Vietnam, more investors seek wholesale purchases of operating IPs.
CBRE Vietnam | Page 38
CBRE Vietnam
CBRE Vietnam
6. Revenue from cleared sites skyrockets as they are converted into drive-in movie theatres and Circle K.
7. Burger King opens at Da Nang airport and Sushi Bar opens in Phu Quoc as overseas visitors increase a further 20%. 8. In the short-term the new Pudong is not Thu Thiem, it is District 4. 9. Gold price declines with new supply from Vietnams two gold medals at the London Olympics 2012. 10. Registered FDI into real estate triples in 2012 as Vietnam sees 20 new foreign investors.
11. Jack Dorsey to spend Christmas 2012 in Vietnam, @Townsend_Marc to have 50,000 followers
CBRE Vietnam | Page 40
CBRE Vietnam
THANK YOU
2012 CB Richard Ellis (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CB Richard Ellis (Vietnam) Co., Ltd. We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources and make no guarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful consideration of factors known to us for example only, and they may not represent current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis. CBRE Vietnam | Page 41
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