Ho Chi Minh City

Tuesday, 9th January, 2018

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HCMC PROPERTY MARKET: A LOOK BACK AT 2017 AND OUTLOOK FOR 2018
• Investment
• Office Market
• Retail Market
• Hospitality Market
• Condominium Market

PANEL DISCUSSION
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INVESTMENT

Source: Retrieved from newspapers, January 2018. 4

INVESTMENT

HCMC: Transactions in the Last Two Years - CBD was the Most Sought After
Project Buyer Seller
Saigon Green
1 Novotel Saigon Liberty Group
View Investment
Kumho Asiana
2 Kumho Asiana Plaza Mapletree
Saigon
Saigon
3 Saigon Metropolitan Indochina Group
Metropolitan Tower
Hong Phuc Quang
4 Senla Boutique Hotel Diep Bach Duong
RE.
5 Lim Tower Gaw Capital Hoa Lam
A plot in Vinhomes
6 CapitaLand Vingroup
Golden River
1 7 Le Meridien Mitsubishi Tien Phuoc
6
5 8 Saigon Center Keppel Land Watco
2
7 9 Duxton Hotel Saigon Confidential Low Keng Huat
3 4
Nguyen Dinh Chieu
10 Novaland NA
Site
10 8
9 11 A&B Tower Fujita A&B Development
11 HCMC People’s
12 Tran Hung Dao Site Confidential
Committee
12
Source: RCA, CBRE Vietnam. TOTAL TRANSACTED VALUE: ~US$1.2 billion

INVESTMENT

Hanoi: Transactions in the Last Two Years – Scattered Around the City
Project Buyer Seller
Nam Thang Long
1 Ciputra Mall Lotte Group
Urban
2 Kosmo Tay Ho NA NEWTATCO
3 Sedona Suites BRG Group Keppel Corp.

1 Lam Vien Construction

4 AZ Lam Vien Complex AZ Land
and Investment
2 3
5 TNR Tower TNR Holdings Vingroup

Dolphin 2
6 Dolphin Plaza TID Corp.
4 Vietnam
6 5 7 International Centre Hotel Vincapital Keppel Corp.
7
8 8 Sofitel Legend Metropole Hanoi NA Vincapital

9 10 Growing Sun
9 Diamond Rice Flower Kinh Bac Corp.
Investment
Elite Capital
10 Hanoi Times Square VinaLand
Resources
11 12 13 11 Usilk City CT1-104 Hai Phat Song Da – Thang Long

12 The Manor Central Park Mitsubishi Bitexco Group

Samsung Research &
13 Sam Sung Group NA
Development Centre

Source: RCA, CBRE Vietnam.

TOTAL TRANSACTED VALUE: ~US$500 million
 INVESTMENT

Investment Transactions in Vietnam is still Low due to Remaining Challenges

Vietnam Investment Volume in Regional Context CHALLENGES

50,000 75% transaction value is from

Transaction value (US$ million)

45,000 Valuation
40,000
Hanoi and HCMC
35,000
Transparency
30,000
25,000
20,000 Structuring
15,000
10,000
5,000 Track record
0

Hong Kong
Philippines

Thailand

Singapore
Vietnam

Taiwan
2016 2017
Disclaimer: Transactions include deals above US$10 million. Information contained herein, including projections, has been obtained from sources believed to be
reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm
independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are
reserved and cannot be reproduced without prior written permission of CBRE.

Source: CBRE Vietnam, RCA.

7

INVESTMENT

Transactions of Development Sites are on the Rise

Transaction value by Status
Development Sites Operating Assets Local Buyer Foreign Buyer
2017 57% 43% 52% 48%

37% 63% 25% 75%

2016

Transaction of Completed Assets by Value and by Use

Residential transactions in 2017 included Galaxy Residence, Dai Phuoc Loctus and The EverRich 3, which were partly under operation.
Source: RCA. 8
 INVESTMENT

HCMC ranks top in terms of Investment and Development Propspects

Investment prospects Development prospects

* Survey of 600 respondents including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.
Source: PwC, Emerging Trends in Real Estate Asia Pacific 2018 Survey. 9
HCMC OFFICE

2017 Key Points

1 Substantial New Supply

2 Performance Edging Up

3 Big Occupiers Dominated the Market

4 Continuing Expansion of Co-Working Space

11

HCMC OFFICE

2017 Market Snapshot

GRADE A GRADE B

2 new projects 3 new projects

59,196 NLA 68,870 NLA
New Supply

US$ 38.33 US$ 21.13

▲ 4.8% y-o-y ▲ 2.4% y-o-y
Asking rents (*)
▲ 4.4% q-o-q ▲ 2.2% q-o-q

8.2% 2.8%
► 0.2 ppt y-o-y ► 0.1 ppt y-o-y
▲ 1.6 ppts q-o-q Vacancy rate ► 0 ppt q-o-q

(*) Asking rents: US$ psm pm (exclusive of VAT & Service Charge)
Source: CBRE Vietnam, Q4 2017.
12
 HCMC OFFICE

2017 wrapped up with substantial new supply

Grade A Grade B

Sai Gon Giai Phong

8,800 sm NLA
Deutsches Haus
27,197 sm NLA

Etown Central
36,450 sm NLA

Saigon Centre P2 Viettel Complex

32,000 sm NLA 23,620 sm NLA
13

HCMC OFFICE

Delayed Decentralization Due to Slow Infrastructure Progress

HCMC Total Supply by Year HCMC Total Supply by Location

1,400,000 100%

1,200,000 80%
1,000,000
NLA (sm)

60%
NLA (sm)

800,000
600,000 40%
400,000
20%
200,000
0 0%
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
CBD District 1 - Non-CBD District 7
Existing Supply New Supply
Tan Binh District District 3 District 10
District 4 Others

2012 - 2016: +5% pa

2012: 53% in CBD
2017: +11%
2017: 51% in CBD
Source: CBRE Vietnam, Q4 2017.
14
HCMC OFFICE

Asking Rents Edging Up

Grade A
US$38.3
40 Rent Increase Unchanged
(US$/sm/month)

35
Asking Rent

30
25
20
2012 2013 2014 2015 2016 2017
Grade B
30 US$21.1
(US$/sm/month)

25
Asking Rent

20
15
10
2012 2013 2014 2015 2016 2017
(*) Asking rents: US$ psm pm (exclusive of VAT & Service Charge)
15
Source: CBRE Vietnam, Q4 2017.

HCMC OFFICE

Occupancy on the Rise despite New Supply

GRADE A GRADE B

91.80% 2017 97.20%

2016

2015

2014

2013

2012

100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100%

Average 2012 – 2016 Average 2012 – 2016

90.96% 92.62%

Source: CBRE Vietnam, Q4 2017. Q4 performance data represents the whole year. .
16
.
 HCMC OFFICE

Demand: Large Floorplate and Relocation to Continue

Tenant’s Purpose Tenant’s Profile

2%
15% Relocation
34% 11% 9%
New Letting Services Manufacturing IT
16%
Expansion
67%
Renewal

27% 24% 10%

Larger Enquired Leasing Sizes
100% 33% 
80% enquiries
60%
40%
20%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016 2017
< 100 sm 100 - 299 sm 300 - 699 sm 700 - 1000 sm > 1000 sm
17
Source: CBRE Vietnam, Q4 2017 Based on CBRE’s Enquiries y-t-d.

HCMC OFFICE

Tenants Consolidate to New Quality Buildings

2017 is the year of Big
Occupiers

District Industry Nationalities Leasing Areas (sm NLA)

District 10 Transportation Switzerland 6,000
District 1 IT/Technology Singapore 5,000
District 1 E-commerce Singapore 4,000
District 1 Manufacturing Japan 3,000
District 1 E-commerce Germany 3,000
District 4 Co-Working Space China 3,000
District 4 IT/Technology Germany 2,500
District 7 Manufacturing USA 2,400
District 4 IT/Technology Korea 2,000
District 10 Service France 1,749
District 1 Manufacturing UK 1,500
District 7 Tech – Transportation US 1,500
District 4 Tech – Transportation Singapore 1,350
District 10 IT/Technology Germany 1,342
District 7 Manufacturing USA 1,274
Source: CBRE Vietnam, Q4 2017.
18
 HCMC OFFICE

Vietnam Manufacturing among Fastest 10 Countries for Growth by 2025

Fastest 10 Countries for Growth by 2025

Source: CBRE Research: The Future of Global Manufacturing, Oxford Economics 19

19

HCMC OFFICE

Trend of Tenants to Renew Leases due to Limited Options in CBD

Diamond Plaza
Manufacturing
600 sm

Saigon Trade Center Sunwah Tower President Place M Plaza

Banking Banking Electronics Banking
3,200 sm 3,500 sm 1,500 sm 800 sm
Bitexco Financial Tower
Insurance Pharmaceuticals
2,400 sm 200 sm
Source: CBRE Vietnam, Q4 2017.
20
HCMC OFFICE

Co-working Space: No sign of Stopping

New Co-Working Operators to join and expand …

CBRE’s Enquiries – Growing Demand despite limited market share

2,000 10

No. of Enquiries
8

Leasing size
1,500

(NLA sm)
6
1,000
4
500 2
0 0
2015 2016 2017
Average size required Number of enquries
Source: CBRE Vietnam, Q4 2017.

HCMC OFFICE

Future Supply 1 2

1. Viettel Phase 2, D10 – NLA: 17,600 sm

2. Thaco, D2 – NLA: 4,000 sm

2018 (21,600 sm NLA)

2019 onwards (348,510 sm NLA) 1 7 8

4

1. Crescent Hub, D7 – NLA: 29,037 sm

2. VietCapital Center, D1 – NLA: 18,401 sm
11
3. Lim 3, D1 – NLA: 29,832 sm 3 6
2 9
4. Friendship Tower – NLA: 13,700 sm
5. OneHub Saigon, D9 – NLA: 10,400 sm
6. 289 Tran Hung Dao, D1 – NLA: 30,000 sm 12

7. Sun Tower, D1 – NLA: 84,800 sm 5 10

8. SJC Tower, D1 – NLA: 30,400 sm
9. Satra Tax Plaza, D1 – NLA: 28,000 sm
10.Nexus Tower, D1 – NLA: 32,000 sm
11.Spirit of Saigon, D1 – NLA: 12,000 sm
Source: CBRE Vietnam, Q4 2017
12.UOA Tower, D7 – NLA: 29,940 sm
HCMC OFFICE

2018 Outlook
Supply Outlook

300,000 Forecast
Grade A Grade B
NLA (sm)

200,000

100,000

0
2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F

Rental Outlook Vacancy Outlook

50 10%
(US$/sm/month)

Vacancy Rate (%)

40 8%
Asking Rent

30 6%
20 4%
10 2%
0%
0
2015 2016 2017 2018F 2019F 2020F
2015 2016 2017 2018F 2019F 2020F
23
Source: CBRE Vietnam, Q4 2017.

HCMC OFFICE

2018 Trends

Going Green
Buildings Changing Ownership:
Continuous upgrading from
Leading to restructuring tenant mix and higher rent
old buildings

Iconic Buildings: Challenge for Decentralised Supply

TALLER AND TALLER Due to delayed infrastructure

P.L.A.C.E Making
Happening to traditional tenants

Co-Working Space:
Moving to Retail Podium for Larger Space

24
Source: CBRE Vietnam, Q4 2017.
HCMC RETAIL

2017 Key Points

1 Retail Podiums Dominated New Supply

2 Healthy Market Performance for both CBD & Non-CBD

3 Another Booming Year for Fast Fashion and F&B

4 Strong Expansion of eCommerce

HCMC RETAIL

2017 Market Snapshot

CBD NON-CBD

7 new projects
No new supply C
74,183 sm NLA
New Supply

US$115.4 US$37.8
▲ 1.2 % y-o-y ▲ 3.8% y-o-y
► 0% q-o-q Asking Rents (*) ► 0% q-o-q

2.7% 6.9%
▼ 2.3 ppts y-o-y ► 0 ppts y-o-y
▼ 0.2 ppts q-o-q ▼ 6.1 ppts q-o-q
Vacancy Rate
(*) Asking rents: US$ psm pm (exclusive of VAT & Service Charge)
Source: CBRE Vietnam, Q4 2017.
27

HCMC RETAIL

All New Supply within Retail Podiums

Pearl Center
RomeA Shopping 20,000 sm NLA
Centre, 9,661 sm NLA

Viettel Complex The CBD Home

8,000 sm NLA Premium
16,000 sm NLA

Vincom Plus
Homyland
The Garden Mall Source: CBRE Vietnam, Q4 2017.
Vincom Plaza SaigonRes 1,400 sm NLA
13,300 sm NLA
5,822 sm NLA
HCMC RETAIL

Supply: Non-CBD Has Potential to Grow

HCMC Total Supply by Year HCMC Total Supply by Location

1,000,000 100%
90%
800,000 80%
NLA (sm)

70%
600,000
60%

NLA (sm)
400,000 50%
40%
200,000 30%
20%
0
2012 2013 2014 2015 2016 2017 10%
0%
Existing Supply New Supply 2012 2013 2014 2015 2016 2017

2012 - 2014: +4% / year CBD - District 1 District 2 Tan Phu District
2015 - 2016: 29% / year Go Vap District Binh Tan District Tan Binh District
2017: +7% District 9 District 7 Others

Source: CBRE Vietnam, Q4 2017.

29

HCMC RETAIL

Asking Rents Slightly Went Up for both CBD and Non-CBD

CBD Rent Decrease Increase

160 US$115.4
(US$/sm/month)

120
Asking Rent

80
40
0
2012 2013 2014 2015 2016 2017

Non-CBD US$37.8
40
(US$/sm/month)
Asking Rent

30

20

10

0
2012 2013 2014 2015 2016 2017
Source: CBRE Vietnam, Q4 2017.
(*) Asking rents: US$ psm pm (exclusive of VAT, service charge)
30
HCMC RETAIL

Occupancy Rate in CBD – Recent High

CBD NON-CBD

97.3% 2017 93.1%

2016

2015

2014

2013

2012

100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100%

Average 2012-2016 Average 2012-2016

91.0% 88.7%

Source: CBRE Vietnam, Q4 2017.

31

HCMC RETAIL

HCMC Net Absorption by Year Market was busy with new fashion and F&B brands
New Entrants Incoming
2017

2016
F&B

2015
NLA (sm)

2014

Fashion
2013

2012

- 80,000 160,000
Cosmetics

New Supply Net Absoption

Source: CBRE Vietnam, Q4 2017.

Others 32
HCMC RETAIL

By 2020, eCommerce revenue will increase 60% compared to 2017

eCommerce Revenue in Vietnam

4.0 2.0%
Revenue % of Retail Revenue

% of Retail Revenue
Revenue (Billion US$)

3.0 1.5%

2.0 1.0%

1.0 0.5%

0.0 0.0%
2012 2014 2016 2018 2020

Source: eMarketer.com, 2017.

33

HCMC RETAIL

Vietnam’s Retail Sales Growth was Top Two

Growth in Retail Sales over 2001 - 2016

14%

12%

10%

8%

6%

4%

2%

0%
China Vietnam Malaysia India Thailand Philippines Hong Kong Indonesia Taiwan US South
Korea
Source: Oxford Economics, Deloitte – Asia Pacific Economic Outlook 2017

34
HCMC RETAIL

Rising Middle Class Promises Further Growth, Boosting Retail Sales

Growth in number of middle class households vs Average annual growth in real disposable income

Source: Oxford Economics, Deloitte – Asia Pacific Economic Outlook 2017 35

HCMC RETAIL

Future Supply 1
3
5
1. Van Hanh Mall, D10 – NLA: 60,000 sm
2. Saigon Co.op, Thu Duc – NLA: 67,200 sm 4
2
3. Union Square, D1 – NLA: 22,800 sm
4. Landmark 81, Binh Thanh – NLA: 33,920 sm
5. Estella Place, D2 – NLA: 26,004 sm

2018 (209,924 sm NLA)

3
2019 onwards (452,979 sm NLA) 2 4
1. Golden Hill, D1 – NLA: 30,996 sm
2. Satra Tax Plaza, D1 – NLA: 25,521 sm
3. Spirit of Saigon, D1 – NLA: 48,000 sm
7
4. Elite Mall, D8 – NLA: 42,000 sm
6
5. City Gate Towers, D8 – NLA: 17,920 sm 5
6. Xi Grand Court, D10 – NLA: 42,000 sm
7. Sala Shopping Centre, D2 – NLA: 60,054 sm
8. Riviera Point, D7 – NLA: 68,088 sm 8
10
9. Crescent Mall Phase 2, D7 – NLA: 18,000 sm 9

10. OneHub Saigon, NLA: NLA: D9 – 70,000 sm

11. Saigon Co.op, D2 – NLA: 30,400 sm
36
12.Saigon Centre Phase 3, D1 Source: CBRE Vietnam, Q4 2017.
HCMC RETAIL

2018 Outlook: Positive for CBD while non-CBD Under Pressure of Rising Supply from Retail Podiums
Supply Outlook
Forecast
300,000
CBD Non-CBD
NLA (sm)

200,000

100,000

0
2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F

Rental Outlook Vacancy Outlook

160 25%
(US$/sm/month)

Vacancy Rate
Asking Rent

20%
120
15%
80
10%
40 5%
- 0%
2015 2016 2017 2018F 2019F 2020F 2015 2016 2017 2018F 2019F 2020F
Source: CBRE Vietnam, Q4 2017. 37

HCMC RETAIL

2018 Trends

Flexible Lease Structures

will be More Common

Multi-brand Retail Stores

Will Grow Fast

Design of Common Areas Will Become

a Distinctive Advantage for Shopping Centres

Physical Stores Will be Re-imagined by Developers

via Digital Technology

38
SECOND HOME MARKET

2017 Key Points

1 Impressive Growth of Tourism Market

2 Good Absorption across Nha Trang, Da Nang, Phu Quoc

3 The Dominance of Big Local Groups

4 Guaranteed Yields Continued to Attract Demand

VIETNAM’S TOURISM

Impressive Growth in International Arrivals

Number of International Arrivals for Major Cities

7,000,000
2014 2015 2016 2017
6,000,000
International Arrivals

5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
HCMC Hanoi Da Nang Nha Trang Phu Quoc
Source: Tourism Departments of various cities, CBRE Vietnam, Q4 2017

Arrivals to Nha Trang ▲ 66% y-o-y

2017 Arrivals to Da Nang ▲ 39% y-o-y
Arrivals to Phu Quoc ▲ 58% y-o-y

41

VIETNAM’S TOURISM

Korea is The Fastest Growing Source Market

International Visitors to Vietnam 2017 by Nationality Top Growth Markets (y-o-y)

Korea ▲ 56.4%
China
China ▲ 48.6%
30% Korea
31%
Japan Hong Kong ▲ 37.9%
Taiwan

USA Russia ▲ 32.3%

4%
Russia
5%
5%
19% Others Taiwan ▲ 21.5%
6%
Philippines ▲ 20.3%

Source: Vietnam National Administration of Tourism.

Spain ▲ 20.0%
42
VIETNAM’S TOURISM

Enhanced International Connectivity

Daegu Seoul
Total International
Zhengzhou Airport New Flights in 2017
Russia Destinations
Guangzhou
Cam Ranh 26 cities 2 new flights

London Beihai Phu Quoc 9 cities 5 new flights

Da Nang 39 cities 3 new flights
Milan

DA NANG
Bangkok
NHA TRANG
Van Don Phu Quoc International
International Airport Passenger Port (Duong Dong)
Kuala Lumpur
PHU QUOC To be completed 2020
Chartered flights To be completed 2018
Direct flight
Source: Vietnam National Administration of Tourism.
43

VIETNAM’S TOURISM

Proposed Special Economic Zones Could Attract Huge Interest

Free Tourism is among priority industries

Reduce 50% of Personal Income Tax

Favorable Corporate Income Tax

SPECIAL POLICIES
Favorable export-import tax /excise tax /VAT

Waive, reduce land/water use fee

60-day visa waiver for foreign visitors

Source: Draft Law on Special Administrative-Economic Units, images from Vnexpress 44

SECOND HOME MARKET

Condo-tel Supply: Increased but at a Slower Pace

Accumulated Condo-tel Supply by Year (Number of Units)

2017 vs. 2016 Nha Trang: x 1.3 Da Nang: x 1.2 Phu Quoc: x 2.6
14,000
Accumulated Supply

12,000
(Number of Units)

10,000
8,000
6,000
4,000
2,000
-
2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
Nha Trang Da Nang Phu Quoc

Source: CBRE Vietnam, Q4 2017

45

SECOND HOME MARKET

Vacation Villa Supply: Decelerating Growth

Accumulated Vacation Villa Supply (Number Of Units)

2017 vs. 2016 Nha Trang: x 1.2 Da Nang: x 1.1 Phu Quoc: x 1.6

2,500
Accumulated unit

2,000

1,500

1,000

500

-
2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
Nha Trang Da Nang Phu Quoc

Source: CBRE Vietnam, Q4 2017 46

 SECOND HOME MARKET

The Dominance of Local Developers

SUN GROUP_Ha Long Ocean Park VINGROUP_Vinpearl Ha Long Bay

NORTH

BIM_Ha Long Marina Urban Area

SUN GROUP_InterContinental Da Nang Sun Peninsula Resort

FLC_Luxury Resort Sam Son
SUN GROUP_Premier Village Da Nang City

VINGROUP_Vinpearl Luxury Da Nang

SUN GROUP_Premier Condotel
Da Nang City
EMPIRE GROUP_CocoBay Da Nang

PHU QUOC CENTRAL COAST

FLC_Quy Nhon Beach & Golf Resort
BIM
Intercontinental
VINGROUP_Vinpearl Resort and
VINGROUP_Vinpearl Resort & Villas
Goft
Nha Trang City

CEO GROUP_Sonasea Phu Quoc SOUTH VINGROUP_Vinpearl Beachfront

Condotel Nha Trang City

SUN GROUP_Premier Residence

Phu Quoc Emerald Bay VINGROUP_Vinpearl Empire Condotel Nha
Trang 47

SECOND HOME MARKET

Asking Selling Price on Upward Trend

Condo-tel Price (US$/sm, excluding VAT) Vacation Villa Price (US$/GFA sm, excluding VAT)

3,000 3,000
Price of Condo-tel (US$/sm)

Price of Vacation Villa

2,500 2,500
(US$/sm)

2,000 2,000

1,500 1,500

1,000 1,000

500 500

0 0
2015 2016 2017 2015 2016 2017

Source: CBRE Vietnam Q4 2017.

SECOND HOME MARKET

Achievable Rental Yields vs Guaranteed Yields

•Rental Yields: 5-10% •Rental Yields: 5-9%

•Guaranteed Yields: 8-12% •Guaranteed Yields: 8-10% (5-
(5-10 years) 10 years)
High-end condo-tel High-end condo-tel
NHA
DA NANG
TRANG

PHU
PHUKET
QUOC
Vacation Villa Vacation Villa
•Rental Yields: 6-9% •Rental Yields: 4-6%
•Guaranteed Yields: 8-10% •Guaranteed Yields: 6-7% (5-
(5-10 years) 15 years)

Note: The yields are obtained from major selected projects

49
Source: CBRE Vietnam Q4 2017.

HOSPITALITY MARKET

More Protection for Buyers Needed

Khanh Hoa Province to set up Bavico to return condotel, asking for

inspection team for ALMA project 50% decrease in guaranteed yield
 SECOND HOME + HOTEL MARKET

Total leasable stock in Nha Trang by 2020: 2017: 24,785 keys By 2020: 34,249 keys
(hotel* + condo-tel + villa) launched keys
20
1 3 7 8 9 10 12 16 17 19
22
23 2 4 5 6 11 13 14 15 18
21

* Only 4-5 star hotels Existing projects Future Projects

Source: CBRE Vietnam; Photo Credit: Nguyen The Duong

1 Vinpearl Beachfront Condotel - 40Fl 7 Panorama Condotel - 39Fl
2 Starcity Nha Trang - 21Fl 8 AB Central Square - 36Fl
3 Citadines Bayfront Nha Trang - 26Fl 9 Vinpearl Empire - 41Fl
4 Muong Thanh Luxury Hotel - 45Fl 10 Tropicana - 49Fl x 2
5 Novotel Hotel - 18Fl 11 Havana Nha Trang Plaza - 42Fl
6 Ibis Styles Hotel - 25Fl 12 Ariyana Smart Condotel - 28Fl
13 The Costa-InterCon Hotel - 19Fl-29Fl 19 Royal Marina Complex - 32Flx2
14 Sheraton Hotel - 33Fl 20 Marriott Courtyard Hòn Tằm
Hyatt Regency Cam Ranh Bay resort &
15 Nha Trang Center - 20Fl 21
spa
16 Gold Coast Condotel - 40Flx2 22 Radisson Blu Cam Ranh Bay
17 Ocean Gate - 40Fl 23 Manna Luxury Holiday Resort
18 Muong Thanh Grand Hotel - 48Fl

SECOND HOME + HOTEL MARKET

Total leasable stock in Da Nang by 2020: 2017: 18,050 keys By 2020: 34,599 keys
(hotel* + condo-tel + villa) launched keys
16 17
1 3 5 6 7 14
18 13
9 19 20
22 8
2 4 12 15
11
21
10

* Only 4-5 star hotels

Source: CBRE Vietnam; Photo Credit: Nguyen The Duong Existing projects Future Projects
1 Cocobay – 50F 7 Hyatt Place 13 Vinpearl Riverfront – 36 Fl 19 Marriott Courtyard Da Nang
2 Ocean Suites - 9Fl 8 OceanViews- 21Fl 14 Novaland – 29Fl 20 Movenpick Hotel and Residences
3 Anvie Resort – 18Fl 9 Wyndham Soleil – 50Fl x 4 15 Fhome – 27Fl x 2 21 Time Square Da Nang
4 Hyatt Regency – 12FL 10 Central Coast - 39Fl 16 Katsutoshi Grand house- 22Fl 22 Mai House Hoi An
5 Ariyana Resort & Suites- 25Fl x 3 11 Alphanam Luxury- 33Fl 17 Citadines Blue Cove - 27Fl x 2
6 Premier Heritage – 26-35 Fl x 5 12 Fusion Suites – 21F 18 Southern Tran Thi Ly Bridge
SECOND HOME + HOTEL MARKET

Total leasable stock in Phu Quoc by 2020: 2017: 5,639 keys By 2020: 15,600 keys
(hotel* + condo-tel + villa) launched keys
6 16 19
3
4 8 11
1 2 5 7 9 10 12 13 14 15 17 18

Source: CBRE Vietnam
* Only 4-5 star hotels Existing projects Future Projects
.

1 Vinpearl Phu Quoc Resort 6 Movenpick Phu Quoc 11 Salinda Phu Quoc 16 InterContinental Phu Quoc
2 Vinpearl Villa Phu Quoc 7 Chen Sea Resort 12 Mercure Phu Quoc 17 JW Marriott Phu Quoc
3 Crowne Plaza Phu Quoc Starbay 8 The Shells 13 Sol Beach House Phu Quoc 18 Premier Village Phu Quoc
4 Nam Nghi 9 La Veranda Resort 14 Sonasea Villas & Resort 19 Hon Thom Resort
5 Fusion Resort Phu Quoc 10 Long Beach Resort 15 Sunset Sanato Resort 20

HOSPITALITY MARKET

2018 Trends

Dominance of China and Korea source markets

Chinese and Koreans will continue to lead the number of tourist arrivals in Vietnam.

Law on SEZ to ignite interest in the proposed zones

With favorable investment policies, and tourism as a key industry, the proposed SEZ will attract huge interest.

Sustainability a key concern

Bigger and taller doesn’t mean more beautiful. Long-term perspective is required.

Legal framework for condo-tel

Draft on Amended Land Law, if passed, will boost demand for condotel market.
HCMC CONDOMINIUM

2017 Key Points

1 Drop in Launches

2 Continued Expansion of Mid-end Segment

3 Increase of Primary Price

4 Compression of Rental Yield

56
HCMC CONDOMINIUM

2017 Market Snapshot

31,106 units launched from 70 projects -18% y-o-y
Luxury High-end Mid-end Affordable

1 new launch 14 new launches 44 new launches 11 new launches

102 units 6,406 units 19,857 units 4,741 units
New launch ▼ 96% y-o-y ▼ 46% y-o-y ▲ 4% y-o-y ► 0% y-o-y

4,386 US$/sm 2,123 US$/sm 1,175 US$/sm 753 US$/sm

▲ 2% y-o-y ▲ 4% y-o-y ▲ 5% y-o-y ▲ 3% y-o-y
Selling Price (*)

660 units 6,755 units 19,745 units 5,745 units

▼ 68% y-o-y ▼ 38% y-o-y ▲ 29% y-o-y ▼ 11% y-o-y
Sold units
(*) Selling price excludes VAT and quotes on NSA LUXURY: >3.500 USD/sm
HIGH END: 1.500 - 3,500 USD/sm
Source: CBRE Vietnam Q4 2017. MID END: 800 - 1.500 USD/sm
AFFORDABLE: <800 USD/sm
57

HCMC CONDOMINIUM

New Launch Supply Decreased

New launch supply by year

45,000 -18% y-o-y

Inflation 3.5%
40,000
New launch supply (units)

Interest 6.5%
35,000
30,000
25,000
-50% y-o-y
20,000
Inflation 19%
15,000 Interest 14%
10,000
5,000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Luxury High-end Mid-end Affordable

31,106 units were launched in 2017: lower than the past two years but still higher than
5-year average (increase by 65% from 2014)
Source: CBRE Vietnam Q4 2017. 58
HCMC CONDOMINIUM

Mid-end Segment Continued To Expand, Leading to a more Balanced Market

New launches by segments Home buyers demand by segments

100%
20%
80%
36% High-end

60% 50% Mid-end

40%
30% 64%
Affordable
40%
44%

20%

0% Batdongsan.com.vn
2007 2015 2016 2017
11M/2017: From a total of 86 million search
Luxury High-end Mid-end Affordable
visitors, 44% looked for mid-end condominium
Source: CBRE Vietnam, Q4 2017.

Source: VRES
59

HCMC CONDOMINIUM

East and South as Established Clusters, Not Yet for Others

District 2

THE EAST
 35% of Accumulated Supply
 CAGR (2014-2017): 22%
 CAGR (2017-2020F): 12%

Binh Thanh

District 1

District 4 District 7
THE SOUTH
 31% of Accumulated Supply
 CAGR (2014-2017): 18%
 CAGR (2017-2020F): 10%
60
Binh Chanh
HCMC CONDOMINIUM

Local Developers Dominated the market, Foreign Share Increased

2015 launches 2016 launches 2017 launches

11%
16%
22%

78%
84%
89%

41,581 units 38,491 units 31,106 units

Foreign developers Local developers

Source: CBRE Vietnam, Q4 2017.
61

HCMC CONDOMINIUM

Sold Units: Decreased from Last Year, but for the First Time Number of Sold Units Higher than New
Launch Supply
Number of sold units

40,000
-5% y-o-y
35,000
30,000
25,000
Sold units

20,000 32,905 units sold

15,000
10,000
60% in Mid-end segment
5,000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Luxury High-end Mid-end Affordable

Affordable
ABSORPTION RATE Mid-end
in Newly Launched High-end
Projects Luxury
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
62
Source: CBRE Vietnam, Q4 2017.
HCMC CONDOMINIUM

Primary Selling Price - Slightly Increased In All Segments

Primary Selling Price

6,000 Luxury: High end: Mid end: Affordable:

▲ 2% by year ▲ 4% by year ▲ 5% by year ▲ 3% by year
5,000
Primary price (US$/sm)

4,000

3,000

2,000

1,000

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Luxury High-end Mid-end Affordable
(*) Selling price excludes VAT and quotes on NSA

Source: CBRE Vietnam Q4 2017

63

HCMC CONDOMINIUM

Primary Selling Price: Binh Thanh, District 4 and District 2 saw the highest growth
Binh Thanh
District 2
3,000
2,500
Primary price

14% 4%
(US$/sm)

Primary price

2,000 2,000
(US$/sm)

1,500
1,000 1,000
500
0
0
2014 2015 2016 2017
2014 2015 2016 2017
High-end Mid-end
High-end Mid-end
District 4 District 7
2,500 2,500
2,000 6% 2,000 0%
Primary price
Primary price

1,500
(US$/sm)
(US$/sm)

1,500
1,000 1,000
500 500
0
0
-500 2014 2015 2016 2017
2014 2015 2016 2017
High-end Mid-end High-end Mid-end
Source: CBRE Vietnam Q4 2017. 64
Selling price excludes VAT and quotes on NSA
HCMC CONDOMINIUM

Handed-over Units Increased, Buy To Let Investors To Watch Out

Number of completed units - HCMC Rental yield by district

9%
40,000
35,000 8%
30,000

Rental yield (%)

7%
25,000
Units

20,000 6%
15,000 5%
10,000
4%
5,000
0 3%
2014 2015 2016 2017 2018f 2019f 2020f 2015 2016 2017

Luxury High-end Mid-end District 1 District 2 Binh Thanh

District 4 District 7
Source: CBRE Vietnam Q4 2017.

65

HCMC CONDOMINIUM

CBRE Sales: More Foreign Buyers, Bigger Unit Size Required*

Buyers by Origin (*) Buyers by unit size

2016 2017 70%

47% 36% 60%

Percentage %

50%
14% 9%
40%

30%
6% 8%
20%

6% 8% 10%

0%
5% 8% >60 sm 60 - 90 sm > 90 sm

Other 22% Other 31% 2016 2017

(*) Note: The analysis above is based on CBRE Vietnam’s residential closed
deals and should not be used as a marketwise benchmark
Source: CBRE Vietnam Q4 2017.
 HCMC CONDOMINIUM

Future supply in 2018

67 projects 1
36,122 units
53% in Mid-end, 33% in 4
6
High-end

1 3

1 1
1 14
5
1
1
1
3

5
12
4
3
Source: CBRE Vietnam Q4 2017. • Bubble size: size of new launch supply in that district
• Number in the bubble illustrates the number of 67
projects launched in the period

HCMC CONDOMINIUM

New Launch Supply Will Be Higher Than 2017 While Sold Units Will Be Stable
New launch supply by year Sold unit by year

45,000 Forecast 40,000 Forecast

40,000 35,000
New launch supply (units)

35,000 30,000
30,000
25,000
Sold units

25,000
20,000
20,000
15,000
15,000
10,000 10,000

5,000 5,000

0 0
2012

2013

2014

2015

2016

2017

2012

2013

2014

2015

2016

2017
2018F

2019F

2020F

2018F

2019F

2020F

Luxury High-end Mid-end Affordable Luxury High-end Mid-end Affordable

Source: CBRE Vietnam Q4 2017.

68
HCMC CONDOMINIUM

Primary Price to Increase

Primary price

6,000 Forecast

5,000
Primary price (US$/sm)

4,000

3,000

2,000

1,000

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F
Luxury High-end Mid-end Affordable

Source: CBRE Vietnam Q4 2017.

69

HCMC CONDOMINIUM

2018 trends

Strenthening of
Big Data and Market Intelligence Urban Regeneration
Township Developments

Material Marketing and Branding matters even more (make better use of
Customization technology)

The rise of Thu Thiem Luxury - Be careful what you wish for!

Traffic jams continue as car/bike sales hike while roads do not increase and 2,000 babies
are born every week in HCMC

70
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Thank You

For more information regarding this presentation please contact:

CBRE Vietnam Co., Ltd. – Research & Consulting

T +84 28 3824 6125

F +84 28 3823 8418
Email: research.vietnam@cbre.com

All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE.
Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the
date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or
representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and
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