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Fearless Forecast “Do not let a good crisis go to waste” J a n u a r y 2 0 1 2
Presented by:
Marc Townsend
Managing Director
CB Richard Ellis (Vietnam) Co., Ltd.
CBRE Vietnam CBRE Vietnam | Page 2 Fearless Forcast 2012
HCMC 2011… Changes
Times Square Saigon M&C Tower Eden A
Taken on January 12, 2012
Taken on January 2, 2011
CBRE Vietnam CBRE Vietnam | Page 3 Fearless Forcast 2012
HCMC 2011… Changes
Vietcombank Tower VietinBank BIDV Tower
Taken on January 12, 2012
Taken on January 2, 2011
CBRE Vietnam CBRE Vietnam | Page 4 Fearless Forcast 2012
HCMC 2011… Changes
Saigon Centre
(phase 2) Ben Thanh Towers
Taken on January 12, 2012
Taken on January 2, 2011
CBRE Vietnam CBRE Vietnam | Page 5 Fearless Forcast 2012
2011 MOST Fearless Forecasts
Office Tenants
• Multiple choices and softening rents
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 CBRE Vietnam | Page 6 Fearless Forcast 2012
2011 MOST Fearless Forecasts
Investors
• Property investment remains dangerous for your health
• 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 IPO’s 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 CBRE Vietnam | Page 7 Fearless Forcast 2012
Source: Historical data by GSO, 1GSO , 2SBV, 3 IMF, 4 SJC, 5 World Bank, 6 Ministry of Investment, 7Oxford Economics
2011 Vietnam Economic Overview 2008 2009 2010 2011 e 2012 f
GDP Growth Rate (y-o-y)
6.2% 5.3% 6.8% 5.91 6.3 3
Lending Rate 12% 12.75%
Down from 21% in Q3
16%-17.0% (Late 2010)
22% - 25%2 N/A
Inflation (Average, y-o-y)
22.9% 6.9%1 9.2%
(Dec‘10: 11.8%) 18.58%1 12.1% 3
Exports US$62.7 bil US$57.1 bil US$71.6 bil US$96.3 bil US$105.4 5
Imports US$80.7 bil US$69.9 bil US$84.0 bil US$105.8 bil US$113.3 5
Gold Price (per Tael)
VND17.8 mil (Dec. 31, 2008, up
7.2% y-o-y)
VND26.7 mil (Dec. 31, 2009, up 50% y-o-y)
VND36.1 mil (Dec. 31, 2010, up
35.2% y-o-y)
VND41.8mil4
(Dec. 30,2011. up 15.8% y-o-y)
N/A
US$/VND (Commercial banks)
17,400 (Dec. 31, 2008)
18,497 (Dec. 31, 2009)
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
US$/VND (Unofficial market)
17,510 (Dec. 31, 2008)
19,470 (Dec. 31, 2009)
21,010 (Dec. 31, 2010)
21,275 (Dec. 31, 2011)
N/A
Committed FDI US$71.7 bil US$22.6 bil 1 US$18.6 bil
(US$6.8 bil real estate)
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$11 bil1 N/A
CBRE Vietnam CBRE Vietnam | Page 8 Fearless Forcast 2012
2011 Regional Economic Comparison
Source: Oxford Economics, Vietnamese General Statistics Office, World Bank, Goldprice.org, goldpricethai.com, pecunix.com
Hong Kong Thailand Singapore China Malaysia Vietnam Indonesia
GDP
Growth Rate 4.9% 1.6% 5.0% 9.0% 4.9% 5.9% 6.3%
Consumer Price
Index 5.3% 3.9% 5.0% 5.6% 3.2% 18.6% 5.4%
Gold Price
( per gram in
US$ equivalent)
US$51.80 US$50.50 US$52.18 US$51.88 US$52.17
US$53.00 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 $38.2 bn
FDI (net inflow
in current US$,
2010)
$68.9 bn $6.3 bn $38.6 bn $185.1 bn $9.5 bn $8.0 bn
(Source: World
Bank)
$13.3 bn
CBRE Vietnam CBRE Vietnam | Page 9 Fearless Forcast 2012
A look ahead to 2012
2012 GDP
(% y-o-y)
CPI
(% y-o-y)
Vietnam 5.8 11.5
Hong Kong 3.5 3.6
Thailand 4.5 2.9
Singapore 3.3 2.8
China 8.1 3.5
Malaysia 4.9 2.8
Indonesia 6.2 5.0
Source: Oxford Economics. Note: GDP growth for Vietnam in 2012, The World Bank, IMF and ADB range between 6.1% – 6.5%.
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2000
Q1
2001
Q1
2002
Q1
2003
Q1
2004
Q1
2005
Q1
2006
Q1
2007
Q1
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
World Western Europe Asia-Pacific United States
With demand from the eurozone and US
expected to remain weak for some time,
emerging East Asia should continue to work
toward increasing intraregional trade and
financial integration, and expanding links
with other emerging economies.
- ADB, Asia Economic Monitor, December 2011 -
CBRE Vietnam CBRE Vietnam | Page 10 Fearless Forcast 2012
2011 Economic Overview – Inflation
Inflation continues…
• Price of rebar in HCMC:
– Dec. 29 2010 – 15,900 VND/Kg
– Dec. 29 2011 – 19,600 VND/Kg
• Price of cement in HCMC:
– Dec. 29 2010 – 1,520 VND/Kg
– Dec. 29 2011 – 1,980 VND/Kg
• Price of one carton of Heineken in HCMC:
– Dec. 29 2010 – 316,000
– Dec. 29 2011 – 330,000
• Price of food and foodstuffs:
– Dec. 2010: 16.2% y-o-y
– Dec. 2011: 24.8% y-o-y
• CPI figure
– Dec. 2010: 11.8% y-o-y
– Dec. 2011: 18.13% y-o-y
– 2011: 18.58% y-o-y
Time A95 A92 Chg Pct. Chg
Before 16,800 16,300
15-Dec-09 16,450 15,950 (350) -2.15%
14-Jan-10 16,900 16,400 450 2.82%
21-Feb-10 17,490 16,990 590 3.60%
27-May-10 16,990 16,490 (500) -2.94%
8-Jun-10 15,990 (500) -3.03%
9-Aug-10 16,900 16,400 410 2.56%
24-Feb-11 19,800 19,300 2,900 17.68%
29-Mar-11 21,800 21,300 2,000 10.36%
26-Aug-11 21,300 20,800 (500) -2.35%
Source: General Statistics Office, Petrolimex
CBRE Vietnam CBRE Vietnam | Page 11 Fearless Forcast 2012
-
2
4
6
8
10
12
14
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
p
20
11
p
FD
I (U
S$ B
illio
ns)
Implemented FDI
2011 Economic Overview – FDI
36.8%
27.3%
9.3%
1.7%
24.9%
COMMITTED FDI, 2010
Real estate
Processing Manufacturing Industry
Construction
Hotels and restaurants
Others
5.8%
48.5%
8.5%
2.9%
34.3%
COMMITTED FDI, 2011
Real estate
Processing Manufacturing Industry
Construction
Hotels and restaurants
Others
Source: Ministry of Planning & Investment
CBRE Vietnam CBRE Vietnam | Page 12 Fearless Forcast 2012
2011 Economic Overview – Currencies
As per 2010, in 2011 the US Dollar appreciated in Vietnam.
However, in 2011 the US Dollar also appreciated against the
Thai Baht and Singapore Dollar.
Source: Google Finance
CBRE Vietnam CBRE Vietnam | Page 13 Fearless Forcast 2012
2011 Vietnam Stock Market
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
300
350
400
450
500
550
4-Jan 1-Feb 1-Mar 29-Mar 26-Apr 24-May 21-Jun 19-Jul 16-Aug 13-Sep 11-Oct 8-Nov 6-Dec
Tra
din
g V
alu
e (Billions
VN
D)
Index
Trading value VNIndex
Source: FPT Securities
At the beginning of 2011, some expected a rise. Going into 2012,
some are wondering where the bottom is.
VN Index drops 27.5%, real estate companies drop XYZ%
Little support from those holding gold.
CBRE Vietnam CBRE Vietnam | Page 14 Fearless Forcast 2012
2011 Regional Stock Market Comparison
Source: ADB
CBRE Vietnam CBRE Vietnam | Page 15 Fearless Forcast 2012 Source: vov.vn; giadinh.net.vn; tuoitre.vn ; 1star1objet.fr
2012: Gold Supply in Vietnam Increases
The magic from Trinh Duc’s 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
CBRE Vietnam CBRE Vietnam | Page 16 Fearless Forcast 2012
2011 International Arrivals
2011: 6 million international arrivals to Vietnam (19.1% y-o-y) and 3.5 million to HCMC (13% y-o-y)
Source: General Statistics Offices; bistrochic.net
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
0
1
2
3
4
5
6
7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Millions
Vietnam HCMC
CBRE Vietnam CBRE Vietnam | Page 17 Fearless Forcast 2012
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); Car Sales by Manufacturer in Vietnam
79%82%
7%
2%
34% 34%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mekong (Fiat,
Ssangyong, PMC)
VMC (BMW,
Mazda, Kia)
GM Daewoo VinaStar
(Mitsubishi)
Mercedes-Benz
Vietnam
Visuco (Suzuki) Toyota
$.0
$20000.0
$40000.0
$60000.0
$80000.0
$100000.0
$120000.0
2007 2008 2009 2010 11M/2011
Car Sale
s (u
nit)
CAR SALES IN VIETNAM
CBRE Vietnam CBRE Vietnam | Page 18 Fearless Forcast 2012
2011 Government Decrees
New in 2011:
• Pricing in Dong
– Decree 95/2011/ND-CP states that VND must be used for quotation or advertising of goods and services, etc.
• Relating to Apartment Service Fees – Decision No. 4520/QĐ-UBND provides that the statutory Apartment Service Fee Rates shall be
applied only when the parties has not yet agreed on the Apartment Service Fee in advance
• Non-Agricultural Use Tax – Decree No. 53/2011/ND-CP
– Pilot program for NALU Tax, Prior to enforcement of Decree No. 53 on January 01, 2012, The Ministry of Finance is unrolling a pilot program to collect non-agricultural land-use tax in certain local areas of Hà Nội, Cần Thơ cities and the Bắc Ninh province.
– The pilot stage will focus on identifying taxation areas as well as connecting and exploiting the databases of local agencies on tax and natural resources.
• Requirement for Environmental Impact Statement – Decree No. 29/2011/ ND-CP dated April 18, 2011 is the first guidance on the assessment on
environmental impact
– Proscribes many requirements and procedures to that are required for specific development projects
CBRE Vietnam CBRE Vietnam | Page 19 Fearless Forcast 2012
The Original Golden Sites
Of the 20 Golden sites:
• 2 completed
• 2 under development
• 16 sites awaiting action
CBRE Vietnam CBRE Vietnam | Page 20 Fearless Forcast 2012
Infrastructure 2011 Milestones
Roadways
• T3 – Thu Thiem Tunnel
• The ten year Nhieu Loc - Thi Nghe Canal Road widening project is completed
• On August 24, the first Bus Rapid Transport (BRT) route in the city opened from Ben Thanh Market, to Mien Tay Bus Station.
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 Nang’s new airport terminal opens!
• Prime Minister Dung officially approved Long Thanh International Airport’s 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).
Nhieu Loc - Thi Nghe Canal Road Source: www.info.vn
Da Nang New Terminal Source: Tuoi Tre
CBRE Vietnam CBRE Vietnam | Page 21 Fearless Forcast 2012
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.
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 city’s
transportation.
East – West Highway
CBRE Vietnam CBRE Vietnam | Page 22 Fearless Forcast 2012
All Future Projects HCMC Hanoi Da Nang Can Tho Nha Trang
(Khanh Hoa)
Vung
Tau
Hai
Phong
Office 267 245 43 22 16 35 13
Retail 86 33 18 7 4 11 5
Hospitality
and SA 44 53 28 12 37 19 6
Residential 311 268 134 10 22 32 9
Projects Under
Construction HCMC Hanoi Da Nang Can Tho
Nha Trang
(Khanh Hoa)
Vung
Tau
Hai
Phong
Office 166 88 15 15 6 19 7
Retail 42 24 6 6 3 1 3
Hospitality
and SA 25 32 17 5 10 8 2
Resi 142 104 19 3 5 14 5
According to BCI Asia…
Source: www.bciasia.com; CBRE Vietnam
CBRE Vietnam CBRE Vietnam | Page 23 Fearless Forcast 2012
Regional Rental Comparison
$.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
Manila Bangkok KL Taipei Seoul HCMC Hanoi Shanghai
- Pudong
Beijing Singapore Tokyo Hong
Kong
Rents
(U
S$
/psm
/M
onth
)
GRADE A OFFICE RENTS IN KEY ASIAN MARKETS
$.0
$200.0
$400.0
$600.0
$800.0
$1000.0
$1200.0
$1400.0
$1600.0
Manila Bangkok HCMC Hanoi Taipei Singapore Shanghai KL Beijing Tokyo Hong Kong
Rents
(U
S$
/psm
/M
onth
)
PRIME RETAIL RENTS IN KEY ASIAN MARKETS
$.0
$5000.0
$10000.0
$15000.0
$20000.0
$25000.0
$30000.0
$35000.0
$40000.0
Beijing Shanghai Guangzhou Hong Kong Singapore Bangkok HCMC Kuala Lumpur
$.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
LUXURY APARTMENT PRIME PRICES & RENTS IN KEY ASIAN MARKETS
AVERAGE PRIME CAPITAL VALUES (US$ psm) AVERAGE PRIME RENTS (US$ psm/month)
40
90
140
190
Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11
RevPAR (MAT) Indexed
Vietnam Singapore
Source: STR &
Local Currency
CBRE Vietnam CBRE Vietnam | Page 24 Fearless Forcast 2012
Office - Rents
$20
$30
$40
$50
$60
2009 2010 2011
$10
$15
$20
$25
$30
2009 2010 2011
$10
$15
$20
$25
$30
2009 2010 2011
Grade A Rents (US$ psm)
Grade B Rents (US$ psm)
Grade C Rents (US$ psm)
Rents 3 y ear 1 y ear 1 quarte r
G rade A -55.0% -8.3% -5.8%
Grade B -44.0% -7.5% -1.5%
Grade C -41.5% -8.5% -3.0%
CBRE Vietnam CBRE Vietnam | Page 25 Fearless Forcast 2012
Office - Vacancy
0%
10%
20%
30%
40%
2009 2010 2011
0%
5%
10%
15%
20%
2009 2010 2011
0%
5%
10%
15%
20%
2009 2010 2011
Grade C Vacancy
Grade B Vacancy
Grade A Vacancy Vacancy 3 year 1 y ear 1 quarte r
G rade A 23.4 pt -14.6 pt -6.1 pt
G rade B 14.4 pt 3.3 pt -0.7 pt
G rade C -2.6 pt -1.9 pt -0.1 pt
CBRE Vietnam CBRE Vietnam | Page 26 Fearless Forcast 2012
Office - Absorption
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2007 2008 2009 2010 2011
NET ABSORPTION BY GRADE
Grade A Grade B Grade C
0
50,000
100,000
150,000
200,000
250,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
NET ABSORPTION BY YEAR
CBRE Vietnam CBRE Vietnam | Page 27 Fearless Forcast 2012
$900
$930
$960
$990
$1,020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011
$650
$670
$690
$710
$730
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011
Secondary Asking Price (US$/sm)
$0
$2,000
$4,000
$6,000
2007 2008 2009 2010 2011
Luxury High-end
Mid-end Affordable
3 Year Residential Price Movement
$4,000
$4,100
$4,200
$4,300
$4,400
$4,500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011
Luxury Condominium (US$ psm)
$1,800
$1,830
$1,860
$1,890
$1,920
$1,950
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011
High-end Condominium (US$ psm)
Mid-end Condominium (US$ psm) Affordable Condominium (US$ psm)
CBRE Vietnam CBRE Vietnam | Page 28 Fearless Forcast 2012
Take-up vs. Hangover
Unsold Units Accumulated (Units)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011
To
tal U
nso
ld U
nit
s
Un
sold
Un
its
by S
eg
men
t
Luxury High-end Mid-end Affordable Total
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011
Luxury High-end Mid-end Affordable
Take-Up Rate (%)
Some are waking up with their
head in their hands
CBRE Vietnam CBRE Vietnam | Page 29 Fearless Forcast 2012
The Residential Nightmare
Q1 5,078 launches
2,229 sales
Q2 4,926 launches
1,390 sales
864 launches
1,867 sales
Q3 1,096 launches
846 sales
Q4
Resolution 11 Dong Devaluation
(9.3%)
US$6,000/unit
in Binh Duong
2012 Death,
Discount or
Opportunity
?
Doc. 8844 /NHNN-CSTT: Remove 4
real estate groups out of the non-
productive outtsatnding loan category
Goldora Villa
sold to ICC Discount Headlines
Property sector, the most attractive
investment channel, but more
cautious to invest in 1-3 years
(survey by Grant Thornton Vietnam)
More incentives to
stimulate sales
More strictly control on
dolarisation price list
in VND
The Ascott signed
Diamond Island
(D.2)
Int’l banks stopped
mortgage lending
CBRE Vietnam CBRE Vietnam | Page 30 Fearless Forcast 2012
Figures consider the major cities of HCMC and Hanoi;
Assumes that 19% of household income is saved;
Generalised, as assumes no mortgages/family contributions – though majority of purchases are still without a mortgage;
AFFORDABILITY(Something to think about for the year ahead)
Data Sources: TNS, Neilson and CBRE Assumptions
Social
Grouping
% of Total
Households
Annual
Income
(US$)
Annual
Saving
(US$)
YEARS TO AFFORD
An Affordable
Condo
($42,000)
A Mid-end
Condo
($72,000)
A High-end
Condo
($135,000)
A Luxury
Condo
($342,000)
A Villa
($350,000)
A Townhouse
($90,000)
A2 1% 22,845 4,341 10 17 31 79 81 21
A1 10% 11,423 2,170 19 33 62 158 161 41
A 9% 7,996 1,519 28 47 89 225 230 59
B 47% 7,425 1,411 30 51 96 242 248 64
C 21% 2,856 543 77 133 249 630 645 166
D 9% 1,713 326 129 221 415 1,051 1,075 276
E 3% 1,428 271 155 265 498 1,261 1,290 332
F 1% 571 109 387 664 1,244 3,152 3,225 829
Residential For Sale - 2011
CBRE Vietnam CBRE Vietnam | Page 31 Fearless Forcast 2012
Retail
The past 18 months has seen shopping centre
rentals create a buzz;
2012, we expect department store rentals to come
back to the forefront:
• Lack of quality space in the CBD;
• Still a softening on rents
2012, shopping centre rentals in the CBD to remain
soft;
• Saigon Centre phase 2, the CBD retail hub on the
horizon;
• First new supply in CBD with department store;
Department Store vs. Shopping Centre
1st quality shopping centre outside the CBD –
Crescent Mall;
However, rentals still softening as retailers have
multiple options and established SHOPHOUSE
location remain popular;
Non-CBD Asking Rents (US$/sm/month)
Source: CBRE Vietnam
$0
$20
$40
$60
$80
$100
2008 2009 2010 2011
Department Store Shopping Centre
CBD Asking Rents (US$/sm/month)
Source: CBRE Vietnam
$0
$20
$40
$60
$80
$100
$120
$140
2008 2009 2010 2011
Department Store Shopping Centre
CBRE Vietnam CBRE Vietnam | Page 32 Fearless Forcast 2012
Retail
New retail entrant - Index Living Mall, District 4:
• Single retailer operating 7,000sm
• Homeware and furnishings
• Success will be key for other similar concepts
New Brands
NEW BRANDS – 2011:
• Luxury brands: Christian Louboutin, Chanel,
Burberry, Cartier, Ralph Lauren
• Cosmetic: Dior, Chanel, M.A.C
• Fashion: GAP, DKNY, Warehouse, LYN Around
• Accessories: Coach, Charles David
• Fast food: Subway, Burger King, Domino Pizza
• Baskin Robbins Ice-cream – re-enter
NEW BRANDS – 2012?
CBRE Vietnam CBRE Vietnam | Page 33 Fearless Forcast 2012
Hotels 2012
Occupancy and RevPAR both
showing signs of growth in 2011.
Coastal markets such as Phu Quoc,
Nha Trang and Da Nang showed a higher
RevPAR growth rate than HCMC:
20
25
30
35
40
45
50
55
60
2009 2010 2011F
RevPAR (US$/room/night)
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 CBRE Vietnam | Page 34 Fearless Forcast 2012
Flight Schedule
From Airlines Day of Service Capacity per
flight (pax)
Max. pax
per day
Max. pax
per year
HCMC Vietnam Airlines Ten times daily 68 680 248,200
HCMC Air Mekong Five times daily 90 450 164,250
Rach Gia Vietnam Airlines Once daily 68 68 10,608
Hanoi Air Mekong Once daily 90 90 32,850
Can Tho Vietnam Airlines Once daily 68 68 10,608
Total 18 flight per day 1,288 466,516
From Airlines Day of Service
Capacity
per flight
(pax)
Total pax
per day
Total pax
per year
HCMC Vietnam Airlines Four times daily 162 648 236,520
Hanoi Vietnam Airlines Three times daily 162 486 78,732
Vladivostok OrenAir 1 flight every 10 days 190
Total 07 flight per day 1,134 315,252
=> 18 flights to Phu Quoc per day, compared to just 10 flights in 2010
=> 07 flights to Nha Trang per day
CBRE Vietnam CBRE Vietnam | Page 35 Fearless Forcast 2012
0
20
40
60
80
100
120
2007 2008 2009 2010 2011F
RevPAR (US$/room/night)
5-star 4-star 3-star
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
CBRE Vietnam CBRE Vietnam | Page 36 Fearless Forcast 2012
Da Nang Hotels/Resorts/2nd Home 2012
2011 y-o-y increase in visitors was 34%, of which international visitors
increased 44% y-o-y
The Hyatt Regency came online in Q4 with 200 five-star rooms, 2012
expects InterContinental, Le Meridien, Melia and Pullman to enter DN
In 2012, the DN hospitality market will target Russian tourists with direct
Russia – Da Nang flights in consideration
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 CBRE Vietnam | Page 37 Fearless Forcast 2012
Serviced Apartments 2011
Demand derived from 3 sources: • Professional expatriates – main source
– Both from Asia and the West – Hanoi: employees in the Embassies
• Returning Overseas Vietnamese • Wealthy Vietnamese ← a new and growing trend
“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
H1/2011 work permits issued
to foreigners in HCMC: • Achieved 85.1% of entire 2009
• Down 16.5% against H1/2010
$0 -$1200 $1200 - $2500 $2500 - $3500 $3500+
Q4/2010 10.0% 40.0% 40.0% 10.0%
Q1/2011 17.9% 41.5% 29.2% 11.3%
Q2/2011 20.5% 48.2% 24.1% 7.2%
Q3/2011 11.7% 52.1% 26.6% 9.6%
Source: CBRE Residential Leasing
Proportion of Housing Budget (US$/month)
Proportion of Requested Area (sm)
Source: CBRE Residential Leasing
0%
20%
40%
60%
80%
100%
Q1/2011 Q2/2011 Q3/2011 Q4/2011
0 - 60 60 - 100 100 - 160 160+
TOP DEMAND!
CBRE Vietnam CBRE Vietnam | Page 38 Fearless Forcast 2012
• Logistics component becomes a must in
industrial park zoning.
• Logistics to grow as Asian regional trade
buoys economy through Eurozone crisis
and slower US growth.
• Japanese investment KEY. Both from
Japan directly, and from Japanese
companies relocating out of Thailand.
• Potential growth areas: • Food & Beverage for South Vietnam
• Electronics for North Vietnam.
• 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.
ILS 2012 Forecast
CBRE Vietnam CBRE Vietnam | Page 39 Fearless Forcast 2012
The Rise of Investment - The Institutional Deal
And a notable variance in yield
At least three
more
institutional
deals to come
in 2012
Pacific Place, Hanoi
Q4 2010 – Reported 12%
CentrePoint, HCMC
Q2 2011 – Reported 10.6 – 11.3%
Saigon Tower, HCMC
Q4 2011 – Reported 8.5%
CBRE Vietnam CBRE Vietnam | Page 40 Fearless Forcast 2012
CBRE’s 10 Most Fearless Forecasts
1. Nguyen Trai still the retail king!
2. Square office buildings back in fashion! The best tenant deals will have happened
in the first half of 2012.
3. Any residential project that hasn’t broken ground will gravitate to the affordable
(new middle class, less than 21,000,000VND psm) segment.
4. Luxury residential in the CBD WILL sell.
5. Golf – Boom or Bust?!?
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 Vietnam’s 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
On December 31, 2012…
CBRE Vietnam CBRE Vietnam | Page 41 Fearless Forcast 2012
The most insightful real estate publication in Vietnam!
Plan your future with two quarter and eight quarter forward looking analysis.
CBRE Vietnam - HCMC & Hanoi Quarterly Reports
© 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.
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