CBRE Vietnam Market Outlook - EN - FINAL PDF

V I E T N A M R E A L E S TAT E
M A R K E T O U T LO O K 2 0 1 9
HO CHI MINH CITY

Wed, 9 Jan, 2019
VIETNAM
MARKET OUTLOOK 2019
CONTENT
01 02
HCMC OFFICE HCMC RETAIL
03 04
HCMC CONDOMINIUM HCMC LANDED PROPERTY
05
HCMC HOTEL
32
A S I A PAC I F I C R E A L E S TAT E M A R K E T O U T LO O K 2 0 1 9 VIETNAM
HCMC OFFICE
VIETNAM
HCMC OFFICE MARKET OUTLOOK 2019
THE FOUR STORIES
1 Landlord Market 2 Flexible Workspace &

Client Portfolio Restructuring
Limited Stock Rent Increase
3 Pre-commitment 4 Asset Optimisation
Construction Pre-commitment Early bird

30% 28% incentives
34
VIETNAM
2018 MARKET SNAPSHOT
GRADE A GRADE B
New Launch New Launch

NLA (sm) 0 3,600
= 0% y-o-y 0.1% y-o-y
US$/sm Asking Rent Asking Rent

/month $43.5 $23.4
15.8% y-o-y 10.8% y-o-y
1.4% q-o-q 1.5% q-o-q
Vacancy Rate Vacancy Rate

(%) 5.1% 1.8%
3.1 ppts y-o-y 1.1 ppts y-o-y
1.4 ppts q-o-q 0.2 ppts q-o-q
Note: Rent does not include Service Charge and 10% VAT 35
Source: CBRE Vietnam.
VIETNAM
GRADE A VACANCY INCREASED DUE TO TENANT CONTRACTION
HCMC Office, Rent and Vacancy by Year
50 10%
(US$/sm/month)
Asking Rent
40 8%
Vacancy Rate (%)

30 6%
20 4%
10 2%
0 0%
2014 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Grade A Rent Grade B Rent Grade A Vacancy Grade B Vacancy
Note: Asking rent does not include Service charge and VAT. 36
Source: CBRE Vietnam, Q4 2018.
VIETNAM
SPACE CONTRACTION
In Response To Rising Rental And Business Restructuring
Tenant Intentions, Based on Leasing Inquiries received by CBRE Vietnam in 2018
Home-shopping
Contraction 18%
Expansion Retail
New letting 8%
50% Finance/Banking ~10,000 sqm
Relocation
25% Real Estate
Media
Note: Based on total leasing inquiries received by CBRE Vietnam

37
VIETNAM
THE RISE OF PRE-COMMITMENT

Due To Changing Tenants’ Demand
Past Present
Tenants and Landlords typically wait for the Leasing negotiation can be started
development to be finished to start negotiating upon finishing of super structure
Viettel Saigon
OneHub Saigon Alpha Town
Complex: Centre P2:
20% 28%
30% 45%
2017 Etown Deutsches

Central: 2020F
Haus: 40%
45%
Source: CBRE Vietnam, Q4 2018. 38
VIETNAM
LARGE TENANCIES
F l e x i b l e W o r k s p a c e E x p a n s i o n & Q u a l i t y - M a x i m i z i n g Tr e n d
Tenants by Industry, Based on Transactions received

Major Office Transactions in HCMC, 2018
by CBRE Vietnam in 2018
No. Industry Purpose Grade NLA (sm)
1 Flexible Workspace New Letting B 5,400
Flexible Workspace 2 IT Relocation B 4,200

22%
26% 3 Media Relocation B 2,130
Services
4 Flexible Workspace Expansion C 2,010
Banking/Finance
5 IT Expansion A 2,000
Manufacturing 12% Insurance
6 Expansion C 1,786
TMI 17% 7 Flexible Workspace Expansion B 1,650
Others 8 Flexible Workspace New Letting B 1,200
16%
7% 9 Design Relocation B 1,200
10 Education Relocation B 1,151
Note: Based on total transactions received by CBRE Vietnam
39
VIETNAM
FLEXIBLE WORKSPACE DEMAND

Not just for Start-up/SMEs
New Tenant: MNCs and Big Companies Occupiers by Company Type
4%
10%
Start-up
18%
SME
Large Company
33% Corporation
13%
MNC
Others
23%

40
VIETNAM
HCMC FLEXIBLE WORKSPACE

S h a r p I n c r e a s e i n S u p p l y, Ye t Q u i c k l y A b s o r b e d
HCMC Flexible Workspace, Total Supply by Year 1997 2015 2017 2018
40,000 160%
Growth Rate (%)

30,000 +109% y-o-y 120% A US
GFA (sqm.)
Operator(s)
operator
20,000 80%
10,000 40% # of venues

3 3 3 2 1
by 2018
0 0%
2013 2014 2015 2016 2017 2018 Total GFA
4,029 4,500 4,450 6,334 5,425
(sm)
Total Supply (GFA) Growth Rate
HCMC FLEXIBLE WORKSPACE

Total supply (GFA): 37,780 sqm
Occupancy Rate: ~80%
VIETNAM
ASSET OPTIMISATION
Le Meridien Saigon Leman Luxury Apt
The Gold View
Estella Place Republic Plaza Saigon

42
Source: CBRE Vietnam. 42
VIETNAM
F U T U R E S U P P LY ( 2 0 1 9 - 2 0 2 1 ) 17 projects >360,000 sm NLA
No Project
1 Thaco Building
2 OneHub Saigon P.1
3 Viettel Complex P.2 16
4 Lim 3 2
5 Friendship Tower
6 Etown 5
7 Crescent Hub 6
8 Five Star 10
4
9 Phuong Long 5
3 8 13 15
10 Opal Office Tower
1
11 DHA Building 12 17
9
12 Alpha Town
13 Vertex Tower
14 UOA Tower
15 Nexus Tower 11 7
2019 completion
14
16 OneHub Saigon P.2 2020 completion
17 Saigon Centre P.3 2021 completion
VIETNAM
MARKET OUTLOOK
Low er R en tal Gr owth R a te Fo r Gr ade A
HCMC Office, Rent Forecast HCMC Office, Vacancy Forecast
$70
4% y-o-y 14%
33%
$60 12%
$50 4% y-o-y 10%
16%
$40 8%
6%
$30
4%
$20 2%
$10 0%
2016 2017 2018 2019F 2020F 2021F 2016 2017 2018 2019F 2020F 2021F
Grade A - CBD Grade A Grade B

44
VIETNAM
2019 MARKET TRENDS
1 2 3 4
Grade A rent will Grade A pre- Enterprise Flexible

increase slightly commitment is Solutions/ Workspace
expected to Rentalisation dual role
slow down
45
VIETNAM
A S I A PAC I F I C R E A L E S TAT E M A R K E T O U T LO O K 2 0 1 9 M A R K E T O U TVL IOE O
TNK A2M
019
HCMC RETAIL
46
VIETNAM
V I E T N A M R E TA I L MARKET OUTLOOK 2019
THE FOUR STORIES
1 The Rise of E-retailing 2 Local Brands To Go Global
PAY
3 Provincial Retail 4 HCMC Supply Reaches ~1 million sqm NLA
Construction
and opening of new
Bac Ninh, My
shopping malls in 2nd
Tho, Nghe tier cities 500K sqm 1 mil sqm
An, Son La….. 1996 2014 2018
47
VIETNAM
THE RISE OF E-RETAILING

E l e c t r o n i c Pa y m e n t , E - c o m m e r c e , Fo o d D e l i v e r y
Lala food delivery application

cease to exist?
Source: CBRE Research, VTV 48

VIETNAM
LOCAL BRANDS TO GO GLOBAL
Source: CBRE Research, Bizhub 49

VIETNAM
PROVINCIAL RETAIL
Ground-breaking of AEONMALL Shopping

Centre in Hai Phong
13-05-2018 - 20:51 PM
In 2018, Vincom put into operation 20 new

shopping centres across the country
Sunday, Dec 23, 2018 22:46
Central Group Vietnam introduces

GO! My Tho
08:23 | 17/11/2018
Source: CBRE Research, retrieved from newspapers, 8 January 2019.

50
VIETNAM
NEW SUPPLY
Accumulated Supply by Year (NLA, sm) 2018 HIGHLIGHTS
BANGKOK: 7 MILLION SQM NLA Q4 2018

SINGAPORE: 9 MILLION SQM NLA Estella Place, D2
2018 Community mall
2017
~26,000 sqm NLA
Van Hanh Mall, D10
2016
~60,000 sqm NLA
2015
2014 New City, D2
2013 ~11,000 sqm NLA
2012
Vincom+ Pho Quang
2011
~2,724 sqm NLA
0 200,000 400,000 600,000 800,000 1,000,000
HCMC - Non-CBD HCMC - CBD Vincom Landmark 81

~34,688 sqm NLA
VIETNAM
H C M C R E TA I L MARKET OUTLOOK 2019
HCMC HANOI
Total Supply Total Supply

992,824 865,000
NLA (sm) 16% y-o-y 9.2% y-o-y
Asking Rent Asking Rent

US$/sm CBD 128 = y-o-y CBD 99.5 0.4% y-o-y
/month Non-CBD 29.3
Non-CBD 35.8 2.6% y-o-y 3% y-o-y
Vacancy Rate Vacancy Rate
(%) CBD 3% 1.4 ppts y-o-y CBD 0.6% 1.2 ppts y-o-y
Non-CBD 9% 2.8 ppts y-o-y Non-CBD 10.2% 2 ppts y-o-y
Note: Average Rent on ground and first floor for specialty stores, excluding Service Charge and VAT
52
VIETNAM
NEW ENTRANTS TO HCMC

Active Expansion from Asian Brands
Source: CBRE Research.

53
VIETNAM
RISING IMPORTANCE OF F&B
Landlords allocate more space to F&B (*)

2015 2018
19% 27%
31%
48%
5%
28%
4%
33%
5% 1%
F&B Fashion & Accessories
*Only for selected shopping centres, Estella Place, Van Hanh Mall, Vincom Dong Khoi,
Saigon Center, Crescent Mall, Aeon Mall, Union Square Cosmetics Entertainment
Others 54
VIETNAM
MARKET OUTLOOK 2019
MORE FAVORABLE NEW RETAIL BUSINESS LEGISLATION
OVERALL, the
Decree 09 provides a Shorter approval
distribution and retail
clearer and more timeline.
sector will continue to
transparent framework
be very attractive for
for foreign investment ENT requirement
foreign investors
in the distribution and widened to include:
retail sector • Convenience stores
• Mini-supermarkets
Source: CBRE Vietnam, Allens.
55
VIETNAM
VIETNAM CONSUMER CONFIDENCE AT AN ALL-TIME HIGH
Vietnam GDP Growth Vietnam Consumer Confidence Index
8%
7%
6%
5%
4%
3% GDP Growth in 2018

peaked at 7.08%
2%
1%
2011 2012 2013 2014 2015 2016 2017 2018
Source: General Statistics Office Source: Nielsen

56
VIETNAM
HOWEVER NOT EVERYONE IS A WINNER
Foreign retail giants experience different

fortunes in Vietnam
Despite losing money, supermarkets

and convenience stores continue
expansion
Source: CBRE Vietnam, retrieved from newspapers, 8 January 2019.

57
VIETNAM
FUTURE SUPPLY
2019F: 247,179 sq. m. NLA 2020F: 61,300 sq. m. NLA
Giga Mall, Thu Duc TNL Plaza, D.4 Sala S.C, D.2 Union Square, D.1
67,200 sq. m. NLA 11,179 sq. m. NLA 60,000 sq. m. NLA 22,800 sq. m. NLA Alpha Mall, D.1
23,300 sq. m. NLA
Aeon Celadon P2, Tan Phu Crescent Mall P2, D.7 Central Premium, D.8 Elite Mall, D.8
36,000 sq. m. NLA 18,000 sq. m. NLA 32,000 sq. m. NLA 38,000 sq. m. NLA
Source: CBRE Vietnam, REIC, Q4 2018.

58
VIETNAM
FORECAST FOR THE NEXT THREE YEARS

Rental Increase Driven by Prime New Supply and Rent Review
HCMC Retail, Rent and Vacancy Forecast
1,400 140
1,200 120
Rent rates (USD)

NLA, thousand sm
1,000 100
800
80
600
400 60
200 40
- 20
2016 2017 2018 2019F 2020F
Occupied space Vacant space Rent - Non CBD Rent - CBD
59
VIETNAM
2019 MARKET TRENDS
1 2 3 4
Consumer E-retailing Asian brands’ The rise of

confidence continues its continued convenience
march expansion and
experiential
retail
60
VIETNAM
TNK A2M
019
HCMC
CONDOMINIUM
LUXURY: >3.500 US$/sm
HIGH END: 1.500 - 3,500 US$/sm
MID END: 800 - 1.500 US$/sm
AFFORDABLE: <800 US$/sm
61
VIETNAM
HCMC CONDOMINIUM MARKET OUTLOOK 2019
THE FOUR STORIES
1 Land Fever in HCMC and Neighbouring Thu Thiem Land Dispute

2
Provinces
3 Limited Affordable Supply 4 Slow Moving Projects

$
Compared to 2015
• Selling price: 10%
• Supply: 91%
62
VIETNAM
2018 HIGHLIGHTS
New Directions Amid Strong Competition
63
VIETNAM
2018 HIGHLIGHTS
Remaining Challenges
64
VIETNAM
HCMC HANOI
New Launch New Launch

30,792 29,840
Unit = 0% y-o-y 19% y-o-y
Selling Price Selling Price

US$/sm $1,714 $1,304
10% y-o-y 2% y-o-y
Unit Sold Unit Sold Unit

31,083 25,377
12% y-o-y 13% y-o-y
Note: Selling price excludes VAT and quotes on NSA 65

VIETNAM

30,792 units launched from 61 projects
Luxury High-end Mid-end Affordable

5 projects 28 projects 26 projects 2 projects
TEXT
1,636 units 12,381 units 16,007 units 768 units
New launch ▲ 21x y-o-y ▲ 93% y-o-y ▼ 22% y-o-y ▼ 84% y-o-y
5,518 US$/sm 2,195 US$/sm 1,158 US$/sm 780 US$/sm

▲ 17% y-o-y 0% y-o-y ▲ 1% y-o-y ▲ 1% y-o-y
Selling Price (*)
981 units 12,082 units 16,755 units 1,265 units

▲ 28% y-o-y ▲ 65% y-o-y ▼ 20% y-o-y ▼ 80% y-o-y
Sold units
(*) Selling price excludes VAT and quotes on NSA
Source: CBRE Vietnam Q4 2018. 66
VIETNAM
2018 NEW LAUNCH

Lower Than Expected But Still High
New launch by years (‘000 units)
40 30,792 units
New Launch
('000 units)
30
20
10
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Lending rate and Inflation by years (%)

30
20
(%)
10
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Lending rate Average CPI (y-o-y) 67

VIETNAM
2018 NEW LAUNCH

More Luxury and High-end, Less Affordable Products
New launch by segment Accumulated new launch by segment
100%
LUXURY 2%
80%
52% 30%
49% HIGH-END
60% 40%
64%
34%
40% MID-END
42%
20%
0% AFFORDABLE
26%
2007 2015 2016 2017 2018
Luxury High-end Mid-end Affordable 260,247 units
68
VIETNAM
PRIMARY PRICE
Sharp Increase in Luxury Segment
Primary price (US$ psm)
Luxury High end Mid end Affordable

US$5,518 US$2,195 2018 Price
US$1,158 US$780
▲ 17% y-o-y 0% y-o-y ▲ 1% y-o-y
▲
▲ 1% y-o-y
6,000
5,000
4,000
3,000
2,000
1,000
-
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

(*) Selling price excludes VAT and quotes on NSA

VIETNAM
SOLD UNITS
Sales Slowed Down, Absorption Rate Remained High
Sold units (‘000 units)
40
31,083 units
Sold units ('000)
30
20
10
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Affordable
ABSORPTION RATE Mid-end
in Newly Launched High-end
Projects 2018 Luxury
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
70
Source: CBRE Vietnam Q4 2018.
VIETNAM
COMPRESSED RENTAL YIELD

Buy-to-let Investors Continued to Suffer from Fierce Competition
HCMC Condo, Handover Units by Year HCMC Condo, Rental Yield of High-end/Luxury
40 36,718 units 10%

Completed Unit (‘000)
8%
30
Rental yield (%)

6%
20
4%
10
2%
0 0%
2014 2015 2016 2017 2018 2019f 2020f 2015 2016 2017 2018
Luxury High-end Mid-end Affordable District 1 District 2

Binh Thanh District 7
(*) Note: The analysis above is based on selected high-end projects
71
VIETNAM
THE EMERGENCE OF SUPER LUXURY PRODUCTS

Opportunity for Capital Gain Investors
Selling Price of Selected Super Luxury Projects, Bangkok and HCMC
25,000 Bangkok HCMC

Selling price (US$ psm)
20,000
15,000
10,000
5,000
0
Somkid Gardens The Sukhothai 98 Wireless Cove Residence Vertex Alpha Hill
Residences
1991 2011 2017 2018 2018 2018
Average launch price Average current price
VIETNAM
MARKET OUTLOOK
2019 Supply Dominated by the East
2018 NEW LAUNCH SUPPLY 2019 NEW LAUNCH SUPPLY
1% 1%
29% 61%
8%
7% 7%
9%
53% 23%
73
VIETNAM
MARKET OUTLOOK
Going bigger and further from centre
VinCity GRANDPARK, D9 Eco Green Saigon, D7 Sunshine City Saigon, D7

44,000 units 4,000 units 3,748 units
Akari City, Binh Tan District Lotte Ecosmart City, D2 The Riverin Thu Thiem, D2
~3,000 units ~1,600 units 1,140 units
74
VIETNAM
MARKET OUTLOOK
Price Increase, Slight Drop in Launch
Forecast on New launch and Sold units Forecast on Primary Price
40,000 7,000

35,000 6,000
30,000 5,000
25,000 4,000
Units
20,000
3,000
15,000
2,000
10,000
1,000
5,000
0 0
2016 2017 2018 2019F 2020F 2016 2017 2018 2019F 2020F
Launch supply Sold units Luxury High-end Mid-end Affordable

75
VIETNAM
2019 MARKET TRENDS
1 2 3 4
Slow licensing Hanoi developers Continued Increasing

process will go South shortage of demand from
challenge the affordable foreign buyers
launching of new products but stock could
projects be limited
$
76
VIETNAM
TNK A2M
019
HCMC READY-BUILT
LANDED PROPERTY
77
VIETNAM
HCMC LANDED PROPERTY MARKET OUTLOOK 2019
THE FOUR STORIES
1 Land Fever in HCMC and Neighbouring Drop in New Supply

2
Provinces
3 Increase in Selling Price 4 Decentralisation
78
VIETNAM

1,251 units launched from 12 projects
Villa Townhouse Shophouse
291 units 722 units 238 units

New supply
US$4,153 per sq. m US$2,941 per sq. m US$5,264 per sq. m

Asking price (*) ▲ 47% y-o-y ▲ 65% y-o-y ▲ 117% y-o-y
Sold unit 1,995 units
(*) Primary price: USD per sq. m land area (excluding VAT)

79
VIETNAM
SIGNIFICANT DROP IN NEW SUPPLY
3,000 250%
2,500 200%
New Launch Growth

New Launch (units)
150%
2,000
100%
1,500 62% y-o-y
50%
1,000
0%
500 -50%
0 -100%
2015 2016 2017 2018
Total Villas Total Townhouses Total Shophouses
New Villa growth New Townhouse growth New Shophouse growth

80
VIETNAM
S U P P LY S P R E A D I N G T O H C M C ’ S V I C I N I T I E S
Projects launched in 2004 and before 2004 2005 2009 – 2011 2014 - 2017 2018 onward
Projects launched in 2005
Projects launched in 2009 - 2011
Projects launched in 2014 - 2017
Projects launched in 2018 and beyond
Dong Nai
Province
81
VIETNAM
PRIMARY ASKING PRICE

Shophouse has the highest price and strongest growth
Primary Asking Price
Shophouse’s price increased 117% y-o-y

6,000
Primary Asking Price
(US$/sm/land area)
5,000
4,000
3,000
2,000
1,000
0
2015 2016 2017 2018
Villa Townhouse Shophouse

USD per sq. m land area (excluding VAT)
VIETNAM
FUTURE LAUNCH (2019-2021) ~11 projects >6,800 units
Senturia South Saigon Simcity Phase 3 Evergreen Phase 2 Senturia An Phu

Binh Chanh (19.8 ha) District 9 (7.8 ha) District 7 (7.4 ha) District 2 (6.8 ha)
GS Metro City Vincity GRAND PARK Harbor City

Nha Be (350 ha) District 9 (300 ha) District 8 (60 ha)
83
VIETNAM
2019 MARKET TRENDS
1 2 3 4
Large scale projects Further increase in Eastern and Shophouse

will be developed in price due to lack of Southern area will maintains its
HCMC’s vicinities new supply lead the future strong growth
supply
84
VIETNAM
A S I A PAC I F I C R E A L E S TAT E M A R K E T O U T LO O K 2 0 1 9
M A R K E T O U TVL IOE O
TNK A2M
019
HCMC HOTEL
85
VIETNAM
H C M C 4 - 5 S TA R H OT E L MARKET OUTLOOK 2019
THE FOUR STORIES
1 Limited new supply 2 Well-positioned performance

compared to the region
53 keys
3 4 Emerging competition from the

Strong growth of tourist arrivals
sharing economy
86
VIETNAM
HCMC Hanoi
New Supply New Supply

53 0
keys = 0.5% y-o-y = 0% y-o-y
ADR ADR
US$/room $114.1 $112.6
/night
5.0% y-o-y 1.8% y-o-y
OCC OCC
(%) 73.3% 78.4%
1.5 ppts y-o-y 3.1 ppts y-o-y
Source: STR, CBRE Vietnam. 87

VIETNAM
CONTINUED GROWTH IN TOURIST ARRIVALS
Number of international visitors to HCMC by year
8 7.5 mil 30%

Arrivals (Million persons)
7 25%
6
Growth Rate (%)

17.4% 20%
5
4 15%
3 10%
2
1 5%
0 0%
2011
2012
2013
2014
2015
2016
2017
2018
Number of international arrivals (mil) Growth rate
Source: HCMC Department of Tourism
88
VIETNAM
IN LINE WITH TOURISM TRENDS FOR VIETNAM
International tourists by origin, 2018 Growth of in-bound arrivals by top origins
2018 2017
23.9% 48.6%
44.3% 56.4%
3.6% 7.8%
15.9% 21.5%
Source: Vietnam Tourism Administration Office, 2018 Source: Vietnam Tourism Administration Office, 2018 89
VIETNAM
IMPROVED Y-O-Y PERFORMANCE

HCMC Hotel, Market performance Regional Comparison
125 90% $113 $202

80%
ADR (US$/room/night)
120
70%
Occupancy Rate
115 60% 78.4% 84.2%
50%
110 Hanoi Singapore
40%
105 30%
20% $107 $87
100
10%
95 0%
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
79.6% 68.3%
2014 2015 2016 2017 2018
Bangkok Kuala Lumpur
ADR Occupancy
ADR (US$/room/night)
Source: STR, CBRE Vietnam.
Occupancy (%)
90
VIETNAM
COMPETITION FROM THE LIKES OF AIRBNB
91
VIETNAM
FUTURE SUPPLY
To be opened in 2019: ~680 keys To be completed in 2020-2021
Mai House, D3 Vinpearl Luxury Landmark 81, Hilton Saigon, D1 Mandarin Oriental Saigon, D1
219 keys Binh Thanh Dist. 350 keys 228 keys
223 keys
Meliá Saigon Central, D1 Fusion Original, D1 Ritz-Carlton Saigon, D1 Wink Hotel, D1

159 keys 88 keys 250 keys 237 keys 92
VIETNAM
EMERGENCE OF LESS “MAINSTREAM” BRANDS
Tan Binh Dist., Dist. 9, Dist. 7

93
VIETNAM
NEW HOTEL TRENDS AROUND THE GLOBE
Hotel & CWS More Marketing through

Self-Checkin Counters Social Architecture
For the digital nomads Social Media
Technology Interaction
94
VIETNAM
2019 MARKET TRENDS
1 2 3 4
Strong inflow of Entrance of luxury Intensifying Affordable

new supply, after a brands is strongly competition from luxury
quiet period anticipated by the sharing economy
market
$
95
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 currency of the information of this publication. This report is presented for information
purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other
financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any
other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage,
cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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V I E T N A M R E A L E S TAT E

HO CHI MINH CITY

THE FOUR STORIES

1 Landlord Market 2 Flexible Workspace &

Limited Stock Rent Increase

3 Pre-commitment 4 Asset Optimisation

Construction Pre-commitment Early bird

2018 MARKET SNAPSHOT

New Launch New Launch

US$/sm Asking Rent Asking Rent

Vacancy Rate Vacancy Rate

GRADE A VACANCY INCREASED DUE TO TENANT CONTRACTION

HCMC Office, Rent and Vacancy by Year

Vacancy Rate (%)

Grade A Rent Grade B Rent Grade A Vacancy Grade B Vacancy

Note: Based on total leasing inquiries received by CBRE Vietnam

THE RISE OF PRE-COMMITMENT

2017 Etown Deutsches

Tenants by Industry, Based on Transactions received

Flexible Workspace 2 IT Relocation B 4,200

FLEXIBLE WORKSPACE DEMAND

New Tenant: MNCs and Big Companies Occupiers by Company Type

Source: CBRE Vietnam, Q4 2018.

HCMC FLEXIBLE WORKSPACE

Growth Rate (%)

10,000 40% # of venues

HCMC FLEXIBLE WORKSPACE

Le Meridien Saigon Leman Luxury Apt

The Gold View

Estella Place Republic Plaza Saigon

F U T U R E S U P P LY ( 2 0 1 9 - 2 0 2 1 ) 17 projects >360,000 sm NLA

HCMC Office, Rent Forecast HCMC Office, Vacancy Forecast

Grade A - CBD Grade A Grade B

Source: CBRE Vietnam, Q4 2018.

2019 MARKET TRENDS

Grade A rent will Grade A pre- Enterprise Flexible

THE FOUR STORIES

1 The Rise of E-retailing 2 Local Brands To Go Global

3 Provincial Retail 4 HCMC Supply Reaches ~1 million sqm NLA

THE RISE OF E-RETAILING

Lala food delivery application

Source: CBRE Research, VTV 48

LOCAL BRANDS TO GO GLOBAL

Source: CBRE Research, Bizhub 49

Ground-breaking of AEONMALL Shopping

In 2018, Vincom put into operation 20 new

Central Group Vietnam introduces

Source: CBRE Research, retrieved from newspapers, 8 January 2019.

Accumulated Supply by Year (NLA, sm) 2018 HIGHLIGHTS

BANGKOK: 7 MILLION SQM NLA Q4 2018

HCMC - Non-CBD HCMC - CBD Vincom Landmark 81

2018 MARKET SNAPSHOT

Total Supply Total Supply

Asking Rent Asking Rent

Vacancy Rate Vacancy Rate

NEW ENTRANTS TO HCMC

Source: CBRE Research.

RISING IMPORTANCE OF F&B

Landlords allocate more space to F&B (*)

MORE FAVORABLE NEW RETAIL BUSINESS LEGISLATION

Source: CBRE Vietnam, Allens.

VIETNAM CONSUMER CONFIDENCE AT AN ALL-TIME HIGH

Vietnam GDP Growth Vietnam Consumer Confidence Index