buying and investing in vietnam presentation
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Presented by :
Marc Townsend Managing DirectorCB Richard Ellis (Vietnam)Saturday, 3rd Nov 2007Hong Kong
BUYING & INVESTINGIN VIETNAM
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MAKE THE BEST OF YOUR BUDGETWHERE TO BUY
Market Sentiment Market Sectors to Consider Where to buy if you have
INVESTMENT PROSPECTS Market Overview Investment Trends
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Map Of Vietnam
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Total Population 85 million
More than 60% of the populationare of working age
(under 35 years)*, highly literate,
hard-working, consumer orientatedand highly motivated.
Birth Rate: 1.44% p.a (1.2m)
Median Age: 25.9 years
Average Life Expectancy:70.8 years
73.85 yrs (women) /68.05 yrs (men)
Population Demographics
>60 Years
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Population
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SERVICED APARTMENT PRICESMARKET SENTIMENTS
SERVICED APARTMENTShortage of quality
apartmentsMainly catersto expatriatesHANOI Serv i ced Aparmen t
Average Rents by Types o f Uni t (US$/sqm/month)
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Q1/2006
Q2/2006
Q3/2006
Q4/2006
Q1/2007
Q2/2007
Q3/2007
Studio
1 Bed
2 Bed
3 Bed
4 Bed
5 Bed
Villa 2 Bed
Villa 3 Bed
Villa 4 Bed
3 Bed (Penthouse)
HCMC Serviced Apartment Average Rentsby Types of Unit (US$/sqm/month)
$0
$10
$20
$30
$40
$50
Q
1/06
Q
2/06
Q
3/06
Q
4/06
Q
1/07
Q
2/07
Q
3/07
Q
4/07
Studio
1-bedroom
2-bedroom
3-bedroom
4-bedroom
5-bedroom
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CONDOMINIUM PRICE FLUCTUATIONSMARKET SENTIMENTS
HANOI new stock for 2008-2010:7,634 units
HCMC new stock for 2008-2010:29,630 units
CONDOMINIUMSC O N D O P R I C E S - S I G N I F I CA N T P R O J E C T S
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Lilam
aComplex
25Vu
NgocPhan
Ciputra
IC
CBuilding
KinhDoBuilding
ThaiThin
hComplex
10
1LangHa
15-1
7NgocKhanh
25LangHa
195DoiCan
ArtexBuilding
VIMECO
ChelseaPark
Golde
nWestlake
TheManor
PacificPlace
Initial Price
Current Price/Market Price (Q1/2007)
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VISTA CONDOMINIUM SALES IN HCMC 19th of October, 2007WHERE TO BUY
Vista & SkyGarden 3(Phu MyHung)
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Latest Residential Release in HCMC
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TIPS ON BUYING RESIDENTIAL IN VIETNAM
Buy from developers with track record
Facilities and amenities (swimming pools etc)
Corner units with views on high floors
Quality properties always have a display
apartment
Think about leasability and resale potential
Monthly service charge and property management
issues
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WHERE TO BUYRESORT VILLA MARKET
Name of resorts Location Area (ha) Details
Son Tra Resort Da Nang 30 5-star hotel (15 storeys), 193 villas
Nam Hai Resort Hoi An 31 40 villas, 60-room hotel
Mui Ne Domaine 3.5 135 luxury villas
Aquaba Mui Ne 2.5 2 seven-storey apartment blocks and 6 private beach front villas
DBC Resort 13 One 5-star hotel and 50 villasHoang Tra Resort 4 One 5-star hotel and 40 villas
Bac My An Resort 34 One 5-star hotel, 1 shopping center, interl school and villas
Silver Shore Resort 20 One 5-star hotel and 50 luxury villas
Millennium Groups Resort 15 One 5-star hotel and villas
Hoang Anh Gia Lais Resort 4.5 100 villas
Trem Resort 10 200 villas
Bai But Resort 40 One 5-star hotel and 200 villasHoa Hai Sea Tourist Resort &
Golf Course260 241 villas and interl standard 36-hole golf course
Indochina Land Resort 20 4-storey Hyatt Hotel, two 8-storey condos Towers and 40 villas
Olalani Resort 7 42 condos, 3 villas and some spaces for office and retail
La Bamboo Spa Resort 11 46 villas and 180 bungalows
Kim Vinh Resort 7 100 villas
21st
Century Resort 13 200 hotel rooms (4-star)
Hoi An Golf & Beach Resort 120 350 hotel rooms, a golf course and villas
On-going
resorts Binh
Thuan
FutureProjects
Da Nang
Hoi An
Quang
Nam
Ongoing Projects: 268 villas / 4 projects in Da Nang, Hoi An, Phan Thiet Binh Thuan Future Projects: More than 876 villas / 15 projects in Da Nang, Hoi An, Quang Nam
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WHERE TO BUY - HANOIUS$250,000HANOI: Condominiums
HATAY: Villas
US$500,000HANOI: Condominiums
Initial price for clean land
Market price for clean land
US$500-650/sqm
US$ 700-950/sqm
An Khanh New Urban Area
WHERE TO BUY IF YOU HAVE
CON DOSAverage sales rate (US$/sqm)PACIFIC PLACE (Hoan Kiem
District)1,800-3000
THE MANOR (My Dinh) 1,700 - 2,200
Ciputra 800-1,400
CONDOSAverage sales rate (US$/sqm)
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WHERE TO BUY HO CHI MINH CITYHCMC Residential Hot Spots
US$250,000
WHERE TO BUY IF YOU HAVE
US$500,0001,600-1,900
1,500-1,700
1,800-2,400
1,100-1400
1,500-1,800
SkyGarden
3
Tan DaCourt
HungVuongPlaza
HorizonCentralGarden
2,300-2,8002,300-2,500
2,300-3,200
1,700-2,900
4,300-5,000
3,800+3,800+4,200-4,800
PanoramaGardenCourtTheManorRiverGardenAvalonSaigonResidenceBenThanhTower
Lancaster
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WHERE TO BUYUS$1,000,000Emerging Products
WHERE TO BUY IF YOU HAVE
IndochinaLandHoldingsOverview
7 remaining(US$ 1.1-2M)
8 leftOpenedLaunching
May 2007 todate
Apr2007
Dec 20062004
40 resort pool villas for sales
THE NAM HAI RESORT 5-star(Quang Nam)
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INVESTMENT PROSPECTS
Hanoi Hi-endResidential ProjectsOpen market rateINCREASING afterlaunching
Average absorptionrate: 91.6 %
RESIDENTIAL PROJECTS in HANOI & HCMC
HCMCsignificant VillaProjects
Trendy segment ofResidential Market ofHCMC
PACIFICPLACE
CIPUTRAHANOI
THEMANOR
THEGARDEN
CHELSEAPARK
GOLDENWESTLAKE
83B Ly Thuong
Kiet Street
Phu Thuong,
Nhat Tan, Xuan
La Ward
My Dinh
Ward
My Dinh
Ward
Trung Kinh
Ward
151 Thuy Khue
Street
Q2/2007 2018 Q2/2007 Q2/2007 Q2/2007 Q3/200895.00% 80.00% 95.00% 95.00% 95.00% 90.00%High 2,800 1,000 1,500 2,100 1,000 2,500Mid 2,300 750 1,200 1,800 900 2,200Low 1,600 500 900 1,500 800 1,600
High 3,000 1,400 2,200 3,000 1,600 2,800Mid 2,500 1,100 1,900 2,200 1,200 2,500Low 1,800 800 1,700 1,560 1,000 2,000
Apartment
InitialAverage
RateCurrentAverage
Rate
Absorption RateApartment
Expected Completion Date
PROJECT NAME
Location
TOP-END RESIDENTIALPROJECTS
HANOI
Average Pr ice Change of Phu Gia, Vi lla R iviera and Thu Duc Garden Home
$1,000
$3,800280%
200%140%120%100%90 %70 %50%30 %
$1,500 20%33% 60 %
73% 100%$3,500133%
$680 62%3% 40%76 %
$1,35099%
0%
50%
100%
150%
200%
250%
300%
2001 2002 2003 2004 2005 2006 Q1/07 Q2/07 Q3/07 Q4/07
Phu Gia - PMH town
(launched in 2001)
Villa Riviera - D.2
(launched in 2004)
Thu Duc Garden Home
(launched in 2005)
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INVESTMENT PROSPECTS
Vietnam ranked
as worlds 4th mostattractive retail
market AT Kearney, 2007
Customer Profile
- Upwardly mobile
- Young, brandconscious culture
RETAIL MARKETANOI HCMC
Gross Area and Average Rent of Hanoi Shopping Centres
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
HanoiTower
TrangTien
Plaza
Vincom
City
Tow
ers
BigCThang
Long
OperaBu
siness
Centre
Pacific
Place
Sm
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
US
Gross Leasable Area
Ave. Asking Rent (US$/sqm/mth)
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DECREE 84 Progressive Land Reform
Decree 84 introduces useful amendments to Vietnams landregulations. Of most importance to the property marketinclude:-
New LAND USE RIGHT certificate issued on a long andstable basis times over (i.e. in perpetuity) for 70 years(formerly 50 years).
Decree 84 also lists cases in which the Government willassume responsibility of land clearance to transfer theland to investors to speed up the development process andavailability of stock to the market place.
Foreign developers can now be assigned property & can bidfor sites at government auctions.
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CAN FOREIGNERS PURCHASE?
A foreign investor can purchase leasehold tenure for normal50 or 70 year term via an assignment of a long term leasefrom the developer direct.
A foreign investor cannot borrow funds to purchase leaseholdtenure under current law. Such tenure cannot be bequeathedeither. CASH ONLY PURCHASERS for this type of property.
Foreign Organizations and individuals who are allowed toenter Vietnam for 3 months can also purchase leasehold titleonly and cannot borrow against the asset and the asset cannot
be bequeathed.
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TAXATION IMPLICATIONS - VIETNAM
Vietnam has a fairly onerous tax regime including:-
1. VAT standard rate is 10% (payable on property
purchase);
2. Corporate Income Tax @ 28%;
3. Capital Gains Tax @ 28% of realized profit (ifcompany) If privately owned 25%; and
4. Personal Income Tax If purchaser does not live in
Vietnam, personal tax rate @ 25% of incomegenerated.
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SUMMARY
Vietnam is an economic growth success story
As incomes rise, so does demand for better housing, consumergoods and modern retail and entertainment facilities
WTO membership has heightened the interest of overseascompanies and therefore interest in quality office and retail space
The fundamentals the economy, demographic are very sound
Developers and investors taking a longer term view of the marketand who seek quality partners and projects are likely to do well
This is a race likely to be won by the marathoners not the sprinters
CBRE (Vietnam) predicts that current growth rates will continue in
the short to medium term for well located and good quality projectsdue to underlying market fundamentals of strong demand for suchstock versus limited supply opportunities in the current market.
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THANK YOU !
www.cbrevietnam.com