cushmanwakefield market beat q42011 eng

8/2/2019 CushmanWakefield Market Beat Q42011 Eng

1/16

MARKETBEATA Cushman & Wakefield Research

Q4 2011

HANOI OFFICE:

Room 602, Asia Tower, 6 Nha ThoStreet, Hoan Kiem District, Hanoi,

VietnamTel: (84) 4 3938 1786

Fax: (84) 4 3938 1781

HO CHI MINH CITY OFFICE:2nd floor, Pathfinder Building, 52 DongDu Street, District 1, Ho Chi MinhCity, VietnamTel: (84) 8 6291 4707

Fax: (84) 8 6291 4701


2/16

ECONOMYAccording to General Statistic Office

(GSO), Vietnams GDP growth is estimated

to be around 5.89% this year, lower than

the 8-9% in the years before the global

economic crisis in 2008.

Inflation in Q4 has eased due to tightened monetary policy, which

rose to less than 1% each month, much lower than the rate a few

months earlier. Inflation in Vietnam in 2011 is forecast to be18.13%.

FDI inflow to Vietnam in 2011was estimated to reach US$14.7

billion, down 26% from the previous year, but total disbursement

hit US$11 billion, the same as in 2010. FDI in the real estate

market this year is expected to be the lowest in five years,

accounting for only 5.8% this year, ranking it fourth on the FDI-

attraction list. Among the investors, Singapore was the largest

followed by The Republic of Korea and Japan.

SUPPLY REMAINS STABLEOne new Grade B office building entered the market this quarter

(approximately 5,000 sqm) which resulted in the total Grade B

supply to increase slightly 1% q-o-q to 578,000 sqm from a total

43 buildings. Grade A supply remained unchanged y-o-y with 7

buildings that stand at approximately 137,000 sqm.

RENTS KEEP DECREASINGNet quoting rents of Grade A decreased slightly q-o-q by 2%, but

suffered significant decrease of some 11% y-o-y (service charge

included, VAT excluded). Rents are currently in the region of

US$44US$57 per sqm per month. Grade B quoting rents

performed better with a reduction of 1% q-o-q and 5% y-o-y, in

the region of US$17US$42 per sqm per month (service charge

included, VAT excluded).

Rent reductions resulted in the occupancy rate for Grade A toincrease 5% q-o-q and 11% y-o-y, to around 79%. Meanwhile,

there was no change in the occupancy rate for Grade B, standing

at 82%.

Total net absorption area, Grade A and Grade B reached

approximately 15,300 sqm this quarter, of which Grade B

accounted for the majority of absorbed space, at 63%.

OUTLOOKThe supply of Grade A and B office space will increase

substantially in the short to medium term, which will mainly

concentrate in the CBD. The entrance of large new supply and

vacancy of some 132,000 sqm will put strong pressure on rents

which will continue to decrease.

We anticipate significant delays in the office development pipeline

due to current economic uncertainty and the large number of key

projects currently under construction.

HCMC office market is expected to remain as a tenants market

during 2012. It is further predicted that tenants will negotiate

hard to achieve better lease conditions and terms, established,

well respected landlords will retain their long standing tenants

with small rental reductions at lease renewals due the large

variance in the quality of building management in the market.

Equally aging buildings with poor building management will risk

losing their tenants due to the attractive relocation options in the

market. The key for landlords during 2012 is to be proactive in

accommodating tenants requirements to retain / secure a long

standing relationship in these times of economic uncertainty.

STATS ON THE GO

4Q11 Q-O-Q

CHANGE

Y-O-YCHANG

E

12MONT

H

OUTLOOK

Overall Vacancy 21.5% -4.1% -10.3%

Grade A Overall Rents $49.49 -1.7% -11.3%

Absorption (sqm) 5,654 72.9% 81 %

ECONOMIC INDICATORS

VIETNAM 2010 2011 2012F

GDP Growth 6.78% 5.8% 6%

CPI Growth 9.19% 18.12% 10.5%

Unemployment 2.88% 5% 5%

SOURCE: GSO, World bank

GRADE A OVERALL RENTAL VS. VACANCY RATES Q42011

0%

5%

10%

15%

20%

25%30%

35%

44

46

48

50

52

54

5658

60

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

US$/sq.m

/mth

Grade A overall rent Vacancy

Q4 2011HO CHI MINH CITY/VIETNAM

OFFICE SNAPSHOTMARKETBEAT

A Cushman & Wakefield Research Publication


3/16

Cushman & Wakefield Viet NamLevel 2, Pathfinder Building52 Dong Du, District 1, HCMCTel: +(84-8) 6291 4707www.cushmanwakefiled.com

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it i s accurateand complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation,express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject toerrors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed byour principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

HO CHI MINH CITY

SUBMARKET INVENTORY OVERALLVACANCY

RATE

UNDERCONSTRUCTION

YTDCONSTRU

CTIONCOMPLETI

ONS

OVERALLDIRECT NET

ABSORPTION

GRADE A AVERAGEGROSS (SERVICE

CHARGED INCL., VATEXCLUDED)

US$SF/YR

EUROSF/YR

3Q11 4Q11 4Q11* 4Q11*

CBD A - Grade 137,000 21.5% 256,000 0 5,600 $50.4 $49.5 $55.2 42.4

CBD B - Grade 378,300 18% 126,600 0 10,950 $32.8 $32.8 $36.6 28.2CBD 515,300 18.9% 382,600 0 16,550 $37.5 $37.2 $41.5 31.9

Non - CBDB - Grade

199,200 17% 223,300 0 -1,285 $21.3 $20.6 $22.9 17.6NON - CBD 199,200 17% 223,300 0 -1,285 $21.3 $20.6 $22.9 17.6

TOTALS** 714,500 18.4% 605,900 0 15,265 $32.9 $32.6 $36.3 27.9

*RENTAL RATES REFLECT ASKING $PSF/YEAR

MARKET STATISTICS

SIGNIFICANT 4Q11 LEASE TRANSACTIONS

BUILDING MARKET TENANT BUILDINGCLASS

SQUARE METER

Bitexco Financial Tower



CBD

CBD

CBD

Samsung

Adidas

Microsoft

A

A

A

3,198

1,000

1,000

Kumho Asiana Plaza CBD P&G A 1,503

Vincom Center

Vincom Center

CBD

CBD

Dentsu

MSIG

B

B

1,019

520

Melinh Point CBD Schlumberger B 1,289

SIGNIFICANT 4Q11 CONSTRUCTION COMPLETIONS

BUILDING MARKET SQUARE METRE COMPLETION DATE

Royal Tower Phu My Hung 102,148 2011

SIGNIFICANT4Q11 PROJECTS UNDER CONSTRUCTION

BUILDING MARKETSQUARE METRE COMPLETION DATE

President Place CBD 14,000 3Q2012

Times Square CBD 14,900 2Q2012

Saigon One CBD 49,000 3Q2012

Le Meriden CBD 9,000 3Q2012

HTMC Building CBD 26,000 3Q2012

DB Tower Non - CBD 12,700 3Q2012

* RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS


4/16

ECONOMIC OVERVIEWAccording to General Statistic Office

(GSO), Vietnams GDP growth is

estimated to be around 5.8% this year,

lower than the 8-9% in the years before

the global economic crisis in 2008.

Inflation in Q4 has eased due to tightened monetary policy,

which rose to less than 1% each month, much lower than

the rate a few months earlier. Inflation in Vietnam in 2011 isforecast to be 18.13%.

FDI inflow to Vietnam in 2011was estimated to reach

US$14.7 billion, down 26% from the previous year, but total

disbursement hit US$11 billion, the same as in 2010. FDI in

the real estate market this year is expected to be the lowest

in five years, accounting for only 5.8% this year, ranking it

fourth on the FDI-attraction list. Among the investors,

Singapore was the largest followed by The Republic of

Korea and Japan.

GRADE CS STOCK DOMINATED THE MARKETQ4 2011, approximately 700 new Grade C units entered the

market. Grade C remains the core product and accountedfor 77% of total stock.

Nearly 80% of total primary stock is concentrated in outer

districts. Districts 7, 8 and Binh Tan remain the three largest

suppliers, accounting for nearly 40%.

GRADE C THE ONLY PERFORMER

The HCMC residential market is still experiencing low levels

of activity, as many projects have been postponed in

anticipation of poor sales performance.

Amongst the three segments, Grade C performed the best

with an absorption rate of 16%. Grade C had the mosttransacted units due to a reasonable price level, which

ranged from approximately US$550 to US$1,550 per sqm

(VAT excluded). More than 83% of the units absorbed in

Q4/2011 were Grade C.

Grade A and B had absorption rates of 5% and 13%,

respectively. Grade A pricing ranged from US$1,660 to

US$4,760; and from US$1,250 to US$4,200 (VAT excluded)

for Grade B. Grade A continued its downward trend of

nearly 4% q-o-q and 7% y-o-y.

DEMAND FOR AFFORDABLE APARTMENTS

Homebuyers of Grade C apartments made up more than70% of total buyers over the last few quarters, which

confirms affordable apartments are in demand. Some

developers in the high-end segment have switched to the

more favourable of low and mid-end market.

OUTLOOK

It appears very clear that homebuyers continue to wait for

further price drops; resulting in developers facing critical

shortage of capital and therefore seeking new sources of

finance. M&A is expected to boom in the 2012.

Coupled with the Directive 02/CT-NHNN that indicates a fall

in future borrowing rates, the withdrawal of the property

market from the non-productive areas, which is now being

considered by the government, may address the capitalshortage issue for both buyers and sellers.

ECONOMIC INDICATORS

NATIONAL 2010 2011 2012F

GDP Growth 6.78% 5.89% 6%

CPI Growth 9.19% 18.13% 10.5%

ASKING PRICE OF ALL SEGMENTS Q4 2011

-

1,000

2,000

3,000

4,000

5,000

6,000

Grade A Grade B Grade C

US$/ sq m

Lower asking pr ice Upper asking pr ice

PRIMARY MARKET PERFORMANCE Q4 2011

-

2,000

4,000

6,000

8,000

10,000

12,000

Grade A Grade B Grade C

units

Accummulated primary supply Unit sold

Q4 2011HO CHI MINH CITY/VIETNAM

APARTMENT FOR SALEMARKETBEAT



5/16


This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that i tis accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warrantyor representation, express or implied, is made to the accuracy or completeness of the information contained herein, and sameis submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to anyspecial listing conditions imposed by our principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

STATS ON THE GO

SIGNIFICANT RESIDENTIAL PROJECTS LAUNCHED IN 4Q 2011BUILDING LOCATION EXPECTED

COMPLETION

UNITS LAUNCHED SALE PRICE

Hoang Anh An Tien (Gold House) Nha Be District 2012 500 698

Everville (Block E) Binh Tan 2013 190 637

SIGNIFICANT PROJECTS UNDER CONSTRUCTION

BUILDING LOCATION DEVELOPER EST. NUMBER OF

UNITS

EXPECTED

COMPLETION

M&C Tower

Thai Binh Plaza (Central Plaza)

Cinco Building

Khang Thong Apartment

Spring Life

District 1

District 2

District 5

District 7

District 2

Saigon M&C JSC

Binh Duong Ltd

Cinco

Khang Thong Group

Khang Dien Saigon

180

364

328

204

975

2012

2012

2013

2013

2014



6/16







which rose to less than 1% each month, much lower than the

rate a few months earlier. Inflation in Vietnam in 2011 isforecast to be 18.13%.







Singapore was the largest followed by The Republic of Korea

and Japan.

GRADE A SUPPLY INCREASESQ4 2011 witnessed the entrance of one Grade A serviced

apartment building, raising the total supply to 711 units, anincrease of 8% y-o-y.

As of Q4 2011, there were 23 Grade A and Grade B serviced

apartment buildings, providing 2,298 units, an increase of 2%

y-o-y. In terms of number of units, District 1 had the highest

market share, 54% total stock due to its prime/CBD location.

NO SIGNIFICANT CHANGE IN THE PERFORMANCE

The performance of the whole market was relatively stable.

The occupancy of Grade A recorded at 89%, a slight

decrease of 2% q-o-q and 1% y-o-y. Grade B was unchanged

from Q3/2011 but increased 5.5% y-o-y.

In terms of rental levels, both grades showed no significant

change. Grade A remained at US$31 per sqm per month,

increase 2.7% q-o-q, and 3.3% y-o-y. Grade B remained at

US$25 per sqm per month (Service charge included, VAT

excluded), an increase of 3% y-o-y.

District 1 always performs well with the highest occupancy

rate, approximately 90% this quarter even though it quoted

the highest rent, at US$31 per sqm per month (Service

charge included, VAT excluded)

The main tenants for the serviced apartment segment come

from Asian countries. Japanese business persons are

returning to HCMC after Japans natural disaster.

Tenants, especially singles, prefer to lease in the CBD due to

the prime location. However, districts 2 and 7 attracted

families due to the larger unit scale and concentration of

many international schools.

OUTLOOKBuy-to-let apartments and villas for rent will be strong

competitors of serviced apartments for long-term stays due to

lower rents.

Twenty-one projects with more than 3,400 units are expectedto come on line over the next five years. 21% of the total

projects will be located in District 1. The CBD is believed to

continue to be the priority choice for tenants at least in the

medium term.

RENTAL VALUES AS OF 4Q 2011

LOCATION AVERAGE

RENT

SQM/MTH

%CHANGE SHORT

TERM

OUTLOO

K

MTH

AGO

YEAR

AGO

GRADE A

CBD 31.2 2.0% 2.3%

Non - CBD 21.8 -5.3% 3.2%

GRADE B

CBD 27.9 1.2% 4.3%

Non - CBD 22.0 -2.9% 1.2%

GRADE A & B OVERALL RENTAL VS. OCCUPANCYRATE 4Q 2011

Q4 2011HO CHI MINH CITY/VIET NAM

SERVICED APARTMENTMARKETBEAT



7/16


This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that itis accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warrantyor representation, express or implied, is made to the accuracy or completeness of the information contained herein, and sameis submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to anyspecial listing conditions imposed by our principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

STATS ON THE GO

SIGNIFICANT PROJECTS COMPLETION IN 4Q 2011BUILDING LOCATION TENURE YEARS UNITS LAUNCHED LEASE PRICE

Sai Gon Nikko Hotel Nguyen Van Cu,District 1

50 53 35



UNITS

EXPECTED

COMPLETION

Golden Hill 87 Cong Quynh,

District 1

Ngan Binh Investment and

Construction Ltd

300 2013

The Vista 628 Ha Noi Highway,District 2

Capita Land 250 2012

Time Square 22-36 Nguyen Hue,District 1

Quang Truong Thoi Dai JSC 100 2012



8/16


This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete.Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to theaccuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other

conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

ECONOMY

According to General Statistic Office







months earlier. Inflation in Vietnam in 2011 is forecast to be

18.13%.








OVERVIEW

Currently in HCMC there are 18 operating IPs with total area of

approximately 3,750 hectares. The lettable area is estimated tobe approximately 66% the total scale or about 2,475 hectares.

The remaining LUR (Land use right) years range from 30 - 47

years, with the average number of LUR years remaining being

approximately 39.

Most of IPs is located in suburban districts, and mainly focused on

the western districts of Binh Tan, Binh Chanh and Tan Binh. Cu

Chi and Hoc Mon are the two districts that are considered new

destinations for IPs as there are large available tracks of land.

Most IPs in HCMC has occupancy rates at 95 -100% as they are

established and have been operating for some10-20 years.

However, due to 5 new IPs having occupancy rates under 50%the average HCMC occupancy rate is around 67 percent.

Rent: HCMC is higher than that of the neighboured provinces,

with average value of approximately US$140/square metre/term.

This rental rate is consideredtwo times higher than Long An and

nearly three times higher than Binh Duong, Dong Nai and Ba Ria-

Vung Tau.

EVIRONMENT CONCERNS

The industrialisation process has created air and water pollution.

This provides practical reasoning for Industrial zones in the city

to recently re-focus to attract hitech and environment friendly

projects. The Ho Chi Minh City Export Processing Zone

Authority (HEPZA) stated that in the near future, 100% of IZs

will have concentrated waste water treatment system, 100% to

have solid waste transfer station, and all the EPZs and IPs will

have to be equipped with automatic observer systems.

The city has placed priority to attract investment into four key

industries: precise mechanical engineering, electricity and

electronics, information technology, pharmaceutical industry and

food processing.

OUTLOOK

It is predicted that the total scale of IPs in HCMC up to 2020 will

be approximately 3,100 hectares, increasing 82% from 2011. In

terms of number of IPs, it is forecasted to have 30 IPs in 2020,

adding 12 IPs to 2011s number.

MARKET STATISTICS

SUBMARKET TOTALAREA ( HA)

LEASABLEAREA (HA)

NUMBEROF IPS

District 2 112 79 1

District 7 300 195 1

District 12 28 22 1

Binh Tan District 670 530 3

Tan Phu District 130 85 1

Thu Duc District 151 105 3

Nha Be District 908 484 2

Binh Chanh District 260 190 2

Cu Chi District 1,194 780 4

SIGNIFICANT FUTURE PROJECTS

IPS AREA ( HA) STATUS

Phong Phu 148 Under construction

Phu Huu 114 Under construction

PERFORMANCE BY DISTRICT Q4 2011

HO CHI MINH CITY/VIET NAM

INDUSTRIAL SNAPSHOTMARKETBEAT

A Cushman & Wakefield Research PublicationQ4 2011

0

20

40

60

80

100

120

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00psm/month %

Rent Occupancy


9/16

ECONOMYAccording to General Statistic Office

(GSO), Vietnams GDP growth is estimated

to be around 5.89% this year, lower than

the 8-9% in the years before the global

economic crisis in 2008.



months earlier. Inflation in Vietnam in 2011 is forecast to be18.13%.








SUPPLY INCREASE

Total Stock of Grade A office space was unchanged incomparison with the previous quarter and stands at

approximately 190,000 sqm. Meanwhile, Grade B total stock

received an additional 84,000 sqm, an increase of 19% q-o-q. The

total stock of Grade B in Q4 2011 is estimated at 517,000 sqm.

COMPETITIVE RENTS FROM THE WESTGrade A quoting rent (VAT excluded, service charge included)

stood in the range of US$27US$53 per sqm per month,

remained unchanged q-o-q but a decrease of 4% y-o-y. Grade B

saw a notable reduction of 7% q-o-q and 12% y-o-y in the quoting

rent and range from US$13 to US$40 per sqm per month (VAT

excluded, service charge included). This decrease is explained bythe supply and demand effect where supply well out ways

demand and market forces are at play in the West of Hanoi.

Occupancy rate of Grade A was 86.7%, an increase of 2% q-o-qand 10% y-o-y. Meanwhile, due to the additional supply in Q42011, Grade B witnessed a decrease of 2% q-o-q and 11% y-o-yin the occupancy rate, standing at around 80%.

Total net absorption: Grade A and Grade B reachedapproximately 57,000 sqm, of which 46% of space is notably usedas landlord offices. Transactions in Q4 2011 were generallyattributable to buildings located in the West.

OUTLOOKNext three years, office market is expected to see more than 1.5

million sqm for all grades entering the market nearly twice as

much as the current supply.

We forecast that there will be around 144,000 sqm of Grade A

entering the market in 2012. With the increasing supply it is

anticipated that the occupancy rate and rental rates for both

Grade A & B office buildings should drop gradually.

Also, there will be a trend of relocation to the West region ofHanoi. This could be explained by the fact that those office

buildings there offer lower rental rates, good services and

facilities. Market in 2012 shall turn to tenants as they have more

choices.

STATS ON THE GO

4Q11 Q-O-Q

CHANGE

Y-O-YCHANG

E

12MONT

H

OUTLOOK

Grade A Overall Vacancy 13.3% -2% -10%

Grade A Overall Rents $37.29 0% -4 %

Grade A Absorption (sq m) 3,770 -231% -47%

ECONOMIC INDICATORS

VIETNAM 2010 2011 2012F

GDP Growth 6.78% 5.8% 6%

CPI Growth 9.19% 18.13% 10.5%

Unemployment 2.88% 5% 5%

SOURCE: GSO, World Bank

GRADE A OVERALL RENTAL VS. VACANCY RATES

Q4 2011HANOI/VIETNAM

OFFICE SNAPSHOTMARKETBEAT


0%

5%

10%

15%

20%

25%

30%

35

36

37

38

39

40

41

42

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

US$/sqm/mth

Grade A overall rent Vacancy


10/16

Unit 602, Asia Tower6 Nha Tho Str., Hoan Kiem DistHanoiTel: +(84-4) 3938 1786www.cushmanwakefield.com

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it i s accurateand complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation,express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject toerrors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed byour principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

ENTER MARKET NAME

SUBMARKET INVENTORY (SQM)

OVERALLVACANCY

RATE

UNDERCONSTRUCTION

(SQM)

YTDCONSTRUC

TIONCOMPLETIO

NS

OVERALLDIRECT NETABSORPTIO

N (SQM)

GRADE A AVERAGEGROSS (US$/SQM/MTH)

US$SF/YR

EUROSF/YR

3Q11 4Q11 4Q11* 4Q11*

CBD A-Grade 126,000 5% 0 0 2,400 $40.8 $40.6 $45.2 34.8

CBD B-Grade 56,000 7% 41,000 10,500 0 $31.8 $29.8 $33.2 25.6

CBD TOTALS 182,000 6% 41,000 10,500 2,400 $38.0 $37.2 $41.5 32.0

Non-CBD A-Grade 64,000 30% 460,000 0 1,300 $30.6 $30.8 $34.426.4

Non-CBD B-Grade 461,000 22% 555,000 155,000 53,000 $23.5 $22.1 $24.6 18.9NON-CBD TOTALS 526,000 23% 1,015,000 155,000 54,300 $24.4 $23.2 $25.8 19.8

TOTALS** 707,000 19% 1,056,000 165,500 56,700 $27.9 $26.8 $29.8 22.9

MARKET STATISTICS

SIGNIFICANT 4Q11 LEASE TRANSACTIONS

BUILDING SUBMARKET TENANT BUILDINGCLASS

SQUARE METRE

Capital Tower CBD Fringe Vietcombank - Cardif LifeInsurance

A 500

Capital Tower CBD Fringe Navigos A 400

TTC

Viet A

Cau Giay

Cau Giay

Novellus

Amway

B

B

1,500

732

SIGNIFICANT 4Q11 SALE TRANSACTIONS

BUILDING MARKET BUYER PURCHASEPRICE (US$)

SQUARE METRE

Vincom City Towers CBD Fringe Techcombank N/A 16,000

SIGNIFICANT 4Q11 CONSTRUCTION COMPLETIONS

BUILDING SUBMARKET MAJOR TENANTSQUARE

METRECOMPLETION

DATE

Song Da Twin Tower

Viet A Tower

My Dinh

Cau Giay

SUDICO

Viet A Corp.

38,190

13.277

Q4 2011

Q4 2011

Nam Cuong Building Suburban Nam Cuong Group 33,000 Q4 2011

SIGNIFICANT4Q11 PROJECTS UNDER CONSTRUCTION

BUILDING SUBMARKETSQUARE METRE COMPLETION DATE

Keangnam Hanoi Landmark Tower

Habico Tower

EVN Twin Tower

Lotte Centre Hanoi

Mipec Tower

Hanoi Indochina Plaza

My DinhMy Dinh

Ba Dinh

Ba Dinh

Dong Da

Cau Giay

100,345

53,936

45,261

43,835

29,500

14,437

Q1 2012

2013

2012

2014

2012

2012



11/16







which rose to less than 1% each month, much lower than

the rate a few months earlier. Inflation in Vietnam in 2011 is

forecast to be 18.13%.







Singapore was the largest, followed by The Republic of

Korea and Japan.

STAGNANT MARKET

Residential market in the fourth quarter of 2011 continues toshow signs of stagnation.

In this quarter, the total number of units launched for sale for

all segments was roughly 1,800. Among which, Grade B

accounts for around 74% and the balance is Grade C. There

was no new Grade A supply. Grade B increased

approximately 28% compared with that in previous quarter.

Due to poor sales performance, some projects have

postponed their launch.

Asking prices of all grades are following a further downward

trend.Under payment pressure, many developers andsecondary investors race to sell products at soft price and

offer discount policies or other promotion programs. Quoting

price for Grade A averages US$2,500/sqm, Grade B

US$1,600/sqm and Grade C US$990. Compared with third

quarter, prices were reduced by about 3% on average.

WEAK DEMANDCurrently, demand comes mostly from end-users and the

remaining from long-term investors who have idle capital

and can hold the units until hand-over.

Buyers still wait for a further drop in prices which adds to the

current stagnation.

OUTLOOKIt is forecast that dozens of projects will be launched for sale

next year. Due to oversupply in the market and tightening

monetary and fiscal policies of the government, apartment

for sale in the coming time will continue to face challenges

and the downward trend is understandable. Accordingly, the

absorption rate is likely to be low.

Mid and low-income apartment segment are considered to

be the focus point of Hanoi real estate market.

ECONOMIC INDICATORS

NATIONAL 2010 2011 2012F

GDP Growth 6.78% 5.89% 6%

CPI Growth 9.19% 18.13% 10.5%

ASKING PRICE OF ALL SEGMENTS Q4 2011

PRIMARY MARKET PERFORMANCE Q4 2011


APARTMENT FOR SALEMARKETBEAT



12/16



STATS ON THE GO

SIGNIFICANT RESIDENTIAL PROJECTS LAUNCHED IN 4Q 2011BUILDING LOCATION TENURE (YEARS) UNITS LAUNCHED SALE PRICE

Hoa Binh Green City Hai Ba Trung 2014 200 1,147-1,571

Hyundai Hillstate Ha Dong 2013 742 1,238-1,381

Daewoo Cleve

Skyview

Berriver Long BienHa Dong

Cau Giay

Long Bien2017

2013

2014

150

60

180

1,400-1,800

1,548-1,595

1,285-1,380


BUILDING LOCATION DEVELOPER EST. NUMBER OFUNITS

EXPECTEDCOMPLETION

Mipec

Mulberry Lane

Hyundai HillstateRoyal City

Mandarin Garden

Dong Da

Ha Dong

Ha DongThanh Xuan

Cau Giay

Mipec

Capital Land

Hyundai E&CVincom

Hoa Phat

314

1,478

9284,200

1,008

2012

2013

20132013

2013



13/16







which rose to less than 1% each month, much lower than the

rate a few months earlier. Inflation in Vietnam in 2011 isforecast to be 18.13%.







Singapore was the largest followed by The Republic of Korea

and Japan.

UNCHANGED SUPPLY IN Q4Hanoi serviced apartment stock, Grade A and B in the fourth

quarter of 2011 was unchanged compared to the previousquarter.

By the end 2011, there were 12 Grade A serviced apartment

buildings, providing 1,372 units, an increase of 10% y-o-y.

Meanwhile, Grade B stock remained unchanged in

comparison with previous year, including 16 buildings or 820

units.

Tay Ho District which is the top location for Western

expatriates had the highest Grade A market share of 39% of

total stock, followed by Ba Dinh and Hoan Kiem districts. Ba

Dinh District occupies the largest Grade B market share, 38%

followed then by Tay Ho District.

MARKET PERFORMANCE DOWNWARD TREND

The market performance in the fourth quarter of 2011

continued in a downward trend for both Grade A and B.

Occupancy rate, Grade A was at 79%, a decrease of 2% q-o-

q and 3% y-o-y, most Grade A buildings have vacancies.

Meanwhile, occupancy rate of Grade B fell slightly by 1% q-o-

q and 1% y-o-y, standing at 89%.

Parallel to the low occupancy rates, quoting rents also kept

decreasing in Q4 2011. Grade A rent was at US$33.5 per

sqm per month (Service charge included, VAT excluded), a

drop of 3% q-o-q and 4% y-o-y. Grade B rent reachedUS$20.5 per sqm per month, a decrease of 2% q-o-q and 8%

y-o-y.

Tay Ho District is always the priority choice for expatriates

staying in Hanoi. As a result, the occupancy rate is higher

than other locations, standing at around 89%. Tay Ho also

provides large supply of townhouses and villas which are

more suitable for families.

OUTLOOKThe serviced apartment market performance in Hanoi is l ikely

to be gloomy due to the global economy effects. Buy-to-let

apartments will continue to be strong competitors for servicedapartments due to the abundant supply and lower rents.

378 Grade A units from Keangnam Hanoi Landmark Tower

Project are due to be launched in the first quarter of 2012,

both occupancy and rental rates for Grade A is forecast to

follow the continuous downward trend in the short-term.

CAPITAL VALUES AS OF 3Q 2011

SUBMARKET AVERAGE

RENT

US$/SQM/MT

H

% CHANGE SHORT

TERM

OUTLOO

K

MTH

AGO

YEAR

AGO

GRADE ACBD 33.6 0% -2%

Non - CBD 33.5 -3% -6%

GRADE B

CBD 19.5 0% -8%

Non - CBD 20.6 -2% -8%

Grade A & B Overall Rental Vs. Occupancy Rate 4Q 2011


SERVICED APARTMENTMARKETBEAT



14/16



STATS ON THE GO

CURRENT SUPPLY BY GRADE IN 4Q 2011GRADE NO. OF BUILDINGS NO. OF UNITS

A

B

C

12

16

15

1,372

820

207



UNITS

EXPECTED

COMPLETION

Keangnam Hanoi Landmark Tower Tu Liem District Keangnam Co. 378 1Q2012

Lotte Center Hanoi Ba Dinh District Lotte 254 2013

Elegant Tay Ho

Le Roi du Soleil

Vietinbank Tower

HD Westlake

Tay Ho District

Tay Ho District

Tu Liem District

Tay Ho District

Duy Hoang Minh

Tan Hoang Minh Corp.

Vietinbank

HD Group

80

N/A

N/A

N/A

2012

2014

2014

Onward


15/16


This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete.Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to theaccuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other

conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. 2012 Cushman & Wakefield, Inc. All rights reserved.

ECONOMY

According to General Statistic Office







months earlier. Inflation in Vietnam in 2011 is forecast to be

18.13%.








MARKET OVERVIEW

Hanoi has nine operating industrial and hi-tech parks with total

scale of approximately 1,760 hectares, of which 1,380 hectares of

lettable leasable area. Thach That and Quoc Oai have the biggest

industrial land area with total leasable area of approximately 620

hectares, occupying approximately 45% of total current supply.

The average leasing price in Hanoi has reached approximately

US$113/sqm/term (terms generally range from 33-49 years,

leasehold).

Seven of the nine operating industrial parks have been fully

occupied since 2009. Hoa Lac Hi-tech Park has the lowest

occupancy rate, only 17%. As a result, the average occupancy

across Hanoi rate is about 69%.

The remaining LUR (Land use right) years in Hanois IPs range

from 33 years to 49 years. Newly established IP, Hoa Lac Hi-tech

Park has the highest remaining LUR years, at 49.

Due to limited current supply, rental rate quoted by developers

is relatively high and gives the developer/s power to select

tenants as they prefer.

DIFFICULT IN SITE CLEARANCE

There is a fact that majority of local people, mostly farmers, dont

want to convert their farm land to IP development purpose as

they worry about future employment, others are not satisfied

with the compensation. Therefore, many projects have slowed

and face processing issues or face postponement.

OUTLOOK

Up to 2020, Hanoi industrial market forecast is for significant

additional supply of approximately 2,900 hectares, representing

160% of current supply.

According to the development orientation of Hanoi to 2020,

Hanoi will focus to attract projects applying advanced

technologies; to continue to develop the key industries such as

electronics & informatics, mechanics, garment & textile and food

processing. Hanoi is further focussed on job creating industry to

fulfil future supply.

MARKET STATISTICS

SUBMARKET TOTAL

AREA (HA)

LEASABLE

AREA (HA)

NO. OF IPS

Gia Lam 97 78 1

Long Bien 40 32 1

Soc Son 100 70 1

Me Linh 344 240 1

Tu Liem 30 24 1

Chuong My 170 111 1

Dong Anh 274 206 1

Thach That & Quoc Oai 705 619 2

SIGNIFICANT FUTURE PROJECTS

IP NAME DISTRICT AREA (HA) STATUS

Phung Hiep Chuong My 401 Site clearance

North Thuong Tin Thuong Tin 470 Site clearance

Dong Anh Dong Anh 470 Planning

PERFORMANCE BY DISTRICT Q4 2011

HANOI/VIETNAM

INDUSTRIAL SNAPSHOTMARKETBEAT

A Cushman & Wakefield Research PublicationQ4 2011

0%

20%

40%

60%

80%

100%

120%

$0$20$40$60$80

$100$120$140$160

$180

psm/term

Rent Occupancy


16/16

MARKETBEATA Cushman & Wakefield Research

Q4 2011

HANOI OFFICE:

Room 602, Asia Tower, 6 Nha Tho

Street, Hoan Kiem District, Hanoi,

VietnamTel: (84) 4 3938 1786

Fax: (84) 4 3938 1781

HO CHI MINH CITY OFFICE:2nd floor, Pathfinder Building, 52 DongDu Street, District 1, Ho Chi MinhCity, VietnamTel: (84) 8 6291 4707Fax: (84) 8 6291 4701

cushmanwakefield market beat q42011 eng

Documents