HANOI QUARTERLY KNOWLEDGE REPORT Q2 2016 Accelerating success www.colliers.com/vietnam
TABLE OF CONTENTS
Page
ECONOMIC OVERVIEW............................................................................................................... 4-5
VIETNAM .................................................................................................................................... 4
HO CHI MINH CITY ...................................................................................................................... 5
HA NOI ........................................................................................................................................ 5
HA NOI MARKET OVERVIEW ................................................................................................ OFFICE ........................................................................................................................................
6-17 6
RETAIL ........................................................................................................................................ 8 CONDOMINIUM ............................................................................................................................ 10
VILLA & TOWNHOUSE ................................................................................................................. 12
SERVICED APARTMENT .............................................................................................................. 14
INDUSTRIAL ................................................................................................................................ 16
Cover Page: Hanoi Skyline
Page LIST OF FIGURES
Figure 1: Vietnam GDP ..................................................................................................................... 4
Figure 2: International Arrivals to Vietnam in 1H 2016 ...................................................................... 4
Figure 3: FDI Capital of HCMC and Hanoi .......................................................................................... 5
Figure 4: GDP Growth Rate of HCMC and Hanoi ................................................................................ 5
HA NOI MARKET OVERVIEW
Figure 5: Office, Average Asking Rent............................................................................................... 6
Figure 6: Office, Occupancy Rate .................................................................................................... 6
Figure 7: Retail, Market Performance ............................................................................................... 8
Figure 8: Retail, Total Supply ........................................................................................................... 8
Figure 9: Condominium, New Launches and Sold Units by Year ........................................................ 10
Figure 10: Condominium, New Launches by Quarter and Segment ..................................................... 10
Figure 11: Condominium, Sales by Quarter and Segment ................................................................... 10
Figure 12: Villa and Townhouse, Supply by Quarter ............................................................................ 12
Figure 13: Villa and Townhouse, Secondary Price by District .............................................................. 12
Figure 14: Villa and Townhouse, Q-o-Q changes in Secondary Price .................................................. 12
Figure 15: Serviced Apartment, Market Performance...........................................................................14
Figure 16: Serviced Apartment, Total Supply ..................................................................................... 14
Figure 17: Industrial, Market Performance............................................................................................16
Figure 18: Industrial, Supply by District ............................................................................................. 16
LIST OF TABLES
Table 1: Macroeconomic Indicators of HCMC and Hanoi ..................................................................... 5
Table 2: Office, New Supply in Q2 2016 ............................................................................................ 6
Table 3: Significant Office Projects ................................................................................................... 7
Table 4: Retail, Future Supply .......................................................................................................... 8
Table 5: Significant Retail Projects .................................................................................................. 9
Table 6: Condominium, New Projects Launched in Q2 2016 .............................................................. 11
Table 7: Villa and Townhouse, New Projects Launched in Q2 2016 .................................................... 13
Table 8: Serviced Apartment, Supply Supply .................................................................................... 14
Table 9: Significant Serviced Apartment Projects ............................................................................. 15
Table 10: Industrial, Future Supply .................................................................................................... 16
Table 11: Hanoi Industrial Market Overview ........................................................................................ 17
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | ECONOMIC OVERVIEW VIETNAM GDP
In the first six months of 2016 (1H2016), Vietnam’s GDP grew 5.52%. Although the growth rate was higher than that of 2012-2014, there were signs of slowdown when comparing to the increase of 6.32% in the same period last year. Adverse weather, including drought in the Central Highlands and salination in the Mekong Delta, resulted in the reduction of 0.8% in the agriculture output in 1H 2016. To achieve the projected economic growth of 6.7% this year, the country must push its GDP to 7.6% in the remaining of 2016.
Q3 2016 forecast
CPI
Average CPI of 1H2016 climbed by 1.72% y-o-y while the core CPI (excluding energy and food prices) grew 1.80% y-o-y. An increase was seen in 10 out of 11 goods and service groups, with transport posting the highest rise at 2.99%, followed by housing and construction materials at 0.55%, restaurant services 0.21%, culture, entertainment and tourism 0.18%, and alcohol and tobacco 0.13%. Only the post and telecommunications group saw a drop of 0.06%. The rising fees of health care services, education and fuel will continue to put pressure on CPI in the rest of the year.
FDI
The total FDI registered in Vietnam in the first half of the year reached USD11.3 billion, significantly up 105.4% y-o-y. Of the total, USD7.5 billion came from 1,145 newly licensed projects, representing a yearly increase of 95.3% in capital and 51.3% in the number of projects. The remainder was contributed by 535 already-operating projects that had raised their capital by more than USD 3.78 billion, or 129% year-on-year (y-o-y). Disbursement of FDI surged to an estimated USD 7.25 billion in the six-month period, a y-o-y rise of 15% percent. Manufacturing and processing industries continued to be the top sector, following by the real estate sector and the science and technology sector, comprising 71%, 5.3% and 5% of the total registered FDI respectively.
RETAIL SALES
In the first six months of 2016, Vietnam’s retail sales of goods and services reached USD76.6 billion, up 9.5% compared to the same period last year. If the price factor was excluded, the growth rate would be 7.5%, lower than the increase of 8.8% in the same period in 2015. Specifically, retail sales of accommodation and catering services reached USD17 billion, accounting for 11.3% of the total sales, up 7.4% y-o-y. Retail sales of tourism services, which made up 0.9% of the total sales, reached USD666.7 million, up 9.6% y-o-y. Retails sales of other services which accounted for 11.6% of total sales, estimated USD8.9 billion, up 9.2% y-o-y.
INTERNATIONAL ARRIVALS
International visitors to Vietnam in 1H2016 were estimated to reach more than 4.7 million arrivals, marking a y-o-y increase of 21.3%. Foreign arrivals by air reached over 3.92 million, up 26% y-o-y while arrivals by road saw a yearly rise of 31.3% to 710,000. However, arrivals by sea declined 27.8 % to 75,000. Growth was recorded in the number of tourists from several Asian and European countries.
EXCHANGE RATE
Contrary to early 2016 expectation, the exchange rate was kept stable in the first 6 months. Using a daily-adjusted central exchange rate mechanism, the SBV has succeeded in stabilizing the Vietnam dong for several quarters. The VND/USD rate experienced minor increases for just a few days after Brexit, but soon moved back to its steady state. Nevertheless, the exchange rate may experience a mild increase to 22,750 VND/USD in the next 6 months. Figure 1: Vietnam GDP
Figure 2: International arrivals to Vietnam in 1H 2016
GDP per capita (nominal)
GDP growth rate
International tourist arrivals
8
2,500
9,000
7
8,000
2,000
4 1,000
3 2
500 1
thousand arrivals
%
1,500
USD/capita
6 5
Average
7,000 6,000 5,000 4,000 3,000 2,000
0
0 2005
2006
2007
2008
2009
2010
2011
2012
Source: World Bank | Colliers International Research
©2016 Colliers International Research
2013
2014
2015
Q2 2016
20052006200720082009 2010 2011 2012 2013 2014 2015 Q2 2016 Source: Asian Development Bank (ADB) | Colliers International Research
Page 4
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | ECONOMIC OVERVIEW HO CHI MINH CITY In the first six months of 2016, the Gross Regional Domestic Product (GRDP) of Ho Chi Minh City reached USD21.2 billion with a stable increase of 7.47% y-o-y. Of total growth rate, trade and service sector contributed 4.19%, industrial and construction sector made up 2.16% while agriculture, forestry and fisheries sector accounted for 0.04%. As of 15 June 2016, FDI inflow of both newly registered and supplementary capital to the city reached 425 projects, worth of USD685.4 million. There are 367 new investment projects with capital reaching USD512.7 million.
Table 1: Marcoeconomic Indicators of HCMC and Hanoi HCMC Q2 2016
Hanoi
Q3 2016F
Q2 2016
GDP (billion)
21.2
10.6
FDI (million)
685.4
1,900
Retail sales (billion)
15.4
45.7
Export (billion)
14.78
5.2
Import (billion)
17.3
11.5
Q3 2016F
Source: General Statistics Office | Colliers International Research
The average price index in the first six months of this year went up 1.02% on an annual basis Transportation sector had the biggest rise of 3.33% due to the hikes in fuel and gasoline price. Retail sales achieved USD15.4 billion, an increase 11.3% y-o-y. Figure 3: FDI Capital of HCMC and Hanoi HCMC
Hanoi
3000 2500 USD million
Export values reached USD14.78 billion, up 1.7% y-o-y. Garments, agricultural products and computers & electronic devices contributed the most to export values. Import values increased by 7.9% y-o-y, worth of USD17.3 billion. The top segments of import values were milk and dairy products, fuel, garment material, plastics and iron & steel.
2000 1500 1000 500 0
HANOI
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012
In 1H2016, Hanoi’s GRDP achieved USD10.6 billion with a growth rate of 7.34% y-o-y. Industrial and construction sector had the highest growth rate of 7.78%, followed by service sector with the growth rate of 7.49%. Agricultural-forestry-fishery witnessed a modest growth rate of 2.06%. CPI in the first six month of 2016 continued to rise, reaching 2.67% y-o-y. Transportation sector had the highest index mainly due to the increase in gasoline prices. Retail sales of Hanoi were up 9.7% y-o-y, reaching USD45.7 billion in which retail sector achieved USD10.7 billion, an increase of 8.6% y-o-y. In the first six months of 2016, the capital welcomed 1.5 million international visitors, an increment of 39.3% y-o-y while the growth rate of domestic tourists was 2% y-o-y.
2013
2014
2015
2016
Source: General Statistics Office | Colliers International Research
Figure 4: GDP Growth Rate of HCMC and Hanoi HCMC
Hanoi
14%
12%
10%
As of 21 June 2016, FDI inflows of both newly registered and supplementary capital reached USD1.9 billion, triple the amount of this period in 2015 and achieved 95% of year’s target. In 1H 2016, export values grew 0.1% y-o-y, reaching USD5.2 billion while those of import went down 4.2% y-o-y, achieving USD 11.5 billion.
8%
6% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q2 2016
Source: General Statistics Office | Colliers International Research
©2016 Colliers International Research
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VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | OFFICE PERFORMANCE
The average asking rents across all grades recorded a nominal q-o-q increase of 0.65ppts, reaching USD22.95/sqm/month. Due to an oversupply in the market, the occupancy rate experienced a downturn, dropping 3.7ppts compared to the previous quarter, staying at 83.25%.
Figure 5: Office, Average Asking Rent Grade A
Grade B
40 35
Grade A showed improvements in both occupancy and rents, up 0.35 ppts and 0.6ppts respectively compared to the previous quarter, achieving 82.3% and USD28.2/sqm/month. While Grade B’s rental rate was soften, decreasing 0.6ppts q-o-q to USD17.7/sqm/month, its occupied rate witnessed a significant drop of 7.48ppts, averaging at 83.25%.
US$/sqm/month
30 25 20 15 10 5 0 Q1
Q2
Q3
Q4
2012
SUPPLY
Grade B dominated new supply in the review quarter, adding 58,000sqm NLA from 4 buildings to the existing stock. After significant growth in the first half of the year, the current office supply reaches more than 1.5 million sqm NLA. By location, most of Grade A buildings is located in the CBD while a majority of Grade B is scattered around the West and Mid-town. The future pipeline will more expand with approximately 330,000sqm GFA of office space entering the market in the next three years. Most of new supply will be decentralised in the West and Midtown area, creating intense competition with the existing CBD.
Q1
Q2
Q3
Q4
Q1
2013
Q2
Q3
Q4
2014
Q1
Q2
Q3
2015
Q4
Q1
Q2
2016
Source: Colliers International Research
Figure 6: Office, Occupancy Rate Grade A
Grade B
100% 80% 60% 40% 20% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
DEMAND
Demand for Hanoi office space is improving on the back of positive economic conditions. Finance, insurance and banking in both domestic and foreign companies are dominant in the leasing market.
2012
2013
2014
2015
2016
Source: Colliers International Research
Table 2: Office, New Supply in Q2 2016 The city is witnessing decentralizing trend as tenants move away from the CBD to cut their costs. Affordable rents and larger floor plates in Midtown and the West are attractive options for occupiers. However, the CBD is still a high potential market with its prime location.
OUTLOOK
Given the fact that supply still outweighs demand, rents are being more affordable and competitive. Landlords will continue to offer flexible leasing terms, attractive incentives and high quality services to secure or retain tenants. Matured office buildings should renovate their facilities to be competitive with newer buildings, especially those in the West of the CBD.
©2016 Colliers International Research
District
Grade
NLA (sqm)
Expected completion
UDIC
Cau Giay
B
14,500
2016
Trico
Long Bien
B
12,280
2016
STV
Hoan Kiem
B
5,000
2016
Cau Giay
B
26,250
2017
Project name
HUD Tower
Source: Colliers International Research
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VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | OFFICE
Table 3: Significant CBD Office Projects No
Name
Address
Completion Year
NLA (sqm)
Service Charges (*)
1
Central Building
31 Hai Ba Trung
1995
3,653
9.0
2
International Centre
17 Ngo Quyen
1995
6,500
3
Hanoi Tower
49 Hai Ba Trung
1997
9,000
4
63 Ly Thai To Building
63 Ly Thai To
1998
5
Sun Red River Building
23 Phan Chu Trinh
1999
6
Vietcombank Tower
198 Tran Quang Khai
2000
Average Occupancy asking rent rate (**) 100%
33.0
7.0
90%
24.0
7.0
100%
27.0
6,753
-
100%
47.0
13,459
7.0
75%
28.0
19,563
-
100%
29.0
7
Opera Business Centre
60 Ly Thai To
2007
3,787
included
85%
24.0
8
Pacific Palace
83B Ly Thuong Kiet
2007
16,600
7.0
91%
25.0
9
Asia Tower
2 Nha Tho
2007
3,100
included
77%
35.0
10
Sun City Building
13 Hai Ba Trung
2007
6,400
-
100%
45.0
11
BIDV Tower
194 Tran Quang Khai
2010
10,120
7.0
95%
30.0
12
Sentinel Place
Hang Da
2010
8,000
8.5
95%
45.0
13
Corner Stone
16 Phan Chu Trinh
2013
26,500
7.0
70%
30.0
14
Hong Ha Center
25 Ly Thuong Kiet
2013
11,000
5.0
27.0%
19.0
144,435
7.0
84%
30.0
1
Tungshing Square
2 Ngo Quyen
1996
8,306
7.0
89%
21.0
2
Melia Hotel
44B Ly Thuong Kiet
1997
8,500
-
90%
38.0
Grade A
3
Prime Centre
53 Quang Trung
1998
7,600
-
100%
27.0
4
VIB Hai Ba Trung
59 Quang Trung
2006
3,000
-
68%
16.0
5
Capital Tower
109 Tran Hung Dao
2010
21,089
7.0
87%
20.0
6
Hanoi Tourist Building
18 Ly Thuong Kiet
2010
7,600
-
100%
24.0
7
Capital Building
72 Tran Hung Dao
2013
5,800
-
100%
25.0
8
Coalimex Building
33 Trang Thi
2013
5,071
5.0
79%
18.0
9
VID Building
115 Tran Hung Dao
2013
4,930
-
89%
23.0
10
Artex Port
31-33 Ngo Quyen
2014
4,725
-
100%
23
76,621
6.0
91%
23.5
Grade B (*) US$/sqm/month (NLA)
©2016 Colliers International Research
Page 7
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | RETAIL
New vacant space in some retail centers pushed the overall occupancy rate down to 88.1%, representing a drop of 0.45ppts q-o-q. The average net asking rents were softened in suburban shopping malls, resulting in a decline of 1.7% q-o-q and 2.5% y-o-y. While the CBD rents remained stable at USD81.44/sqm/month, those of non-CBD sub-markets were reduced to USD28.3/sqm/month respectively.
SUPPLY
As of Q2 2016, the retail stock is more than 700,000sqm NLA from 53 buildings, marking an increase of 7.5% q-o-q. Three new retail podiums entered the market, providing approximately 45,000sqm NLA. More than 150,000sqm GFA of new retail centers is expected to come online in the next quarters, diversifying shopping activities of Hanoi people. Vingroup is leading the market share of retail space with three under-construction shopping malls in the West and Mid-town area.
Figure 7: Retail, Market Performance Rental rate
Occupancy
100%
80 70
95%
60 50
90%
40 85%
30 20
80%
US$/sqm/month
PERFORMANCE Table 3: Significant Office Projects
10
75%
0 2008
2009
2010
2011
2012
2013
2014
2015 Q2 2016
Source: Colliers International Research
Figure 8: Retail, Total Supply CBD
Non-CBD
800,000 700,000 600,000
DEMAND
According to the Consumer Confidence Index by Nielsen, Vietnamese consumer confidence continues staying at a high level, ranking as the 7th most optimistic country in the world despite a slight decrease of 2ppts in Q2 2016. Rising affluence, growing middle class population and an improving economic outlook supports Vietnamese’s optimistic view on the local economy. This may have positive impacts on retail sales and in turn expanding demand for retail space.
sq m
500,000 400,000 300,000 200,000 100,000 0 2010
2011
2012
2013
2014
2015
Q2 2016
Source: Colliers International Research
Table 4: Retail, Future Supply
OUTLOOK
Strong competition in securing new tenants will continue in Hanoi retail market when the supply pipeline is expected to grow substantially. Retail centers in non-CBD area will lower their rents than the average market rate to fill up their vacant space. Besides, landlords of mature retail developments should restructure their properties to have a more efficient mix of retail sales, F&B and entertainment.
District
GFA (sqm)
Expected completion
Long Bien
24,000
Q3 2016
Vincom Exchange City
Tu Liem
23,140
Q4 2016
Vincom Pham Ngoc Thach
Dong Da
18,900
Q4 2016
Vincom Green Star
Tu Liem
50,000
Q4 2016
Discovery Complex
Cau Giay
38,144
Q1 2017
Project Name Mipec Riverside
Source: Colliers International Research
©2016 Colliers International Research
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VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | RETAIL
Table 5: Significant Retail Projects Name of Project / Building
No
Address
Location
Completion Year
NLA (sq m)
ARR (*)
Occupancy Rate
1995
550
90-100
100%
1
Central Building
31 Hai Ba Trung
Hoan Kiem
2
Hanoi Tower
49 Hai Ba Trung
Hoan Kiem
1997
2,056
50-60
73%
3
63 Ly Thai To Building
63 Ly Thai To
Hoan Kiem
1998
594
150
100%
4
ICC Building
71 Nguyen Chi Thanh
Dong Da
2006
2,900
16
50%
5
Pacific Place
83b Ly Thuong Kiet
Hoan Kiem
2007
2,000
70
88%
6
Opera Business Center
6b Trang Tien
Hoan Kiem
2007
1,070
90-150
100%
7
Golden Westlake
151 Thuy Khue
Tay Ho
2007
1,000
25
75%
8
Sun City
13 Hai Ba Trung
Hoan Kiem
2008
861
90-95
100%
9
Asia Tower
6 Pho Nha Tho
Hoan Kiem
2008
500
100
100%
10
Sentinel Place
41A Ly Thai To
Hoan Kiem
2010
550
45
57%
11
Sky City Tower
88 Lang Ha
Dong Da
2010
5,400
20-80
100%
12
Han Viet Tower
203 Minh Khai
Hai Ba Trung
2012
600
16-17
59%
13
Rainbow Tower
19/5 KDT Van Quan
Ha Dong
2012
900
20
100%
14
Hapumedicenter
85 Vu Trong Phung
Thanh Xuan
2012
18,500
20
100%
15
The Lancaster Hanoi
20 Nui Truc
Ba Dinh
2013
3,123
33
45%
16
Madarin Garden Residential
1 Hoang Minh Giam
Cau Giay
2013
11,000
25-30
100%
Retail Podium
51,604
91%
1
Vincom Center Ba Trieu - Tower A&B
191 Ba Trieu
Hai Ba Trung
2004
17,000
90-100
99%
2
Vincom Center Ba Trieu - Tower C
191 Ba Trieu
Hai Ba Trung
2004
10,974
80
100%
Hai Ba Trung
2007
5,200
28
96%
Tay Ho
2008
5,000
30
100%
10
85%
3
Ruby Plaza
44 Le Ngoc Han
4
Syrena
51B Xuan Dieu
5
Trang Tien Plaza
24 Hai Ba Trung
Hoan Kiem
2008
14,000
6
Savico MegaMall
7-9 Nguyen Van Linh
Long Bien
2011
54,900
20-25
99%
7
Keangnam Palace Landmark
Lot E6, Pham Hung
Tu Liem
2011
60,771
20-53
80%
8
Vincom Center Long Bien
KDT Vincom
Long Bien
2012
45,000
20
70%
9
Indochina Plaza Hanoi
241 Xuan Thuy
Cau Giay
2012
19,929
22
97%
10
Vincom Mega Mall - Royal City
72A Nguyen Trai
Thanh Xuan
2013
230,000
70
99%
11
Vincom Mega Mall - Time City
458 Minh Khai
Hai Ba Trung
2014
200,000
50
100%
12
Aeon Mall Long Bien
2 Co Linh
Long Bien
2015
72.000
45
100%
13
Vincom Nguyen Chi Thanh
Dong Da
2015
34,500
70-80
54A Nguyen Chi Thanh Shopping Centre
719,346
99% 96%
1
Parkson (Viet Tower)
198 Tay Son
Dong Da
2007
15,761
15
97%
2
The Garden (Bitexco)
Me Tri
Tu Liem
2007
23,700
28-35
99%
3
Ho Guom Plaza
Ha Dong
Ha Dong
2013
23,380
16
94%
4
Lotte Department Store
54 Lieu Giai
Ba Dinh
2014
38,709
43
97%
Department Store
101,550
97%
(*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT
©2016 Colliers International Research
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VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | CONDOMINIUM PERFORMANCE
The market recorded 4,950 successful transactions, up 24% compared to the previous quarter. Effective sales events and various promotion packages helped to push up sale rates.
Figure 9: Condominium, New Launches & Sold Units by Year New Launches
Sold Units
35,000 30,000 25,000 units
The positive market sentiment initiated slight price increases. On the primary market, price growth of 1-2% q-o-q was recorded across all segments. Especially, projects with a close proximity to the city center or ongoing infrastructure projects increased their sale price by 5-7%.
20,000 15,000 10,000 5,000
SUPPLY
The review quarter had approximately 6,497 units from 15 condominium projects, marking an increase of 45% q-o-q in newly launched supply. Mid to high-end segments dominated new launches, accounting for 52% of total new projects.
0 2012
2013
2014
2015
1H2016
Source: Colliers International Research
Figure 10: Condominium, New Launches by Quarter and Segment
With well-established infrastructure, the West and East area are hot spots for new residential developments.
Luxury
High-end
Mid-end
Affordable
6,000 5,000
DEMAND
Rapid urbanization rate, reduced household size and young population continue to be key demand drivers of Hanoi residential market. The review quarter has seen strong sales activities in high-end apartments due to improved investor’s confidence. However, real demand is under the affordable to mid-end segment for the purpose of owner-occupation. Typical units ranged from 45-90sqm are favorite options for end-users who having limited budgets.
units
4,000 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012
2013
2014
2015
2016
Source: Colliers International Research
Figure 11: Condominium, Sales by Quarter and Segment Luxury
OUTLOOK
Mid-end
Affordable
5,000 4,000
units
The supply pipeline will remain strong with more than 20,000 units launched in the rest of year. With positive market sentiment, sales price is expected to follow an upward trend. New projects tend to be located in a master community where having all necessary facilities and amenities for future residents.
High-end
6,000
3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012
2013
2014
2015
2016
Source: Colliers International Research
©2016 Colliers International Research
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VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | CONDOMINIUM
Table 3: 6: Significant OfficeNew Projects Table Condominium, projects launched in Q2 2016 No
Name of Project/Building
Developer
Location
Completion Year
Number of units
Asking Price (US$/sqm)
1
Mon City
Hai Dang Real Estate Corp.
Tu Liem
2017
100
1,400
2
West Bay Sky Residence
Vihajco
Ecopark
2018
500
600 - 700
3
Summer Suites (Season Avenue)
Capital Land
Ha Dong
2017
286
1250
4
Doanh Nhan Tower 1
XNK Tay Do
Ha Dong
2017
600
900-1,000
5
D’.Le Roi Soleil (phase 1)
Tan Hoang Minh
Tay Ho
2018
200
2,700 - 3500
6
Sapphire 1&4
TNR Holdings
Tu Liem
2017
1,360
100
7
Golden Field My Dinh
MBLand Holding
Tu Liem
2017
400
1,200 - 1,00
8
D'. Le Pont D'or
Tan Hoang Minh Group
Dong Da
2017
308
1,800
9
Eco Green Tower
Công ty Cổ phần Sông Đà 1.01
Hoang Mai
2017
294
1,000-1,100
10
Lộc Ninh Singashine
Loc Ninh
Chuong My
2017
448
0
11
Eco Green City CT1
Viet Hung Real Estate & Construction Co. Ltd.
Hoàng Mai
2018
364
1,100
12
Eco Green City CT2
Viet Hung Real Estate & Construction Co. Ltd.
Hoàng Mai
2018
493
1,500
13
Central Field Trung Kính
MBLand
Cau Giay
2017
492
1,500 - 1,600
14
Tabudec Lake View Plaza
Tabudec
Ha Dong
2017
252
700
15
Goldseason
TNR Holdings
Thanh Xuan
2018
400
1,400- 1,600
New launches in Q2 2016
6,497
* Excluding all kinds of tax, promotions and management fee The information is updated as at the end of Q2 2016
©2016 Colliers International Research
Page 11
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | VILLA & TOWNHOUSE
Townhouses continued to lead successful sale transactions with nearly 200 sales recorded, accounting for 65% of sold dwellings. On the primary market, Tu Liem achieved the highest sale price of USD3,700/sqm while Gia Lam had the lowest rate of USD1,100/sqm. The secondary price increased 2.9% q-o-q, averaging at USD3,400/sqm. Projects in decentralised districts softened their prices while those in urban areas witnessed price growth. Compared to the previous quarter, Ha Dong recorded the highest price growth of 6% while Thanh Xuan had the strongest price decrease of 4%.
Figure 12: Villa and Townhouse, Supply by quarter No. of Dwellings
No. of Projects
35,000
140
34,000
120
33,000
100
32,000 dwellings
PERFORMANCE
31,000
80
30,000
60
29,000
40
28,000
20
27,000 26,000
0 Q3
Q4
Q1
Q2
2014
SUPPLY
The stock grew substantially in the review quarter with the launch 1,201 dwellings from 14 projects. Outlying districts with large greenfield sites and upgraded infrastructure such as Ha Dong, Hoai Duc, Long Bien, Tu Liem and Hoang Mai are top suppliers of landed properties. Among that, Ha Dong takes the largest market share, representing 66.5% of supply pipeline.
Q3
Q4
Q1
2015
Q2 2016
Source: Colliers International Research
Figure 13: Villa and Townhouse, Secondary price by District Q1 2016 Secondary price Q2 2016 Market average price
Q2 2016 Secondary price Q2 2016 Primary price
7000 6000
DEMAND
Landed properties have become more affordable in recent years thanks to their reduced sizes. Smaller villas and townhouses are being launched to suit buyers’ preferences.
USD/sqm
5000 4000 3000 2000 1000 0
For home owners, this type of properties provides a traditional accommodation that is preferred by most Vietnamese people. Also it is believed to achieve high rental yield and land value appreciation over time. This is explained why investors are becoming more attractive to this market segment.
Thanh Xuan
Tu Liem
Hoang Mai
Ha Dong
Long Bien
Gia Lam
Source: Colliers International Research
Figure 14: Villa and Townhouse, Q-o-Q changes in secondary price Market average price Q2 2016
Q-o-Q changes
7000
20
6000
15
5000
10
4000
5
3000
0
2000
-5
1000
-10
%
USD/sqm
OUTLOOK
Infrastructure development has been a priority in Hanoi, with the local government taking steps to improve the transport system. Better connectivity between the city center and suburban districts will enhance the value of future landed projects. It is expected that the supply pipeline will welcome more than 1,000 dwellings in the rest of the year.
Hoai Duc
0
-15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011
2012
2013
2014
2015
2016
Source: Colliers International Research
©2016 Colliers International Research
AcceleratingPage success 12
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | VILLA & TOWNHOUSE
Table3:7:Significant SignificantOffice new projects Table Projectslaunched in Q2 2016 No
Name of Project/Building
Developer
Location
Completion Year
Number of units
Asking Price (US$/sqm)
1
Victoria Van Phu
Van Phu Invest
Ha Dong
2016
148
2,000
2
Gamuda Gardens (Phase 2)
Gamuda Land
Hoang Mai
2016
44
2,700
3
FLC Eco House
FLC group & KHKT corp.
Long Bien
2016
104
1,500
4
Park Hill shophouse
Vin Group
Hai Ba Trung
2016
26
1,600
5
The Boutique shophouse
Vin Group
Hai Ba Trung
2016
10
2,000
6
Vinhomes Botanica
Vin Group
Tu Liem
2016
61
4,500
7
HDI Homes
Handico 7
Thanh Xuan
2017
18
5,000-6,500
8
Green Pearl
Daewoo co, LTD
Hai Ba Trung
2017
20
4,700-4,900
9
Pandora
Hoa Binh Corporation
Thanh Xuan
2017
10
3,000 - 4,500
10
Lucky House
Hancorp
11
622 Minh Khai
Handico & Hai Chau Corp.
12
Thanh Ha B
13
Starlake
14
Phu Luong Residence
Trung Viet & Hai Phat Corp.
Hoang Mai
2018
20
1,700
Hai Ba Trung
2018
61
3,700
Muong Thanh
Ha Dong
2019
451
800-1,000
Daewoo E&C
Tay Ho
2019
28
4,500 - 5,000
Ha Dong
N/A
200
1000
New launches in Q2 2016
1,201
* Excluding all kinds of tax, promotions and management fee The information is updated as at the end of Q2 2016
©2016 Colliers International Research
AcceleratingPage success 13
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | SERVICED APARTMENT
Grade A had a nominal rent growth of 0.95ppts q-o-q, reaching USD31.7/sqm/month while its occupancy rate improved 2.3ppts, averaging at 85.9%. Grade B dropped 1.81ppts q-o-q in rents and 4.4ppts in occupancy rates, staying at USD21.7/sqm/month and 80.3% respectively. By location, the highest average asking rent for both two Grades was recorded in Cau Giay, followed by Ba Dinh and Tu Liem.
Figure 15: Serviced Apartment, Market Performance Asking Rent
Occupancy Rate
3400
100%
3300 US$/unit/month
PERFORMANCE Table 3: Significant Office Projects
80%
3200 3100
60%
3000 40%
2900 2800
20%
2700 2600
SUPPLY
The opening of Novotel Suites Hanoi in the review quarter expanded the total stock by 1.5% q-o-q. Being AccorHotels‘s very first Novotel Suites in Asia, the development provides 53 serviced accommodation, especially designed for business clients. No new supply will enter the market from now until 2017. Generally, most of Grade A projects is under international management while a majority of Grade B developments are self-managed or under local management.
0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011
2012
2013
2014
2015
2016
Source: Colliers International Research
Figure 16: Serviced Apartment, Total supply Grade A
units
Grade B
3,500 3,000 2,500 2,000
DEMAND
In recent years, the office market has witnessed a decentralization trend, where companies gradually relocate from prime CBD to non-CBD areas. As a result, there has been growing demand for serviced apartment in the west area of the city.
1,500 1,000 500 2000
Demand has also come from expatriates working in certain industrial parks in Hanoi and Bac Ninh. In terms of guest nationality, Japanese and Korean have the highest proportion in customer profile.
2005
2010
The supply pipeline is anticipated to welcome more than 500 new serviced units by 2018. Villas and buy-to-let apartments continue to create fierce competition for long-term requirements, while hotels compete for tenants on shorter stays. This forces providers to differentiate their business strategies to attract tenants. It is suggested that serviced accommodation should be managed by international brands to be entitled to a global profile, brand awareness, professional marketing as well as structured and standardised operating procedures.
©2016 Colliers International Research
2012
2013
2014
2015 Q1 2016
Q2 2016
Source: Colliers International Research
Table 8: Serviced Apartment, Future Supply Project Name
OUTLOOK
2011
Trang An Complex Somerset WestPoint Somerset West Central Hanoi
District
Expected units
Expected completion
Cau Giay
42
2017
Tay Ho
247
2017
Cau Giay
252
2018
Source: Colliers International Research
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VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | SERVICED APARTMENT
Table3:9:Significant SignificantOffice Serviced Apartment Projects Table Projects No.
Project Name
Address
Location
Total Units
Average Occupancy
ARR(*) (**)
Ba Dinh
194
85%
28.0 31.5
1
Hanoi Daewoo
360 Kim Ma
2
Hanoi Somerset Grand
49 Hai Ba Trung
Hoan Kiem
185
85%
3
Sedona Suites
96 To Ngoc Van
Tay Ho
181
90%
34.3
4
Somerset West Lake
254D Thuy Khue
Tay Ho
90
82%
30.0
5
Sofitel Plaza
1 Thanh Nien
6
Sun Red River
23 Phan Chu Trinh
7
Hanoi Lake View
28 Thanh Nien
8
Pacific Place
83B Ly Thuong Kiet
9
Intercontinental Ha Noi
13 Nghi Tam
10
Somerset Hoa Binh
106 Hoang Quoc Viet
11
Fraser Suites Hanoi
51 Xuan Dieu
12
Crown Plaza
36 Le Duc Tho
13
Calidas
E6, Pham Hung
14
Lotte Center
15
Hanoi Club
Ba Dinh
56
100%
38.0
Hoan Kiem
46
96%
23.0
Tay Ho
26
90%
25.0
Hoan Kiem
35
83%
20.0
Tay Ho
25
88%
35.0
Cau Giay
206
87%
31.0
Tay Ho
184
95%
40.5
Tu Liem
136
97%
34.5
Tu Liem
378
97%
32.0
Dao Tan, Cong Vi
Ba Dinh
258
87%
35.0
76 Yen Phu
Tay Ho
54
96%
29.0
2,054
91%
32.5
Tay Ho
59
88%
26
Grade A 1
Oriental Palace
33 Tay Ho
2
Pan Horizon
157 Xuan Thuy
Cau Giay
86
80%
22
3
Rose Garden
170 Ngoc Khanh
Ba Dinh
96
91%
22
4
Jana Garden Terrace
6 Kim Dong
Hoang Mai
72
83%
20
5
V-Tower
649 Kim Ma
Ba Dinh
36
100%
28
6
DMC Lake View
535 Kim Ma
Ba Dinh
66
82%
16
Hai Ba Trung
50
92%
18
Hoan Kiem
39
92%
23
Ba Dinh
40
92%
22
7
Atlanta
49 Hang Chuoi
8
Elegant Suites Hahoi
19B Ha Hoi
9
Hoa Binh Green
No. 14, Ally 376 Buoi
10
Times City
485 Minh Khai
Hai Ba Trung
150
85%
19
11
Royal City
72 Nguyen Trai
Thanh Xuan
100
70%
15
12
My Way
4, Alley 86, Duy Tan
Cau Giay
39
93%
25
13
Rainbow
7 Trieu Viet Vuong
Hai Ba Trung
26
88%
14
14
Dolphin
28 Tran Binh
Tu Liem
70
93%
12
15
Lancaster Hanoi
20 Nui Truc
Ba Dinh
31
90%
24
16
Elegant Suites Westlake
10C Dang Thai Mai
Tay Ho
131
94%
27
17
May Fair
34B Tran Phu
Ba Dinh
48
95%
17
18
Hanoi Lakes Residences
11-13 Nam Trang
Ba Dinh
10
100%
11
19
Skyline Tower
4 Dang Dung
Ba Dinh
79
95%
21
20
Candle Hotel
287-301 Doi Can
Ba Dinh
69
74%
29
21
Park View
9 Nguyen Binh Khiem
Hai Ba Trung
6
83%
15
22
Flower Village Hanoi
14 Thuy Khue
Tay Ho
131
90%
23
23
Palace de Thien Thai
2 Tho Nhuom
Hoan Kiem
16
98%
20
24
The City Residences
37 Phan Dinh Phung
Ba Dinh
15
67%
15
25
Swan Lake
3/61/31 Xuan Dieu
Tay Ho
6
83%
16
26
Lakeside Garden
56 Xuan Dieu
Tay Ho
8
62%
14
1,479
87%
21.0
Grade B (*) US/sqm/month
(**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge
©2016 Colliers International Research
AcceleratingPage success 15
VIETNAM VIETNAM QUARTERLY QUARTERLY KNOWLEDGE KNOWLEDGE REPORT REPORT Q2 2016 | HA NOI | INDUSTRIAL PERFORMANCE
Due to the conversion of Dai Tu IP, the average gross asking rent nominally dropped 0.3% to USD82.8/sqm/term and the remaining Land Use Right was 34.9 years. Noi Bai IP had the highest asking rent of USD5/sqm/year. Ready- built factories offered rents ranged from USD1.5 – USD2.5/sqm/month while their management fees were at USD0.43/sqm/month on average. The average occupancy rate increased by 0.4ppts, reaching 61.9%. Noi Bai, Phu Nghia, Sai Dong B, Thach That and Thang Long have been leased out.
Figure 17: Industrial, Market Performance Average asking rent
Occupancy rate
90
100% 80%
85
60% 80 40% 75
20%
70
SUPPLY
In April 2016, the Government accepted a proposal to convert Dai Tu IP into an urban residential area. This was due to its low occupancy rate of 30%-35% and inefficient operation which negatively affected the surrounding environment. Hence, the total existing supply went down by 1% q-o-q, with 10 IPs and 3,800ha of total land area.
0% Q4 2015
Q1 2016
Source: Colliers International Research
Figure 18: Industrial, Supply by District
Tu Liem 9%
DEMAND
In recent years, due to rising operation cost in China, foreign manufacturers have chosen Vietnam as their alternative production bases. The country’s northern centres- notably Hanoi, Haiphong and Bac Ninh province – have been attractive location on the back of their close proximity to China, lower labour costs than in the south and a variety of tax incentives. A surge in foreign-invested manufacturing activities in the region has fuelled strong demand for industrial properties.
Q2 2016
Others 9% Dong Anh 35%
Me Linh 12%
Chuong My 12% Thach That 23%
Source: Colliers International Research
Table 10: Industrial, Future Supply District
GFA (ha)
Quang Minh II Industrial park
Me Linh
266
Phuc Tho Industrial park
Phuc Tho
74
Phu Xuyen Industrial park
Phu Xuyen
488
Thanh My - Xuan Son Industrial park
Son Tay
108
Soc Son Industrial park
Soc Son
340
Soc Son II Industrial park
Soc Son
204
Soc Son III Industrial park
Soc Son
180
Soc Son IV Industrial park
Soc Son
216
Thanh Oai II Industrial park
Thanh Oai
480
Habeco Industrial park
Thuong Tin
300
Industrial Park Name
OUTLOOK
The supply pipeline by 2020 is expected to have 10 new IPs with a total land area of 2,650ha. Under the socioeconomic development plan by 2020 with visions until 2050, Hanoi will be home of 33 industrial and hi tech parks. As the fast growth of industrial parks has outpaced infrastructural development, it is suggested that the government should have a comprehensive planning to establish efficient logistics network.
Source: Colliers International Research
©2016 Colliers International Research
Page 16
VIETNAM QUARTERLY KNOWLEDGE REPORT Q2 2016 | HA NOI | INDUSTRIAL
Table3:11:Significant Hanoi Industrial Overview Table Office Market Projects No.
Name of Industrial Park
Location
Distance to CBD (km)
Total Area (ha)
Asking Rent (US$/sqm)
Occupancy
LUR Term
Tu Liem
15
261
155
99%
2048
1
Nam Thang Long
2
Noi Bai
Soc Son
31
116
140
100%
2044
3
Phu Nghia 1
Chuong My
24
170
95
100%
2058
4
Phu Nghia 2
Chuong My
24
238
95
65%
2058
5
Quang Minh
Me Linh
24
344
70
95%
2053
6
Sai Dong B (Phase I&II)
Long Bien
11
97
95
100%
2046
7
Thach That
Thach That
24
150
100
100%
2056
8
Thang Long
Dong anh
16
302
95
100%
2047
9
Hanssip (phase 1)
Phu Xuyen
44
72
120
25%
2060
10
Hoa Lac Hi-Tech
Thach That
39
1,586
55
20%
2048
11
Dong Anh
Dong Anh
19
470
100
95%
2057
3,807
83
62%
Total
©2016 Colliers International Research
Page 17
VIETNAM | RESEARCH & FORECAST REPORT
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