Ho Chi Minh City Wednesday, 5th July, 2017 AGENDA Ho Chi Minh City, Vietnam WEDNESDAY 5th July 2017 Reverie Saigon 09:00am Opening Remarks Hang Dang, Managing Director, Vietnam 09:05am Macro Update Recent Trends on Capital Markets Hospitality Market: Beyond APEC 2017 Dung Duong, Head of Research & Consulting, CBRE Vietnam 09:35am Commercial Market: The Rise of Millennials, Co-working Space, and Young Demographics Retailing Hieu Le, Head of Occupier Leasing, CBRE Vietnam 10:05am Residential Market: How Demand is Shifting Kiet Vo, Head of Residential Project Marketing, CBRE Vietnam 10:35am Close Macro Updates ECONOMY REAL ESTATE MARKET INSIGHTS Q / Despite absence of the TPP, Vietnam looks confident to attract strong inflow of investment Source: Press articles were retrieved in June 19th 2017 ECONOMY REAL ESTATE MARKET INSIGHTS Q / Real Estate Industry is Next Up for Disruption Frontier Digital Ventures invests in AutoDeal, Propzy Propzy - an online classifieds platform that originates and facilitates property sale and leasing transactions in Vietnam Source: Press articles were retrieved in June 19th 2017 ECONOMY REAL ESTATE MARKET INSIGHTS Q / Proposals toward Transparency, Consistency and Sustainability Green buildings are expected to become a new trend in the low‐ and medium‐priced housing segments Source: Press articles were retrieved in June 19th 2017 REAL ESTATE ECONOMY MARKET INSIGHTS Q / Still Solid Fundamentals 25 10 20 15 10 GDP growth rate (%) Interest rate (%) GDP, CPI and Basic Rates 2007 2008 2009 2010 2011 Average CPI (y-o-y) 2012 Lending rate 2013 2014 Deposit rate 2015 2016 6M 2017 GDP Growth Rate Source: Vietnamese General Statistics Office, commercial banks REAL ESTATE ECONOMY MARKET INSIGHTS Q / Vietnam is Becoming Increasingly More Attractive to Foreign Investors Vietnam’s FDI, 6M 2017 4% 2% 11% Vietnam’s CEO Survey, May 2017 Manufacturing 6% 6M 2017 Utility Production, Distribution Mining 33% Retail and wholesale, vehicles Real Estate 44% Source: Vietnamese General Statistics Office Source: Vietnam CEO’s Survey by Oxford Business Group, May 2017 Total FDI 6M 2017: US$19.2 billions 54.8% y-o-y “ 70% of top-level executives expect positive business conditions in the next 12 months Some 20% expect the commercial environment to be very positive, while just 10% of those interviewed thought the months ahead will be negative ” REAL ESTATE INFRASTRUCTURE MARKET INSIGHTS Q / HCMC – Diversifying Public Transport System Metro line no Bicycle Possibility to Develop a Bike Sharing System in Ho Chi Minh City Underground package started on 26 May 2017 First BRT line Water bus Route: An Lac roundabout to Rach Chiec terminal Length: 23km Operation in: 2019 Trial ride at the end of June First route operates in July REAL ESTATE INFRASTRUCTURE MARKET INSIGHTS Q / HCMC – Tan Son Nhat Airport Expansion Plan Tan Son Nhat airport - Expansion H HH • • Capacity: 25-45 million passenger per year Plan to finalised in Dec 2017 H H H To local departure To int’ departure Around ten buildings in HCMC have helipads, including Diamond Plaza, Bitexco Financial Tower and Tan Son Nhat Saigon Hotel Source: VNExpress, CafeF, Baomoi 10 REAL ESTATE INFRASTRUCTURE MARKET INSIGHTS Q / Involvement of Local Developers in Building Metro Lines Noi Bai Airport Me Linh Me Linh Lien Ha Ba Vi Nhon Yen Vien Troi Cat Linh Son Dong Hanoi Station Under Planning Nhu Quynh Duong Xa Yen So 2A 2A Under Construction Under Construction – About to be opened Ha Dong Ngoc Hoi 11 REAL ESTATE INFRASTRUCTURE MARKET INSIGHTS Q / Hanoi – Active Construction on New Key Roads Nguyen Van Cu – Co Linh Completed –(1/2017) 1/2017 Le Duc Tho – Xuan Phuong Completed – 4/2017 Pham Van Dong Road Under-construction (2017) World’s costliest? Hanoi plans  to spend over $342mn  building 2.2km road 11 Completed Under-construction O Cho Dua – Voi Phuc Approved for Upgrade Nguyen Xien – Xa La Under-construction (2017) Truong Chinh Under-construction (2018) 12 Capital Market REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Investment Channels Return from Different Asset Classes 775.5 points 180 23% y-o-y 160 22,400VND 140 0.5% y-o-y Index 120 100 36.3M VND 80 10% y-o-y 60 40 20 June Apr Feb Dec 2016 Oct Aug June Apr Feb Local Gold Dec 2015 Oct Aug Jun Apr Feb Dec VN-Index Oct Aug Jun Apr Feb Dec Oct Aug Jun 2014 2017 USD/VND Source: Vietnamese General Statistics Office, FTP Securities, SJC 14 REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Investors Shift to Seek for Yield Spread Main Investment Motivation in Real Estate Percentage of 504 responses 80% of respondents were companies domiciled in Asia Pacific and the other 20% were domiciled primarily in Western Europe, the Middle East and North America Prime Office Yield Relative to 10-year Government Bond VIETNAM IS INCREASINGLY APPEALING TO FOREIGN INVESTORS Source: CBRE Asia Pacific Investor Intentions Survey, 2016 and 2017 15 REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Strong Fundamentals 35% 10 20% 5% 1H 2017 2016 2015 International arrivals 2014 2013 -10% 2012 - Growth Rate (%) 15 2011 Arrivals (Million persons) Strong Growth of Tourist Arrivals to Vietnam Growth rate Source: Ministry of Tourism Strong Prime Retail Rental Growth Source: CBRE Vietnam Singapore New Delhi Bangkok Shenzhen Hanoi Beijing Shanghai Guangzhou -4 Mumbai -2 HCMC % Growth rate Source: CBRE Research, New Channels for Old Favourites, 2017 16 REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Local Investors Dominate 2,000 1,600 50 100% Local SELLER 97% Local 0% Local BUYER 31% Local 40 1,200 30 800 20 400 10 - No of transactions Transaction value (US$ million) Vietnam Investment Volume 2011 2012 2013 Commercial 2014 Mixed use 2015 Residential 2016 1H 2017 No of transaction Dislaimer: Transastion includes deals above US$10 million Information contained herein, including projections, has been obtained from sources believed to be reliable While we not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it It is your responsibility to confirm independently its accuracy and completeness This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE Source: CBRE Vietnam, RCA 17 REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Notable Transactions in 1H 2017 Site in Ha Dong  Hanoi Hanoi Times Square, Hanoi BIM Group UDIC » Lotte Group 23 Le Duan D1, HCMC Auction 3,025 sqm Q1 2017 Lotte/Ciputra Mall Hanoi 7.3 ha US$64 mil 4 ha » Aeon Mall Vietnam Q2 2017 9.5 ha » Elite Capital Resources Phat Dat Real Estate 9.9 ha Dai Phuoc Lotus, Dong Nai ~US$80 mil 198.5 ha Vinacapital » CFLD US$12 mil 2.5 ha » Unknown buyer Bau Bang Urban Area & Industrial Park,  Binh Duong Becamex » Paiho Group » Tan Hoang Minh Group Diamond Rice Flower, Hanoi CII Land Plot D2, HCMC CII 7,000 sqm Vinaland divested from  Thang Long Property The Everrich 3,  District 7, HCMC » Hong Kong Land Source: RCA retrieved in Jun ‘17, Vietnam Investment Review US$250 mil 4.2 ha Kinh Bac Corporation » Growing Sun Investment  18 REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Local Developers Seek Funding from Alternative Sources Financing option Quarter Developer Value US$ mil Remark Debt financing Q2 2017 Sacomreal 13 Equity raising Q2 2017 SonKim Land 100 EXS Capital closed the first round of US$46 million, out of an expected US$100 million follow-on fundraising for SonKim Land Joint Venture Q2 2017 Nam Long 50% of US$348 mil JV with Hankyu Realty, Nishi Nippon Railroad to develop Mizuki Park, 16 in HCMC This JV was formed last year to develop Flora Sakura, Fuji Residence and Kikyo Residence in District Joint Venture Q1 2017 CII ~US$115 mil project value Equity raising Q4 2016 Novaland 120 70% of investors are foreign Joint Venture Q3 2016 Bitexco 290 JV with Mitsubishi Corporation to develop the Manor Central Park in Hoang Mai, Hanoi Equity raising Q3 2016 FLC 480 From existing shareholders Debt financing Q2 2016 Nam Long 22 Bond with fixed rate: 11%, tenure: year JV with Hong Kong Land to develop 96,000sm development site in District Convertible bond due in 2020, rate 7% Source: CBRE Vietnam 19 REAL ESTATE INVESTMENT MARKET INSIGHTS Q / Pending Projects Revitalised HCMC Old photos Hanoi Kenton Node Thuan Kieu Plaza The K-Park, Van Phu NUA Booyoung Vina New photos D1mension Source: CBRE Vietnam 20 REAL ESTATE R E TA I L MARKET INSIGHTS Q / What Local Retailers and Developers are Planning Number of locations New format??? 2016 2013 2017 2004 Shopping centre Co.opFood 100 Co.opmart 87 Co.opSmile 200 (Plan) Sense City 2016 2013 Vinmart Vinmart+ Source: CBRE Vietnam 55 REAL ESTATE R E TA I L MARKET INSIGHTS Q / Becoming More Attractive Global Retail Development Index (GRDI) Rank Country Market attractive-ness (25%) Country risk (25%) Market saturation (25%) Time pressure (25%) GRDI score India 63.4 59.1 75.7 88.5 71.7 China 100.0 64.5 24.4 92.5 70.4 Malaysia 77.1 87.1 23.3 56.2 60.9 Turkey 75.8 60.4 31.7 71.4 59.8 United Arab Emirates 92.3 100.0 0.9 44.4 59.4 Vietnam 26.7 25.4 72.4 100.0 56.1 Morocco 34.6 55.4 64.5 69.8 56.1 Indonesia 49.3 45.5 52.1 76.7 55.9 Source: A.T Kearney 2017 NOTE Market attractiveness Country risk Market saturation Time pressure Low attractiveness High risk Saturated No time pressure 100 High attractiveness Low Risk Not Saturated Urgent to enter 56 REAL ESTATE R E TA I L MARKET INSIGHTS Q / HCMC – Future Supply Viettel Project, D10 – 15,000 sm Golden Plaza, D5 – 15,000 sm The Garden Mall, D5 – 19,000 sm Xi Grand Court, D10 – 42,000 sm 2017 2018 – 2020 Su Van Hanh Shopping Center, D10 – 80,000 sm Spirit of Saigon, D1 – 48,000 sm Crescent Mall Phase 2, D7 - 18,000 sm Sala Shopping Centre, D2 - 60,000 sm OneHub Saigon, D9 - 70,000 sm Saigon Tax Trade Centre, D1 - 25,000 sm Vincom Central, Binh Thanh District – 60,000 sm Source: CBRE Vietnam, REIC 57 REAL ESTATE R E TA I L MARKET INSIGHTS Q / Hanoi – Future Supply 1 Truong Dinh Plaza, Hoang Mai Dist – 15,000 sm Discovery Complex, Cau Giay Dist – 22,000 sm Central Field, Cau Giay Dist – 20,000 sm 2017 2018 – 2020 Lotte Mall, Tay Ho – 130,000 sm D’Capitale, Nam Tu Liem – N/A Aeon Mall Ha Dong - 95,000 sm Vietinbank Tower, Tay Ho – N/A Vinhomes Gallery Giang Vo, Ba Dinh – N/A 6 Sun Grand City Thuy Khue, Tay Ho – 28,000 sm FLC Twin Towers, Cau Giay – 19,000 sm Vinhomes Metropolis, Ba Dinh – 41,000 sm (est.) Source: CBRE Vietnam, REIC 58 REAL ESTATE R E TA I L MARKET INSIGHTS Q / Market Outlook HANOI HCMC Rental rate to be stable in CBD and slightly up in the nonCBD locations Large pipeline for the coming quarters, putting pressure on rental and occupancy rates A surge of retail podiums, especially in condominium projects to be handed soon in the decentralized area Millennials continue to drive the market Market is not saturated, urging international retailers to enter and capture growth opportunity Annual New Supply Forecast 250,000 250,000 200,000 200,000 NLA, sm NLA, sm Annual New Supply Forecast 150,000 100,000 150,000 100,000 50,000 50,000 2014 2015 2016 2017 2017 E 2018F 2019F 2014 2015 2016 2017 2017E 2018F 2019F Source: CBRE Vietnam, REIC 2017e: 2H of 2017 59 RESIDENTIAL MARKET How demand is shifting REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Thanh My Loi area The Sun Avenue 1,288 condos Sold rate: 65% Palm Heights 816 condos Sold rate: 97% Lakeview City 963 townhouse/villas Sold rate: 86% Victoria Village 420 condos Sold rate: 70% Condo site (High-end) Palm Residences 135 townhouse/villas Sold rate: 100% Diamond Island 1,275 units Sold rate: 93% of launched products Landed properties site Waterina suites 86 condos Vista Verde 1,152 condos Sold rate: 95% Feliz En Vista 873 condos Sold rate: 93% Current supply Condo site (High-end) 61 Future supply Photo credit to One World REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Thu Thiem area Khanh Hoi site Mixed-use Saigon M&C 180 condos VHGR 5,050 condos Sold rate: 88% Thu Thiem EcoSmart City Mixed-use Marina Bay Mixed-use VHGR 63 villas Sold rate: N/A GS Thu Thiem Mixed-use Sunwah Pearl 789 condos Sold rate: N/A Empire City 3,000 condos Sold rate: 94% of launched products Sala Dai Quang Minh 529 townhouse/villas Sold rate: 100% Sala Dai Quang Minh 2,596 condos Sold rate: 73% of launched products New City 1,229 condos Thu Thiem Lake View Mixed-use Current supply 62 Future supply REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / District Sunrise City 2,083 Condos Sold rate: 100% Development site Condos Sunrise City View 703 Condos Sold rate: 79% Sky Garden - PMH 3,187 Condos Sold rate: 100% PMH shophouse 644 shophouses Sold rate: 100% CitizenTS 300 Condos Sold rate: 98% Him Lam Riverside 758 Condos Sold rate: 100% LaVida + 1,200 Condos Sold rate: N/A RichLane Residences 243 Condos Sold rate: N/A Current supply Future supply 63 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Nha Be District Galleria Nam Sai Gon 58 Townhouse/villas Sold rate: 98% Dragon Hill 350 Condos Sold rate: 100% Phu Hoang Anh 802 Condos Sold rate: 100% Golden House 498 Condos Sold rate: 100% Hung Phat Silver Star 447 Condos Sold rate: 86% Nine South Estate 381 townhouse/villas Sold rate: 100% Sunrise Riverside 1,846 condos Sold rate: 60% of launched products The Park Residence 928 condos Sold rate: 100% Ngan Long 60 townhouse/villas Sold rate: 100% Kim Long 43 townhouse/villas Sold rate: 100% HAGL 1,104 Condos Sold rate: 100% Kenton Node 1,640 Condos Sold rate: N/A Current supply Future supply 64 REAL ESTATE CONDOMINIUM MARKET INSIGHT Q2/2017 South Tu Liem and Cau Giay Districts Condo Site Vinhomes Skylake 1,826 condos Sales rate: 89% My Dinh Pearl 984 condos – Sales rate: 60% of unit launched Mixed – use Project Mixed - use Projects Vinhomes Green Bay 1,424 condos – Sales rate:72% 390 villas/shophouses - Sales rate: 100% West D’Capitale 1,692 condos Sales rate: 68% Vinata Tower 384 condos Sales rate: N/A Current supply Future supply 65 REAL ESTATE CONDOMINIUM MARKET INSIGHT Q2/2017 North Tu Liem and Tay Ho Districts An Binh City 2,732 condos Sales rate: 60% of unit launched Condos Site Kosmo Tay Ho Diplomatic Quarters (Ngoai Giao Doan) Starlake 300 villas launched Sales rate: N/A West Discovery Complex Condos Site D’El Dorado Current supply Future supply 66 REAL ESTATE CONDOMINIUM MARKET INSIGHT Q2/2017 South Hai Ba Trung and Hoang Mai Districts Imperia Sky Garden 342 condos (Sky B) Sales rate: 70% of unit lauched 536A Minh Khai 200 condos Sales rate: 95% T&T Vinh Hung 310 condos Sales rate: 65% of unit lauched Green Pearl Landed Properties Site Times City Minh Khai Plaza Current supply Future supply Sunshine Palace 299 condos Sales rate: N/A CBD Fringe Sunshine Garden South 67 REAL ESTATE CONDOMINIUM MARKET INSIGHT Q2/2017 Long Bien District Eco City 412 condos Sales rate: 73% Valencia Garden 366 condos Sales rate: 38% Ecohomes Phuc Loi 680 condos Sales rate: 53% Vinhomes Riverside Vinhomes The Harmony Mixed-use East Northern Diamond 192 condos Sales rate: 38% Hanoi Garden City Current supply Future supply 68 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Market Snapshot Q2 2017 HCMC HANOI North North 5% 5% East 36% Central 20% Midtown CBD 0% 0% 32% 0% West East West 34% South South South West 25% 3% 36% 8,086 units Launched 9,580 units Launched 9,522 units Sold Primary Price: $1,578 psm 4,650 units Sold ▼ 7% y-o-y ▲ 59% y-o-y ▲ 9% y-o-y ▲ 23% y-o-y ▼ 4% y-o-y ▲ 80% q-o-q ▲ 40% q-o-q ▼ 1% q-o-q ▼ 14% q-o-q ▼ 24% q-o-q Primary Price: $1,324 psm ▲ 4% y-o-y 0% q-o-q * Units sold: including number of units sold in new launch and unsold stock in pervious quarters * Primary price: average price in the primary market Source: CBRE Vietnam 69 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / HCMC with first-time launches; Hanoi busy with follow-on launches New Launches by Segment Total Units HCMC 16,000 12,000 8,000 4,000 31 Project 55% Q1 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 2016 Q1 Q2 Units 16,000 12,000 8,000 4,000 - 27 Project 25% Q3 2015 Source: CBRE Vietnam Q4 Q1 Q2 Q3 2016 166% 2017 Total Q2 16 Q-o-Q Hanoi Q1 First launch Q4 Q1 Q2 2017 First launch 47% Q-o-Q - Affordable: US$3,500 psm 70 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / HCMC – Supply spreads across the city Sunwah Pearl The Parkland Ha Do Centrosa Jamila 3 • Bubble size: size of new launch supply in that district 71 • Number in the bubble illustrates the number of projects launched in the perioed Source: CBRE Vietnam REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Hanoi – New supply across districts, expanding to one new rural district Booyoung Vinhomes Green Bay Imperia Sky Garden HA DONG Central Lake Ecopark • Bubble size: size of new launch supply in that district • Number in the bubble illustrates the number of projects launched in the perioed Source: CBRE Vietnam 72 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Mid-end Segment Continues to Dominate the Market Sold units Hanoi 14,000 12,000 No of sold units No of Sold Units HCMC 10,000 8,000 6,000 4,000 2,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 Q1 2016 Q2 2017 Q2 2017: • Mid-end products accounted for 55% of total new launch in Hanoi and 56% in HCMC • Also, making up 54% of total sales in Hanoi and 51% in HCMC Source: CBRE Vietnam 73 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / Condominium Developers – Stronger Together CII + Hongkong Land Thu Thiem project Total investment: US$ 114.4 million Scale: 9.6 Timeline: 2018 – 2020 Nam Long + Hankyu Realty + Nishi Nippon Railroad Mizuki Park project Total investment: US$ 325 million Scale: 26 Timeline: 2017 – 2024 Components: condominium, land plots, townhouse, villa CENINVEST + Hi Brand The K - Park Total investment: N/A Components: condominium, landed properties Source: CBRE Vietnam 74 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / CBRE Sales: More Foreign Buyers* Buyers by Purpose Buyers by Origin 1H 2016 1H 2017 1H 2016 63% 41% 20% 13% 13% 13% 11% Owner-occupier 1H 2017 29% Buy-to-let Investors 74% 53% 10% 8% Buy-to-gain Investors 18% 6% (*) Note: The analysis above is based on CBRE Vietnam’s residential closed deals and should not be used as a marketwise benchmark Source: CBRE Vietnam 75 REAL ESTATE CONDOMINIUM MARKET INSIGHTS Q / CBRE Sales: larger in unit sizes* Buyers by unit size (sm) Buyers by unit type 38% >90 sm 71% 37% 21% 14% 60-90 sm 7% 8% 3% 1%