Vietnam Real Estate Market Presented by Savills Vietnam Co., Ltd. - PowerPoint PPT Presentation

Disclaimer: This document is prepared by Savills for information only. Whilst reasonable care has been exercised in preparing this document, it is subject to change and these particulars do not constitute, nor constitute part of any offer or contract. Interested parties should not rely on these statements as representations of fact, and must satisfy themselves by inspection or otherwise as to their accuracy. Vietnam Real Estate Market Presented by Savills Vietnam Co., Ltd. Tokyo, Nov 2011 1

Savills World Wide  A FTSE – 250 listed company established in the UK in 1855  Unrivalled international experience and expertise  Group profit before tax of £ 47.3 million in 2010, presents an 88% increase as compared to 2009 Attracting a Global Audience Vietnam Real Estate Market Presentation 2

Savills Vietnam — Our Story A Proven Track Record…  Established in 1995 as Chesterton Petty  100% foreign-owned business license granted in 1998  Hundreds of satisfied developers, investors, owners and occupiers Vietnam Real Estate Market Presentation 3

Savills Vietnam — Our Awards Bloomberg Asia Pacific Property Awards 2011 Region-wide awards:  Best Real Estate Agency  Best Real Estate Agency Marketing  Best Property Consultancy Marketing Nation-wide awards:  Best Real Estate Agency  Best Real Estate Agency  Best Property Consultancy Marketing  Best Property Consultancy Vietnam Real Estate Market Presentation 4

Savills Vietnam — Our People The Savills Team…  Over 750 employees in Vietnam who offer premium quality property services  Our people are creative and entrepreneurial  Dynamic and distinctive individuals who believe in quality Vietnam Real Estate Market Presentation 5

Presentation Structure I. Country & Macroeconomics Overview II. Market Overview III. Investment in Vietnam IV. Investment Opportunities Vietnam Real Estate Market Presentation 6

Part I Country & Macroeconomics Overview S a v i l l s Vietnam Real Estate Market Presentation 7

About Vietnam - - Land area: 331,210 sq km, extending 1,650 km north to south - - Coastline: 3,444 km - - Labour force: approx. 47 million (2010 est.) Source: CIA – The World Factbook Vietnam Real Estate Market Presentation 8

Population in Vietnam -- Population: approx. 90 million (July 2011 est.) -- With 65% of the population aged 30 or younger, Vietnam is a country of youth. -- GDP per capita: approx. $1,170 (2010 est.) - Ho Chi Minh City: approx. $2,800 (2010 est.) - Hanoi: approx. $1,950 (2010 est.) Source: IMF , CIA -The World Fact Book, VCCI, Hochiminhcity.gov.vn Vietnam Real Estate Market Presentation 9

Economic indicators GDP growth to be 6% in 2011 was targeted by the Government. Bill. US$ % 90 9 80 8 70 7 60 6 50 5 40 4 30 3 20 2 10 1 0 0 9M 2005 9M 2006 9M 2007 9M 2008 9M 2009 9M 2010 9M 2011 GDP Nominal Growth rate (Y-o-Y) Source: GSO Vietnam Real Estate Market Presentation 10

Economic indicators - Inflation rate to be 18-19% in 2011 - Inflation rate of 9 months 2011 reached 16.63% against Dec. 2010 Source: General Statistics Office, World Economic Outlook April 2011, ADB forecast Vietnam Real Estate Market Presentation 11

Economic indicators - Viet Nam Gold market performance fluctuated sharply in line with world market during the quarter - Private owned gold in Vietnam: approx. 500 tons of gold, approx. US$ 35 billion - Stock market performance in Q3/2011 continued the downtrend of Q2/2011 US$/oz VnIndex 2,000 550 1,800 500 1,600 450 1,400 400 1,200 350 1,000 300 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Gold Price (LHS) Vnindex (RHS) Vietnam Real Estate Market Presentation 12

Economic indicators - Inter-bank average rate of VND versus USD were stable during Q3/2011 VND/ US$ 20,750 20,700 20,650 20,600 20,550 20,500 Apr. May Jun. Jul. Aug. Sept. Source: State Bank of Viet Nam (SBV) Vietnam Real Estate Market Presentation 13

Economic indicators Vietnam inter-bank interest rates Source: CEIC Vietnam Real Estate Market Presentation 14

Economic indicators - Ceiling interest rate at 14% for capital mobilization was strictly applied. % 16 14 12 10 8 6 4 2 0 2008 2009 2010 2011 Base interest rate Discount rate Refinancing rate Source: State Bank of Viet Nam • Vietnam Real Estate Market Presentation 15

Economic indicators - Credit growth was 10.5% at the end of August 2011 compared with the end of 2010. - The tighter monetary policy continued to be implemented. % 60 51.39 50 37.73 35.00 40 30.00 28.00 40.00 27.65 30 29.00 27.00 20 12.00 23.00 21.40 19.20 10 10.50 0 2005 2006 2007 2008 2009 2010 Aug. 2011 Credit growth rate (LHS) Capital mobilization rate Credit growth (LHS) Capital mobilization growth rate Source: State Bank of Viet Nam • Vietnam Real Estate Market Presentation 16

Economic indicators - Retail sale of 9 months 2011 reach US$67.5 million. - Increasing 18% Y-o-Y Mill.US$ 8.5 25% 8.0 20% 7.5 15% 7.0 10% 6.5 5% 6.0 0% Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Retails sales of goods and services Growth rate (same period) Source: GSO • Vietnam Real Estate Market Presentation 17

Part II Market Overview Q3/2011 S a v i l l s Vietnam Real Estate Market Presentation 18

Overview • - Despite the low season, Hotel is the best performing sector in HCMC in the last quarter. • - Hanoi Retail has achieved the highest average occupancy of 93% (+4% QoQ). • - Market performance of Serviced Apartment and Office for lease sectors in both cities remained stable or slightly decreased. • - Absorption rates of Residential for sales dropped in HCMC but increased in Hanoi for Apartments. Possible built up demand from Q4 2011 onwards. Vietnam Real Estate Market Presentation 19

Ho Chi Minh City Market S a v i l l s • Vietnam Real Estate Market Presentation 20

HCMC Office • Supply • - 11 new buildings with 60,000 sq m • - Total supply: 1.2 mil. sq m (+5% q-o-q) • Market performance • - Avg. occupancy: 80% (-2% q-o-q) • - Avg. rent rate: Grade A: US$50/sq m (-1% q-o-q) Grade B: US$29/sq m (-2% q-o-q) Grade C: US$20/sq m (-1% q-o-q) • Outlook • - 20,000 sq m to come in next 2 quarters • - 440,000 sq m to come in 2012- 2013 Vietnam Real Estate Market Presentation 21

HCMC Office CBD is the choice of tenants . Growing service charge in total rent Grade B is the main supplier. % % 100 20 Grade C 80 18 Grade B 60 16 40 14 Grade A 20 12 - 10 Q3/2010 Q4/2010 Q1/2011 Q2/2011 Q3/2011 Q3/2010 Q4/2010 Q1/2011 Q2/2011 Q3/2011 Grade A Grade B Grade C Source: Savills Research and Consultancy Vietnam Real Estate Market Presentation 22

HCMC Office FDI vs. Rent of Grades A&B New supply vs. Take-up Sq m % US$/sq m/mth US$ billion 300,000 100 100 9 90 90 8 250,000 80 80 7 70 70 6 200,000 60 60 5 50 150,000 50 4 40 40 3 30 100,000 30 2 20 20 1 10 50,000 10 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q3/2011 - 0 2005 2006 2007 2008 2009 2010 3Q 2011 Registered FDI Grade A Grade B New Supply Take-up Occupancy Source: Savills Research and Consultancy Vietnam Real Estate Market Presentation 23

HCMC Retail • Supply • - 1 new retail centre with 1,000 sq m • - Total supply: 620,000 sq m (-1% q-o-q) • - 8 retail podiums, 7 department stores, 17 shopping centres, 57 supermarkets, 3 wholesale markets • Market performance - Avg. occupancy: 86% (+1% q-o-q) - Avg. rent rate: US$65/sq m (unchanged) • Outlook • - 72,000 sq m to come in 2H/2011 • - 740,000 sq m to come in 2012- 2015 HCMC Market Presentation 24

HCMC Retail Department stores had the Only suburban area had an best performance increase in rent % q-o-q change % q-o-q change 2.0 3.0 2.5 1.5 2.0 1.5 1.0 1.0 0.5 0.5 0.0 CBD Secondary area Suburban area -0.5 0.0 Retail podium Department Shopping -1.0 store centre -0.5 -1.5 Occupancy Rent rate Occupancy Rent rate Source: Savills Research and Consultancy Vietnam Real Estate Market Presentation 25

HCMC Hotel • Supply • - No new hotel • - Total supply: 10,185 rooms (stable q-o-q) • - 13 five-star hotels, 14 four-star hotels, 47 three-star hotels • Market performance • - Avg. occupancy: 66% (+6% q-o-q) • - Room rate: 5-star: US$128/room/night (+1% q-o-q) • Outlook 4-star: US$85/room/night (remained stable) • - 3,300 rooms to come in 2012- 3-star: US$47/room/night (+1% q-o-q) 2013 Vietnam Real Estate Market Presentation Q3/2011 26

HCMC Hotel International visitors vs. Occupancy of 4 and 5-star hotels visitors % 1,600,000 100 90 1,400,000 80 1,200,000 70 1,000,000 60 800,000 50 40 600,000 30 400,000 20 200,000 10 - 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 2007 2008 2009 2010 2011 Total international visitors 5-star occupancy 4-star occupancy Source: Savills Research and Consultancy Vietnam Real Estate Market Presentation 27