Macro Update
Source GDP Growth reached 6.42% accelerating in Q2, on track to meet target of around 6%
H1 2024 GDP expanded by 6.42% y-o-y showing positive signs of recovery
Vietnam continues to be an attractive destination for FDI capital flows
FDI reached US$ 15.19 bn, up +13.1% y-o-y (*) FDI inflows includes newly licensed capital only (**) Including Hong Kong
The PMI in June indicates an improvement in the health of the manufacturing sector and overall business conditions
Exports growth accelerated, recorded 14.5% growth y-o-y
Exports rebounded, thanks to a recovery in global demand
All key export groups recorded positive growth
Similar improvement recorded in import activities during H1 2024
International arrivals significantly improved in H1 2024
• 8.8 million arrivals in H1 2024
• +58.4% y-o-y and +11.4% comparing with pre-
South Korea and China are the two largest source markets for visitors to Vietnam
Inflation is a headwind
• Food and Food Products (+4.0% y-o-y)
• Housing, Electricity, Water, Fuel and Construction materials (+5.5% y-o-y)
• Education (+8.6% y-o-y)
• Healthcare (+7.0% y-o-y)
The average CPI in H1 2024 increased by 4.08% y-o-y Source
The 12-month term deposit interest rate is the average interest rate of the top 25 banks in the system
Performance of major assets, H1 2024, % y-o-y change
Gold stood out as one of the top yielding investment channels in H1 2024
USD/VND VN Index Local gold
Bank deposit rate
petrol Condo rental yield
(*) Rental yield for selected high-end and mid-end condominiums, average of Hanoi and HCMC.
Source: SBV, VNDirect, SJC, VCB, Nymex, World Bank. Calculated by CBRE Research
The credit growth of the economy reached 4.45% by the end of Q2 2024
Credit growth appears to be accelerating
Office Market
HCMC: Pressure from 2023 strong supply affects Grade A occupancy rate
Pressure on newer buildings amidst softer demand
Note: The asking rents and vacancy rates in Hanoi does not include TechnoPark Tower. Asking rents are exclusive of VAT and service charge.
Source: CBRE Research, Q2 2024.
HANOI: Vacancy rates only marginally improved
Moderate Net Absorption from Expansion and Relocation Transactions
Source: CBRE Research, Q2 2024.
Source: CBRE Research, Q2 2024.
VIETNAM OFFICE MARKET
Limited rental growth across Hanoi, HCMC
Note: Asking rents are exclusive of VAT and service charge. Asking rents and vacancy rates in Hanoi do not include TechnoPark Tower.
Source CBRE Research, Q2 2024.
Hanoi: Rents are flattening out
Plenty of High-Quality Pipeline Ahead
HCMC Office Market Outlook: Softer Demand May Prompt Landlords To Review Leasing
Policies
Source: CBRE Research, Q2 2024.
Hanoi Office Market Outlook: Better Rental Growth Prospects for Welllocated Grade A Offices, While Pipeline Remains Strong
Hanoi Office - Asking Rents and Rental Growth
Hanoi Office - New Supply and Vacancy Rate
Note: The asking rents and vacancy rates in Hanoi does not include TechnoPark Tower. Asking rents are exclusive of VAT and service charge.
Source: CBRE Research, Q2 2024.
Retail Market
2024 New Supply
H1 2024 H2 2024
Vincom 3/2
District 10, Ho Chi Minh
Reopening after renovation, June 2024
NLA: 20,000 sqm
Vincom Megamall Grand Park
District 9, Ho Chi Minh
Grand opening June 2024
NLA: 36,000 sqm
NLA: 10,581 sqm VIETNAM
The Linc Park City
District Ha Dong, Hanoi
Grand opening Q1 2024
Parc Mall
District 8, Ho Chi Minh
Expected to open in Q3 2024
NLA: 44,450 sqm
AEON Xuan Thuy
District Cau Giay, Hanoi
Expected to open in Q3 2024
NLA: 18,000 sqm
Central Premium Mall
District 8, Ho Chi Minh
Expected to open in Q3 2024
NLA: 24,000 sqm
The Diamond Residence
District Thanh Xuan, Hanoi
Expected to open in Q3 2024
NLA: 14,000 sqm
Consumer Confidence is Stagnant, and Spending has been Moderate
Pre Covid Covid
Post Covid
Supports
Higher Occupancy and Rental Growth
Note: Asking rent is calculated for ground floor and first floor, excluding VAT and service charge. Source: CBRE Research, Q2 2024.
There is an increased demand from Chinese retailers, in particular F&B and Lifestyle brands.
More shopping malls are undergoing renovations and revamping their tenant mix to create space for new market entrants and ensure more experiences for shoppers.
Retailers with an existing CBD presence are looking at fringe CBDs or second tier districts in HCMC and Hanoi. 04
CBRE expects 2024F rental prices to continue increasing at a favorable pace in context momentum since 2022, +8-9% in Non-CBD areas, and +17-18% in CBD areas.
VIETNAM RETAIL MARKET
Industrial Market
Numerous groundbreaking activities across North, South
in Yen Phong 2A IP
Industrial Yen Phong Expansion by Frasers Property
Source: Ministry of Planning and Investment
Biggest Factory of Suntory Pepsico in Asia in Huu Thanh IP
Pegavision Factory in Green IPark Thai Bình
First Pandora Factory in VSIPIII Binh Duong
Record high in FDI Disbursement
Foreign Direct Investment (FDI) Disbursement in the First 6 Months of the Years 2020-2024
SK Factory in Deep C Hai Phong
Image: Thanh Nien, Dau Tu Chung Khoan VnExpress
LOGOS
Improvements in Infrastructure Continue to be a Key Catalyst for Industrial Developments
Number of km of expressway completed by period
Number of km of express way completed in the South* accounted for 69% of the total completed expressway during 2023 2025F
(*): including South Central region, Southeast region, Mekong Delta region
Source: Ministry of Planning and Investment, Vietnamplus, Vnexpress Image: Tuoi Tre
Huu Nghi Chi Lang Expressway kicks start April 21st, 2024 1,163 km 16 years (2004 2019)
Cam Lo La Son Expressway
Ben Luc Long Thanh Expressway
VIETNAM INDUSTRIAL MARKET
Industrial land records mild rental growth as absorption moderates
Industrial Land Rental Rates
Ready-built factories (RBF) continued to enjoy healthy absorption, while warehouses (RBW) recorded a strong 6-month in the Southern markets
Ready-Built Factory - Supply vs Absorption
Ready-Built Warehouse - Supply vs Absorption
Source: CBRE Vietnam, Q2 2024
*RBW excludes service warehouse
North - New Supply South - New Supply North - Net Absorption South - Net Absorption
Covered markets: South includes HCMC, Dong Nai, Binh Duong and Long An; North includes Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong
Rental growth more evident among ready-built factory facilities
Ready-Built Factory Rental Rate
Ready-Built Warehouse Rental Rate
*RBW excludes service warehouse
Covered markets: South includes HCMC, Dong Nai, Binh Duong and Long An; North includes Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong
Source: CBRE Vietnam, Q2 2024
Outlook: Further growth is manufacturers demonstrate increased commitment to Vietnam, prompting additional RBF sub-developers to seek entry into Vietnam
Strong historical growth
Samsung
2008: First factory in Bac Ninh
2023: Factories in 3 provinces
Acc. Registered Investment Capital (*): ~US$22.4bn x33 Vs. 2008
LG
1994: First factory in Hung Yen
2023: Factories in 2 provinces
Acc. Registered Investment Capital (*): ~US$8.0bn x617 Vs. 1995
Foxconn
2007: First two projects in Bac Giang, Bac Ninh
2023: Factories in 5 provinces
Acc. Registered Investment Capital (*): ~US$3.2bn x19 Vs. 2007
To further expand
Source: Company information, public news
Goertek
2013: First factory in Bac Ninh
2023: Factories in 2 provinces
Acc. Registered Investment Capital (*): ~US$1.4bn x35 Vs. 2013
Samsung plans to add US$1bn to Vietnam investment annually
May 9th, 2024
LG will invest an additional US$3bn in Vietnam, expected to double the capacity of its Hai Phong factory
July 3rd, 2024
Foxconn to invest US$383mn in Vietnam
circuit board plant, says state media
June 24th, 2024
Goertek to invest another US$280mn in Vietnamese consumer electronics subsidiary
Jan 16th, 2024
Outlook: RBW
Demand will Benefit from Rapid Expansion of Vietnam's Logistics, but Might Face Temporary Supply Abundance
Vietnam's rank in the top Agility Emerging Markets Logistics Index 2024 continues to improve Market Size of Vietnam Freight and Logistics Industry
Market Size of Vietnam E-commerce Industry
Source: Modor Intelligence, Agility Emerging Markets Logistics Index 2024
Outlook: New Industrial Land Supply Remains Limited in the South
Industrial Land, Forecasted New Supply and Rental Growth
NORTH SOUTH
Source: CBRE Research, Q2 2024
Tier 1: South includes HCMC, Dong Nai, Binh Duong, Long An and BR-VT; North includes Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong.
Tier 2: South includes Binh Thuan, Tay Ninh, and Binh Phuoc; North includes Quang Ninh, Bac Giang, Vinh Phuc, Thai Nguyen, Ha Nam, and Thai Binh
Residential Market
RESIDENTIAL MARKET
HCMC: New supply in H1 2024 remained limited
Condominium: Supply growth
accelerated in Hanoi; remained limited in HCMC in H1 2024
HANOI: Highest level of new supply in the last 5 years in H1 2024
• Affordable < 35 million VND per sq.m.
• Mid-end:35-60 million VND per sq.m.
• High-end 60-120 million VND per sq.m
• Luxuryandabove : >120 million VND per sq.m. New supply
+176% y-o-y
high-end and above units
Source: CBRE Research, Q2 2024. Note: HE
VIETNAM
Condominium:
Strong buying momentum in Hanoi, with number of sold units in
Source: CBRE Research, Q2 2024
HANOI AND HCMC CONDOMINIUM MARKET, NEW LAUNCH AND SOLD UNITS
Significant new launches in H1 2024
Source: CBRE Research
Nam Tu Liem district, Hanoi
Total launch: 2,200 condo units (Phase 1) LUMI HANOI | CAPITALAND
Thuy Nguyen, Hai Phong city
Total launch: >2,000 low-rise units
Nam Tu Liem district, Hanoi
Total launch: >1,100 condo units
Thu Duc City, HCMC
Total launch: >840 condo units
Nam Tu Liem district, Hanoi
Total launch: ~700 condo units
THU THIEM ZEIT RIVER | GS E&C
Thu Duc City, HCMC
Total launch: 40 condo & 10 low-rise units
VINHOMES ROYAL ISLAND | VINHOMES
THE CANOPY RESIDENCES | GIC
LUMIERE EVERGREEN | MASTERISE HOMES
EATON PARK | GAMUDA LAND
VIETNAM RESIDENTIAL MARKET
HANOI AND HCMC CONDOMINIUM MARKET, AVERAGE PRIMARY PRICES, 2019 Q2 2024
PRIMARY MARKET
Prices of condominiums in Hanoi are quickly catching up with prices in HCMC in both primary and secondary markets
SECONDARY MARKET (*)
Source: CBRE Research, Q2 2024. Prices exclude VAT and maintenance fee. (*) Secondary market includes asking prices of all existing launched projects.
Landed property: After
Source: CBRE Research, Q2 2024
HANOI AND HCMC LANDED PROPERTY MARKET, AVERAGE PRICES, 2019 Q2 2024
PRIMARY MARKET
Prices of landed property in HCMC skyrocketed as new supply located in prime areas.
SECONDARY MARKET (*)
How affordable do prices look?
Note: Avg. apartment prices of Hanoi and HCMC are primary prices per sqm at the end of Q2 2024, including VAT and maintenance fee. Avg. apartment prices of other cities are retrieved from Numbeo in July 2024 for city center areas.
Source: Statista, Numbeo, CBRE Research, Q2 2024.
Demand: Investment purpose and the need for personal space are key reasons driving the intention of purchasing residential properties
Top 3 reasons driving properties purchase intentions in Vietnam (N=1,000)
Source:
Outlook: Future Supply Until 2026 Looks Stronger in Hanoi; Remains
Limited in HCMC
~ 55,000 units
Lumi Hanoi (Phase 2) (Capitaland)
Nam Tu Liem
Expected launch: 2,000 units
The Matrix One (Phase 2) (MIK Group)
Nam Tu Liem
Expected launch: 1,000 units
The Metropolitan (Mitsubishi Corp.)
Gia Lam
Expected launch: >4,000 units
Vinhomes Global Gate (Vinhomes)
Dong Anh
Expected launch: 7,000 units (*)
Vinhomes Dan Phuong (Vinhomes)
Dan Phuong
Expected launch: 3,500 units (*) HCMC: ~ 35,000 units
The Global City (next phase) (Masterise Homes)
D2 (Thu Duc City)
Expected launch: 8,500 units (*)
Lotte Eco Smart City (Lotte Group)
D2 (Thu Duc City)
Expected launch: 1,000 units
Vinhomes Can Gio (Phase 1) (Vinhomes)
Can Gio district
Expected launch: 2,000 units (*)
Binh Trung Project (Phase 1)
(Khang Dien & Keppel Land)
D2 (Thu Duc City)
Expected launch: 900 units (*)
Zeitgeist (next phase) (GS E&C)
Nha Be district
Expected launch: 1,000 units (*)
Source: CBRE Research, Q2 2024.
Note: (*) Total estimated residential supply (including condominium and low-rise properties) from H2 2024 to 2026.
Forecast of new supply and sold units, Condominium, 2024-2026F
Condominium Outlook: prices to soon approach
levels
In Hanoi, new supply in 2024 to double that in 2023 while primary and secondary prices expect a new peak.
In HCMC, new supply in 2024 to remain limited while primary and secondary prices continue to rise stably.
Forecast of average prices, Condominium, 2024-2026F
Average primary prices
Average secondary prices
Source: CBRE Research, Q2 2024
HANOI HCMC
Forecast of new supply and sold units, Landed property, 2024-2026F
Landed Property
Outlook:
New supply to increase in Hanoi while remaining low in HCMC
In Hanoi, new supply to improve in the second half of 2024.
In HCMC, new supply in 2024 to remain limited, while primary prices escalate by 20% y-o-y.
Forecast of average prices, Landed property, 2024-2026F
Source: CBRE Research, Q2 2024
Where are we in the Real Estate growth cycle?
Slowing down Bottoming out
