CBRE RESEARCH
EXCLUSIVE TENANT EVENT
|
Q1 2021
AGILE WORKPLACE HO CHI MINH CITY
CONTENT
01
OFFICE MARKET SUMMARY
02
THE FLEXIBLE SPACE MARKET
03
Q&A
EXCLUSIVE TENANT EVENT| Q1 2021
© 2021 CBRE, INC.
EXCLUSIVE TENANT EVENT
OFFICE MARKET SUMMARY
|
Q1 2021
01
4
HCMC OFFICE MARKET SUMMARY
HCMC OFFICE: MARKET SNAPSHOT Q1 2021
GRADE B
GRADE A TOTAL SUPPLY
475,253
NLA (sqm)
ASKING RENT*
US$42.1
947,233 sqm NLA
18 projects
68 projects
US$25.1
5.8% y-o-y
1.7% q-o-q
US$/sqm/month
VACANCY RATE
sqm NLA
14.2%
(%)
0.3% y-o-y 0.9% q-o-q
3.4 ppts y-o-y
9.0%
3.9 ppts q-o-q
2021F
new NLA: 47,214 sqm from 4 Grade B buildings
28% decrease in annual new supply y-o-y
3.3 ppts y-o-y 0.1 ppts q-o-q
Source: CBRE Vietnam Research, Q1 2021. Note: Asking rent is quoted on NLA, excluding VAT & Service charges.
EXCLUSIVE TENANT EVENT| Q1 2021
4
© 2021 CBRE, INC.
OFFICE MARKET PERFORMANCE BY YEAR
15%
$30 10%
$20 5%
2021 Q1
2020
2019
$0
2018
$10
2017
Asking Rent (US$/sqm/month)
$40
0%
Grade A Asking Rent
Grade B Asking Rent
Grade A Vacancy Rate
Grade B Vacancy Rate
Asking rents (US$/sqm/month)
20%
Vacancy Rate (%)
$50
Hanoi Office, Market Performance by Grade $30
30%
$25
25%
$20
20%
$15
15%
$10
10%
$5
5%
$0
Growth rate
HCMC Office, Market Performance by Grade
0%
2017
2018
2019
2020
Q1 2021
Asking rents - Grade A
Asking rents - Grade B
Vacancy rate - Grade A
Vacancy rate - Grade B
Source: CBRE Vietnam Research, Q1 2021. Note: Asking rent is quoted on NLA, excluding VAT & Service charges. EXCLUSIVE TENANT EVENT| Q1 2021
5
© 2021 CBRE, INC.
OFFICE SUPPLY BY YEAR
0%
10%
800,000
0%
400,000
-10%
-
-20%
2017
2021 Q1
-20%
2020
0
2019
-10%
2018
400,000
20%
1,200,000
Growth Rate
800,000
30%
Q1 2021
10%
1,600,000
2020
20%
1,200,000
40%
2019
30%
2,000,000
2018
1,600,000
NLA (sqm)
40% Growth Rate (%)
Hanoi Office, Total Supply by Grade
2,000,000
2017
NLA (sqm)
HCMC Office, Total Supply by Grade
Supply - Grade A
Supply - Grade B
Supply - Grade A
Supply - Grade B
Growth rate - Grade A
Growth rate - Grade B
Growth rate - Grade A
Growth rate - Grade B
Source: CBRE Vietnam Research, Q1 2021. Note: Asking rent is quoted on NLA, excluding VAT & Service charges .
EXCLUSIVE TENANT EVENT| Q1 2021
6
© 2021 CBRE, INC.
POSITIVE ABSORPTION IN BOTH GRADE A AND GRADE B SECTORS HCMC Office, Net Absorption
HCMC Office, New Transactions by Purpose
145,000
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
NLA (sqm)
125,000 105,000 85,000
65,000 45,000 25,000 5,000
68%
14% 11% 7% 2019
-15,000
2017
2018 Grade A
2019
2020
Q1 2020 2021 Q1
New Letting
Renewal
Relocation
Contraction
Q1 2021 Expansion
Grade B Source: CBRE Vietnam Research, Q1 2021. The statistics are based on the total number of transactions.
Source: CBRE Vietnam Research, Q1 2021. Note: Asking rent is quoted on NLA, excluding VAT & Service charges.
EXCLUSIVE TENANT EVENT| Q1 2021
2020
7
© 2021 CBRE, INC.
TRANSACTION AND LEASING HCMC Office, New Transactions by Industry
Top lease space in Q1 2021
Others Oil & Gas Services Flexible workspace Media/Communication/Market… Retail/Trade/E-commerce Manufacturing Logistics Insurance Finance/Banking Information Technology 0% 2019
10% 2020
20%
30%
40%
Q1 2021
Source: CBRE Vietnam Research, Q1 2021. The statistics are based on the total NLA of transactions. EXCLUSIVE TENANT EVENT| Q1 2021
8
Size (sqm)
Industry
District
Grade
660
Finance/Banking
D.1
A
800
IT
D.7
A
6,000
IT
D.7
A
1,300
Media/ Marketing
D.1
A
1,350
Finance/Banking
D.4
B
1,000
Insurance
D.1
A
1,500
Logistics
D.10
B
2,400
Insurance
D.1
A
1,100
Manufacturing
D.1
A
580
CWS
D.1
B
550
Logistics
Binh Thanh
B
600
Media/ Marketing
7
B © 2021 CBRE, INC.
OFFICE EXPANSIONS: APAC OCCUPIERS OUTPERFORM GLOBAL AVERAGE CBRE APAC Survey: APAC Respondents’ attitudes still more positive regarding increase in office space vs. Global Respondents HCMC Office, Top Expansion transaction, Q1 2021 Source: Taichinhdoanhnghiep, March 2021
SQM 2,000 1,500 1,000 500
D7
Source: CBRE APAC, the Future of Work, Q1 2020. EXCLUSIVE TENANT EVENT| Q1 2021
D1
Insurance
Logistics
Banking
I.T.
Retail/ E-commerce
Source: CBRE Vietnam Research, Q1 2020. © 2021 CBRE, INC.
GROWTH IN RELOCATION TRENDS
HCMC Office, Top Relocation areas, Q1 2021
The statistics are based on the total NLA of transactions, recorded by CBRE Vietnam
Binh Thanh: 1.700 sqm
District 10: 3.000 sqm District 1: 6.800 sqm
District 2: 1.600 sqm
High quality management and building specifications
good accessibility
District 4: 1.300 sqm District 7: 6.600 sqm
Source: CBRE Vietnam Research, Q1 2020. EXCLUSIVE TENANT EVENT| Q1 2021
Competitive financial ©incentives 2021 CBRE, INC.
INFRASTRUCTURE IMPROVEMENT WILL FURTHER DECENTRALIZATION TREND
Grade A-B Rent gap narrows
Asking Rent
$50
Grade A rent
$40
93%
$30
68%
$20
Grade B rent
$10 $0
2017
2018
2019
2020
2021 Q1
Source: CBRE Vietnam Research, Q1 2021.
60
40% 35% 30% 25% 20% 15% 10% 5% 0%
Thu Thiem 2 bridge resumes construction
Metro Line. 1 is 81% done
Asking Rate
50 40 30 20
10 Grade A - Grade A - Grade B - Grade B CBD non CBD CBD Non CBD
© 2021 CBRE, INC.
EXCLUSIVE TENANT EVENT| Q1 2021
Rent
Vacancy Rate
Source: CBRE Vietnam Research, Q1 2021.
Vacancy Rate
Market Performance by area
FUTURE OFFICE SUPPLY 2021: > 47.000 m2 NLA
Saigon First House District 3 NLA: 15,348 m2
2022 and onwards : >150.000 m2 NLA
The Graces District 7 NLA: 8,295 m2
AP Tower (Q1 2021) Binh Thanh District NLA: 12,627 m2
Etown 6 Tan Binh District NLA: ~40,000 m2
Techcombank Tower District 1 GFA: ~30,000 m2
Huong Viet @ Thủ Thiêm District 2 GFA: >60,000 m2
Cobi Tower District 7 NLA: 27,200 m2 Worc@Q2 (Q1 2021) District 2 NLA: ~5,000 sqm
EXCLUSIVE TENANT EVENT| Q1 2021
One Central Saigon District 1 40,000 m2 for office
Pearl 5 Tower District 3 NLA: 10,944 m2 Under-construction
Under-planning
© 2021 CBRE, INC.
MARKET OUTLOOK HCMC Office, Market Performance Forecast
3.3%
1,600
• Continue with Neutral Case
Rent (USD/sqm/month)
Total Supply (‘000 sqm)
1,400 1,200 1,000 800 600 400
50 45 40 35 30 25 20 15 10 5 -
30% 25% 20% 15% 10% 5% 0% 2020
200 2017 2018 2019 2020
Source: CBRE Vietnam Research, Q1 2021. EXCLUSIVE TENANT EVENT| Q1 2021
Q1 2021F 2021
Vacancy rate
HCMC Office, Supply Forecast
Q1 2021F - 2021F - 2021F 2021 Best Neutral Worst Case Case Case
Grade A rent
Grade B Rent
Grade A vacancy
Grade B vacancy
Source: CBRE Vietnam Research, Q1 2021. Note: Asking rent is quoted on NLA, excluding VAT & Service charges. © 2021 CBRE, INC.
EXCLUSIVE TENANT EVENT
|
Q1 2021
Agile workspace
02
EXCLUSIVE TENANT EVENT| Q1 2021
© 2021 CBRE, INC.
WHAT IS AGILE REAL ESTATE?
WHY FLEX? WHY NOW?
Real estate that is dynamic and nimble in supporting organizational objectives and employee needs-today and tomorrow
Headcount Insurance
Run Rate Reduction
Reduce Capital Expenses
SPECTRUM OF SOLUTIONS
Coworking
Incubator / Accelerator
Serviced Offices
Enterprise Solutions
Turnkey 15
Short Term Lease
Long Term Lease
Owned Asset
OCCUPIER SHIFT TO AGILE SOLUTION
10,000 “on demand” flex memberships in the Americas
WFH till 2021, then hybrid
“Top 10 Tech Firm” 5,000 flex desk deal in India
73% of respondents expect flexible office space will play some role in future strategy.
WFH till Q3 2021, then hybrid
1,000 “on demand” flex memberships globally
EXCLUSIVE TENANT EVENT| Q1 2021
“Virtual First” © 2021 CBRE, INC.
FLEXIBLE SECTOR SEES NEGATIVE GROWTH, YET STILL HAS POTENTIAL HCMC Hanoi Flexible Workspace, Supply & Expansion Rate
Total GFA (sqm)
80,000
90%
60,000
60%
40,000
30%
20,000
0%
0
Growth rate
Negative 120% growth
100,000
-30% 2017
2018
Supply - HCMC Growth Rate - HCMC Source: CBRE Vietnam Research, Q1 2021.
EXCLUSIVE TENANT EVENT| Q1 2021
2019
2020
Q1 2021
Supply - Hanoi Growth Rate - Hanoi
Total Stock
Grade A Penetration
Total Penetration
HCMC
84,900 sqm
3.9%
4.4%
Hanoi
63,842 sqm
1.2%
1.8% © 2021 CBRE, INC.
FLEXIBLE WORKSPACE OCCUPANCY REBOUNDS AFTER COVID SHORTFALL
Occupancy rate, Private Office
Flexible Workspace, Market Performance Partly Recovered from 100% COVID’s 19 80% 60%
Circo Dong Du D.1 Hotel Podium
40%
Dreamplex Ngo Quang Huy, D.2 Standalone villa
Toong Pham Ngoc Thanh, D.1 Street house
TEC Friendship Tower, D.1 Office Building
20% 0% 2018
2019
2020
2021 Q1
Size (wks)
Industry
District
Grade
20
Oil & Gas (*)
D.1
B
430
Entertainment(*)
D.1
A
11
Film Studio
D.1
B
12
Automotive(*)
D.7
B
15
Film Studio(*)
D.1
A
EXCLUSIVE TENANT EVENT| Q1 2021
(*): transactions by CBRE
Coming soon @ D.2 Dreamplex UnOffice Coming soon Toong Cong Hoa @ Republic Plaza, hotel at Tan Binh District
Coming soon @ D.4 Warehouse
Decentralization
Cost saving
Asset value maximization © 2021 CBRE, INC.
Source: CBRE Vietnam Research, Q1 2021. Note: occupancy for Private Office in HCMC market.
INCREASED FLEX SPACE SOPHISTICATION SHIFTS LANDLORDS’ BUSINESS MODEL Landlords’ increasing confidence drives revenue-share trend
CWS in Vietnam Take leasing risk and fill Use revenue sharing up vacant space with model with operators agile space tenants Develop agile space business as value-added services to tenants Widen space offerings – event space and wellness facilities Let agile office operators as tenants
Asset enhancement by space conversion and introduce agile space tenants
Stake acquisition of M&A In agile office operators
Asset redevelopment Into agile space
Source: 2020 Global Occupier Sentiment Survey, CBRE Research, September 2020. EXCLUSIVE TENANT EVENT| Q1 2021
© 2021 CBRE, INC.
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Live comps database powered by machine learning
Flexible Availability and Survey Tool
Traditional Lease vs Flexible Space
FASTER. BETTER. TRANSPARENT. EXCLUSIVE TENANT EVENT| Q1 2021
© 2021 CBRE, INC.
Adelaide | Bangalore New Delhi
Bangkok | Canberra Hanoi | Wellington
APAC OFFICE RENT TRACKER
RENTS AT PEAK PLATEAU
Seoul | Taipei
Explore prime office market data for major global markets.
RENTS AT PEAK Brisbane | Melbourne Sydney | Tokyo
RENTAL DECLINE ACCELERATING
RENTAL GROWTH SLOWING
www.cbre.com/renttracker RENTAL GROWTH MODERATING
Q4 2020 DATA AVAILABLE
RENTAL GROWTH ACCELERATING
RENTAL DECLINE MODERATING
Auckland Beijing Ho Chi Minh City Hong Kong SAR Kuala Lumpur Mumbai Perth Shanghai
RENTAL DECLINE SLOWING RENTS AT TROUGH Guangzhou | Shenzhen Singapore
Source: CBRE Research, Q4 2020. Jakarta
EXCLUSIVE TENANT EVENT
|
Q1 2021
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