CBRE RESEARCH
H A N O I R E A L E S TAT E MARKET OUTLOOK
RESTART THE UNEVEN RECOVERY VIETN AM
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CONTENT 1. HANOI OFFICE
2 . H A N O I R E TA I L 3. VIETNAM INDUSTRIAL
RESTART THE UNEVEN RECOVERY
4. HANOI RESIDENTIAL
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
HANOI OFFICE
REGAIN
44
A YEAR TO LOOK BACK Vietnam’s business environment returned to normal Workplace visit as at 29 Dec 2020
The economy was hit hard as the number of enterprises entering bankruptcy soared
Office vacancy rate increased due to COVID-19 and new supply 9%
17%
+17%
Compared to pre-COVID level
HCMC
30% 20% 10% Hanoi
0% -10%
2019
-20%
-30% 18-Feb
0 29-Dec
5,000 10,000 15,000 2019
2020
Occupancy
Vacancy
9M 2020
Source: CBRE Research, GSO, Google Mobility index. Pre-COVID level is the median value, for the corresponding day of the week, during the 5-week period Jan 3–Feb 6, 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
5
HANOI OFFICE: MARKET SNAPSHOT 2020
GRADE A
GRADE B
TOTAL SUPPLY
528,000 sqm NLA
974,000 sqm NLA
NLA (sqm)
21 projects
ASKING RENT*
US$26.8
2.2% y-o-y
US$13.8
0.3% q-o-q
US$/sqm/month
VACANCY RATE
71 projects
23.2%
(%)
15.7 ppts y-o-y -1.1 ppts q-o-q
-3.7% y-o-y -0.5% q-o-q
13.6%
126,000 SQM NEW SUPPLY
1 Grade A and 1 Grade B Projects
4.3 ppts y-o-y 2.1 ppts q-o-q
Source: CBRE Vietnam Research, Q4 2020. Note: Asking rent is quoted on NLA, excluding VAT & service charges.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
6
LARGEST NEW SUPPLY SINCE 2014 Hanoi Office, Total Supply 2014 - 2020 1,600
NLA (thousands sqm)
1,400 1,200 1,000
Capital Place Grade A NLA: 93,000 sqm
800 600 400 200 0 2014
2015
2016
Existing supply Source: CBRE Vietnam Research, Q4 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
2017
2018
New supply
2019
2020 Century Tower Grade B NLA: 33,000 sqm CBRE RESEARCH | © 2021 CBRE, INC.
7
HIGHEST VACANCY RATE SINCE 2014
NLA (thousands sqm)
Hanoi Office, Vacancy Rate 300
30%
250
25%
200
20%
150
15%
100
10%
50
5%
0
0% 2014
2015 Vacant space
2016
2017
Grade A - Vacany rate
2018
2019
2020
Grade B - Vacancy rate
Source: CBRE Vietnam Research, Q4 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
8
RENTAL GROWTH DISRUPTION BY COVID -19
Hanoi Office, Asking Rent
Impact of new project
30
USD/sqm/month
25
Grade A
20
2.9% y-o-y
(without new project)
15 10
Grade B
5
3.7%
y-o-y
0 2014
2015
2016 Grade A
2017
2018
2019
2020
Grade B
Source: CBRE Vietnam Research, Q4 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
9
CONTRACTION GREW SHARPLY AS OCCUPIERS LOOK TO REDUCE COSTS
Major Transaction Types Collected And Closed By CBRE, 2018 - 2020 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Hanoi Office, Net Absorption 160
NLA (thousands sqm)
140
HCMC
Hanoi
2018 New Letting Renewal
HCMC
Hanoi
HCMC
2019 Expansion Relocation
Hanoi
2020 Contraction
120 100 80 60 40 20 0 -20
2014 2015 2016 2017 2018 2019 2020 Grade A
Grade B
Source: CBRE Vietnam Research, Q4 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
10
KEY DEMAND DRIVERS CONTINUE TO SHIFT AS THE PANDEMIC UNFOLDS Tenant’s Industry, Major Transactions Collected And Closed By CBRE, 2018 – 2020 IT/Tech
Some sectors still take the lead,…
Manufacturing Banking/Finance/Insurance Ecommerce Logistics
… some are rising,…
Education Energy
… while some fall behind.
Flexible workspace 0%
5% 2018
10% 2019
15%
20%
25%
30%
2020
Source: CBRE Vietnam Research, Q4 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
11
A SHIFT IN REAL ESTATE STRATEGY?
27%
38%
Will adapt a hybrid model with both remote and officebased work
Will reduce staff density in workplace
8%
8%
7%
Will use (more) satellite offices to cater to decentralized workforce
Wil l not change
Will use more coworking space (including serviced offices and coworking)
6%
4%
2%
Will consolidate office locations to cut costs
Will reduce open-office layout
Will use less coworking space (including serviced offices and coworking)
Source: “Emerging Trends in Real Estate Asia Pacific 2021 Survey”, PWC.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
12
FIRMS INCORPORATE FLEXIBILITY AND DISTANCING
The importance of flexible workspace at the current time in accommodating employees of your organization?
APAC Office, Leadership Attitudes Towards Working Location No universal answer Encourage employees to work from home; work in the office when needed
17%
18%
11%
Encourage employees to work in the office; allow them to work from home if they wish
35%
27%
Bring everyone back to the office, rethink workplace design Bring everyone back to the office, no changes needed N = 106 Source: “The Real Estate Reset” of CBRE APAC, Q4 2020.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
26%
27%
11%
29%
Very important Slightly important
Important Not important
Source: “Emerging Trends in Real Estate Asia Pacific 2021 Survey”, PWC.
CBRE RESEARCH | © 2021 CBRE, INC.
13
WHAT TENANTS ARE LOOKING FOR?
High quality management services
Strong location, with good access to existing and future public transportation
Modern specifications, including large floor plates
Green building technology, with built-in design to save energy and water
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
A good range of valueadded amenities, such as coffee shop, flexible workspace, gym, convention hall
Competitive financial incentives, such as longer rent free and fit-out periods CBRE RESEARCH | © 2021 CBRE, INC.
14
FUTURE OFFICE SUPPLY Hanoi Office, Notable Future Projects
Awaiting Large-scale Projects 200,000
2021
150,000 Techno Park Tower, Gia Lam NLA: 115,000 sqm
HUD Tower, Thanh Xuan NLA: 48,000 sqm
Thai Building, Cau Giay NLA: 24,000 sqm
BRG Tower, Hoan Kiem NLA: 5,000 sqm
100,000 50,000
2022 onward
0 2020 BRG Grand Plaza, Dong Da NLA: 26,000 sqm
The Valley Smart Building, Nam Tu Liem NLA: 39,500 sqm
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Lotte Mall Hanoi, Tay Ho NLA: 45,000 sqm
2021F
Grade A
2022F
Grade B
Source: CBRE Vietnam Research, Q4 2020
CBRE RESEARCH | © 2021 CBRE, INC.
MARKET OUTLOOK: LIMITED GROWTH PROSPECT, BUT AMONGST THE LEAST AFFECTED COUNTRIES APAC, Grade A Office Rental Growth Outlook 2020
2021F
5% 0% -5% -10% -15%
Hong Kong SAR
Melbourne
Shenzhen
Shanghai
Beijing
Jakarta
Tokyo
Guangzhou
Hanoi
Ho Chi Minh City
Singapore
Seoul
Taipei
-20%
Bangkok
15
Source: CBRE Vietnam Research, Q4 2020
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
16
MARKET OUTLOOK
27
20%
26
10%
25
0% 2020
2021F
2022F
14
30%
13
20%
12
10%
11
Vacancy rate
30%
Hanoi Grade B Office, Performance Outlook Asking rents (US$/sqm/month)
28
Vacancy rate
Asking rents (US$/sqm/month)
Hanoi Grade A Office, Performance Outlook
0% 2020
2021F
2022F
Asking rent - Best case
Asking rent - Worst case
Asking rent - Best case
Asking rent - Worst case
Vacancy rate - Best case
Vacancy rate - Worst case
Vacancy rate - Best case
Vacancy rate - Worst case
Source: CBRE Vietnam Research, Q4 2020
Notes:
Best case scenario: border restriction is lifted at the end of H1 2021 Worst case scenario: border restriction continue to the end of 2021 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
17
WILL LINE NO. 2A IMPACT RENTS IN 2021?
No connectivity with Line No. 3 during 2021
Public perceptions will need time to adapt
Potential public advocacy issues should COVID-19 resurge in Hanoi ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
CONTINUED EXPANSION FOR LESS AFFECTED OCCUPIER SECTORS OCCUPIERS WILL CONTINUE TO RESTRUCTURE & ADOPT FLEXIBLE STRATEGIES SIGNIFICANT NEW SUPPLY TO COME ONLINE
RENTAL RATES TO STABILISE
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
20 21
THE
REGAIN OF OFFICE MARKET
CBRE RESEARCH | © 2021 CBRE, INC.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
H A N O I R E TA I L
RESHAPE
20 20
A YEAR TO LOOK BACK Vietnam Mobility Index
RETAIL & RECREATION
Total Sales and Services Turnover (Y-o-y change)
11.8%
12.3%
Vacancy Rates Increase
16%
12.1% 7.7%
-16%
2.7%
2.6%
12% 10%
compared to pre-COVID level
8%
-1.3%
GROCERY & PHARMACY
14%
6% 4%
+9%
-15.6%
compared to pre-COVID level
Vietnam PARKS
-17%
HCMC 2019
Hanoi 2020
Da Nang
2% 0% CBD
Non-CBD 2019
2020
compared to pre-COVID level
Source: CBRE Vietnam Research, GSO, Google Mobility index. The pre-COVID level is the median value, for the corresponding day of the week, during the 5-week period Jan 3–Feb 6, 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
21
SLIGHT GROWTH IN NEW SUPPLY AND SIGNIFICANT CHANGES IN PERFORMAN CE
HANOI RETAIL: MARKET SNAPSHOT 2020
CBD TOTAL SUPPLY
~56,017 sqm NLA 13 projects
NLA (sqm)
ASKING RENT (*)
US$ 107.7
US$/sqm/month
VACANCY RATE (%)
Non-CBD
14.3%
34 projects
▲ 9.2% q-o-q ▲ 9.7% y-o-y ▲ 3.2 ▲12.9
~998,172 sqm NLA
ppts q-o-q
US$ 24.5
12.3%
ppts y-o-y
▼ 0.1%
q-o-q
▼ 1.3%
y-o-y
2 NEW PROJECTS New supply: 41,018 sqm ▼ 53% average of past three years
▲ 1.0
ppt q-o-q
▲ 3.3
ppts y-o-y
Source: CBRE Vietnam Research, Q4 2020 Note: (*) Asking rent is quoted on NLA, excluding VAT & Service charges for Ground Floor and First floor. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
22
STRONG EXPANSION OF EXISTING TENANTS Number Of Stores Change Y-o-y By Category (2019 Vs. 2020)
UNIQLO opened 3 outlets in Vincom Pham Ngoc Thach, Vincom Center Metropolis, Aeon Mall Long Bien Source: tuoitre.vn
MLB opened 2 outlets in Trang Tien Street & Vincom Center Ba Trieu Source: Vincom.com
Haidilao entered Hanoi market with 3 new branches in Vincom Pham Ngoc Thach, Vincom Tran Duy Hung & Vincom Megamall Times City
80% 60%
40%
Source: CBRE
20%
New launching coffee shop of The Coffee House in Hinode City
0%
Source: CBRE
-20%
A brand new concept of Kichi Kichi in Trang Tien Plaza
-40% Hanoi
Vietnam
Source: CBRE
Nars opened its first boutique store on Trang Tien street Source: CBRE Source: QandME Retail Store Status, 2020.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
23
DECREASE IN NUMBER OF NEW ENTRANTS 2019
2020 – New Entrants
2021 Expected
Fashion & Accessories
F&B
From South East Asia
Mid-end
Multi platforms
Others
Awaits Vaccine
CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Source: CBRE Vietnam Research, Q4 2020. CBRE RESEARCH | © 2021 CBRE, INC.
24
STRONG TENANTS TAKE ADVANTAGE OF THE SITUATION TO EXPAND Who are strong tenants
What they ask
Financially stable
Good location, good quality retail space
F&B
Strong market presence
Fashion & Accessories
Strong tenants
Free fit out period up to 3 months
Omni channels
Adaptability
Rent negotiation
CAPEX support
Special leasing terms Strategy
Source: CBRE APAC Research, Asia Pacific Retail Flash Survey conducted Sept 21 to Oct 20, 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
25
NEW CONSUMER BEHAVIOURS WILL BE HERE TO STAY
“Vietnam's E-commerce Market To Reach $13.1 Bn In 2020: Study “(up 30.3% y-o-y) Source: Entrepreneur.com, Dec 2020
% 87
(*)
believe consumers focus on
sustainability and wellness Which will reshape shopping behaviour
% 61
(*)
expect a significant increase in consumers’
spending on experience
Source: QandME Vietnam EC Market, 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Source: CBRE APAC. *Answers from 120 APAC industry leaders, CBRE survey, 2020 CBRE RESEARCH | © 2021 CBRE, INC.
26
FASHION IS AMONGST THE STRONGEST EXPANDING SECTORS IN 2021
Nike to Open 30 Stores in 2021, Continue Investing in Customer Outreach and Supply Chain Source: RetailTouchPoint, Nov. 2020
Louis Vuitton, Christian Dior join Hanoi luxury market Source: Vietnamnet, Nov. 2020
Asia will lead spending recovery, Uniqlo CEO Yanai says Source: NikkeiAsia, Dec. 2020
“China and Southeast Asia will drive consumer spending: Taiwan and Vietnam, which have controlled the coronavirus, are enjoying firm spending while Malaysia, Indonesia and the Philippines are stagnant” ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Demand for large flagship stores from luxury and fast fashion retailers continues to increase even as they pivot to e-commerce
CBRE RESEARCH | © 2021 CBRE, INC.
27
THE FUTURE OF RETAIL PROPERTY: HOW TO INCREASE RETAIL ASSET RESI LIENCE
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
28
MARKET OUTLOOK: LARGE-SCALE PROJECTS WILL DOMINATE FUTURE PIPELI NE Over 300,000
sqm in the pipeline
2021
Hanoi Retail Forecast 120
2022-2023
20%
FLC Twin Towers NLA:14,000 sqm
US$/sqm/month
100
The Manor Central Park NLA : 70,000 sqm Lotte Mall Hanoi NLA : 72,000 sqm
15% 80 60
10%
40 5% 20 -
0% 2020
Vincom Mega Mall Smart City NLA : 49,000 sqm
2021F
2022F
2023F
CBD Asking Rent
Park City NLA: 12,000 sqm
Non-CBD Asking Rent CBD Vacancy Rate Non-CBD Vacancy Rate
Hinode City NLA : 10,000 sqm
Upcoming Vincom Mega Malls
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Aeon Mall Giap Bat NLA : 84,000 sqm
Source: CBRE Vietnam Research, Q4 2020 Note: Asking rent is quoted on NLA, excluding VAT & Service charges for Ground Floor and First floor. CBRE RESEARCH | © 2021 CBRE, INC.
29
MARKET OUTLOOK: VIETNAM IS AMONGST THE LEAST AFFECTED APAC Retail, % Changes in Rental rates Forecast 10%
Y-o-Y Change
0% -10%
-20% -30% -40% -50%
2020F
2021F
2019 - 2021 Cumulative
Note: Asking rent is quoted on NLA, excluding VAT & Service charges for Ground Floor and First floor ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Hanoi
HCM
Hong Kong SAR
Auckland - Regional Ctr
Tokyo (Ginza)
Melbourne - Regional Ctr
Melbourne - CBD
Perth - CBD
Singapore
Brisbane - Regional Ctr
Perth - Regional Ctr
Taipei
Sydney - Regional Ctr
Source: CBRE Vietnam Research, January 2021
Sydney - CBD
Shenzhen
Brisbane - CBD
Beijing
Guangzhou
Shanghai
-60%
. CBRE RESEARCH | © 2021 CBRE, INC.
MARKET WILL PICK UP NOTABLY IN H2 2021
Consumer Confidence: • Improving gradually then picking up when vaccines show effect Retail Space Demand • New concept/format • Physical stores need to evolve into experience Tenants: • Rise of Automobiles, Luxury, Home Furnishing & Decor • Looking for opportunities in 2nd – tier cities Landlords • Transforming to regional centres to offer onestop experience • Mixed use developments help drive spending
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
INDUSTRIAL
RESILIENCE
32
A YEAR TO LOOK BACK
20 20
High Occupancy Rate of Industrial Parks
U P B E AT I N D U S T R I A L P R O P E R T Y M A R K E T
Surge of Logistic Property Demand
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Strong Asking Rent Escalation
Limited Industrial Land Supply in Prime Locations
Manufacturing Relocation is Key Demand Driver
New Players Have Joined The Market
CBRE RESEARCH | © 2021 CBRE, INC.
33
MARKET SNAPSHOT - INDUSTRIAL LAND SUPPLY • • • • •
Hanoi Hung Yen Hai Duong Hai Phong Hung Yen
South Total leasable area: 24,238 ha
North Total leasable area: 9,433 ha
10,000
90%
9,000
80%
250 200
50% 150
40%
5,000
30%
4,000
100
20%
3,000
10%
2,000
0%
1,000 0
300
60%
6,000
HCMC Dong Nai Binh Duong Long An
350
70%
8,000 7,000
• • • •
100%
Binh Duong
Dong Nai
BR-VT Long An HCMC
Total Industrial Land Area (ha)
Hai Phong
Bac Ninh
Hanoi
Hai Duong
Leasable Industrial Land Area (ha)
Significant gap of supply and rental rate between the major industrial regions ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Hung Yen
USD/sqm/remaining term
11,000
PERFORMANCE
50
HCMC Hanoi
Binh Dong Duong Nai
90 - 100% Occupancy rate
Occupancy rate Minimum asking rent
Long An
Bac Ninh
Hung Hai Hai BR-VT Yen Duong Phong
70 - >80% Occupancy rate
0
50 - >60% Occupancy rate
Vacancy rate Maximum asking rent
Source: CBRE Vietnam Research, Q4 2020. Note: Asking rent is exclusive of VAT and Management/Service charge. The asking industrial land rent is quoted on remaining lease term of industrial parks. Normally, the remaining lease term is from 30 – 45 years. CBRE RESEARCH | © 2021 CBRE, INC.
34
MARKET SNAPSHOT - READY-BUILT FACTORY AND WAREHOUSE SUPPLY
ASKING RENT
3
2
10 8 6
Ready-built Factory
4
Stable asking rent
2 HCMC Hanoi Binh Dong Bac Hung Bac Hai Hai Duong Nai Ninh Yen Giang Duong Phong
1
Warehouse
12 10
• • • •
HCMC Dong Nai Binh Duong Long An
RBF
0
USD/sqm/month
Hanoi Hung Yen Hai Duong Hai Phong Bac Ninh Thai Nguyen Vinh Phuc Bac Giang
Mil. sqm
• • • • • • • •
USD/sqm/month
12
0 RBF Supply
WH Supply
Major Northern Provinces Major Southern Provinces Source: CBRE Vietnam Research, Q4 2020. Note: Northern RBF supply is calculated for Bac Ninh, Hai Duong, Hai Phong, Thai Nguyen, Vinh Phuc, Hung Yen, Bac Giang. Northern WH supply is calculated for Bac Ninh, Hanoi, Hai Duong, Hai Phong, Hung Yen. Southern RBF and WH supply is calculated for HCMC, Binh Duong, Dong Nai, Long An. Asking rent is exclusive of VAT and Management/Service charge ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Developed logistics hubs
8
Emerging logistics hubs
Warehouse
6 4 2 0
HCMC Hanoi
Binh Dong Duong Nai
Bac Ninh
Hai Phong
Long An
Hung Yen
Up 5%-10% y-o-y in selected new projects
New supply increases significantly in major industrial regions CBRE RESEARCH | © 2021 CBRE, INC.
35
LOGISTICS INDUSTRY DOMINATES DEMAND Industrial land is the most sought-after product, especially for logistics property development. 30%
38%
Animal feed and Furniture are one of the biggest beneficiaries from FTAs.
Industrial Land RBF WH
33%
One fifth of leasing enquiries belongs to logistics companies Logistics Electronics 20%
Plastic
35% 12% 7% 2%
5%
Industrial Property Development
6%
4%
6%
Garment Medical Equiment Investment Construction
Automotive Other
Source: CBRE Vietnam Research, Q4 2020. Note: The statistic is based on industrial property enquiries received by CBRE Vietnam in 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
36
MANUFACTURING RELOCATION IS A KEY DEMAND DRIVER Bac Giang Bac Ninh
Apple’s vendors in Vietnam: Supply Chain Restructuring
Quang Ninh Ha Noi
China+1 Strategy
Manufacturing Relocation
Hai Phong Nghe An
Local Expansion Da Nang
Quang Nam
Supplier by country
Manufacturing location of suppliers in Vietnam
Dong Nai
20% Binh Duong
HCMC Tien Giang
Existing Manufacturing Location
45%
Expanded Manufacturing Location
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
35%
19%
North South Central
China
7%
Vietnam 74%
Other
Source: Supplier List, Apple Supplier Responsibility 2019. CBRE RESEARCH | © 2021 CBRE, INC.
37
LOCAL MANUFACTURING EXPANSION TO ACCOMMODATE BUSINESS GROWTH FTAs are the strong boost of local manufacturing expansion.
UKVFTA December 2020 Vietnam & UK
Automotive
Electronics
RCEP November 2020 ASEAN+
EVFTA
Agriculture & Garment
Logistics
June 2019 Vietnam & EU August 2020 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
38
NEW PLAYERS IN THE MARKET Tier-1 industrial cities and provinces are key focused areas.
Phu Tho
Industrial Park Vinh Phuc
Logistics Property
Bac Giang Quang Ninh
Bac Ninh Hanoi Hung Yen
Ha Nam
Hai Duong
Hai Phong
Thai Binh
Nam Dinh
Tay Ninh Binh Duong Dong Nai HCMC Long An BR - VT
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
OUTLOOK
40
ESTABLISHING NEW LOGISTICS HUBS IN MAJOR INDUSTRIAL REGIONS Binh Duong
Chi Lang City
Thai Nguyen Thai Nguyen City
Tay Ninh
Industrial Park International Airport
Vinh Phuc Thu Dau Mot City
Bac Giang
Vinh Phuc City Bac Giang City
Dong Nai Bien Hoa City
Bac Ninh City Quang Ninh Bac Ninh
HCMC Ha Long City
Hai Duong City Hai Duong
Ha Noi
Hai Phong City
Hung Yen
Long An
CBD of HCMC Cat Lai Port
Hai Phong
Phu Ly City Ha Nam
Thai Binh BR - VT Hiep Phuoc Port Cai Mep Port
Ninh Binh City
Nam Dinh
Northern Region ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Southern Region
30 km
Long An International Port
CBRE RESEARCH | © 2021 CBRE, INC.
41
INVESTMENT INTO INFRASTRUCTURE DRIVES DEMAND IN NEW LOCATION Expansion of expressway to border and coastal areas in the North
Lang Son
Thai Nguyen
Mong Cai
Lang Son
Thai Nguyen
Mong Cai Vinh Phuc
Vinh Phuc
Bac Giang Bac Ninh
Bac Giang
Hai Duong Hai Phong
Vinh Phuc
Ha Long
Noi Bai
Bac Giang
Quang Ninh
Bac Ninh Phu Ly
Van Don
Bac Ninh Ninh Binh
Hanoi Hai Duong
Performance of IPs in Tier-1 & Tier-2 region 300
80%
250
200
60%
150
40%
100
20%
50
0% Tier-1 Occupancy rate
0 Tier-2 Min asking rent Max asking rent
USD/sqm/remaining term
Hung Yen
100%
Source: CBRE Vietnam Research, Q4 2020. Image source: Zing News. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Phu Ly
Completed Expressway
Nam Dinh
Hai Phong
Ha Long
Cat Bi
Thai Binh
Under-construction/planning Expressway
National Road
Tier-1: Hanoi, Bac Ninh, Hai Duong, Hung Yen, Hai Phong Tier-2: Vinh Phuc, Nam Dinh, Bac Giang, Quang Ninh
Construction of Van Don Mong Cai Expressway is expected to complete in 2021. CBRE RESEARCH | © 2021 CBRE, INC.
42
INVESTMENT INTO INFRASTRUCTURE DRIVES DEMAND IN NEW LOCATION Binh Duong
Expansion of expressway to the west and coastal areas in the South Chon Thanh
Thu Dau Mot
Dong Xoai
Bien Hoa
Tay Ninh
Dong Nai
Bien Hoa Phan Thiet
Chau Doc
Ha Tien
Cao Lanh
Tan Son Nhat
Tan An
Long Thanh
Long Xuyen My Tho Vinh Long
Vung Tau
Rach Gia
Experimental operation of Trung Luong - My Thuan Expressway in December 2020.
HCMC
Can Tho
Cat Lai
Long An Soc Trang Bac Lieu
Performance of IPs inTier-1 & Tier-2 region 100%
350 300
80%
250
60%
200
40%
150 100
20%
Hiep Phuoc
USD/sqm/remaining term
Ca Mau
Tan An Long An International
Tien Giang My Thuan 2 Bridge
My Tho
Vinh Long
50
0%
0 Tier-1
Occupancy rate
Tier-2 Min asking rent
Can Tho
Max asking rent
Source: CBRE Vietnam Research, Q4 2020. Image source: Vnexpress, Tuoitre. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Vinh Long Completed Expressway Under-construction/planning Expressway
Construction of My Thuan 2 Bridge started in August 2020.
Construction of My Thuan - Can Tho Expressway & Long Thanh International Airport started in January 2021
CBRE RESEARCH | © 2021 CBRE, INC.
43
IMPROVEMENT OF WAREHOUSE QUALITY INCREASES RENTAL LEVEL
SPECIALIZED FACILITIES FOR ADVANCED DISTRIBUTION NETWORK E-commerce drives leasing demand in 2021. Strong leasing demand condensed in in-city fulfillment centers.
SIGNIFICANT IMPROVEMENT OF WAREHOUSE QUALITY High-cost storage systems such as Automatic Storage & Retrieval Systems (ASRS) are mainly adopted by large e-commerce companies. Such solutions usually require built-to-suit properties or significant upgrade of large-scale new builds. Technology will lead to significant advances in warehouse operations and efficiency.
Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
44
RESURGE OF INDUSTRIAL PROPERTY DEVELOPMENT New supply is expected to resurge and balance gap with rapid increasing demand.
120
2,500
100
2,000
80
1,500
60
1,000
40
500
20
0
0 2016 2017 2018 2019 2020 2021F 2022F
4,000
180 160 140 120 100 80 60 40 20 0
3,500 3,000 2,500
Ha
3,000
2,000 1,500 1,000 500
0 2016
2017
2018
2019
2020 2021F 2022F
Tier-2 New Supply
Tier-2 New Supply
Tier-1 New Supply
Tier-1 New Supply
Tier-1 Average asking rent (International travel restriction)
Tier-1 Average asking rent (International travel restriction)
Tier-1 Average asking rent (International travel resumes)
Tier-1 Average asking rent (International travel resumes)
Northern Tier-1: Hanoi, Bac Ninh, Hai Duong, Hung Yen, Hai Phong Northern Tier-2: Bac Giang, Nam Dinh, Vinh Phuc, Quang Ninh Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
USD/sqm/remaining term
Southern Region USD/sqm/remaining term
Ha
Northern Region
Southern Tier-1: HCMC, Dong Nai, Binh Duong, Long An Southern Tier-2: Binh Thuan, BR-VT, Binh Phuoc, Tay Ninh, Tien Giang, Vinh Long
CBRE RESEARCH | © 2021 CBRE, INC.
45
INCREASING COMPETITION FROM REGIONAL PEERS Not only Vietnam but also neighboring countries have rapidly established new industrial parks. Korea - Myanmar Industrial Complex 225 ha South Korea: Korea Land and Housing Corp, Global SAE-A Myanmar: Ministry of Construction
Yangon Amata Smart and Eco City 800 ha Thailand: Amata Corp Myanmar: Ministry of Construction
Yangon, Myanmar
Myanmar Singapore Industrial Park 436 ha Singapore: Sembcorp Myanmar: Pahtama Group, Myanmar Agribusiness
Brebes, Indonesia
Brebes Industrial Park 4,000 ha Indonesia: PT Wijayakusuma Industrial Estate
Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
SIGNIFICANT IMPROVE OF PERFORMANCE OF IPS IN TIER-2 REGIONS ASKING RENT INCREASE MODERATELY IN TIER-1 REGION WAREHOUSE RENTAL RATE ESTABLISHES NEW HIGH LEVEL. NEW SUPPLY IN PRIME LOCATIONS LOCAL MANUFACTURING EXPANSION & PRODUCTION SHIFTING ARE KEY DEMAND DRIVERS
20 21
THE
RESILIENCE OF INDUSTRIAL MARKET BALANCING DEMAND AND SUPPLY
NEW LOGISTICS HUBS EMERGE IN NON-TRADITIONAL AREAS
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
HANOI REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
HANOI RESIDENTIAL
RESUMPTION
48 48
A YEAR TO LOOK BACK
DISRUPTED SALES ACTIVITIES
Limited transactions from foreigners
Lower supply and sales volume
Investors looking for other channels/markets
Weak rental market
BUT SHOWING SIGNS OF RECOVERY
New launch and sold units bounced back in Q4 (similar to pre-COVID level) AA SS II AA PP AA C C II FF II C C RR EE AA LL EE SS TT AA TT EE M M AA RR KK EE TT O OU U TT LL O OO O KK 22 00 22 11 || VV II EE TT N N AA M M
Increase in new supply in neighboring provinces
Sold units exceeded new supply
Price growth as projects near completion
C C BB RR EE RR EE SS EE AA RR C CH H || © © 22 00 22 11 C C BB RR EE ,, II N NC C ..
49
NEW LAUNCH DOWN 52% Y-O-Y, BUT BOUNCED BACK BY YEAR END HANOI CONDOMINIUM: MARKET SNAPSHOT 2020 Total units sold: 18,514 - Total units launched: 17,974 from 34 projects Luxury
High-end
New launch 0 project supply 0 unit
3 projects 1,989 units 1 project relaunched ▲ 12% y-o-y
Selling price*
Sold units
US$ 5,100/sqm
59 units ▲ 26% y-o-y
US$ 2,168/sqm ▼ 7% y-o-y
1,823 units ▼ 19% y-o-y
(*) Selling price: US$ psm (excluding VAT and quoted on NSA)
Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Mid-end
Affordable
24 projects 13,260 units ▼ 55% y-o-y
7 projects 2,725 units ▼ 54% y-o-y
US$ 1,361/sqm ▲ 4% y-o-y
13,838 units ▼ 31% y-o-y
US$ 830/sqm ▲ 6% y-o-y
2,794 units ▼ 55% y-o-y
DECLINE IN NEW LAUNCH
LUXURY: >US$4,000 psm | HIGH END: US$2,000 – 4,000 psm MID END: US$1,000 – 2,000 psm | AFFORDABLE: < US$1,000 psm CBRE RESEARCH | © 2021 CBRE, INC.
Limited New Supply Due to Disruption of COVID-19
A Image: S I A P A CNhan I F I C R Dan.com.vn EAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
51
LOWEST NEW SUPPLY VOLUME SINCE 2015 Hanoi Condominium, New Launch Supply, 2020
17,974 units
40,000
(▼ 52% y-o-y) 100 90
35,000
Number of units
70
25,000
60
20,000
50 40
15,000
30
10,000
Number of projects
80
30,000
20
5,000
10
-
0 2010
2011 Luxury
2012
2013
High-end
2014 Mid-end
2015
2016
Affordable
2017
2018
2019
2020
Number of projects launched
Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
52
NEW SUPPLY IN 2020: THE EAST LED THE NEW LAUNCH SUPPLY Landed property: 844 units (▼ 80% y-o-y) from 8 projects Condominium: 17,974 units (▼ 52% y-o-y) from 34 projects
NORTH
WEST
NO NEW LAUNCH IN 4 CORE DISTRICTS (*) IN 2020
EAST
11%
5%
44% 40%
East 8 Landed property 0 Luxury
3 High-end 24 Mid-end 7 Affordable
SOUTH Source: CBRE Vietnam Research, Q4 2020. (*) 4 core districts: Hoan Kiem, Hai Ba Trung, Dong Da, Ba Dinh districts
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Future bridge
West
South
North
EAST took the lead in number of units launched in 2020 CBRE RESEARCH | © 2021 CBRE, INC.
53
RENTAL YIELDS COMPRESSED IN TRADITIONAL EXPAT HUBS Hanoi Condominium, Rental Yields By Clusters 6.0% 5.0%
Rental Yield
4.0% 3.0% 2.0% 1.0% 0.0% CBD
Midtown Tay Ho 2018
2019
West
South
2020
Source: CBRE Vietnam Research, Q4 2020. Selected projects only, capital gain not included. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
54
INVESTORS LOOKING FOR OTHER CHANNELS New stock trading accounts hit record high
Returns Of Different Investment Channels 2020
06/12/2020
2019
Gold prices hit new record 21/07/2020
2018
Bitcoin soars above $35,000, hitting new high 06/01/2021
Source: CBRE Vietnam Research; SJC; SBV, Q4 2020 • VN Index: y-o-y change, end of period • Bank savings: 12-month deposit • SJC gold: y-o-y change of price per tael ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
VND/USD exchange rate Gross residential yield Bank deposit Stock Market (VN Index) Gold (SJC) Return > 15% in one year CBRE RESEARCH | © 2021 CBRE, INC.
Selling prices are set at higher levels across locations
Image: Nhandan.com.vn
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
56
HANOI CONDOMINIUM: DELAY IN LAUNCH OF PROJECTS AT PRIME LOCATION S LEADING TO LOWER PRIMARY PRICING FOR HIGH -END SEGMENT Hanoi Condominium, New Launch Vs. Sold Units Lower Supply Volume Allows Sales To Catch Up
Hanoi Condominium, Primary Prices, 2020 $6,000
40,000 35,000
$5,100
$5,000
30,000
$3,000
$2,168 (▼7% y-o-y) $1,361 (▲ 4% y-o-y) $830 (▲6% y-o-y)
$2,000 $1,000 $0 2018 Luxury
High-end
2019 Mid-end
2020 Affordable
Units
$4,000
Launch: ▼ 52% y-o-y Sold: ▼ 35% y-o-y
25,000 20,000 15,000 10,000 5,000 2018 New launch
2019
2020
Sold units
Selling price: US$ psm (excluding VAT and quoted on NSA) Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
57
NEW RECORDS DISTRICTS DEVELOPERS SET BY NEW PRICING LEVELS ACROSS CLUSTERS First two new Nha high-end projects Be, Thu Duc and launched inDistrict Long Bien 9 recorded highest and Gia Lam districts price growth. New
Luxury project relaunched in Cau Giay district
WEST
CAU GIAY ▲ 35% y-o-y
EAST
projects in these area quoted higher selling prices by 47%-70% in comparison with surrounding area.
LONG BIEN ▲ 11% y-o-y NAM TU LIEM ▲ 10% y-o-y GIA LAM ▲ 20% y-o-y
New high-end project offered higher pricing DISTRICT Primary Price▲% (% differences between the highest offerings in 2020 and average selling price of the same location in 2019)
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
Source: CBRE Vietnam Research, Q4 2020.
(Selling price: US$ psm (excluding VAT and quoted on NSA)
SOUTH
Upgrade in position of large-scale township CBRE RESEARCH | © 2021 CBRE, INC.
HUNG YEN ▲ 12% y-o-y
58
HANOI LANDED PROPERTY: LIMITED NEW SUPPLY LEADING TO STRONG PRIC E GROWTH Hanoi Landed Property, New launch vs. Sold units Launches mostly from smaller scale projects compared to previous years
6,500
▲ 8% y-o-y
6,000
6,000
5,000
5,500
▲ 9% y-o-y
5,000 4,500
▲ 6% y-o-y
4,000
4,000
Units
Secondary price (US$/sqm)
Hanoi Landed Property, Secondary Prices, 2020
3,000 Launch: ▼ 80% y-o-y Sold: ▼ 88% y-o-y
2,000
3,500
1,000
3,000 2018 Villa
2019 Townhouse
2020 Shophouse
2018 New launch
2019
2020
Sold units
Prices are quoted per sqm of land inclusive of construction cost, exclusive of VAT Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
POSITIVE
Recovery Prospects
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
60
MARKET OUTLOOK Hanoi Condominium, New Launch and Sold Units Forecast
40,000 Launch: ▲ 40% y-o-y Sold: ▲ 38% y-o-y
Number of units
35,000 30,000
25,000
25,500
25,000 20,000 15,000 10,000 5,000 2018
Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
2019
2020
2021F
2022F
New launch CBRE RESEARCH | © 2021 CBRE, INC.
61
MARKET OUTLOOK Hanoi Condominium, Primary Price Forecast
Primary Pricing (US$ psm)
$7,000 $6,000
$6,000
$5,000 $4,000
$4,600
$3,000
▲ 10% y-o-y
▲ 5% y-o-y
▲ 4% y-o-y
▲ 2% y-o-y
▲ 4% y-o-y
▲ 4% y-o-y
$2,000
$1,000 $0 2018
2019 Luxury
2020 High-end
Mid-end
2021F
2022F
Affordable
Source: CBRE Vietnam Research, Q4 2020. ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
62
FOREIGN DEVELOPERS AND SOUTHERN BASED DEVELOPERS GO NORTH A HCMC-based company bought 50% share of Splendora 21/08/2020
Japanese real estate giant Nomura invests in Ecopark 12/11/2020
Phu My Hung bought a company owned 200ha in Bac Ninh MASTERISE HOMES LAUNCHED MASTERI WATERFRONT @ VINHOMES OCEAN PARK Image source: Vneconomy.vn
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
FUJITA CORPORATION & TAKARA LEBEN LAUNCHED THE MINATO RESIDENCE IN HAI PHONG
08/09/2018
Image source: Cafebiz.vn CBRE RESEARCH | © 2021 CBRE, INC.
EMERGENCE OF SUBURBAN DISTRICTS AND PROVINCIAL MARKETS FOCUSING ON LANDED PROPERTY PRODUCTS Landed Property, New Launch Forecast, 2021F 3,000 2,500
Number of units
63
2,000 1,500 1,000 500 Hung Yen Bac Ninh (*)
Hai Duong
Thai Bac Giang Nguyen
Source: CBRE Vietnam Research, Q4 2020. (*) Hung Yen excludes Ecopark
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
64
RESIDENTIAL CLUSTERS IN HANOI: EXPANSION AND UPGRADING
2020
2030F
Affordable projects to move further and further away from RING ROAD 3
(*) 4 core districts: Hoan Kiem, Hai Ba Trung, Dong Da, Ba Dinh districts
LUXURY ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
HIGH-END
MID-END
AFFORDABLE CBRE RESEARCH | © 2021 CBRE, INC.
Improvement in product quality, driven by new joiners to Hanoi market Investors looking for new opportunities in 2nd tier provinces
20 21
Vaccine for COVID-19 and Vaccine for market
THE
New supply bounced back in 2021
RESUMPTION OF RESIDENTIAL MARKET
Big data, technology, proptech to track customers and drive customization. Better services, better positioning, better sale management and asset management
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2021 | VIETNAM
CBRE RESEARCH | © 2021 CBRE, INC.
A S I A PAC I F I C R E A L E S TAT E MARKET OUTLOOK | VIETNAM
THANK YOU CBRE RESEARCH
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