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

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

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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

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Vietnam Real Estate Market

Presented by Savills Vietnam Co., Ltd. Tokyo, Nov 2011

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

  • r 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.

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  • 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

Savills World Wide Attracting a Global Audience

Vietnam Real Estate Market Presentation

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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

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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

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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

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Presentation Structure

Vietnam Real Estate Market Presentation

  • I. Country &

Macroeconomics Overview

  • II. Market Overview
  • III. Investment in Vietnam
  • IV. Investment Opportunities
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7 Vietnam Real Estate Market Presentation

Country & Macroeconomics Overview

S a v i l l s

Part I

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About Vietnam

Vietnam Real Estate Market Presentation

  • 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

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Population in Vietnam

Vietnam Real Estate Market Presentation

  • - Population: approx. 90 million (July

2011 est.)

  • - With 65% of the population aged

30 or younger, Vietnam is a country

  • f 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

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Economic indicators

GDP growth to be 6% in 2011 was targeted by the Government.

Source: GSO

Vietnam Real Estate Market Presentation 1 2 3 4 5 6 7 8 9 10 20 30 40 50 60 70 80 90 9M 2005 9M 2006 9M 2007 9M 2008 9M 2009 9M 2010 9M 2011 %

  • Bill. US$

GDP Nominal Growth rate (Y-o-Y)

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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

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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

Vietnam Real Estate Market Presentation

300 350 400 450 500 550 1,000 1,200 1,400 1,600 1,800 2,000 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. VnIndex US$/oz Gold Price (LHS) Vnindex (RHS)

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Economic indicators

  • Inter-bank average rate of VND versus USD were stable during Q3/2011

Source: State Bank of Viet Nam (SBV)

Vietnam Real Estate Market Presentation

20,500 20,550 20,600 20,650 20,700 20,750 Apr. May Jun. Jul. Aug. Sept. VND/ US$

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Economic indicators

Vietnam inter-bank interest rates

Source: CEIC

Vietnam Real Estate Market Presentation

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Economic indicators

  • Ceiling interest rate at 14% for capital mobilization was strictly applied.

Source: State Bank of Viet Nam

  • Vietnam Real Estate Market Presentation

2 4 6 8 10 12 14 16 2008 2009 2010 2011 % Base interest rate Discount rate Refinancing rate

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Economic indicators

19.20 21.40 51.39 30.00 37.73 27.65 10.50 28.00 35.00 40.00 23.00 29.00 27.00 12.00 10 20 30 40 50 60 2005 2006 2007 2008 2009 2010

  • Aug. 2011

% Credit growth rate (LHS) Capital mobilization rate

  • 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.

Source: State Bank of Viet Nam

  • Vietnam Real Estate Market Presentation

Capital mobilization growth rate Credit growth (LHS)

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Economic indicators

  • Retail sale of 9 months 2011 reach US$67.5 million.
  • Increasing 18% Y-o-Y

Source: GSO

  • Vietnam Real Estate Market Presentation

0% 5% 10% 15% 20% 25% 6.0 6.5 7.0 7.5 8.0 8.5 Jan. Feb. Mar. Apr. May Jun. Jul.

  • Aug. Sept.

Mill.US$ Retails sales of goods and services Growth rate (same period)

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18 Vietnam Real Estate Market Presentation

Market Overview Q3/2011

S a v i l l s

Part II

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Overview

Vietnam Real Estate Market Presentation

  • - 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.

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Ho Chi Minh City Market

S a v i l l s

  • Vietnam Real Estate Market Presentation
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HCMC Office

Vietnam Real Estate Market Presentation

  • 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
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HCMC Office

Vietnam Real Estate Market Presentation

CBD is the choice of tenants. Grade B is the main supplier.

Grade A Grade B Grade C 10 12 14 16 18 20 Q3/2010 Q4/2010 Q1/2011 Q2/2011 Q3/2011 %

  • 20

40 60 80 100 Q3/2010 Q4/2010 Q1/2011 Q2/2011 Q3/2011 % Grade A Grade B Grade C

Growing service charge in total rent

Source: Savills Research and Consultancy

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HCMC Office

Vietnam Real Estate Market Presentation

FDI vs. Rent of Grades A&B New supply vs. Take-up

Source: Savills Research and Consultancy

10 20 30 40 50 60 70 80 90 100

  • 50,000

100,000 150,000 200,000 250,000 300,000 2005 2006 2007 2008 2009 2010 3Q 2011 % Sq m New Supply Take-up Occupancy 1 2 3 4 5 6 7 8 9 10 20 30 40 50 60 70 80 90 100 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q3/2011 US$ billion Registered FDI Grade A Grade B US$/sq m/mth

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HCMC Retail

HCMC Market Presentation

  • 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
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HCMC Retail

Vietnam Real Estate Market Presentation

Department stores had the best performance Only suburban area had an increase in rent

  • 1.5
  • 1.0
  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 CBD Secondary area Suburban area Occupancy Rent rate % q-o-q change

  • 0.5

0.0 0.5 1.0 1.5 2.0 Retail podium Department store Shopping centre Occupancy Rent rate % q-o-q change

Source: Savills Research and Consultancy

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HCMC Hotel

Vietnam Real Estate Market Presentation Q3/2011

  • 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) 4-star: US$85/room/night (remained stable) 3-star: US$47/room/night (+1% q-o-q)

  • Outlook
  • - 3,300 rooms to come in 2012-

2013

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HCMC Hotel

Vietnam Real Estate Market Presentation

International visitors vs. Occupancy of 4 and 5-star hotels

10 20 30 40 50 60 70 80 90 100

  • 200,000

400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000

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 visitors %

Source: Savills Research and Consultancy

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HCMC Serviced Apartments

Vietnam Real Estate Market Presentation

Supply

  • 2 new projects with 58 units
  • Total supply: 3,207 units (+2% q-o-q)

Market performance

  • Avg. occupancy: 85% (-1% q-o-q)
  • Avg. Prices:

Grade A: US$30/sq m/mth (+7% q-o-q) Grade B: US$26/sq m/mth (-1% q-o-q) Grade C: US$16/sq m (stable q-o-q)

Outlook

  • - 2,400 units to come in 2012- 2014
  • - 470 units entering in 2012
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HCMC Villas & Townhouses

Vietnam Real Estate Market Presentation

  • Supply
  • - No new project entered the market
  • - Primary supply: 130 villas &
  • 120 townhouses (-30% q-o-q)
  • - Secondary supply: 3,000 dwellings
  • Market performance
  • - Market absorption rate: 4% (-17% q-o-q)
  • - Primary price:

Villa: US$230,000 - US$2,380,00

Townhouse: US$96,000 -

US$345,000

  • - Avg. transacted price:
  • US$390,000 per unit (-8% q-o-q)

Outlook

  • Until 2012: more than 1,700 dwellings
  • 2013-2014: more than 3,000 dwellings
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HCMC Apartments

Vietnam Real Estate Market Presentation

  • Supply
  • - 5 new projects with 812 units
  • - Primary supply: 14,100 units (-14% q-o-q)
  • - Secondary supply: 65,800 units
  • Market performance
  • - Market absorption rate: 10% (-2 percentage

points q-o-q)

  • - Avg. transacted prices:

Grade A: US$1,834/sq m (-17% q-o-q) Grade B: US$1,769/sq m (-10% q-o-q) Grade C: US$700/sq m (+3% q-o-q)

  • Outlook
  • - Next 2 quarters: 3,538 units
  • - Next 5 quarters: 20,200 units
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31 Vietnam Real Estate Market Presentation

  • Grade C remains the market driver, accounting for 75% absorbed units
  • The market achieved a low absorption rate of approximately 10%.
  • Primary transaction volume dropped -27% q-o-q.

HCMC Apartments

  • 4,000

8,000 12,000 16,000 20,000 Q4/2010 Q1/2011 Q2/2011 Q3/2011 Available units for sale Sold units units

Source: Savills Research and Consultancy

  • 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 Grade A Grade B Grade C units

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Hanoi Market

S a v i l l s

  • Vietnam Real Estate Market Presentation
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Hanoi Office

Supply

  • 115 buildings, 868,000 sq m (+9% QoQ);+21% YoY)
  • 16 Grade A, 40 Grade B and 60 Grade C
  • Four new Grade B buildings (65,000 sq m) and one new

Grade C building (5,300 sq m)

Market performance

  • Occupancy: 86% (+0% QoQ; +0% YoY)
  • Rental rate: US$25.5/sq m/mth (+2% QoQ; -3%YoY)
  • Grade A: 87% (+1% point QoQ), US$37.8 (+3.4% QoQ)
  • Grade B: 85.1% (-7% points QoQ), US$25.6 (-0.7% QoQ)
  • Grade C: 88%(+8% points QoQ), US$17.7 (+0% QoQ)

Outlook

  • Up to 2014: 84 projects, 1.2 million sq m
  • Q4/2011: 5 out of 13 projects with >10,000 sq m
  • ccupying 66% total supply in Q4/ 2011

Vietnam Real Estate Market Presentation

Nam Do Complex Han Viet Tower

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Hanoi Office

Correlation of distance to CBD, price and grade

Vietnam Real Estate Market Presentation

  • 10

20 30 40 50 60 0.00 2.00 4.00 6.00 8.00 10.00 Grade A Grade B Grade C CBD (km) US$/ sqm/ mth

  • The further

from the CBD, the lower price

  • Grade A

concentrated within 2km radius of CBD

  • Largest

variation of price Grade A

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Hanoi Office

Grade B increased sharply in office take-up

Vietnam Real Estate Market Presentation

Average take-up space by quarter (Q4/2009 – Q3/2011): 41,000 sq m

  • 20,000
  • 10,000

10,000 20,000 30,000 40,000 50,000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2009 2010 2011 Grade A Grade B Grade C sq m

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Hanoi Retail

Supply

  • 143 projects, 463,000 sq m
  • 2 new projects: 12,000 sq m

Performance

  • Average occupancy: 93% (+4 % points QoQ)
  • Rental rate:
  • Shopping centre: US$15 to US$150/ sq m/ mth
  • Department store: US$20 to US$100/ sq m/ mth
  • Hypermarket: US$15 to US$100/ sq m/ mth
  • Retail podium: US$40 to US$200/ sq m/ mth

Outlook

  • In next four years: 90 projects, ~1.6 million sq m
  • Mainly in Thanh Xuan, Hai Ba Trung, Cau Giay, Tu

Liem and Ha Dong districts

Vietnam Real Estate Market Presentation

Hang Da Galleria

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Hanoi Retail

CBD continues to have high occupancy

Vietnam Real Estate Market Presentation 50 100 150 200 250 20 40 60 80 100 CBD Secondary Suburban % US$/ sq m/ month Occupancy rate Min rent rate Max rent rate

All retail projects in CBD achieved 100% occupancy

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Hanoi Hotel

Supply

  • 49 hotels, ~7,350 rooms
  • 5-star: 11 hotels, ~ 3,600 rooms
  • 4-star: 11 hotels, ~ 1,800 rooms
  • 3-star: 26 hotels, ~ 1,950 rooms

Market performance

  • Occupancy: 51% (-4 % points QoQ, -5 % points YoY)
  • Rental rate: US$83/room/ night (-4% QoQ, -1% YoY)
  • 5-star: 50% (-2 % points QoQ), US$110 (-5% QoQ)
  • 4-star: 54% (-6 % points QoQ), US$71 (-5% QoQ)
  • 3-star: 50% (-5 % points QoQ), US$41 (-2% QoQ)

Outlook

  • 27 out of 41 projects provide 6,600 rooms
  • Q4/2011: ~250 rooms from 2 hotels
  • Mainly in Tu Liem district

Vietnam Real Estate Market Presentation Vista Ha Noi Hotel

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Hanoi Hotel

RevPAR: Decreased across all grades q-o-q

Vietnam Real Estate Market Presentation

20 40 60 80 100 120 140 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008 2009 2010 2011 5-star 4-star 3-star US$/room

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Hanoi Serviced Apartments

Supply

  • Total stock: 43 buildings, 2,459 units
  • Ha Noi Lakeview decreased -14 units due to

being renovated.

  • Mainly in Tay Ho and Ba Dinh districts.

Performance

  • Average occupancy: 87% (same as Q2/2011)
  • Average rent: US$26.7/sq m/ mth ( -1.7% QoQ)

Outlook

  • 12 out of 31 future projects: 2,600 units
  • Tu Liem district is the largest future supplier

Vietnam Real Estate Market Presentation

Ha Noi Lake View

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Hanoi Villas & Townhouses

Supply

  • 114 projects, ~38,100 dwellings
  • In which, 84 SC projects ,~23,865 dwellings

Market performance

  • Inactive market with few transactions
  • Large gap in price between SC and CCC

projects

  • SC projects:
  • Villa:
  • US$1,200 to US$12,700/ sq m
  • US$147,000 to US$3,030,000/

dwelling

  • Townhouse:
  • US$1,000 to US$15,000/ sq m
  • US$108,000 to US$1,215,000/

dwelling

Vietnam Real Estate Market Presentation

Park city Vincom Village

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Market performance

  • CCC projects:
  • Villa:
  • US$730 to US$6,000/ sq m
  • US$192,500 to US$1,272,000/

dwelling

  • Townhouse:
  • US$1,200 to US$2,700/ sq m
  • US$93,900 to US$298,000/ dwelling

Outlook

  • 55 projects, ~4,800 hectares
  • Large supply: Quoc Oai, Me Linh, Hoang Mai

& Long Bien districts

Hanoi Villas & Townhouses

Vietnam Real Estate Market Presentation

CEO Quoc Oai Dang Xa NUA

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Hanoi Apartments

Supply

  • Primary: 21 projects, 9,600 units, mainly Grade B
  • Secondary: 140 projects, 49,000 units
  • New supply: 1 project , launching 200/860 units

Market performance

  • Market absorption rate: 32% (+16% points QoQ) overall
  • Grade A: 2%(-3% points QoQ), US$2,489 (+0.3% QoQ)
  • Grade B: 36% (+25% points QoQ), US$1,753 (-13% QoQ)
  • Grade C: 22% (-4% points QoQ), US$1,170 (+4% QoQ)

Outlook

  • 102 projects, 46,800 units
  • Q4/2011: 12 projects, 7,600 units
  • 2012: 34 projects, 20,000 units
  • Mainly in Ha Dong, Hai Ba Trung and Cau Giay

Vietnam Real Estate Market Presentation

Nam Do Complex

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Hanoi Apartments

Absorption rate is better than previous quarter

Vietnam Real Estate Market Presentation 10 20 30 40 50 60 70 80 90 2,000 4,000 6,000 8,000 10,000 12,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2009 2010 2011 % Units Primary supply Sold out Absorption rate

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Hanoi Apartments

Grade B & C are main sold products of the market during last year

Vietnam Real Estate Market Presentation Q3/2011

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Grade A Grade B Grade C

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Industrial Zones(IZs) In Vietnam

Vietnam Real Estate Market Presentation Q3/2011

  • Currently, Vietnam has 260 IZs established,

with 171 IZs in operation and 89 IZs in the process of clearance and compensation or basic construction.

  • Up to early December 2010 Vietnam IZs

have attracted 3,900 foreign invested projects with total registered capital of nearly US$54 billion.

  • 209 additional IZs expected to be

established by 2020 with a total area of 64,310 ha

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47 Vietnam Real Estate Market Presentation Q3/2011

Vietnam and Japan - Cooperation In Supporting Industry Development

  • Vietnam is a very important partner of Japan in

supporting industries. In the coming time, more Japanese companies will come to invest in Vietnam as well as reallocate their production facilities from China to Vietnam.

  • Japan has invested nearly 1,500 FDI projects with

a total registered value of US$21 billion in Vietnam, of which nearly US$12 billion has been disbursed.

  • Many Japanese corporations focused on

building assembly facilities in Vietnam to supply regional and global markets.

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48 Vietnam Real Estate Market Presentation

COFFEE BREAK

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49 Vietnam Real Estate Market Presentation

Investment in Vietnam

S a v i l l s

Part III

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Vietnam- The investment destination

  • Jan 2011: ranked fourth most preferred

emerging market for investments by the Association for Foreign Investors in Real Estate (AFIRE).

  • April 2011: Southeast Asia’s top investment

destination, ahead of Malaysia and India - survey conducted by the National University of Singapore for the ASEAN Business Advisory Council

Vietnam Real Estate Market Presentation

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Demand is still there

Illustration: HCMC Apartments

  • Supply
  • Begin its downward trend from the

beginning of 2011

  • Sold units
  • Increasing from Q2/2009 – Q3/2010
  • Going down from Q4/2010 – Q3/2011
  • Current sold units equal to Q2/2009

level

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

  • 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2009 2010 2011 Units Supply Sold units Absorption rate

Vietnam Real Estate Market Presentation

Source: Savills Research and Consultancy

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0% 5% 10% 15% 20% 25% 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 Demand index Average demand index 2009 - 2010

  • Average demand index 2009 – 2010: 18%
  • The market underperformed in 2011
  • Possible built up demand from Q4 2011 onward: ~ 4,700 units

Demand is still there

  • Vietnam Real Estate Market Presentation
  • Illustration: HCMC Apartments
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Location Price Use Hai Phong $9,450,000 Serviced apartments District 1, HCMC $38,000,000 Retail and office development Son Tra District, Da Nang $10,000,000 Hotel, restaurant and vacant land Tu Liem District, Ha Noi $17,000,000 5 floor retail podium of the two residential towers. Dong Da District, Ha Noi $14,300,000 Proposed development: 27 storey

  • ffice building with 3 basements

Cau Giay District, Ha Noi $25,200,000 Proposed development: 35 level mixed use building: apartment with retail/office podium

Typical Investment Transactions Q3/2011

Vietnam Real Estate Market Presentation 53

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Cap Rates Around Asia Pacific (Prime)

Cities Office Retail 1Q/2010 1Q/2011 1Q/2010 1H/2011 Beijing 5.96% 5.66% NA NA Shanghai 6.60% 5.50% 7.00% 6.50% Hong Kong 3.10% 3.36% 3.76% 3.54% Taipei 3.30% 2.80% 3.90% 3.10% Tokyo 4.70% 4.80% 5.30% 5.20% Seoul 5.90% 5.70% 7.00% 6.50% Singapore 5.25% 3.88% 5.25% 4.75% Kuala Lumpur 10.05% 10.11% 10.89% 11.61% Hanoi 12.00% 12.00% 10.00% 10.00% Ho Chi Minh City 12.00% 12.00% 10.00% 10.00% Sydney 7.25% 7.00% 6.50% 6.50%

Vietnam Real Estate Market Presentation 54

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Japanese Wave of Investment

  • Daiwa

House and Kobelco Eco-Solutions Company constructing the Long Duc Industrial Zone in Long Thanh, Dong Nai Province

  • Japan Asia Vietnam bought CentrePoint Building
  • Nikko Cordial invested in PetroVietnam Securities
  • SBI bought 20% in FPT Securities
  • Unicharm bought 100% in Diana
  • Mizuho – Vietcombank
  • NTT Docomo from Japan bought 25% stake of Vietnam Mobile

Group

  • Kirin Holding bought 57% stake of Interfoods
  • Daio Paper bought 48% stake of Saigon Paper

Vietnam Real Estate Market Presentation

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Investing in Vietnam - Forms of investment

  • Joint Venture: with Vietnam partners

(typically land contribution from local partner)

  • 100% FDI structures
  • Co-investment into existing joint ventures

and 100 percent FDI structures

  • Business Corporation Contract (BCC)
  • Local listed and unlisted real estate

funds/companies

  • Overseas listed and unlisted real estate

funds/companies

Vietnam Real Estate Market Presentation

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Investing in Vietnam - Challenges

  • Immature legal framework
  • Securing clear land title
  • Regulatory transparency
  • Complicated and time-consuming licensing

procedures

  • Complications due to involvement of SOEs
  • Unrealistic pricing expectations

Vietnam Real Estate Market Presentation

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Good time to invest in real estate in Vietnam?

  • Good pricing & availability of distressed assets as

local developers/investors under pressure to divest their assets due to  Difficulty to secure bank financing  Possibility of license being revoked  Portfolio restructuring  Divesting non-core real estate assets or reducing stake to raise cash for core businesses  Creating a brand name by building partnerships with well-known developers and investors  Delivery of returns to investors

Vietnam Real Estate Market Presentation

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59

Good time to invest in real estate in Vietnam?

  • Timing – opportunity to benefit from

completion of clearance & compensation and/or infrastructure by vendor of many projects.

  • Effective long-term alternative

investment channel compared to other channels such as stock market, gold market, etc.

  • Potential for growth with Vietnam

being an emerging market

Vietnam Real Estate Market Presentation

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SLIDE 60

60

Investment Outlook

  • 2012 will see an increasing number of investment deals
  • Evolving legislative framework
  • Accelerated licensing of projects following the elections
  • Significant volume of transactions expected to take place in

the next few years

  • Expected fall in inflation
  • Rapid growth of housing demand due to young population

and replacement of old houses

Vietnam Real Estate Market Presentation

slide-61
SLIDE 61

61 Vietnam Real Estate Market Presentation

slide-62
SLIDE 62

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