Valuation in Vietnam‐Myanmar after twenty years from today

Presented by: Mr. Duong Pham, MRICSChartered Valuation Surveyor(Vietnam), RICS Registered Valuer(UK)

Executive Director, DCF Vietnam Corporation Date: 18 June 2019

Content

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1. Vietnam Insights

2. Valuation - Legislation

3. Valuation – Activities

4. Valuation – Role in Economy

5. Valuation – Future Outlook

1. Vietnam Insights

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- Total area: 653,407 km2

- Population (6/2019): 54,307,773persons –ranking at 26th on the word

- Density : 83.11/km2

- Total area: 310,060 km2

- Population (6/2019): 97,373,362persons – ranking at 14th on the word

- Density: 314.04/km2

- 63 cities and provinces (5 municipalities and 58 provinces)

1. Vietnam Insights

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2. Valuation Legislation

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Legislation

Before 2000

2002-2005 2006-

2010

2010 -2019

- Constitution 1992 - Land law 1993- Open up economy- State Security

Commission of Vietnam established

- Business Law 2000- Price Ordinance 2002- Amendment of Land Law

2003- Amendment of Foreign

Investment Law 2001 and 2005

- Ho Chi Minh Stock Exchange and Ha Noi Stock Exchange established

- Joining WTO in 2008- Vietnam Valuation

Association (VVA) established in 24/5/2006

- Price Law 2012 – basic legal framework for valuation

- Vietnam Valuation Standards (13 items)

- Land Law 2013- Construction Law

(amendment)

2. Valuation Legislation

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Valuation operationConditions

Valuer certified by Ministry of Finance

Those who is eligible for registration for examination (in 6 subjects) organized by Ministry of Finance one time per year and have to pass on this examination,

- Resident of Vietnam or having foreign valuation certification which is accepted by Vietnam Ministry of Finance for application

- Having the capacity for civil acts, having a clear background, professional ethics,

- Having a university or postgraduate diploma in pricing, valuation, economic, economic technical, law granted by legal training organizations in Vietnam or international institute.

- Having a valid valuation training certificate issued by agencies and organizations with specialized training functions under the Ministry of Finance's regulations.

2. Valuation Legislation

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Valuation operation

Conditions

Valuation Firm registration

Legal framework

- In accordance with Business Law

- In accordance with Investment Law

- In accordance with regulations for eligible qualify standard to operate valuation which is 1‐3 compulsory registered MOF valuers based on type of business

Valuation Firm operation

- Vietnam Valuation Standards (13 items) – Main

- International Valuation Standards as IVS, RICS, etc. – Reference

3. Valuation Activities

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Firm Regulated by Ministry of Finance of Vietnam

Firm which is regulated by Ministry of Finance of Vietnam and allowed to refer to International Valuation Standards (RICS regulated Firm)

Operating as Investment Law and referring to International Valuation Standards

273 Firms 1 Firm (DCF Vietnam Corporation)

5 Firms:- CB Richard Ellis Vietnam

Company Limited (CBRE)- Jones Lang LaSalle Vietnam

Company Limited (JLL)- Savills Vietnam Company

Limited (Savills)- Cushman & Wakefield

Vietnam Company Limited- Colliers Vietnam

No. of Firms

3. Valuation Activities

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No. of Valuers and Auditors in Vietnam

Total MRICS in Vietnam 66- Chartered Surveyor 49- Registered Vauer 13

3. Valuation Activities

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3. Valuation Activities

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• Valuation Procedure (VVS)• Valuation Result - Letter of Opinion of Value- Valuation Certificate- Valuation Report

• Risk Management in doing valuation- Asset (legal and physical)- Inspection- Data- Assumption - Valuation - Limitation

3. Valuation Activities

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• Case Study – Real estate valuation Type: Industrial Property Land area: 11,596sqm Lease term: 2041 Lease payment: annual payment/ lumpsum payment Improvements: Warehouse: 1,296sqm; Office: 1,159sqm and ancillaries Purpose: Potential for disposal Timing: 5 working days Fee: (US$) Type of report: Valuation Certificate in dual languages Valuation Approaches: Market, Cost and Income Approaches Valuation Methods: Derpreciated Replacement Cost; Capitalisation; Direct

Comparison

4. Valuation – Role in Economy

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Urbanization and Industrialization- Van Don (Quang Ninh

Province)

- Bac Van Phong (Khanh Hoa)

- Phu Quoc (Kien Giang)

- Ha Noi City- Hai Phong City- Da Nang City- Ho Chi Minh City- Can Tho City

4. Valuation – Role in Economy

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Infrastructure and Transportation

15 operating roads and 7 undertaken projects- Ha Noi – Lao Cai:

264km- Ha Noi – Hai Phong:

105km- Da Nang – Quang Ngai:

129km

11 international airports and 11 local airports- Tan Son Nhat airport

(HCMC): in 1930- Noi Bai airport (Ha Noi

City): in 1977- Dang Nang airport (Da

Nang): in 1940- 23 airports in 2020- 28 airports in 2030

In 2018

According to Acardis and Vietnam Construction Cost by Construction Ministry

Metroline

Long Thanh Airport

4. Valuation – Role in Economy

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Economic performance

4. Valuation – Role in Economy

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Banking ProportionTotal debit Total debit for

real estateComparative rate

Thou

sand

bill

ions

Don

g

4. Valuation – Role in Economy

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Real Estate Perfomance

4. Valuation – Role in Economy

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Real Estate Perfomance

4. Valuation – Role in Economy

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Real Estate Perfomance

4. Valuation – Role in Economy

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Real Estate Perfomance

4. Valuation – Role in Economy

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Real Estate Perfomance

4. Valuation – Role in Economy

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Real Estate Transactions

4. Valuation – Role in Economy

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Real Estate Transactions

4. Valuation – Role in Economy

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M&A Cases

5. Valuation – Future Outlook

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COMPETENCY

TRUSTWORTHY

TRANSPARENCY

COMPULSORY

THANK YOU

Disclaimer: This document has been prepared in good faith and for general informational purposes only. Nothing herein contains investment, legal, tax and/or other advice andinvestors should seek independent professional advice before making any investment decision. While reasonable care has been taken to ensure that the sources of informationherein are reliable, no guarantee is provided to the accuracy or completeness of such information (and the same may not be independently verified or audited) and no liability isaccepted for any inaccuracyor omission.