Hanoi Quarterly Knowledge Report | Q2 2016

Accelerating successwww.colliers.com/vietnam

HANOI QUARTERLY KNOWLEDGE REPORT Q2 2016

TABLE OF CONTENTS

ECONOMIC OVERVIEW...............................................................................................................

VIETNAM ....................................................................................................................................

HO CHI MINH CITY ......................................................................................................................

HA NOI ........................................................................................................................................

HA NOI MARKET OVERVIEW ................................................................................................ OFFICE ........................................................................................................................................

RETAIL ........................................................................................................................................

CONDOMINIUM ............................................................................................................................

VILLA & TOWNHOUSE .................................................................................................................

SERVICED APARTMENT ..............................................................................................................

INDUSTRIAL ................................................................................................................................

Cover Page: Hanoi Skyline

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LIST OF FIGURES Figure 1: Vietnam GDP .....................................................................................................................

Figure 2: International Arrivals to Vietnam in 1H 2016 ......................................................................

Figure 3: FDI Capital of HCMC and Hanoi ..........................................................................................

Figure 4: GDP Growth Rate of HCMC and Hanoi ................................................................................

HA NOI MARKET OVERVIEW Figure 5: Office, Average Asking Rent...............................................................................................

Figure 6: Office, Occupancy Rate ....................................................................................................

Figure 7: Retail, Market Performance ...............................................................................................

Figure 8: Retail, Total Supply ...........................................................................................................

Figure 9: Condominium, New Launches and Sold Units by Year ........................................................

Figure 10: Condominium, New Launches by Quarter and Segment .....................................................

Figure 11: Condominium, Sales by Quarter and Segment ...................................................................

Figure 12: Villa and Townhouse, Supply by Quarter ............................................................................

Figure 13: Villa and Townhouse, Secondary Price by District ..............................................................

Figure 14: Villa and Townhouse, Q-o-Q changes in Secondary Price ..................................................

Figure 15: Serviced Apartment, Market Performance...........................................................................

Figure 16: Serviced Apartment, Total Supply .....................................................................................

Figure 17: Industrial, Market Performance............................................................................................

Figure 18: Industrial, Supply by District .............................................................................................

LIST OF TABLES Table 1: Macroeconomic Indicators of HCMC and Hanoi .....................................................................

Table 2: Office, New Supply in Q2 2016 ............................................................................................

Table 3: Significant Office Projects ...................................................................................................

Table 4: Retail, Future Supply ..........................................................................................................

Table 5: Significant Retail Projects ..................................................................................................

Table 6: Condominium, New Projects Launched in Q2 2016 ..............................................................

Table 7: Villa and Townhouse, New Projects Launched in Q2 2016 ....................................................

Table 8: Serviced Apartment, Supply Supply ....................................................................................

Table 9: Significant Serviced Apartment Projects .............................................................................

Table 10: Industrial, Future Supply ....................................................................................................

Table 11: Hanoi Industrial Market Overview ........................................................................................

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GDPIn the first six months of 2016 (1H2016), Vietnam’s GDP grew 5.52%. Although the growth rate was higher than that of 2012-2014, there were signs of slowdown when comparing to the increase of 6.32% in the same period last year. Adverse weather, including drought in the Central Highlands and salination in the Mekong Delta, resulted in the reduction of 0.8% in the agriculture output in 1H 2016. To achieve the projected economic growth of 6.7% this year, the country must push its GDP to 7.6% in the remaining of 2016.

CPIAverage CPI of 1H2016 climbed by 1.72% y-o-y while the core CPI (excluding energy and food prices) grew 1.80% y-o-y. An increase was seen in 10 out of 11 goods and service groups, with transport posting the highest rise at 2.99%, followed by housing and construction materials at 0.55%, restaurant services 0.21%, culture, entertainment and tourism 0.18%, and alcohol and tobacco 0.13%. Only the post and telecommunications group saw a drop of 0.06%. The rising fees of health care services, education and fuel will continue to put pressure on CPI in the rest of the year.

FDIThe total FDI registered in Vietnam in the first half of the year reached USD11.3 billion, significantly up 105.4% y-o-y. Of the total, USD7.5 billion came from 1,145 newly licensed projects, representing a yearly increase of 95.3% in capital and 51.3% in the number of projects. The remainder was contributed by 535 already-operating projects that had raised their capital by more than USD 3.78 billion, or 129% year-on-year (y-o-y). Disbursement of FDI surged to an estimated USD 7.25 billion in the six-month period, a y-o-y rise of 15% percent. Manufacturing and processing industries continued to be the top sector, following by the real estate sector and the science and technology sector, comprising 71%, 5.3% and 5% of the total registered FDI respectively.

RETAIL SALES In the first six months of 2016, Vietnam’s retail sales of goods and services reached USD76.6 billion, up 9.5% compared to the same period last year. If the price factor was excluded, the growth rate would be 7.5%, lower than the increase of 8.8% in the same period in 2015. Specifically, retail sales of accommodation and catering services reached USD17 billion, accounting for 11.3% of the total sales, up 7.4% y-o-y. Retail sales of tourism services, which made up 0.9% of the total sales, reached USD666.7 million, up 9.6% y-o-y. Retails sales of other services which accounted for 11.6% of total sales, estimated USD8.9 billion, up 9.2% y-o-y.

INTERNATIONAL ARRIVALS International visitors to Vietnam in 1H2016 were estimated to reach more than 4.7 million arrivals, marking a y-o-y increase of 21.3%. Foreign arrivals by air reached over 3.92 million, up 26% y-o-y while arrivals by road saw a yearly rise of 31.3% to 710,000. However, arrivals by sea declined 27.8 % to 75,000.Growth was recorded in the number of tourists from several Asian and European countries.

EXCHANGE RATEContrary to early 2016 expectation, the exchange rate was kept stable in the first 6 months. Using a daily-adjusted central exchange rate mechanism, the SBV has succeeded in stabilizing the Vietnam dong for several quarters. The VND/USD rate experienced minor increases for just a few days after Brexit, but soon moved back to its steady state. Nevertheless, the exchange rate may experience a mild increase to 22,750 VND/USD in the next 6 months.

Q2 2016 | ECONOMIC OVERVIEW

©2016 Colliers International Research

VIETNAM QUARTERLY KNOWLEDGE REPORT

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Q3 2016 forecast

Figure 1: Vietnam GDP

Source: World Bank | Colliers International Research

Figure 2: International arrivals to Vietnam in 1H 2016

Source: Asian Development Bank (ADB) | Colliers International Research

VIETNAM

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Figure 4: GDP Growth Rate of HCMC and Hanoi

Source: General Statistics Office | Colliers International Research


Table 1: Marcoeconomic Indicators of HCMC and Hanoi

HCMC Hanoi

Q2 2016 Q3 2016F Q2 2016 Q3 2016F

GDP (billion) 21.2 10.6

FDI (million) 685.4 1,900

Retail sales (billion) 15.4 45.7

Export (billion) 14.78 5.2

Import (billion) 17.3 11.5

HO CHI MINH CITY

In the first six months of 2016, the Gross Regional Domestic Product (GRDP) of Ho Chi Minh City reached USD21.2 billion with a stable increase of 7.47% y-o-y. Of total growth rate, trade and service sector contributed 4.19%, industrial and construction sector made up 2.16% while agriculture, forestry and fisheries sector accounted for 0.04%.

As of 15 June 2016, FDI inflow of both newly registered and supplementary capital to the city reached 425 projects, worth of USD685.4 million. There are 367 new investment projects with capital reaching USD512.7 million.

The average price index in the first six months of this year went up 1.02% on an annual basis Transportation sector had the biggest rise of 3.33% due to the hikes in fuel and gasoline price. Retail sales achieved USD15.4 billion, an increase 11.3% y-o-y.

Export values reached USD14.78 billion, up 1.7% y-o-y. Garments, agricultural products and computers & electronic devices contributed the most to export values. Import values increased by 7.9% y-o-y, worth of USD17.3 billion. The top segments of import values were milk and dairy products, fuel, garment material, plastics and iron & steel.

HANOI

In 1H2016, Hanoi’s GRDP achieved USD10.6 billion with a growth rate of 7.34% y-o-y. Industrial and construction sector had the highest growth rate of 7.78%, followed by service sector with the growth rate of 7.49%. Agricultural-forestry-fishery witnessed a modest growth rate of 2.06%.

CPI in the first six month of 2016 continued to rise, reaching 2.67% y-o-y. Transportation sector had the highest index mainly due to the increase in gasoline prices.

Retail sales of Hanoi were up 9.7% y-o-y, reaching USD45.7 billion in which retail sector achieved USD10.7 billion, an increase of 8.6% y-o-y. In the first six months of 2016, the capital welcomed 1.5 million international visitors, an increment of 39.3% y-o-y while the growth rate of domestic tourists was 2% y-o-y.

As of 21 June 2016, FDI inflows of both newly registered and supplementary capital reached USD1.9 billion, triple the amount of this period in 2015 and achieved 95% of year’s target.

In 1H 2016, export values grew 0.1% y-o-y, reaching USD5.2 billion while those of import went down 4.2% y-o-y, achieving USD 11.5 billion.

Figure 3: FDI Capital of HCMC and Hanoi


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Accelerating success

Q2 2016 | HA NOI | OFFICE


©2016 Colliers International Research Page 6

PERFORMANCEThe average asking rents across all grades recorded a nominal q-o-q increase of 0.65ppts, reaching USD22.95/sqm/month. Due to an oversupply in the market, the occupancy rate experienced a downturn, dropping 3.7ppts compared to the previous quarter, staying at 83.25%.

Grade A showed improvements in both occupancy and rents, up 0.35 ppts and 0.6ppts respectively compared to the previous quarter, achieving 82.3% and USD28.2/sqm/month. While Grade B’s rental rate was soften, decreasing 0.6ppts q-o-q to USD17.7/sqm/month, its occupied rate witnessed a significant drop of 7.48ppts, averaging at 83.25%.

SUPPLYGrade B dominated new supply in the review quarter, adding 58,000sqm NLA from 4 buildings to the existing stock. After significant growth in the first half of the year, the current office supply reaches more than 1.5 million sqm NLA. By location, most of Grade A buildings is located in the CBD while a majority of Grade B is scattered around the West and Mid-town.

The future pipeline will more expand with approximately 330,000sqm GFA of office space entering the market in the next three years. Most of new supply will be decentralised in the West and Midtown area, creating intense competition with the existing CBD.

DEMANDDemand for Hanoi office space is improving on the back of positive economic conditions. Finance, insurance and banking in both domestic and foreign companies are dominant in the leasing market.

The city is witnessing decentralizing trend as tenants move away from the CBD to cut their costs. Affordable rents and larger floor plates in Midtown and the West are attractive options for occupiers. However, the CBD is still a high potential market with its prime location.

OUTLOOKGiven the fact that supply still outweighs demand, rents are being more affordable and competitive. Landlords will continue to offer flexible leasing terms, attractive incentives and high quality services to secure or retain tenants. Matured office buildings should renovate their facilities to be competitive with newer buildings, especially those in the West of the CBD.

Figure 5: Office, Average Asking Rent

Source: Colliers International Research

Figure 6: Office, Occupancy Rate


Table 2: Office, New Supply in Q2 2016


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2012 2013 2014 2015 2016

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m/m

onth

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0%

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100%


2012 2013 2014 2015 2016

Grade A Grade B

Project name District Grade NLA (sqm)

Expected completion

UDIC Cau Giay B 14,500 2016

Trico Long Bien B 12,280 2016

STV Hoan Kiem B 5,000 2016

HUD Tower Cau Giay B 26,250 2017

Q2 2016 | HA NOI | OFFICE



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(*) US$/sqm/month (NLA)

Table 3: Significant CBD Office Projects

No Name Address Completion Year

NLA (sqm)

Service Charges

(*)

Occupancy rate

Average asking rent

(**)1 Central Building 31 Hai Ba Trung 1995 3,653 9.0 100% 33.0

2 International Centre 17 Ngo Quyen 1995 6,500 7.0 90% 24.03 Hanoi Tower 49 Hai Ba Trung 1997 9,000 7.0 100% 27.04 63 Ly Thai To Building 63 Ly Thai To 1998 6,753 - 100% 47.05 Sun Red River Building 23 Phan Chu Trinh 1999 13,459 7.0 75% 28.06 Vietcombank Tower 198 Tran Quang Khai 2000 19,563 - 100% 29.0

7 Opera Business Centre 60 Ly Thai To 2007 3,787 included 85% 24.08 Pacific Palace 83B Ly Thuong Kiet 2007 16,600 7.0 91% 25.0

9 Asia Tower 2 Nha Tho 2007 3,100 included 77% 35.010 Sun City Building 13 Hai Ba Trung 2007 6,400 - 100% 45.0

11 BIDV Tower 194 Tran Quang Khai 2010 10,120 7.0 95% 30.0

12 Sentinel Place Hang Da 2010 8,000 8.5 95% 45.0

13 Corner Stone 16 Phan Chu Trinh 2013 26,500 7.0 70% 30.0

14 Hong Ha Center 25 Ly Thuong Kiet 2013 11,000 5.0 27.0% 19.0

Grade A 144,435 7.0 84% 30.0

1 Tungshing Square 2 Ngo Quyen 1996 8,306 7.0 89% 21.02 Melia Hotel 44B Ly Thuong Kiet 1997 8,500 - 90% 38.0

3 Prime Centre 53 Quang Trung 1998 7,600 - 100% 27.0

4 VIB Hai Ba Trung 59 Quang Trung 2006 3,000 - 68% 16.05 Capital Tower 109 Tran Hung Dao 2010 21,089 7.0 87% 20.06 Hanoi Tourist Building 18 Ly Thuong Kiet 2010 7,600 - 100% 24.0

7 Capital Building 72 Tran Hung Dao 2013 5,800 - 100% 25.08 Coalimex Building 33 Trang Thi 2013 5,071 5.0 79% 18.09 VID Building 115 Tran Hung Dao 2013 4,930 - 89% 23.010 Artex Port 31-33 Ngo Quyen 2014 4,725 - 100% 23

Grade B 76,621 6.0 91% 23.5


Q2 2016 | HA NOI | RETAIL



Table 3: Significant Office ProjectsPERFORMANCENew vacant space in some retail centers pushed the overall occupancy rate down to 88.1%, representing a drop of 0.45ppts q-o-q.

The average net asking rents were softened in suburban shopping malls, resulting in a decline of 1.7% q-o-q and 2.5% y-o-y. While the CBD rents remained stable at USD81.44/sqm/month, those of non-CBD sub-markets were reduced to USD28.3/sqm/month respectively.

SUPPLYAs of Q2 2016, the retail stock is more than 700,000sqm NLA from 53 buildings, marking an increase of 7.5% q-o-q. Three new retail podiums entered the market, providing approximately 45,000sqm NLA.

More than 150,000sqm GFA of new retail centers is expected to come online in the next quarters, diversifying shopping activities of Hanoi people. Vingroup is leading the market share of retail space with three under-construction shopping malls in the West and Mid-town area.

DEMANDAccording to the Consumer Confidence Index by Nielsen, Vietnamese consumer confidence continues staying at a high level, ranking as the 7th most optimistic country in the world despite a slight decrease of 2ppts in Q2 2016. Rising affluence, growing middle class population and an improving economic outlook supports Vietnamese’s optimistic view on the local economy. This may have positive impacts on retail sales and in turn expanding demand for retail space.

OUTLOOKStrong competition in securing new tenants will continue in Hanoi retail market when the supply pipeline is expected to grow substantially. Retail centers in non-CBD area will lower their rents than the average market rate to fill up their vacant space. Besides, landlords of mature retail developments should restructure their properties to have a more efficient mix of retail sales, F&B and entertainment.

Figure 7: Retail, Market Performance

Table 4: Retail, Future Supply



Figure 8: Retail, Total Supply


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Mipec Riverside Long Bien 24,000 Q3 2016

Vincom Exchange City Tu Liem 23,140 Q4 2016

Vincom Pham Ngoc Thach Dong Da 18,900 Q4 2016

Vincom Green Star Tu Liem 50,000 Q4 2016

Discovery Complex Cau Giay 38,144 Q1 2017



Q2 2016 | HA NOI | RETAIL



Table 5: Significant Retail Projects

No Name of Project /Building Address Location Completion

YearNLA

(sq m) ARR (*) Occupancy Rate

1 Central Building 31 Hai Ba Trung Hoan Kiem 1995 550 90-100 100%2 Hanoi Tower 49 Hai Ba Trung Hoan Kiem 1997 2,056 50-60 73%3 63 Ly Thai To Building 63 Ly Thai To Hoan Kiem 1998 594 150 100%4 ICC Building 71 Nguyen Chi Thanh Dong Da 2006 2,900 16 50%5 Pacific Place 83b Ly Thuong Kiet Hoan Kiem 2007 2,000 70 88%6 Opera Business Center 6b Trang Tien Hoan Kiem 2007 1,070 90-150 100%7 Golden Westlake 151 Thuy Khue Tay Ho 2007 1,000 25 75%8 Sun City 13 Hai Ba Trung Hoan Kiem 2008 861 90-95 100%

9 Asia Tower 6 Pho Nha Tho Hoan Kiem 2008 500 100 100%

10 Sentinel Place 41A Ly Thai To Hoan Kiem 2010 550 45 57%11 Sky City Tower 88 Lang Ha Dong Da 2010 5,400 20-80 100%12 Han Viet Tower 203 Minh Khai Hai Ba Trung 2012 600 16-17 59%13 Rainbow Tower 19/5 KDT Van Quan Ha Dong 2012 900 20 100%14 Hapumedicenter 85 Vu Trong Phung Thanh Xuan 2012 18,500 20 100%15 The Lancaster Hanoi 20 Nui Truc Ba Dinh 2013 3,123 33 45%16 Madarin Garden Residential 1 Hoang Minh Giam Cau Giay 2013 11,000 25-30 100%

Retail Podium 51,604 91%

1 Vincom Center Ba Trieu - Tower A&B 191 Ba Trieu Hai Ba Trung 2004 17,000 90-100 99%2 Vincom Center Ba Trieu - Tower C 191 Ba Trieu Hai Ba Trung 2004 10,974 80 100%3 Ruby Plaza 44 Le Ngoc Han Hai Ba Trung 2007 5,200 28 96%4 Syrena 51B Xuan Dieu Tay Ho 2008 5,000 30 100%5 Trang Tien Plaza 24 Hai Ba Trung Hoan Kiem 2008 14,000 10 85%6 Savico MegaMall 7-9 Nguyen Van Linh Long Bien 2011 54,900 20-25 99%7 Keangnam Palace Landmark Lot E6, Pham Hung Tu Liem 2011 60,771 20-53 80%8 Vincom Center Long Bien KDT Vincom Long Bien 2012 45,000 20 70%9 Indochina Plaza Hanoi 241 Xuan Thuy Cau Giay 2012 19,929 22 97%10 Vincom Mega Mall - Royal City 72A Nguyen Trai Thanh Xuan 2013 230,000 70 99%11 Vincom Mega Mall - Time City 458 Minh Khai Hai Ba Trung 2014 200,000 50 100%12 Aeon Mall Long Bien 2 Co Linh Long Bien 2015 72.000 45 100%13 Vincom Nguyen Chi Thanh 54A Nguyen Chi Thanh Dong Da 2015 34,500 70-80 99%

Shopping Centre 719,346 96%

1 Parkson (Viet Tower) 198 Tay Son Dong Da 2007 15,761 15 97%2 The Garden (Bitexco) Me Tri Tu Liem 2007 23,700 28-35 99%3 Ho Guom Plaza Ha Dong Ha Dong 2013 23,380 16 94%4 Lotte Department Store 54 Lieu Giai Ba Dinh 2014 38,709 43 97%

Department Store 101,550 97%

(*) ARR (Average Rental Rate): All rents are stated in net rents per sqm, inclusive service charge but exculding VAT


Q2 2016 | HA NOI | CONDOMINIUM



PERFORMANCEThe market recorded 4,950 successful transactions, up 24% compared to the previous quarter. Effective sales events and various promotion packages helped to push up sale rates.

The positive market sentiment initiated slight price increases. On the primary market, price growth of 1-2% q-o-q was recorded across all segments. Especially, projects with a close proximity to the city center or ongoing infrastructure projects increased their sale price by 5-7%.

SUPPLYThe review quarter had approximately 6,497 units from 15 condominium projects, marking an increase of 45% q-o-q in newly launched supply. Mid to high-end segments dominated new launches, accounting for 52% of total new projects.

With well-established infrastructure, the West and East area are hot spots for new residential developments.

DEMANDRapid urbanization rate, reduced household size and young population continue to be key demand drivers of Hanoi residential market. The review quarter has seen strong sales activities in high-end apartments due to improved investor’s confidence. However, real demand is under the affordable to mid-end segment for the purpose of owner-occupation. Typical units ranged from 45-90sqm are favorite options for end-users who having limited budgets.

OUTLOOKThe supply pipeline will remain strong with more than 20,000 units launched in the rest of year. With positive market sentiment, sales price is expected to follow an upward trend. New projects tend to be located in a master community where having all necessary facilities and amenities for future residents.

Figure 9: Condominium, New Launches & Sold Units by Year


Figure 10: Condominium, New Launches by Quarter and Segment



Figure 11: Condominium, Sales by Quarter and Segment

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Table 3: Significant Office ProjectsTable 3: Significant Office Projects

* Excluding all kinds of tax, promotions and management feeThe information is updated as at the end of Q2 2016

Table 6: Condominium, New projects launched in Q2 2016

No Name of Project/Building Developer Location Completion Year

Number of units

Asking Price (US$/sqm)

1 Mon City Hai Dang Real Estate Corp. Tu Liem 2017 100 1,4002 West Bay Sky Residence Vihajco Ecopark 2018 500 600 - 7003 Summer Suites (Season Avenue) Capital Land Ha Dong 2017 286 12504 Doanh Nhan Tower 1 XNK Tay Do Ha Dong 2017 600 900-1,0005 D’.Le Roi Soleil (phase 1) Tan Hoang Minh Tay Ho 2018 200 2,700 - 35006 Sapphire 1&4 TNR Holdings Tu Liem 2017 1,360 1007 Golden Field My Dinh MBLand Holding Tu Liem 2017 400 1,200 - 1,00

8 D'. Le Pont D'or Tan Hoang Minh Group Dong Da 2017 308 1,800

9 Eco Green Tower Công ty Cổ phổn Sông Đà 1.01 Hoang Mai 2017 294 1,000-1,100

10 Lổc Ninh Singashine Loc Ninh Chuong My 2017 448 0

11 Eco Green City CT1 Viet Hung Real Estate & Construction Co. Ltd. Hoàng Mai 2018 364 1,100

12 Eco Green City CT2 Viet Hung Real Estate & Construction Co. Ltd. Hoàng Mai 2018 493 1,500

13 Central Field Trung Kính MBLand Cau Giay 2017 492 1,500 - 1,600

14 Tabudec Lake View Plaza Tabudec Ha Dong 2017 252 700

15 Goldseason TNR Holdings Thanh Xuan 2018 400 1,400- 1,600

New launches in Q2 2016 6,497


Q2 2016 | HA NOI | VILLA & TOWNHOUSE



PERFORMANCETownhouses continued to lead successful sale transactions with nearly 200 sales recorded, accounting for 65% of sold dwellings. On the primary market, Tu Liem achieved the highest sale price of USD3,700/sqm while Gia Lam had the lowest rate of USD1,100/sqm. The secondary price increased 2.9% q-o-q, averaging at USD3,400/sqm. Projects in decentralised districts softened their prices while those in urban areas witnessed price growth. Compared to the previous quarter, Ha Dong recorded the highest price growth of 6% while Thanh Xuan had the strongest price decrease of 4%.

SUPPLYThe stock grew substantially in the review quarter with the launch 1,201 dwellings from 14 projects. Outlying districts with large greenfield sites and upgraded infrastructure such as Ha Dong, Hoai Duc, Long Bien, Tu Liem and Hoang Mai are top suppliers of landed properties. Among that, Ha Dong takes the largest market share, representing 66.5% of supply pipeline.

DEMANDLanded properties have become more affordable in recent years thanks to their reduced sizes. Smaller villas and townhouses are being launched to suit buyers’ preferences.

For home owners, this type of properties provides a traditional accommodation that is preferred by most Vietnamese people. Also it is believed to achieve high rental yield and land value appreciation over time. This is explained why investors are becoming more attractive to this market segment.

OUTLOOKInfrastructure development has been a priority in Hanoi, with the local government taking steps to improve the transport system. Better connectivity between the city center and suburban districts will enhance the value of future landed projects. It is expected that the supply pipeline will welcome more than 1,000 dwellings in the rest of the year.

Figure 12: Villa and Townhouse, Supply by quarter


Figure 13: Villa and Townhouse, Secondary price by District



Figure 14: Villa and Townhouse, Q-o-Q changes in secondary price

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Table 3: Significant Office ProjectsTable 3: Significant Office ProjectsTable 3: Significant Office Projects

* Excluding all kinds of tax, promotions and management feeThe information is updated as at the end of Q2 2016

Table 7: Significant new projects launched in Q2 2016

No Name of Project/Building Developer Location Completion Year

Number of units

Asking Price (US$/sqm)

1 Victoria Van Phu Van Phu Invest Ha Dong 2016 148 2,0002 Gamuda Gardens (Phase 2) Gamuda Land Hoang Mai 2016 44 2,7003 FLC Eco House FLC group & KHKT corp. Long Bien 2016 104 1,5004 Park Hill shophouse Vin Group Hai Ba Trung 2016 26 1,600 5 The Boutique shophouse Vin Group Hai Ba Trung 2016 10 2,000 6 Vinhomes Botanica Vin Group Tu Liem 2016 61 4,5007 HDI Homes Handico 7 Thanh Xuan 2017 18 5,000-6,5008 Green Pearl Daewoo co, LTD Hai Ba Trung 2017 20 4,700-4,9009 Pandora Hoa Binh Corporation Thanh Xuan 2017 10 3,000 - 4,50010 Lucky House Hancorp Hoang Mai 2018 20 1,70011 622 Minh Khai Handico & Hai Chau Corp. Hai Ba Trung 2018 61 3,70012 Thanh Ha B Muong Thanh Ha Dong 2019 451 800-1,00013 Starlake Daewoo E&C Tay Ho 2019 28 4,500 - 5,00014 Phu Luong Residence Trung Viet & Hai Phat Corp. Ha Dong N/A 200 1000

New launches in Q2 2016 1,201


Q2 2016 | HA NOI | SERVICED APARTMENT



Table 3: Significant Office ProjectsPERFORMANCEGrade A had a nominal rent growth of 0.95ppts q-o-q, reaching USD31.7/sqm/month while its occupancy rate improved 2.3ppts, averaging at 85.9%. Grade B dropped 1.81ppts q-o-q in rents and 4.4ppts in occupancy rates, staying at USD21.7/sqm/month and 80.3% respectively.

By location, the highest average asking rent for both two Grades was recorded in Cau Giay, followed by Ba Dinh and Tu Liem.

SUPPLYThe opening of Novotel Suites Hanoi in the review quarter expanded the total stock by 1.5% q-o-q. Being AccorHotels‘s very first Novotel Suites in Asia, the development provides 53 serviced accommodation, especially designed for business clients. No new supply will enter the market from now until 2017.

Generally, most of Grade A projects is under international management while a majority of Grade B developments are self-managed or under local management.

DEMANDIn recent years, the office market has witnessed a decentraliza-tion trend, where companies gradually relocate from prime CBD to non-CBD areas. As a result, there has been growing demand for serviced apartment in the west area of the city.

Demand has also come from expatriates working in certain industrial parks in Hanoi and Bac Ninh. In terms of guest nationality, Japanese and Korean have the highest proportion in customer profile.

OUTLOOKThe supply pipeline is anticipated to welcome more than 500 new serviced units by 2018. Villas and buy-to-let apartments continue to create fierce competition for long-term requirements, while hotels compete for tenants on shorter stays. This forces providers to differentiate their business strategies to attract tenants. It is suggested that serviced accommodation should be managed by international brands to be entitled to a global profile, brand awareness, professional marketing as well as structured and standardised operating procedures.

Table 8: Serviced Apartment, Future Supply


Figure 15: Serviced Apartment, Market Performance


Figure 16: Serviced Apartment, Total supply


-

500

1,000

1,500

2,000

2,500

3,000

3,500

2000 2005 2010 2011 2012 2013 2014 2015 Q1 2016 Q22016

Grade A Grade Bunits

0%

20%

40%

60%

80%

100%

2600

2700

2800

2900

3000

3100

3200

3300

3400

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2011 2012 2013 2014 2015 2016

US

$/u

nit/

mon

th

Asking Rent Occupancy Rate

Project Name District Expected units

Expected completion

Trang An Complex Cau Giay 42 2017

Somerset WestPoint Tay Ho 247 2017

Somerset West Central Hanoi Cau Giay 252 2018







Table 3: Significant Office ProjectsTable 9: Significant Serviced Apartment Projects

No. Project Name Address Location Total Units

Average Occupancy

ARR(*) (**)

1 Hanoi Daewoo 360 Kim Ma Ba Dinh 194 85% 28.02 Hanoi Somerset Grand 49 Hai Ba Trung Hoan Kiem 185 85% 31.5

3 Sedona Suites 96 To Ngoc Van Tay Ho 181 90% 34.3

4 Somerset West Lake 254D Thuy Khue Tay Ho 90 82% 30.05 Sofitel Plaza 1 Thanh Nien Ba Dinh 56 100% 38.06 Sun Red River 23 Phan Chu Trinh Hoan Kiem 46 96% 23.07 Hanoi Lake View 28 Thanh Nien Tay Ho 26 90% 25.08 Pacific Place 83B Ly Thuong Kiet Hoan Kiem 35 83% 20.09 Intercontinental Ha Noi 13 Nghi Tam Tay Ho 25 88% 35.010 Somerset Hoa Binh 106 Hoang Quoc Viet Cau Giay 206 87% 31.011 Fraser Suites Hanoi 51 Xuan Dieu Tay Ho 184 95% 40.512 Crown Plaza 36 Le Duc Tho Tu Liem 136 97% 34.513 Calidas E6, Pham Hung Tu Liem 378 97% 32.014 Lotte Center Dao Tan, Cong Vi Ba Dinh 258 87% 35.015 Hanoi Club 76 Yen Phu Tay Ho 54 96% 29.0

Grade A 2,054 91% 32.5

1 Oriental Palace 33 Tay Ho Tay Ho 59 88% 262 Pan Horizon 157 Xuan Thuy Cau Giay 86 80% 223 Rose Garden 170 Ngoc Khanh Ba Dinh 96 91% 224 Jana Garden Terrace 6 Kim Dong Hoang Mai 72 83% 205 V-Tower 649 Kim Ma Ba Dinh 36 100% 286 DMC Lake View 535 Kim Ma Ba Dinh 66 82% 167 Atlanta 49 Hang Chuoi Hai Ba Trung 50 92% 188 Elegant Suites Hahoi 19B Ha Hoi Hoan Kiem 39 92% 23

9 Hoa Binh Green No. 14, Ally 376 Buoi Ba Dinh 40 92% 22

10 Times City 485 Minh Khai Hai Ba Trung 150 85% 1911 Royal City 72 Nguyen Trai Thanh Xuan 100 70% 15

12 My Way 4, Alley 86, Duy Tan Cau Giay 39 93% 25

13 Rainbow 7 Trieu Viet Vuong Hai Ba Trung 26 88% 1414 Dolphin 28 Tran Binh Tu Liem 70 93% 1215 Lancaster Hanoi 20 Nui Truc Ba Dinh 31 90% 2416 Elegant Suites Westlake 10C Dang Thai Mai Tay Ho 131 94% 2717 May Fair 34B Tran Phu Ba Dinh 48 95% 17

18 Hanoi Lakes Residences 11-13 Nam Trang Ba Dinh 10 100% 11

19 Skyline Tower 4 Dang Dung Ba Dinh 79 95% 21

20 Candle Hotel 287-301 Doi Can Ba Dinh 69 74% 29

21 Park View 9 Nguyen Binh Khiem Hai Ba Trung 6 83% 15

22 Flower Village Hanoi 14 Thuy Khue Tay Ho 131 90% 23

23 Palace de Thien Thai 2 Tho Nhuom Hoan Kiem 16 98% 20

24 The City Residences 37 Phan Dinh Phung Ba Dinh 15 67% 15

25 Swan Lake 3/61/31 Xuan Dieu Tay Ho 6 83% 16

26 Lakeside Garden 56 Xuan Dieu Tay Ho 8 62% 14

Grade B 1,479 87% 21.0

(*) US/sqm/month (**) ARR (Average Rental Rate): All rents are stated in gross rents per sqm, not including VAT and serviced charge

Q2 2016 | HA NOI | INDUSTRIAL



PERFORMANCEDue to the conversion of Dai Tu IP, the average gross asking rent nominally dropped 0.3% to USD82.8/sqm/term and the remaining Land Use Right was 34.9 years. Noi Bai IP had the highest asking rent of USD5/sqm/year. Ready- built factories offered rents ranged from USD1.5 – USD2.5/sqm/month while their management fees were at USD0.43/sqm/month on average.

The average occupancy rate increased by 0.4ppts, reaching 61.9%. Noi Bai, Phu Nghia, Sai Dong B, Thach That and Thang Long have been leased out.

SUPPLYIn April 2016, the Government accepted a proposal to convert Dai Tu IP into an urban residential area. This was due to its low occupancy rate of 30%-35% and inefficient operation which negatively affected the surrounding environment. Hence, the total existing supply went down by 1% q-o-q, with 10 IPs and 3,800ha of total land area.

DEMANDIn recent years, due to rising operation cost in China, foreign manufacturers have chosen Vietnam as their alternative production bases. The country’s northern centres- notably Hanoi, Haiphong and Bac Ninh province – have been attractive location on the back of their close proximity to China, lower labour costs than in the south and a variety of tax incentives. A surge in for-eign-invested manufacturing activities in the region has fuelled strong demand for industrial properties.

OUTLOOKThe supply pipeline by 2020 is expected to have 10 new IPs with a total land area of 2,650ha. Under the socioeconomic development plan by 2020 with visions until 2050, Hanoi will be home of 33 industrial and hi tech parks. As the fast growth of industrial parks has outpaced infrastructural development, it is suggested that the government should have a comprehensive planning to establish efficient logistics network.


Figure 17: Industrial, Market Performance


Figure 18: Industrial, Supply by District


Table 10: Industrial, Future Supply


Industrial Park Name District GFA (ha)

Quang Minh II Industrial park Me Linh 266

Phuc Tho Industrial park Phuc Tho 74

Phu Xuyen Industrial park Phu Xuyen 488

Thanh My - Xuan Son Industrial park Son Tay 108

Soc Son Industrial park Soc Son 340

Soc Son II Industrial park Soc Son 204

Soc Son III Industrial park Soc Son 180

Soc Son IV Industrial park Soc Son 216

Thanh Oai II Industrial park Thanh Oai 480

Habeco Industrial park Thuong Tin 300

Dong Anh35%

Thach That23%

Chuong My12%

Me Linh12%

Tu Liem9%

Others9%

0%

20%

40%

60%

80%

100%

70

75

80

85

90

Q4 2015 Q1 2016 Q2 2016

Average asking rent Occupancy rate

Q2 2016 | HA NOI | INDUSTRIAL Q2 2016 | HA NOI | INDUSTRIAL



Table 3: Significant Office ProjectsTable 11: Hanoi Industrial Market Overview

No. Name of Industrial Park Location Distance to CBD (km)

Total Area(ha)

Asking Rent (US$/sqm) Occupancy LUR Term

1 Nam Thang Long Tu Liem 15 261 155 99% 20482 Noi Bai Soc Son 31 116 140 100% 20443 Phu Nghia 1 Chuong My 24 170 95 100% 20584 Phu Nghia 2 Chuong My 24 238 95 65% 20585 Quang Minh Me Linh 24 344 70 95% 20536 Sai Dong B (Phase I&II) Long Bien 11 97 95 100% 20467 Thach That Thach That 24 150 100 100% 20568 Thang Long Dong anh 16 302 95 100% 20479 Hanssip (phase 1) Phu Xuyen 44 72 120 25% 206010 Hoa Lac Hi-Tech Thach That 39 1,586 55 20% 204811 Dong Anh Dong Anh 19 470 100 95% 2057

Total 3,807 83 62%

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