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Savills Market Research


Vietnam

Quarterly Market Briefing


Vietnam

Macro Indicators
GDP growth rate (%)
Retail sales (Billion $)
Currency Exchange Rate (VND/USD)
Trade surplus (Billion $)
International visitors (Million)

Value

YoY Growth Rate


(%)

6.2%

-0.5ppt

117

+10%

22,800

-0.8%

+2.6

N/A

10

+26%

Registered FDI (Billion $)

20.9

-8%

FDI disbursement (Billion $)

15.8

+9%

101,100

+16%

Newly established businesses (Unit)


- Real estate (Unit)
CPI (%)

3,126

+84%

N/A

+4.7%

Mortgage rate (%)

11%

+1ppt

Credit growth (%)

18.7%

+1.7ppt

41

N/A

Foreign Reserve (Billion $)

Q4/2016

In 2016, GDP growth achieved 6.2% with the real


estate industry expanding 4% to a 5-year high.
New annual records were set in foreign-exchange
reserve, FDI disbursement and newly established
businesses. Real estate ranked 1st in newly
established businesses with over 3,100 registered and
ranked 2nd in newly registered FDI capital with
US$1.5 billion. The total retail sales of goods was
more than US$117 billion, up 10% YoY.
Viet Nam recorded the highest ever growth of
international arrivals with over 10 million visitors,
increasing 26% YoY.

QMR Brief Ho Chi Minh City

Q4/2016

RETAIL: Retail Keeps Growing At Year End


Retail stock was approximately 1.1 million m2, increasing 19,200
m2 from one new shopping centre and five supermarkets, 1%
quarter-on-quarter (QoQ) and 15% year-on-year (YoY).

FIGURE 1

The average gross rent decreased -1% QoQ, occupancy


increased 1% QoQ with additional short term tenants for the
year-end shopping season. Shopping centre occupancy was
stable QoQ, retail podium increased 3 ppts and department store
decreased -1 ppt.
At year-end, households typically spend more on household
appliances and FMCG in anticipation of the Tet holidays. A
gradual shift of the dependent proportion to a balanced
demographic has availed new opportunities for entertainment,
recreational activities and personal services.
Source: Savills Research & Consultancy

OFFICE: Stable Performance Despite New Supply


In Q4/2016, one Grade C (Nhac Viet) and two Grade B
(Mapletree Business Centre, Sai Gon Giai Phong) projects came
online whilst four existing projects, including two Grade C and
two Grade A (Bitexco Financial Tower, Saigon Tower) supplied
additional stock. The HCMC office stock was 1,620,000 m 2, up
3% QoQ and YoY.

FIGURE 2

Overall performance was stable despite the additional stock. The


average occupancy was 97%, up 2 ppts YoY, while the average
rent increased 3% YoY.
New take-up was predominantly drawn from Grade B projects,
accounting for 96% of all newly leased office space. Grade A was
the best performer of the year with average gross rents
increasing
5%
YoY
to
VND
1,100,000/m 2/month
(US$48/m2/month).

Source: Savills Research & Consultancy

SERVICED APARTMENT: Rise in Short-Term Leasing


In Q4/2016, one new Grade B project in district 3 entered the
market whilst one Grade C project in district 12 closed for
renovations. Serviced apartment stock decreased -1% QoQ but
grew 3% YoY to 4,510 units from 83 projects.

FIGURE 3

The average occupancy increased 3 ppts QoQ and 4 ppts YoY


to 87%, setting a six-year high. Much of the contribution was from
increased short-term stays in December, accounting for up to
50% of total Grade A & B leased units. The average rent was
VND 550,000/m2/month (US$24/m2/month), up 2% QoQ and 6%
YoY due to rent increases across all grades.
Newly launched mid to high-end projects have focused on
smaller apartments to meet the demand of single expats and
couples. This trend will continue for the future supply, anticipated
to reach 2,650 units by 2019.

Source: Savills Research & Consultancy

QMR Brief Ho Chi Minh City

Q4/2016

HOTEL: Record Breaking International Arrivals


In Q4/2016, one 3-star hotel completed renovations and five new
3-star hotels supplied more than 440 rooms. The HCMC hotel
stock was more than 15,900 rooms from 130 projects, up 3%
QoQ and 8% YoY.

FIGURE 4

The average occupancy was approximately 69%, up 3 ppts QoQ.


The average room rate (ARR) was VND 1,890,000/room/night
(US$83/room/night), up 1% QoQ due to ARR increases in all
segments, but decreasing -3% YoY.
In 2016, HCMC set a new record of 5.2 million international
visitors, increasing 13% YoY and accounting for 52% of arrivals
to Viet Nam.
From 2017 to 2019, 16 new projects will supply approximately
3,500 rooms. More than 700 rooms from five existing 3 to 4-star
hotels are awaiting rating approval.

Source: Savills Research & Consultancy

APARTMENT: Renewed Mid-end Sales


In Q4/2016, 18 new projects and the next phases of 4 active
projects were launched, supplying more than 8,300 units and
recording an increase of 11% QoQ. There were approximately
45,200 available units across all grades.

FIGURE 5

Sales reached 10,200 units, increasing 36% QoQ and 32% YoY.
Absorption was 22%, increasing 4 ppts QoQ and 2 ppts YoY due
to good Grade B and C performances. Grade A had the highest
absorption rate at 26 percent. Grade B sales increased
significantly by 61% QoQ
From Q1/2017 to 2018, over 60,000 units are expected to enter
the market.

Source: Savills Research & Consultancy

VILLA & TOWNHOUSE: Sustained Landed Property Demand


Three new projects and the next phases of three existing projects
provided approximately 550 dwellings to the primary market. The
primary stock reached approximately 3,000 dwellings,
decreasing -22% QoQ but increasing 55% YoY.

FIGURE 6

In Q4/2016, due to limited new launches, villa and townhouse


sales decreased -18% QoQ, with townhouse sales accounting
for a 70% share. Absorption was 33%, up 1 ppt QoQ and 2 ppts
YoY. Districts 2 and Nha Be accounted for the most sales.
Medium to large townhouses of 90 to 120 m2 continued to be well
absorbed. There was high demand for projects with favorable
payment schemes.

Source: Savills Research & Consultancy

QMR Brief Hanoi

Q4/2016

RETAIL: Rents Maintain Downward Trend


In Q4/2016, the total retail stock was approximately 1,200,000
m, up 2% quarter-on-quarter (QoQ) and 10% year-on-year
(YoY) due to the entry of two new shopping centres and one retail
podium, cumulatively providing approximately 56,000 m.

FIGURE 1

Ground level rents decreased QoQ and YoY across all retail
segments to a four-year low. Average occupancy increased 1.1
percentage points (ppts) QoQ but decreased -3.0 ppts YoY.
While shopping centre occupancy decreased -1.3 ppts QoQ,
both department store (0.5 ppt) and retail podium (13.9 ppts)
occupancy increased.
New entrants performed well while fierce competition forced
existing projects to either renovate or close. From 2017 to 2018,
new retail supply will be concentrated in the West and Secondary
areas.

Source: Savills Research & Consultancy

OFFICE: Limited Grade A Vacancy in the West


One project entered the market supplying approximately 9,700
m2. Ha Noi office stock reached 1,640,000 m2, increasing 1%
QoQ and 4% YoY. In Q1/2017, two projects will launch,
cumulatively supplying approximately 70,000 m 2.

FIGURE 2

The average rent was stable QoQ but increased 1.1% YoY, while
the average occupancy increased 1 ppt QoQ and 4 ppts YoY.
Grade A occupancy in the Secondary area sharply increased due
to landlord incentives. In the West, Grade A far outpaced Grade
B with vacancy of just 6 percent.
According to the National Business Registration Portal, in 2016,
Ha Noi was the most dynamic commercial centre with over
22,000 newly registered businesses, increasing 19% YoY.
Source: Savills Research & Consultancy

SERVICED APARTMENT: Increased Occupancy but Lower ARR


In Q4/2016, due to the entry of four new projects, serviced
apartment stock reached 4,028 units, up 5% QoQ and 9% YoY.

FIGURE 3

The average occupancy exceeded 87%, increasing 0.4 ppt both


QoQ and YoY. The average room rate (ARR) was down -2.1%
QoQ and -2.4% YoY due to sharp Grade B decrease of -4.8%
QoQ and -4.5% YoY. Take-up was positive across all grades
totalling more than 190 units.
In 2017, three new projects supplying 765 units are expected to
come online. From 2018 onwards, six of seven expected projects
will enter the market with approximately 800 units.

Source: Savills Research & Consultancy

QMR Brief Hanoi

Q4/2016

HOTEL: Peak Season Increases QoQ Performance


Hotel stock increased 1% QoQ after the re-entry of one 3-star
hotel and the withdrawal of another 3-star for renovations but
decreased -3% YoY. Sofitel Plaza Ha Noi was officially
rebranded Pan Pacific Ha Noi.

FIGURE 4

The average occupancy was up 8 ppts QoQ due to the peak


season but relatively stable YoY. The ARR increased 12% QoQ
and 9% YoY. RevPAR increased 27% QoQ and 9% YoY.
Ha Noi recorded 4,000,000 international arrivals in 2016, up 23%
YoY and accounting for 40% of arrivals to Viet Nam.

Source: Savills Research & Consultancy

APARTMENT: More Supply at Year-End


In Q4/2016, the total primary stock was 21,670 units, increasing
27% QoQ and 35% YoY. Nineteen freshly launched projects and
twenty one newly launched projects supplied 10,280 units,
increasing a significant 81% QoQ and 28% YoY.

FIGURE 5

There were approximately 6,730 sales, increasing 19% QoQ and


5% YoY. The absorption rate decreased -2 ppts QoQ and -9 ppts
YoY to 31%, while the average asking price increased 2% QoQ
and 1% YoY to US$1,230/m2.
In 2017, approximately 77 projects will enter the market
supplying over 50,000 units, much of which will be Grade B and
come from Hoang Mai, Thanh Xuan, Tu Liem and Ha Dong.

Source: Savills Research & Consultancy

VILLA | TOWNHOUSE: A Record Selling Quarter


The total stock was approximately 35,000 dwellings, up 4.9%
QoQ and 12.8% YoY. Four new projects and the fresh launches
of four existing project supplied approximately 600 dwellings, of
which villas accounted for 18 percent. Tu Liem, Ha Dong and
Long Bien districts were the main suppliers, cumulatively
accounting for a 50% supply share.

FIGURE 6

Sales increased 129% QoQ to 766 units, of which 64% were


townhouses. Dominating in sales this quarter were Tu Liem with
24% and Ha Dong with 23 percent. Villa and townhouse sales
exceeded the former record set prior to 2011.
In Q1/2017, more than 2,300 dwellings are expected to enter the
market, mainly from Vingroup.
Source: Savills Research & Consultancy

About Savills

SAVILLS PROVIDES MARKET REPORTS FOR MAJOR SECTORS


IN ALL LARGE CITIES OF VIETNAM AND THE REGION.
VIETNAM

REGIONAL

About Savills

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