Hanoi Q1/2013 Quarterly Report

Transcription

1 Market Insights from CBRE s Hanoi Q1/2013 Quarterly Report Presented by: Research & Consulting CB Richard Ellis (Vietnam) Co., Ltd. Wednesday, April 10, 2013

2 CPI (% y-o-y) / Interest rates (%) ECONOMIC OVERVIEW CPI (% m-o-m) Inflation surged Monetary expansion Monetary contraction Inflation controlled Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 Q 1 / H I G H L I G H T S Viet Nam Ha Noi Ho Chi Minh City GDP (% y-o-y) 4.9 ( ) 7.5 ( ) 7.6 ( ) CPI (% y-o-y, average) 6.6 ( ) 6.03 ( ) 3.24 ( ) Exchange rate (e-o-p) 20,828 20,828 20,828 Export (US$ Bil.) 29.7 ( ) 2.44 ( ) 9.9 ( ) Import (US$ Bil.) 29.2 ( ) 5.36 ( ) 5.26 ( ) FDI Registered (US$ Bil.) 6.03 ( ) 0.15 ( ) 0.13 ( ) FDI Implemented (US$ Bil.) 2.70 ( ) - - FDI Real Estate (US$ Bil.) 0.25 ( ) - - International arrivals (mil.) 1.8 ( ) 0.43 ( ) 1 ( ) 2 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL CPI, VN (% y-o-y) CPI, VN (% m-o-m) Refinancing rate (%) Rediscounting rate (%)

3 ECONOMIC OVERVIEW Lending rate (% per annum) 20% 15% 10% 5% 0% Mar Jun Sep Dec Mar Jun Sep Dec Mar Major indicators Short-term Long-term Current y-o-y VN-Index % Real Estate Holding & Development - listed stocks Real Estate Services - listed stocks Gold price (VND mil per tael) % % % D R I V E R S F O R G R O W T H Monetary easing Re-financing rate to 8% from 9% Re-discounting rate to 6% from 7% VND deposit rate cap to 7.5% from 8% interest rate finally at levels that encourage people to divert cash away from deposits Lending rate to 11 12% (short-term loan) However, many businesses still cannot afford loans real effect remains to be seen Gradual improvement in domestic demand Better credit conditions Robust inflow FDI (doubled y-o-y) Improved retail sales (11.7% y-o-y) Better income nationally from rising exports (19.7% y-o-y) BOTTOM LINE: Growth is stunted, BUT monetary easing by itself will be a driver for growth 3 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

4 ECONOMIC OVERVIEW Decree 02 SBV provides VND30 tril loan for homebuyers at 6% int. rate: Beneficiaries: low-income earners, government officials and employees, people of the armed forces Purpose: to buy or rent social houses or commercial houses smaller than 70 sm, selling price under VND15 mil per sm Establishment of VAMC: NPL account for 6% of total outstanding loans (Feb 13) - from 8.6% end of 2012 The Govt. will establish VAMC in April 2013: - Initial capital: USD4.78 bil -Target to resolve NPL (less than 3%) by VAMC bond P O L I C Y N P L s h a v e f i n a l l y b e e n a c k n o w l e d g e d w i t h t h e c r e a t i o n o f a G o v t. A M C s t i l l a l o n g w a y f r o m b e i n g r e s o l v e d b u t b e t t e r t h a n h i d i n g u n d e r a r o c k l i k e a s p e r CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

5 HANOI INFRASTRUCTURE Kim Ma Nguyen Chi Thanh Overpass Extended Tran Dang Ninh, Cau Giay District Cat Linh Ha Dong Urban railway Overpasses Construction started on 2 overpasses, expected completion in Q3/2013: - Kim Ma Nguyen Chi 278 m - Dai Co Viet Tran Khat m Elevated Highway Q 1 / H I G H L I G H T S Vinh Tuy Nga Tu So (Ring Road No. 2), developed by Vingroup, to be completed by 2016 Urban railway Cat Linh Ha Dong: 9.2/13.05 km of main route and 100% Depot area handed over Roads in the pipeline Extended Tran Dang 256 m VND322 bil, approved in Jan '13 Cat Linh La Thanh Thai Ha Thai Thinh Lang circulated after 10 years' construction Parking 11 parking sites to be constructed during 2013 National roads: Improvement work on National Road No. 5, Jan '13, with investment capital of VND793.5 bill - debt financed by VDB 5 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

6 CONDOMINIUM FOR SALE L A U N C H V S. C O M P L E T I O N S U P P L Y New Launch Supply (Units) Q1 Q2 Q3 Q4 Whole year 25,000 20,000 15,000 10,000 New Completion Supply (Units) Q1 Q2 Q3 Q4 Whole year 10,000 8,000 6,000 4,000 5, Launch Supply by District Cau Giay 3% 25% Tu Liem 34% Hoang Mai Others 38% 2, YTD New launch supply 9.6% y-o-y 2 Mid-end + 7 Low-end projects Developers more realistic project launches more in line with demand Re-launches with price adjustments primary price by up to 50% of original price Completion supply 29% y-o-y, from 3 High-end and 4 Mid-end 6 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

7 CONDOMINIUM FOR SALE Primary asking price distribution (no. of units) 16,000 12,000 8,000 4,000 0 P R I M A R Y V S. S E C O N D A R Y M A R K E T Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Below $1,000 psm $1,000-$1,250 psm $1,250-$1,500 psm Above $1,500 psm Primary market: 95% new launches <US$1,000 per sm Notable new launches after Lunar New Year Feb 13 sees almost a doubling y-o-y Secondary market: More offers below initial cost Average asking prices 2.8% q-o-q Luxury segment incurs largest price falls Secondary price change q-o-q 15% 10% 5% Secondary price by Segments Luxury High-end Mid-end Low-end $4,000 $3,000 $2,000 0% -5% YTD $1,000 $ YTD 7 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

8 What concerns or prevents buyers in making decisions? Macroeconomic factors: Economic prospect - biggest concern (Nielsen s survey) Incompatibility between income and house prices Vietnam: House prices ~ 25x annual income European countries 7x; Thailand 6.3x; Singapore 5.2x Developers reputation and commitment Construction progress Availability of facilities and amenities What motivates buyers? Deposit rate to 7.5% savings less attractive Falling gold prices + stabilizing exchange rate gold trading and foreign exchange less profitable Buyers now have much greater bargaining power VND30 tril fund from SBV to finance low cost home purchases 6% int. rate per year Limited eligibility CONDOMINIUM FOR SALE DEMAND VN Consumer Confidence Index Q Q Q Q Q Source: Nielsen VN Consumer Major Concerns Q1 '12 Q4 '12 Job security 17% Economy 27% Economy 15% Increasing utility bills 18% Increasing food prices 14% Source: Nielsen Job security 17% 8 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

9 CONDOMINIUM FOR SALE Trend End-users continue to dominate demand Low-end segment more active Stronger interest in projects with: Asking price under VND15 mil Small unit sizes ( sm) Good construction progress, facilities, and good infrastructure Buy-to-let now a popular trend Buyers now demand greater degree of transparency than before Outlook Gradual improvements in enquiries in the future Successful transactions will occur in: Projects with good construction progress Unsold stock (units) T R E N D - O U T L O O K %q-o-q %y-o-y 2013YTD sales volume (units) 21,600 5% 21% 600 Projects with good facilities and located in areas with good infrastructure Projects with attractive price points Sales rate highest in Low-end segment Secondary prices will continue to drop in the next quarter, albeit at a slower pace (~1.5-2% q-o-q) Rising interest in acquisitions from financially strong developers, esp. overseas developers 9 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

10 LANDED PROPERTY New supply New completion / handover of 250 units in 2 projects in Hoai Duc and Ha Dong S U P P L Y New launch: The Manor Park City township (~90 ha, Hoang Mai district) by Bitexco Group Adding to supply in the south of the city Supply issues Lack of amenities continued to discourage buyers / residents from moving in into newly completed townships Of about 9,000 units in townships completed within the last 3 years, its estimated 60% are not occupied. Capital value of such units will continue to fall unless amenities are added in a timely manner. The Manor Park City Perspective Starlake Groundbreaking 10 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

11 Millions LANDED PROPERTY S E C O N D A R Y A S K I N G P R I C E S Prices started stabilizing in several districts after 7 quarters of decline Observed in Cau Giay, Tu Liem, Hoang Mai, Thanh Tri, and certain projects in Ha Dong Prices either unchanged or increased by 5%-7% Other districts, prices decreased slightly by 5%-7% q-o-q (Hoai Duc and Long Bien) Y-o-y prices lower by 15%-20% across all projects Average Secondary Price per sm of Villa in New Urban Area 50% 40% 30% 20% 10% 0% -10% 0 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113-20% Market Average Price Average Price Change 11 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

12 LANDED PROPERTY Investment now mostly long-term, as opposed to short term speculation Rental potential a stronger factor in investment decisions D E M A N D Speculation is significantly reduced but market is still vulnerable to speculation, especially as other investment channels fall short Speculation will not be completely ruled out and will be present in less transparent projects End-buyers still not in a hurry to make a purchase Many current options More options as more projects are completed Recent interest rate cuts should encourage both investors and end buyers to make a move Demand for houses for rent continues to grow especially among young people (students, young professionals, and young couples) Lack of houses for rent, especially those aiming at middle class, young people 12 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

13 LANDED PROPERTY Policies Social housing is a specialist subject. Small % of the market Restricted to a target market, although criteria is proposed to be widened Its impact on the overall market is likely to be minimal Some condo for sale projects to be converted to apartments for rent Its feasibility will determine whether there will be a new trend where developers build and operate apartments for rent Outlook Amenities MUST be added to new townships or houses will never fill Electricity and water Schools Markets/Supermarkets Sports / entertainment facilities etc Prices are generally still under pressure More acquisitions by financially capable developers Historical & Expected Completion (Units) O U T L O O K *Savings are assumed at 20%-30% of total income, depending on each income band. 13 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL ,000 12,000 10,000 8,000 6,000 4,000 2, f Gamuda Yen So Park Construction

14 OFFICE N E W S U P P L Y NEW SUPPLY in Q1/2013: Cornerstone Office Building Prime CBD location (16 Phan Chu Trinh, Hoan Kiem Dist) Grade A 26,500 sm NLA Positive pre-leasing activities Only new CBD supply this quarter VIB bank s new Head Office 14 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

15 OFFICE M A R K E T P E R F O R M A N C E Office Asking Rents Grade A Grade B $60 $50 $40 $30 $20 $10 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Office Vacancy Grade A Grade B 50% 40% 30% MARKET PERFORMANCE: varies between Grade A and Grade B Asking Rents: Grade A rents increased by 2.2% q-o-q Grade B rents continued a downward trend, decreasing 5.5% q-o-q Vacancy Grade A: 30%, up from 23% in Q4/2012 Grade B: 19%, down from 22% in Q4/2012 New take-up primarily in Grade B as a result of lower rents Cost cutting is a key driver for companies, both local and international Tenants are open to relocation but will not pay more than current rents 20% 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

16 OFFICE Large supply expected in Q2/2013 of approximately 400,000 sm (GFA) ~40% are fitting out 42% are in the west Rents in the West are still under pressure, especially Grade B Asking rents may appear stable but actual rents are lower Tenants: Banks are still active, not in expanding space but rather they negotiate on current rents Cost continues to be number one concern, followed by building quality and services Tenants have the incentive to move out of old buildings in the CBD for better and cheaper options Landlords: competing by rents will not be enough going forward; landlords will have to compete by service in order to keep tenants Office acquisitions will increase developers restructuring their investment portfolios SOEs are expected to sell their office buildings & stop developing new office towers O U T L O O K It will take up to 10 years to absorb dfs the current vacancy + additional supply 16 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

17 RETAIL Grand Plaza Closed for renovation: Dec 2012 R E S T R U C T U R I N G Mipec Shopping Centre (Restructured) Hang Da Galleria Restructuring expected soon 17 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

18 RETAIL Trang Tien Plaza Closed for renovation April 2011 Officially reopened in April 2013 GFA 14,000 sm C h a l l e n g e s d u r i n g t o u g h e c o n o m i c t i m e s? The failure of existing high-end projects, such as Grand Plaza, Hang Da Galleria Stagnant sales in some luxury projects Necessary goods vs. high-priced luxury goods Tax and intermediary fee ~50% original prices 18 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

19 RETAIL M A R K E T P E R F O R M A N C E Retail Ground Floor Rents CBD non-cbd $120 $100 $80 $60 $40 $20 $ Q1/2013 Retail Vacancy CBD non-cbd 40% 30% 20% 10% 0% -10% Q1/2013 Market Performance Average rents increased due to high price offered by Trang Tien Plaza. Rents in existing projects remained stable Rents in restructured project lower Vacancies increased compared to last year CBD: Vacancy is significantly higher due to the soft performance of Hang Da Galleria (current stock) Non-CBD: Vacancy increased slightly Demand More stores closed in shopping centres (172) than opened (121) in Q1 Opened: textiles, household & furniture, F&B Closed: textiles, shoes, household & furniture Low demand resulted from a slowing down economy Nielsen report indicates low consumer and manufacturing confidence expected in the short-term 19 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

20 RETAIL Expected Supply (sm) Fitting-Out Under Construction Under Planning 1,200,000 1,000, , , , ,000 0 Vincom MegaMall 2013f Royal City +2014f Vincom MegaMall Times City Large supply anticipated: Ocean Group expanded investment in retail real estate Oceanmart was opened in Jan '13 in Ha Dong district Ocean Mall (GFA 10,000 sm) to open in Thang Long International Village in Q2; 75% leased out Ocean Mall (GFA 18,000 sm) to open in Trung Hoa Nhan Chinh in Q2 Ho Guom Plaza opening Q2/Q3 (GFA 23,380 sm) Vincom Mega Mall Royal City opening July (GFA 230,000 sm) Vincom Mega Mall Times City: Phase 1 by end of 2013 (GFA 115,000 sm) Phase 2 in 2015 (GFA 109,000 sm) O U T L O O K AeonMall Vietnam has obtained an investment certificate to build a US$200 million retail complex in Hanoi. 20 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

21 SERVICED APARTMENT Supply One boutique project opened (16 units) Projects expected to open in late 2012 continue to reschedulemarket challenges Improved occupancy both international and selfmanaged operators International operator groups: 90%, up from 87% Self-managed group: 79%, up from 77% Asking rents Unchanged in international operators. Decrease of 2.5% q-o-q in self-managed projects Q 1 / R E V I E W IDC White House Historical Vacancy & Supply Vacancy Rate (%) 30% 25% 20% 15% 10% 3,000 2,500 2,000 1,500 1,000 35% 30% 25% 20% 15% International Operator Self-managed Average 5% % 0% Supply Vacancy Rate (%) 0 5% 0% Q4/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/ CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

22 SERVICED APARTMENT D E M A N D & O U T L O O K Demand Volume of enquiries is stable but budgets are lower by approximately 10% q-o-q Will continue to be affected by cost cutting Oriental Palace Outlook ~200 new serviced apartments to open in Q2 Candeo Hotels Hanoi, 70 units Elegant Tay Ho, 140 units Competition and lower budgets will continue to affect performance of most projects Management and quality of facilities will continue to be a key driver in this sector Lack of Grade B serviced apartments in the West Strong interest from overseas operators and developers Calidas Landmark CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

23 HOTEL Q 1 / R E V I E W Y-o-Y Changes by Grade (Q1/2013) 2% Occupancy ADR RevPAR 0% -2% -4% -6% -8% 5-star 4-star 3-star Visitor Arrivals to Hanoi (Millions) SUPPLY Current: 8,673 rooms, mostly in Hoan Kiem & Ba Dinh Change in supply 3.7% y-o-y 5-star sector accounts for 43% market share MARKET PERFORMANCE 5-star hotel sector recorded the highest increase in occupancy Y-o-Y and the largest drop in ADR and RevPar YTD DEMAND Visitors to Hanoi Int l: 425,000 ( 18.9% y-o-y) Key markets Largest visitor source: Asia region (>50% of total visitors) Arrivals from key markets, incl. Japan (11%), Australia (9%), France (8%) and Korea (8%) 23 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

24 HOTEL FUTURE SUPPLY Opening in Q2/2013: Hilton Garden Inn (2 nd Hilton Hotel in Hanoi) InterContinental Hanoi Landmark Candeo Hotel 2013 (1,000 rooms; 13.4% y-o-y) sees the openings of InterContinental Hanoi Landmark, JW Marriott, and Hilton Garden Inn DEMAND & PERFORMANCE Historical Supply by Grade O U T L O O K Hanoi's market may be less volatile compared with other domestic tourist destinations because of stronger MICE activities According to IATA (The International Air Transport Association), by 2014, Vietnam is projected to be the world s 3rd fastest growing market for international passengers and freight, and the 2nd fastest for domestic passengers. INVESTMENT CHANNEL Accor announces management of 3 new hotels in Sapa, Phu Quoc, Vung Tau under Mercure brand name 12,000 10,000 8,000 6,000 4,000 2, star 4-star 3-star YTD 2013f 24 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013

25 To subscribe, please contact Q 1 / r e l e a s e d F r i d a y, A p r i l 1 9, quarterlyreports@cbrevietnam.com THANK YOU! 2013 CBRE (Vietnam) Co., Ltd. This report has been prepared in good faith & with due care by CB Richard Ellis (Vietnam) Co., Ltd. We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources & make no guarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful consideration of factors known to us for example only, & they may not represent current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, & cannot be reproduced without prior written permission of CB Richard Ellis. 25 CBRE RESEARCH & CONSULTING MARKET INSIGHTS FROM CBRE S HANOI QUARTERLY REPORT APRIL 2013