CBRE Vietnam Market Outlook EN HN FINAL

ASIA PACIFIC REAL ESTATE
MARKET OUTLOOK 2019
EMBRACING CHANGE
ENHANCING RESILIENCE
Key changes
ahead
VIETNAM
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2019 MARKET OUTLOOK 2019
LONGEST GROWTH CYCLE IN THREE DECADES

ASIA OUTPERFORMS BUT IS NOT IMMUNE FROM GLOBAL DOWNTURN
10
9 years 9 years 7 years 10 years

8
Real GDP growth, %
6
Asia
4
World
-2
1982
1999
1981
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019F
Source: Oxford Economics, December 2018.
VIETNAM
WHAT MIGHT BRING THE CYCLE TO AN END?

IT WON’T BE GEOPOLITICS
G7 Unemployment (%, Monthly, SA)
9
FALKLANDS
8 WAR US EMBASSY SYRIA WAR
IN BEIRUT BOMBED JAPANESE TSUNAMI
INDIRA GANDHI ISIS
KILLED BOSNIAN
WAR ENDS BRITISH RULE EMERGES
7 REAGAN GLASNOST MAASTRICHT US INVASION OF IRAQ
IN HONG KONG ENDS CRIMEA
SHOT IN USSR TREATY FALL OF MADRID
GAZA WAR ANNEXED
IRAN-IRAQ TRAIN BOMBING
THE SOVIET UNION
6 WAR ENDS EUROZONE
IRAN-IRAQ 1ST GULF WAR PARIS BOMBING
CREATED RUSSO-GEORGIAN WAR
WAR STARTS IRAQ INVADES KUWAIT
9 / 11 BREXIT
BERLIN WALL FALLS
5 CATALONIA REFERENDUM TRUMP TARIFFS
ANNOUNCED
4
1980 1983 1986 1988 1991 1994 1996 1999 2002 2004 2007 2010 2012 2015 2018
Source: OECD, Stratfor and CBRE Research, December 2018.

VIETNAM
IT IS RELATIVE INTEREST RATES THAT MATTER

G7 Unemployment and Interest Rate (Quarterly, %)
8.5 5
SPIKE
8.0 SPIKE 4
7.5 SPIKE 3
NO
7.0
SPIKE 2
6.5
1
6.0
0
5.5
-1
5.0
4.5 -2
4.0 -3
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
G7 Unemployment Rate (%, LHS) G7 Interest Rate, Deviation from Trend (%, RHS)
Source: Oxford Economics and CBRE Research, Q3 2018.
VIETNAM
P A C E O F R AT E H I K E S P O S E S A C O N U N D R U M
BUT THE ERA OF CHEAP FINANCING IS COMING TO AN END
US Fed Fund Rate Commercial lending rate* across the region

%
Fed Funds Rate Forecast 2016 2017 2018
6 Long-term target rate 6%
5 5%
4 4%
3 3%
2 2%
1 1%
0 0%
2012
2007
2008
2009
2010
2011
2013
2014
2015
2016
2017
2018
2019
2020
China Hong Korea Australia Singapore Japan
Kong
* The commercial lending rate is calculated by adding minimum interest rate spread to the reference rate under typical commercial property lending terms
Source: US Federal Reserve, CBRE Research, December 2018.
VIETNAM
N O E N D I N S I G H T TO U. S . - C H I N A T R A D E D I S P U T E
The value of goods (US$ bn)

subject to U.S. tariffs is already equal
to half of the total imports
from China in 2017
25% 90-day truce ends on March 1
505
tariff
10%
tariff
25% tariff
200 200 or
34 16
6-Jul-18 23-Aug-18 24-Sep-18 2019 2019
Effective dates
Source: CBRE Research, December 2018.

VIETNAM
C A P I TA L V A L U E G R O W T H I S W E L L A H E A D O F R E N T S
OFFICE RETAIL LOGISTICS
10-year performance of Asia Pacific Rental Value and Capital Value Indices
180 180 180
Price: +78%
160 160 160
Index Q3 2008 = 100
Index Q3 2008 = 100

Index Q3 2008 = 100
Price: +48% Price: +38%
140 140 140
120 120 120

Rent: +21% Rent: +21%
100 100 100
80
Rent: 0% 80 80
60 60
60
2008 Q3
2009 Q3
2010 Q3
2011 Q3
2012 Q3
2013 Q3
2014 Q3
2015 Q3
2016 Q3
2017 Q3
2018 Q3
2008 Q3
2009 Q3
2010 Q3
2011 Q3
2012 Q3
2013 Q3
2014 Q3
2015 Q3
2016 Q3
2017 Q3
2018 Q3
2008 Q3
2009 Q3
2010 Q3
2011 Q3
2012 Q3
2013 Q3
2014 Q3
2015 Q3
2016 Q3
2017 Q3
2018 Q3
Capital Value Index Rental Value Index Capital Value Index Rental Value Index Capital Value Index Rental Value Index

Borrowing cost (2018) Prime yield (2019F)
10%
12%
0%
2%
4%
8%
6%
-6%
-4%
-2%
Hong Kong
Guangzhou
Beijing
Source: CBRE Research, January 2019.

Shanghai
Taipei
Singapore
Sydney
OFFICE
Melbourne
Seoul
Brisbane
Auckland
Tokyo
Perth
Hong Kong
Guangzhou
Shanghai
Beijing
Melbourne
Sydney
RETAIL
Taipei
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2019
Auckland
Singapore
Prime yield relative to borrowing cost
Brisbane
Spread
Tokyo
Hong Kong
OR SHOULD WE BE CONCERNED?
W I L L N E G AT I V E C A R R Y B E N O R M A L
Beijing
Shanghai
Auckland
Brisbane
Sydney
LOGISTICS
Melbourne
VIETNAM
Perth
Tokyo
Singapore
MARKET OUTLOOK 2019
VIETNAM
N E G AT I V E C A R R Y M AY B E J U S T I F I E D B Y
S T R O N G R E N TA L G R O W T H
OFFICE RETAIL LOGISTICS
Prime yield (2019F)
Prime yield relative to borrowing cost vs three year rental growth
Aggregate three years rental growth

12% 30%
10% 25%
8% 20%
6% 15%
4% 10%
2% 5%
Borrowing cost (2018)
0% 0%
-2% -5%
-4% -10%
-6% -15%
Beijing
Beijing
Beijing
Shanghai
Shanghai
Shanghai
Seoul
Brisbane
Brisbane
Brisbane
Guangzhou
Singapore
Auckland
Perth
Guangzhou
Auckland
Singapore
Auckland
Perth
Singapore
Hong Kong
Hong Kong
Hong Kong
Taipei
Taipei
Tokyo
Sydney
Melbourne
Melbourne
Tokyo
Tokyo
Sydney
Sydney
Melbourne
Spread Aggregate three years rental growth
VIETNAM
OFFICE
Smarter space usage
VIETNAM
KEY OFFICE SECTOR CHANGES
1 Stronger influence of coworking 2 Service differentiation by landlords
Leasing activity by sector in 2018 2019F Tenants seeking value beyond the traditional
criteria of location, accessibility and rents
Flexible office The 4Cs
(Coworking and
serviced office)
TMT
Life Science
Coworking Customisation
Resources
Financial
0% 20% 40% 60% 80% 100% Corporate Social Community

New Setup Additional office Consolidation Relocation Responsibility
Note: Beijing, Shanghai, Hong Kong, Singapore, Seoul, Bangalore, Delhi NCR, Mumbai and Sydney CBD are the markets
covered.
Source: CBRE Research, December 2018
VIETNAM
SUPPLY-DEMAND GAP TO WIDEN IN 2019

MOST NEW STOCK IN DECENTRALISED LOCATIONS
Grade A office net absorption and new supply New supply in top five markets (2019-2020F)
80 16
70 14 Shanghai 52%
60 12
NFA (million sq. ft.)
Bangalore 82%
50 10
40 8 Delhi NCR 74%
(%)
30 6
Shenzhen 96%
20 4
10 2 Tokyo 82%
0 0
- 5 10 15 20 25
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Millions q. ft. NFA
E F F
New Supply Net Absorption Annual Vacancy Rate (%, RHS) CBD / Core Non CBD
Source: CBRE Research, November 2018
VIETNAM
NEW OFFICE PROJECTS EMPHASISE DIFFERENTIATION

Crystal Plaza, Shanghai One Taikoo Place, Hong Paya Lebar Quarter,
Location: Pudong Decentralised Area Kong Singapore
Date of opening: by phase (Q2 2018 – Q1
2019) Location: Quarry Bay Location: Decentralised Area
Date of opening: Q3 2018 Date of opening: Q3 2018
Source: Various news sources, CBRE Research, December 2018

VIETNAM
RENTAL GROWTH TO FALL BELOW FIVE -YEAR AVERAGE

GUANGZHOU & SINGAPORE THE EXCEPTIONS. PERTH TO RECOVER
Grade A office net effective rental growth
Outperforming Recovering Slowing Declining
15% 15%
10% 10%
5% 5%
0% 0%
-5% -5%
-10% -10%
-15% -15%
Auckland
Shanghai
Singapore
Guangzhou
Beijing
Perth
Brisbane
Manila
Bangkok
Shenzhen
Jakarta
Hanoi
Kuala Lumpur
Hong Kong
Melbourne
Taipei
Tokyo
Seoul - CBD
Sydney
Mumbai - BKC
Bangalore - ORR
Gurgaon - Core
Ho Chi Minh City
Bangalore - CBD
2019F 5-year average

Note: The rental growth is based on effective Grade A rent in the CBD/core location of each market, unless specified
Source: CBRE Research, November 2018
VIETNAM
RETAIL
Omnichannel evolution
VIETNAM
KEY RETAIL SECTOR CHANGES
1 Rationalisation of online sales growth 2 Effective tenant mix adjustment in malls

Asia Pacific online and offline retail sales growth New Retail Entrants to Asia Pacific: by Trade
26.4% 36.0%
24.5% Online
19.3% Offline
16.8%
28.4%
11.9%
15.6%
1.8% 2.3% 2.0% F&B

1.2%
Value to Mid-range Fashion
2016 2017 2018 2019 2012 2013 2014 2015 2016 2017
Source: Euromonitor, January 2019. Source: CBRE Research, January 2019.
VIETNAM
TENANT MIX LEANS TOWARD EXPERIENCE -BASED RETAIL

Hobbies/ Leisure Indoor park New Retail
ABC Cooking Studio SuperPark Yi Tiao
Shanghai: iapm
Taipei: Taipei 101 Hong Kong: One Silversea • Capitamall LuOne, Huaihai
Singapore: Westgate Suzhou: Olympic Sports Centre • LC Mall, Pudong
Kuala Lumpur: The Gardens Mall Singapore: Suntec City Decentralised
Jakarta: Central Park Kuala Lumpur: Avenue K • Skymall, Xinzhuang
Source: Companies website, January 2019.
VIETNAM
WEAK RECOVERY AND

SLOWING RENTAL GROWTH TO CONTINUE
Outperforming Recovering Slowing

15%
10%
5%
0%
-5%
-10%
Melbourne
Singapore
Shenzhen
HCMC
Taipei
Sydney
Guangzhou
Hong Kong
Hanoi
Brisbane
Tokyo (Ginza)
Auckland
Beijing
Shanghai
Remarks: All the above are high street rents except China, Singapore and Auckland tracked shopping centres rents.
VIETNAM
MARKET OUTLOOK 2019
LOGISTICS
Operational and portfolio
upgrading
VIETNAM
E-COMMERCE TO GROW BUT MARGINS ARE TIGHT
E-retailers increase portfolios 3PLs face tight margin

Every US$1billion e-commerce sales needs…
Operating Profit Margin: FY 2016 vs FY 2017
12%
1.85 million sq. ft. FY 2016 FY 2017
10%
8%
FY 2015 - 2017
6%
1.23 million sq. ft. 4%
2%
FY 2017
0%
Kerry Logistics DHL Singapore Post Yamato SF Express
Source: JD.com, Amazon, MWPVL, January 2019 Remarks: DHL – Pep + Express, Kerry Logistics - Integrated Logistics - Logistics Operations, Singapore Post –
Logistics, Yamato - Delivery Business + BIZ-Logistics Business, SF Group - Total
Source: Capital IQ, January 2019.
VIETNAM
FOCUS ON EFFICIENCY AND LAST-MILE LOGISTICS
Amazon’s Warehouse facilities in U.S.

(Number of completion during 2012 and 2018)
76 Fresh Distribution Center
Delivery Stations
Regional Sortation Centers &

Cross Docking Centers
Fullfillment Centers
9
2012 2018
Source: MWPVL International, January 2019
VIETNAM
STRONG DEMAND FOR MODERN LOGISTICS FACILITIES
Industrial investment turnover

Prime logistics stock as a % of total stock
in Southeast Asia and India (excl. Singapore)
800
Australia ~10% 700
Investment turnover (US$ mil)

600
Japan 4%-5% 500
400
Korea 3%-4% 300
200
China 2%-3% 100
0
2016 2017 2018
Industrial development site Completed industrial properties
Source: RCA, CBRE Research, January 2019.

VIETNAM
STEADY LOGISTICS RENTAL GROWTH
On par Outperforming Recovering

6%
4%
2%
0%
-2%
-4%
-6%
Guangzhou
Melbourne
Shenzhen
Greater Tokyo
Beijing
Sydney
Hong Kong
Brisbane
Auckland
North Vietnam
Perth
Singapore
Shanghai
South Vietnam
Remarks: The historical growth rate of Vietnam is a 2-year.
VIETNAM
SUPPLY CHAINS - POLICY CHANGES
China India
Supports development of
100% FDI permitted to boost
high-tech manufacturing
manufacturing sector
Introduction of M0
(新型产业用地) Relaxation of Integrated
General Industrial use Industrial Area (IIA) policy
→ Business Park
Logistics operators Industrial developers/ investors

• Less industrial space for logistics • More incentives for developing
development institutional grade industrial assets

VIETNAM
Enhancing Resilience
VIETNAM
STRATEGIES FOR ENHANCING RESILIENCE
OFFICE RETAIL LOGISTICS INVESTMENT
CORE x FLEXI ONLINE OFFLINE GROW

GROW + ELEVATE PROFIT REBALANCE
• Evaluate leasing decisions • Expand omnichannel • Enlarge urban logistics • Prepare exit routes and
based on cost and capabilities to footprint and capacity lock-in profits on early
flexibility integrate online and investments
offline sales • Upgrade warehouse
• Prioritise flexible space systems and portfolio • Review portfolios and
solutions that • Focus experience- quality to achieve better focus on asset
complement core based offering in main operational efficiency repositioning
portfolios stores
VIETNAM
INVESTMENT THEMES – CYCLICAL PLAYS
Office Sector Debt
Decentralisation Markets with Real estate

to capture occupier Strong Rental Growth Debt Opportunities
demand for cost saving
Hong Kong Singapore Australia

Beijing Guangzhou China
Shanghai Perth

VIETNAM
INVESTMENT THEMES – STRUCTURAL PLAYS
Core Assets
- Defensive Placemaking Modern Logistics Niche Sectors
Investments Facilities
Developed Markets Beijing Japan Data Centres

Shanghai Korea Multifamily
Hong Kong China
Singapore Australia
Southeast Asia
India
VIETNAM REAL ESTATE
MARKET OUTLOOK 2019
HANOI
Thursday, 10 Jan, 2019
VIETNAM
MARKET OUTLOOK 2019
CONTENTS
01 02
HANOI OFFICE HANOI RETAIL
03 04
HANOI RESIDENTIAL HANOI HOTEL
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2019 VIETNAM
HANOI OFFICE
VIETNAM
HANOI OFFICE MARKET OUTLOOK 2019
2018 HIGHLIGHTS
Office performance improved amid limited new supply
Grade A’s vacancy at 10-year low (4.3%)
Pre-commitment seen in new projects
Flexible Workspace emerged as a major source of demand

VIETNAM
OFFICE - MARKET SNAPSHOT IN 2018

Improving market performance amid limited new supply
HANOI HCMC
Grade A Grade B Grade A Grade B
NLA (sm) No new supply 2 new buildings No new supply 1 new building
since 2016 (+48,000 sm, NLA) (+3,600 sm, NLA)
US$/sm US$25.4 US$13.9 US$43.5 US$23.4

▲ 2.2% y-o-y ▲ 1.6% y-o-y ▲ 15.8% y-o-y ▲ 10.8% y-o-y
/month
4.3% 12.2% 5.1% 1.8%

Vacancy ▼ -5.2 ppts y-o-y ▼ -1.1 ppts y-o-y
▼ -4.6 ppts y-o-y ▼ -3.1 ppts y-o-y
(%)
(*) Asking rent excludes Service charge and VAT

Source: CBRE Vietnam.
VIETNAM
HANOI OFFICE – GRADE A’S VACANCY AT 10-YEAR LOW

Rental rates increased y-o-y in both grades
Hanoi Office, Rent and Vacancy by Year
$50.00 40.00%
Vacancy rate (%)

$40.00 30.00%
Asking rents
$30.00
20.00%
$20.00
$10.00 10.00%
$0.00 0.00%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Grade A - Asking Rent Grade B - Asking Rent
Grade A - Vacancy Grade B - Vacancy
(*) Asking rent excludes Service charge and VAT 35
VIETNAM
HANOI OFFICE – HIGHEST ABSORPTION OVER THE PAST THREE

YEARS
Shorter time to stabilize
New buildings opened in 2017
achieved 90 – 100% occupancy after 1 year
200,000 Central Point

Horison Tower Eurowindow Richy
(NLA: 8,384 sm) (NLA: 6,304 sm) (NLA: 7,343 sm) (NLA: 14,123 sm)
150,000
(NLA,sm)
100,000
50,000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Grade A Grade B
36
Source: CBRE Vietnam, Q4/2018.
VIETNAM
HANOI OFFICE – SUPPLY GROWTH AT LOWER RATE

Stronger Pre-Commitment level at new buildings
Pre-commitment (*) seen
Hanoi Office Supply, NLA sm in recently and upcoming
completed projects
Supply growth +9%+5%+3%
1,400,000 Detech Tower II
1,200,000 Grade B – Q4 2018
1,000,000
NLA (sm)
800,000 NLA: 15,000 sm

600,000 Pre-commitment: 50%
400,000
200,000
0 FLC Twin Towers
Grade B – Q1 2019
NLA: 23,500 sm
Grade A Grade B
Pre-commitment: 13%
(*) Pre-commitment recorded prior to opening of the building
VIETNAM
HANOI OFFICE – LARGER TENANCIES

Co-working space emerged as a major source of demand
List of Major Transactions in Hanoi (>=1,000 sm)
No. Area Size Industry Co-working leads the major transactions of
1 Midtown 4,000 Energy equal or above 1,000 sm
2 Midtown 3,400 Co-working
3 Midtown 2,700 Real Estate
8% Co-working
CWS
4 CBD 2,700 Co-working
5 West 2,500 IT 9% Insurance
31%
6 Midtown 2,200 Co-working Energy
7 West 2,200 Insurance 9% IT
8 CBD 1,500 Education Healthcare
9 Midtown 1,500 Insurance 13% Real Estate
10 Midtown 1,500 Healthcare Education
11 West 1,500 IT 16%
13%
12 Midtown 1,300 Insurance
13 Midtown 1,300 Healthcare
14 West 1,263 Co-working Note: Leasing transactions recorded by CBRE Vietnam
Source: CBRE Vietnam, 2018. 38
15 West 1,000 Education
VIETNAM
HANOI OFFICE M A R K E T O U TVL IOE O
T NK A2M
019
GROWTH OF CO-WORKING SPACE IN HANOI:

Impressive growth(+81% y-o-y)
Acc. Number
Major operators in flexible workplace in Vietnam
of venues
30,000 300% First
introduced
25,000 250% 1997 2015 - 2017 2018
Growth rate (%)

in Vietnam
20,000 200% since
GFA (sm)
15,000 150%
10,000 100% A U.S.
Operator
operator
5,000 50%
- 0%
2013 2014 2015 2016 2017 2018 # of venues
7 3 6 7 3 1
by 2018 (*)
GFA (sm) Growth rate
Total GFA
HANOI CO-WORKING SPACE by 2018 6,629 4,500 7,450 12,500 6,800 5,425
Total supply (GFA): 25,000 sqm (sm) (*)
Occupancy Rate: ~70% (*) Including Hanoi and HCMC
39
VIETNAM
FLEXIBLE WORKSPACE DEMAND

Not just for Start-up/SMEs
New Tenant: MNCs and Big Companies Occupiers by Company Type
4%
10%
Start-up
18%
SME
Large Company
33% Corporation
13%
MNC
Others
23%
Source: CBRE Vietnam, Q4 2018.

40
VIETNAM
FUTURE SUPPLY ACROSS OFFICE CLUSTERS

Further expansion of office cluster in the West next 5 years
2019 (NLA: 104,000 sm) 2020 (NLA: 126,000 sm)
14 projects ~278,000 sm NLA
Thai Square Capital Place
Hoan Kiem Dist. Ba Dinh Dist.
Grade A Office 24,545 sm NLA 94,400 sm NLA
Grade A Grade A
Grade B Office – Under construction
– Under construction
TCB Tower
BRG Grand Plaza
17,000 sm NLA
Larger West 34,000 sm NLA
Grade B
Grade B
Sub-market – Under construction
Thanh Cong Office 2021 (NLA: 48,000 sm)

Cau Giay Dist. Coninco Building
17,190 sm NLA Dong Da Dist.
Grade B 19,000 sm NLA
– Under construction Grade B
VIETNAM
MARKET OUTLOOK
Gradual rental growth expected in both grades
Hanoi Office, Rent Forecast Hanoi Office, Vacancy Forecast
$30 20%
18%
$25 16%
$20 14%
12%
$15 10%
8%
$10 6%
$5 4%
2%
$0 0%
2016 2017 2018 2019F 2020F 2021F 2016 2017 2018 2019F 2020F 2021F
Grade A Grade B
(*) Asking rent (US$/sm/month) excludes Service charge and VAT
VIETNAM
2019 MARKET TRENDS
1 2 3
Grade A: Stabilized rents in
New Grade A Co-working
existing projects
Supply in CBD space – A
New completed projects
major source
ask for higher rents than
of demand
average
VIETNAM
ASIA PACIFIC REAL ESTATE MARKET OUTLOOK 2019 M A R K E T O U TVL IOE O
T NK A2M
019
HANOI RETAIL
VIETNAM
HANOI RETAIL MARKET OUTLOOK 2019
KEY HIGHLIGHTS
1 The Rise of E-retailing 2 Local brands go global
PAY
4 Local supermarket brands gain strong

3 Provincial Retail
foothold
Construction
and opening of new
Bac Ninh, My
shopping mall in 2nd
Tho, Nghe tier cities
An, Son La…..
VIETNAM
VIETNAM RETAIL MARKET OUTLOOK 2019
THE RISE OF E-RETAILING

Electronic payment, e-commerce, food delivery
Some key players in Vietnam market
Lala food
delivery
application
cease to exist?
Source: CBRE Research, VTV

VIETNAM
LOCAL BRANDS GO GLOBAL
Source: CBRE Research, Bizhub

VIETNAM
PROVINCIAL RETAIL
Ground-breaking of AEONMALL Shopping

Centre in Hai Phong
13-05-2018 - 20:51 PM
In 2018, Vincom put into operation 20 new

shopping centres across the country
Sunday, Dec 23, 2018 22:46
Central Group Vietnam introduces

GO! My Tho
08:23 | 17/11/2018
Source: CBRE Research, retrieved from newspapers, 8 January 2019.

VIETNAM
SUPERMARKET: LOCAL PLAYERS HAVE STRONG FOOTHOLD

New foreign player entrances
Hanoi supermarkets
Q4 2015 Q4 2018
13 41
5 6
0 4

VIETNAM
H A N O I R E TA I L MARKET OUTLOOK 2019
HANOI RETAIL – LOWER COMPLETIONS IN Q4 2018
Hanoi Retail Supply, NLA sm Newly opened projects

BANGKOK: 7 MILLION SM NLA
HCMC: 1 MILLION SM NLA Q4 2018
1,000
Vincom Center Metropolis
900
800 ~25,440 sm NLA
700
'000 sm, NLA
Q3 2018
600 Discovery Complex
500
~21,632 sm NLA
400
300 Q2 2018
200 Machinco
100 ~14,610 sm
-
2014 2015 2016 2017 2018 Q2 2018
Truong Dinh Plaza
CBD Midtown and the West Other Non-CBD ~10,820 sm
VIETNAM
2018 MARKET SNAPSHOT
HANOI HCMC
Total Supply Total Supply

865,000 992,824
NLA (sm) 9.2% y-o-y 16% y-o-y
Asking Rent Asking Rent

US$/sm
/month
CBD 99.5 0.4% y-o-y CBD 128 = y-o-y
Non-CBD 29.3 3% y-o-y Non-CBD 35.8 2.6% y-o-y
Vacancy Rate Vacancy Rate

(%) CBD 0.6% 1.2 ppts y-o-y CBD 3% 1.4 ppts y-o-y
Non-CBD 10.2% 2 ppts y-o-y Non-CBD 9% 2.8 ppts y-o-y
Note: Average rent on ground floor, excluding VAT
VIETNAM
NEW ENTRANTS TO HANOI

Active Expansion by Asian Brands/Concepts
Luxury brands
Source: CBRE Research

VIETNAM
VIETNAMESE CONSUMER CONFIDENCE AT AN ALL -TIME HIGH
Vietnam GDP Growth Vietnam Consumer Confidence Index
8%
7%
6%
5%
4%
3% GDP Growth in 2018

peaked at 7.08%
2%
1%
2011 2012 2013 2014 2015 2016 2017 2018
Source: General Statistics Office Source: Nielsen

VIETNAM
FUTURE SUPPLY IN 2019

Retail podium as a trend
DONG
TAY HO
FLC Twin Towers ANH
Sun Plaza Ancora
~14,400 sm NLA TU LIEM ~19,830 sm NLA
WESTLAKE
CAU GIAY HOAN

BA DINH LONG
HOAI DUC KIEM
BIEN
More supply
in the WEST DONG GIA
Vincom Skylake DA HAI BA
TRUNG LAM
~15,000 sm Hinode City
THANH ~42,200 sm
Vincom
XUAN Tran Duy Hung
~31,000 sm NLA HOANG

MAI
THANH
TRI
HA DONG

VIETNAM
FORECAST FOR THE NEXT THREE YEARS
Hanoi Retail, Rent and Vacancy Forecast
1,400 120.00
Asking rent (US$ psm pm)

NLA, thousands sm
1,200 100.00
1,000
80.00
800
60.00
600
40.00
400
200 20.00
0 0.00
2016 2017 2018 2019F 2020F 2021F
Occupied space Vacant space Rent - CBD Rent - Non CBD

VIETNAM
2019 MARKET TRENDS
1 2 3 4
Large-scale
Strong consumer E-retailing Asian
projects with
confidence continues its brands/concepts
foreign players
march to be further
will create new
embraced
retail
destinations
VIETNAM
T NK A2M
019
HANOI
RESIDENTIAL
VIETNAM
HANOI RESIDENTIAL MARKET OUTLOOK 2019
HANOI RESIDENTIAL MARKET

A 10-YEAR LOOKBACK
Hanoi residential development directions Accumulated Supply, Hanoi Residential
350,000 317,500 units

300,000
9%
250,000
EAST 200,000 24%

150,000
WEST
84,000 units
100,000 5% 58%
50,000 15%
SOUT
H
- 67%
2009 2018
Notes: accumulated supply to date including landed property and condominium West South East Others
Source: CBRE Vietnam, Q4 2018
VIETNAM

A 10-YEAR LOOKBACK
Forming the “Skyline” in West of Hanoi And transforming “Ghost Town” projects
VIETNAM

A 10-YEAR LOOKBACK
Going further and bigger with fund raising

VIETNAM

A 10-YEAR LOOKBACK
And better connectivity amid much greater traffic

VIETNAM
HANOI CONDOMINIUM MARKET OUTLOOK 2019
2018 HIGHLIGHTS
Lower new supply
The rise of residential in suburban locations
Future supply to come from large scale developments
Flat Prices
VIETNAM
2018 HIGHLIGHTS – MARKET PERFORMANCE
HANOI HCMC
29,840 30,792
v 19% y-o-y =0% y-o-y
New Launch
(Units)
$1,304 $1,714
Selling prices (*)
v 2% y-o-y ˄ 10% y-o-y
(US$ psm)
25,758 31,083
Sold units v 11% y-o-y v 12% y-o-y
(Units)
(*) Selling price: US$ psm (exclusive of VAT & Maintenance fee)
VIETNAM
LUXURY: >3,500 US$/sm

HIGH END: 1,500 – 3,500 US$/sm
2018 HANOI MARKET SNAPSHOT
MID END: 800 – 1,500 US$/sm
AFFORDABLE: <800 US$/sm 29,840 units launched from 72 projects 19% y-o-y
Luxury High-end Mid-end Affordable
0 project 26 projects 46 projects 10 projects

0 unit 6,109 units 20,615 units 3,116 units
New launch
TEXT
▼ 19% y-o-y ▼ 8% y-o-y ▼ 55% y-o-y
3,460 US$/sm 1,930 US$/sm 1,123 US$/sm 729 US$/sm

▼ 1.3% y-o-y ▼ 1.1% y-o-y ▲ 1.3% y-o-y ▲ 3.2% y-o-y
Selling Prices (*)
127 units 5,608 units 16,133 units 3,890 units

▼ 47% y-o-y ▼ 18% y-o-y ▼ 5% y-o-y ▼ 21% y-o-y
Sold units
(*) Selling prices exclude VAT and quote on NSA
Source: CBRE Vietnam Q4 2018.
VIETNAM
THE RISE OF RESIDENTIAL IN SUBURBAN LOCATIONS
Share of new launch supply in 2018 by location Increasing share of sub-

urban areas
NORTH 100%
11% 13% 20%
9%
% to new launch
80%
EAST
18% 60%
WEST MIDTOWN
56% 2%
2017: 9% 40%
2017: 64% 20%
0%
SOUTH 2016 2017 2018
16%
Urban Sub-urban

Sub-urban includes districts: Gia Lam, Dong Anh, Chuong My, Hoai Duc, Thanh Tri, Dan Phuong, Hung Yen
VIETNAM
EXPANDING MID-END SEGMENT

More options at similar pricing levels
% of mid-end to new launch (2015 - 2018) 47% 59% 63% 70% Common unit values
from US$70,000 -
$100,000 (*)
40,000
35,000
20%
30,000
25,000
20,000 53%
15,000
10,000
5,000 27%
-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US$ 1250 -1$1,500/sq.m
Luxury High-end Mid-end Affordable US$ 1000 - $1,250/sq.m
US$ 800 - $1,000/sq.m
(*) Selling price excludes VAT and quotes on NSA
VIETNAM
MARKET ABSORPTION:
Lower new supply volume allows sales to catch up
Hanoi launched units versus sold units 2018 (y-o-y) New launch 19%
40,000 Sold units 11%
Launched units
30,000 Sold units
20,000
10,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Lending rates and Inflation rates (%)

20
Lending rage
%
15 Average CPI (y-o-y)

10
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
VIETNAM
HANOI CONDOMINIUM: END-USERS A MAIN FOCUS

Affordability playing an important role
Hanoi primary pricing by segment Hanoi vs HCMC primary pricing

$1,800 $1,714
Luxury High end Mid end Affordable
US$3,460 US$1,930 US$1,123 US$729 $1,600
▼ 1.3% y-o-y ▼ 1.1% y-o-y ▲ 1.1% y-o-y ▲ 3.2% y-o-y $1,400 $1,304
(US$ per sq.m.)

$1,200
5000
$1,000
US$ per sq.m.
4000
$800
3000
$600
2000
$400
1000 $200
0 $0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2015 2016 2017 2018
Luxury High-end Mid-end Affordable Hanoi HCMC
(*) Selling price excludes VAT and quotes on NSA
VIETNAM
PRODUCT ENHANCEMENTS
Competition in terms of features and amenities
among new projects
Quantity vs Quality Back to basics

5-star amenities open at
Riverside Garden (*)
TNR GoldSeason focuses on educational
Fire Safety system inspection completed at
amenities for residents’ children (*)
Thanh Xuan Complex (*)
From old designs to new product features
Old design with limited exposure to

natural light and outdoor view Dual Key Duplex
(*) Translated from Vietnamese Newspaper. Source: Various websites

VIETNAM
MARKET OUTLOOK
Going bigger and further from the CBD
VinCity Ocean Park, Gia Lam The Manor Central Park, Hoang Mai
44,000 units ~ 6,000 units
Park City, Ha Dong Ecopark, Hung Yen Gamuda City, Hoang Mai
~1,000 units ~6,000 units ~5,000 units
71
VIETNAM
MARKET OUTLOOK
Progress at prime sites – the return of luxury in 2019?
4 1
Tay Ho
4
Area
5
2 3
Midtown
CBD
6 1
6 2
3
VIETNAM
MARKET OUTLOOK
More premium offerings expected
New launch Forecast Primary Pricing Forecast
40,000 $5,000
Primary Pricing (US$ psm)

$4,500
35,000
$4,000
30,000 $3,500
25,000 $3,000
20,000 $2,500
15,000 $2,000
$1,500
10,000
$1,000
5,000 $500
- $0
2016 2017 2018 2019F 2020F 2021F 2016 2017 2018 2019F 2020F 2021F
Luxury High-end Mid-end Affordable Luxury High-end Mid-end Affordable
(*) Selling price (US$ psm) excludes VAT and quotes on NSA
VIETNAM
HANOI LANDED PROPERTY MARKET OUTLOOK 2019
2018 HIGHLIGHTS
New supply reached ~2,600 units
Strong absorption; sold units exceeded new launch
Price gains for villa and townhouse products at emerging

locations
VIETNAM
S U P P L Y E X P A N S I O N M O S T L Y T O W E S T, B U T G R A D U A L L Y
TOWARD THE EAST
Projects launched in 2016
2016 2017 2018

VIETNAM
2018 LIMITED NEW SUPPLY

SALES EXCEEDED NEW LAUNCH
8,000
Launched units Sold units
Number of units
6,000 2018:
2,606 units launched
4,000 2,700 units sold
2,000
-
2014 2015 2016 2017 2018
Ecopark Grand – The Island The Manor Central Park Louis City
VIETNAM
UPWARD TRENDS IN SECONDARY PRICING

AT EMERGING LOCATIONS
$9,000
Established locations New locations
$7,500
$6,000
USD ($) psm
$4,500
$3,000
$1,500
$0
Tay Ho Thanh Cau Nam Tu Bac Tu Hoang Ha Hoai Dan Long Gia Lam Hung
Xuan Giay Liem Liem Mai Dong Duc Phuong Bien Yen
Source: CBRE Vietnam Q4 2018. Q4/16 Q4/17 Q4/18
Secondary pricing includes VAT and construction cost (US$ psm of land)
VIETNAM
2019 RESIDENTIAL MARKET OUTLOOK
1 2 3 4
Large scale and More diverse & Investors will be Vietnam’s first
mega scale differentiated pondering over new Metro Line soon to
projects product offerings locations, new concepts be up and running
VIETNAM
T NK A2M
019
HANOI
4-5 STAR HOTELS
VIETNAM
HANOI 4-5 STAR HOTEL MARKET OUTLOOK 2019
2018 MARKET HIGHLIGHTS
1 Quiet year with no new 4-5-star supply Well-positioned performance

2
compared to the region
3 Strong growth of tourist arrivals 4 Potential competition from the

sharing economy
VIETNAM
2018 MARKET SNAPSHOT
Hanoi HCMC
New Supply New Supply
0 53
keys = 0% y-o-y = 0.5% y-o-y
ADR ADR
US$/room $112.6 $114.1
/night
1.8% y-o-y 5.0% y-o-y
OCC OCC
78.4% 73.3%
(%) 3.1 ppts y-o-y 1.5 ppts y-o-y
Source: STR, CBRE Vietnam.

VIETNAM
TOURISM TREND FOR VIETNAM
International tourists to Vietnam by origins, 2018 Growth of in-bound arrivals by top origins
2018 2017
23.9% 48.6%
44.3% 56.4%
3.6% 7.8%
15.9% 21.5%
Source: Vietnam Tourism Administration Office, 2018 Source: Vietnam Tourism Administration Office, 2018
VIETNAM
TOURISM TREND FOR HANOI
International Tourist Arrivals to Hanoi by year
5,000 4,525 35%

Thousand tourist arrivals
30%
4,000
25%
3,000 20%
19.1%
2,000 15%
10%
1,000
5%
0 0%
2011 2012 2013 2014 2015 2016 2017 2018
International tourist arrivals growth International Arrivals to Hanoi
in 2018:
Source: VNAT 4.5 million
(Up 19.1% y-o-y)
VIETNAM
QUIET YEAR WITH NO NEW 4-5-STAR SUPPLY
Accumulated Hotel Rooms by year

Supply growth in 2018 = 0%
12,000
10,000
No. of rooms
8,000
6,000
4,000
2,000
0
2014 2015 2016 2017 2018
5-star 4-star
Source: CBRE Vietnam, Q4 2018
VIETNAM
STABLE SUPPLY AND HEALTHY DEMAND

SUPPORT MARKET PERFORMANCE
Hanoi upscale hotel, market performance by quarters 2018 Comparison
120 100% $112.6 $114.1

ADR (US$ per room per night)
115 90%
80%
Occupancy Rate
110 70% 78.4% 73.3%
105 60%
50% HANOI HCMC
100 40%
95 30%
20% $107.0 $86.6
90 10%
85 0%
Q4
Q1
Q2
Q3
Q1
Q2
Q3
Q1
Q2
Q3
Q4
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q4
79.6% 68.3%
2014 2015 2016 2017 2018
BANGKOK KL
ADR Occupancy
Source: STR, CBRE Vietnam, Q4 2018
ADR
Occupancy
VIETNAM
COMPETITION FROM THE LIKES OF AIRBNB
Snapshot of AirBnB vs. 4-5 star hotels in major

cities (HN and HCMC)
AirBnB 24,142 active rentals
Hotel
(4-5 star) 17,479 rooms
Occupancy, Occupancy,
Hanoi HCMC
89% 77%
ADR, Hanoi ADR, HCMC

US$/room/night 38 120 47 123
Source: AirDnA, CBRE Vietnam, Dec 2018
VIETNAM
EXPANSION OF MID-SCALE HOTEL CHAINS

Focusing on CBD and midtown
More Asian brands …
2
4 1 5
2
187 21 251
5
Source: CBRE Vietnam, REIC, Q4 2018.
VIETNAM
SUPPLY GROWTH ESCALATE IN 2019 – 2021
To be completed in 2019: 457 keys Some key projects to be completed by 2021F
Grand Mercure Hilton & Doubletree by Hilton Westin Hanoi

Novotel Thai Ha
250 keys 620 keys 220 keys
345 keys
Kim Lien Site Four Seasons Hanoi San Raffles

Wyndham Garden Hanoi 300 keys 100 keys 100 keys
112 keys
Source: CBRE Vietnam, REIC, Q4 2018.
VIETNAM
OUTLOOK: CBD AND MIDTOWN DOMINATE SUPPLY SHARE

Expansion to the north
Brand expansion by 2021F Hanoi Hotel Supply Breakdown by areas
2021F
NORTH
2018
17%
10%
EAST
New brand entrance by 2021F MIDTOWN CBD
30% 26%
WEST 28% 30%
22%
5%
25%
7%
SOUTH
Source: CBRE Vietnam, Q4 2018, Upscale Hotels

VIETNAM
DEMAND: POTENTIAL TOURISM ACTIVITIES

VIETNAM
NEW HOTEL TRENDS AROUND THE GLOBE
Hotel & CWS More Marketing through

Self-Checkin Counters Social Architecture
For the digital nomads Social Media
Technology Interaction
VIETNAM
2019 MARKET TRENDS
1 2 3 4
Strong inflow of 5-star segment Intensifying Affordable

new supply, after a continues to competition from luxury
quiet period outperform due sharing economy
to limited new
supply $
THANK YOU
For more information regarding this presentation please contact:
CBRE Vietnam Co., Ltd. – Research & Consulting
T +84 28 3824 6125

F +84 28 3823 8418
Email: [email protected]
All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including
projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not
verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness
and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to
be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are
reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without
prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss,
damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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ASIA PACIFIC REAL ESTATE

MARKET OUTLOOK 2019

LONGEST GROWTH CYCLE IN THREE DECADES

9 years 9 years 7 years 10 years

WHAT MIGHT BRING THE CYCLE TO AN END?

Source: OECD, Stratfor and CBRE Research, December 2018.

IT IS RELATIVE INTEREST RATES THAT MATTER

US Fed Fund Rate Commercial lending rate* across the region

The value of goods (US$ bn)

6-Jul-18 23-Aug-18 24-Sep-18 2019 2019

Source: CBRE Research, December 2018.

OFFICE RETAIL LOGISTICS

Index Q3 2008 = 100

120 120 120

Source: CBRE Research, December 2018.

Source: CBRE Research, January 2019.

Prime yield relative to borrowing cost vs three year rental growth

Aggregate three years rental growth

KEY OFFICE SECTOR CHANGES

1 Stronger influence of coworking 2 Service differentiation by landlords

0% 20% 40% 60% 80% 100% Corporate Social Community

SUPPLY-DEMAND GAP TO WIDEN IN 2019

40 8 Delhi NCR 74%

NEW OFFICE PROJECTS EMPHASISE DIFFERENTIATION

Source: Various news sources, CBRE Research, December 2018

RENTAL GROWTH TO FALL BELOW FIVE -YEAR AVERAGE

2019F 5-year average

KEY RETAIL SECTOR CHANGES

1 Rationalisation of online sales growth 2 Effective tenant mix adjustment in malls

1.8% 2.3% 2.0% F&B

TENANT MIX LEANS TOWARD EXPERIENCE -BASED RETAIL

WEAK RECOVERY AND

Outperforming Recovering Slowing

E-COMMERCE TO GROW BUT MARGINS ARE TIGHT

E-retailers increase portfolios 3PLs face tight margin

1.23 million sq. ft. 4%

FOCUS ON EFFICIENCY AND LAST-MILE LOGISTICS

Amazon’s Warehouse facilities in U.S.

76 Fresh Distribution Center

Regional Sortation Centers &

STRONG DEMAND FOR MODERN LOGISTICS FACILITIES

Industrial investment turnover

Investment turnover (US$ mil)

Japan 4%-5% 500

Korea 3%-4% 300

China 2%-3% 100

Source: RCA, CBRE Research, January 2019.

STEADY LOGISTICS RENTAL GROWTH

On par Outperforming Recovering

SUPPLY CHAINS - POLICY CHANGES

Logistics operators Industrial developers/ investors

Source: CBRE Research, January 2019.

STRATEGIES FOR ENHANCING RESILIENCE

OFFICE RETAIL LOGISTICS INVESTMENT

CORE x FLEXI ONLINE OFFLINE GROW

INVESTMENT THEMES – CYCLICAL PLAYS

Office Sector Debt

Decentralisation Markets with Real estate

Hong Kong Singapore Australia