Click here
 

Colliers International Research - Asia Pacific

When Published, Hong Kong
Comprehensive and up-to-date research reports covering real estate markets across Emerging Asia, by leading real estate solutions provider - Colliers International
 

Ho Chi Minh City Knowledge Report - January 2012

Apr 04, 2012
  • Print

January 2012 |

HO CHI MINH CITY

KNOWLEDGE REPORT--4Q2011

ECONOMIC OVERVIEW
industry and construction rose 5.53%; contributed 2.32 points percent and 2011 is the first year to implement the the service rose 6.99%; contributed economy and socio development plan 2.91 point percent. in 5-year period 2011-2015; the country has many basic advantages: stable FDI political situation, socio-economic re- The registered FDI in 2011 reached covery after more than a year strongly US$14.7 billion, equaling 74% from affected by high inflation and global the same period last year. The newly recession. However, with the difficulties registered capital of 1,091 licensed proand challenges implicit in world econ- jects was US$11.5 billion; the additional omy and debt problems, the economy registered capital of 374 projects ligrowth rate tended to slow down. Com- censed from previous years was US$3.2 modity, petrol and raw materials prices billion. still remain high. Domestically, inflation CPI and high interest rate has put pressure on production and people's life. Under December's CPI rose 0.53% from Nothe circumstances, the Government vember (it was much lower than 1.38% has focused on leading and directing to and 1.98% paces of the same period overcome the difficulties and fulfill the in 2009 and 2010), of which groups of objectives set out. items and services with higher CPIs than the general were textile, hats, GDP footgear up 0.86% catering and re2011's GDP was estimated growing lated services up 0.69% (grain food 5.89% from 2010 and the pace was was up 1.40%; foodstuff up 0.49%); even for all the three sectors, of which family appliances up 0.68%. groups of it rose 5.57% in 1st Quarter; 5.68% in items and services with lower CPIs 2nd Quarter; 6.07% in 3rd Quarter; and than the general were housing and 6.10% in 4th Quarter. Although this construction material up 0.51%; drinks year's pace was lower than that of and tobacco up 0.49%; culture, enter6.78% from 2010, it was high and rea- tainment tourist up 0.35%; medicines sonable in the context of many difficul- and health service up 0.24%; transport ties in production and the country's fo- up 0.16%; education up 0.05%; only cused efforts in curbing inflation and postal and communication services stabilizing macro economy. Of the reduced 0.09%. CPI in 12/2011 rose economy's 5.89% general pace, the 18.13% from 12/2010. 2011's average agriculture, forestry and fishery rose CPI rose 18.58% from that in 2010. 4%, contributed 0.66 point percent; the Overview

www.colliers.com/vietnam Pg 1

KNOWLEDGE REPORT | Q4 2011 | ECONOMICS | HCMC

ECONOMIC OVERVIEW
China was still the largest for Vietnam imports, comprising US$24.6 billion, up 22.7% from last year followed by ASEAN US$20.9 billion, up As estimated, total retail sales of consumer 27.7%; Korean US$13 billion, up 33.6%; Japan goods and services of 2011 rose 24.2% from US$10.2 billion, up 13%, EU US$7.5 billion, up 2010, if the factor of high price was excluded, 18% and United State US$4.3 billion, up 14.5%. the growth was 4.7%. Of the total, trade business rose 24.1% from last year; hotel and res- Exports taurant 27.4%; service 22.1% and tourism 12.2% respectively. Retail sales of consumer goods and services Imports

"Nobody

wants to put the of the

creditworthiness

United States in jeopardy. Nobody wants to see the United States default. So we've got to seize this moment, and we have to seize it soon." Barack Obama - President of the USA. (Source: Colliers International) (Source: Colliers International) 2011 total export turnovers were estimated reaching US$96.3 billion, rose 33.3% from 2010, of which the domestic sector gained US$41.8 billion, up 26.1% and the FDI sector (including crude oil) gained US$54.4 billion, up 39.3%. If the crude oil were excluded, the FDI sector gained US$47.2 billion, up 38.4% from last year.

2011 total import turnovers were estimated reaching US$105.8 billion, rose 24.7% from last "It would be a moral dis- year, of which the domestic sector achieved aster if the United States US$58 billion, up 21.2% and the FDI sector The increase in export turnovers was partly due gained US$47.8 billion, up 29.2%. were to default on its to the increase in price of some items in the debts and become unable The import turnovers by sector in 2011 was, world market, e.g. pepper up 65%; cashew machinery and equipment reached US$15.2 42%; coffee 44%; rubber 29%; rice 9%; cassava to pay its obligations." billion, up 12%; gasoline and oil US$9.9 billion, and cassava products 9%; coal 15.6%; crude oil up 66.2%; fabric US$6.8 billion, up 26.1%; plas- tics US$4.7 billion, up 25.7%; textile, footwear 40.8%; petrol up 36%. If the price increase facJamie Dimon CEO tor was excluded, the turnovers increased by JPMorgan Chase & Co. materials US$2.9 billion, up 12%, chemicals 11.4% from the same period in 2010. US$2.7 billion, up 25.7%; chemical products US$2.4 billion, up 16.3%; fodder and raw mate- The United State was still the largest market for Vietnam exports, comprising US$16.7 billion, up "Interest hikes and the rials US$2.3 billion, up 7.2%. 17.5% from last year, followed by EU with stock markets taking a The price increase of some imported products US$16.5 billion, up 45.4%; ASEAN with huge hit and real nasty increased, such as price for cotton was up 72%; US$13.6 billion, up 31.5%; Japan with US$10.6 consequences, not just for petrol up 46%; for rubber up 22% and for billion, up 37.8% and China with US$10.8 bilfor the United States, but liquidized gas up 18%. If inflationary factor were lion, up 47.6%. excluded, 2011's import turnovers would infor the entire global econcrease 3.8% against the same period in 2010. omy." Christine Lagarde MD International Monetary

www.colliers.com/vietnam Pg 2

KNOWLEDGE REPORT | Q4 2011 | ECONOMICS | HCMC

ECONOMIC OVERVIEW
Trade Balance dexes were motor vehicles by 138.7%; inflammable ceramic (excluding ceramic used in construction) by 33.1%; motorbikes by 17.3%. Products with low or reduced consumption indexes were clothes (excluding leather clothes) by 15.9%; butter and milk by 15.7%; products from prefabricated steel by 12.6%; raw flour by 12.5%; animal feed by 9.8%; aquatic products by 8.6%; shoes and scandals by 6%; cement by 3.9%; vegetables down by 6.3%; cables and wire with electric isolator down by 7.5%

"We are on the verge of an economic collapse which starts, let's say, in Greece. The financial system remains extremely vulnerable." George Soros - Financier, businessman and philanthropist.

(Source: Colliers International) In-stock indexes of the processing and manufacturing sector as of 01/12/2011 rose 23% 2011's trade deficit was estimated to reach from last year same period. Products with high US$9.5 billion, equaling 9.9% of total export in-stock indexes were inflammable ceramic turnovers. This was the lowest rate since past 5 (excluding ceramic used in construction) rose year and 2011 was a year with lowest trade defiby 98.6%; cement by 64.1%; fertilizer and nitric cit rate against exports turnovers since 2002. compound by 57%; other products by plastic Industrial Production Index (IPI) by 55.6%; motorbike by 41.7%; beer and malt December's Industrial Production Index (IPI) by 21.7%. Products with low or reduced inincreased by 4.8% from November 2011 and stock indexes were sugar down by 12.1%; mo7.5% from the same period last year. 2011's IPI tored vehicles by 14.6%; milk and butter by rose 6.8% from 2010, of which mining and quar- 19.5%; non-alcohol drinks by 31%.

rying reduced by 0.1%; manufacturing rose by 9.5% and electricity, gas and water supply rose "This vicious cycle is gainby 10%. ing momentum, and frankly, it has been exacer- Industrial products with higher IPI from the same bated by policy indecision period in 2010 were inflammable ceramic and political dysfunction." (excluding ceramic used in construction) rose by 139.3%; sugar by 33.7%; ship building and servicing by 28.4%; motorbike by 19.6%; beer by 16.4%; butter and milk by 15.8%; clothes Christine Lagarde MD (excluding leather clothes) by 13.3%; fiber and International Monetary Fund. fabric by 11.6%; aquatic products by 11.3%; animal feed by 10.9%; power, gas and water by 10.3%; fertilizer and nitric compound by 9.5%; tobacco by 9.3%; shoes and scandals by 8.3%. Products with low or reduced IPI were extract"If the euro fails, then ing, filtering and supplying water by 6.8%; ceEurope fails." ment by 6.8%; steel by 1.8%; pharmaceutical products by 1.3%; oil and natural gas down by 0.8%; cables and wire with electric isolator down Angela Merkel - German by 19.6%. Chancellor. Consumption indexes for processed and manufactured products in 2011 increased by 15% from last year period. Products with high in-

(Source: Colliers International)

www.colliers.com/vietnam Pg 3

KNOWLEDGE REPORT | Q4 2011 | INFRASTRUCTURE | HCMC

INFRASTRUCTURE DEVELOPMENTS

City to start many roads, bridges projects in 2012 According to the plan announced by Ho Chi Minh City Department of Transportation, the construction of Saigon 2 Bridge, Binh Tien Bridge, and Ha Huy Giap Parallel Road will be given top priority. The Saigon 2 Bridge project aims to ease traffic overload from Hanoi Highway to downtown area via the existing Saigon 1 Bridge. Meanwhile, the presence of Binh Tien Bridge with the total length of 3,2 km will reduce the traffic jams from Nguyen Tri Phuong Street and National Highway 50 to Long An Province.

Underground Parking Deformation Most of underground parking projects in Ho Chi Minh City are constructed accompanied with commercial centre services. Since 2004, HCMC has planned to construct 8 underground parking located in the centre of the city. Until now, there are only 4 parking projects to be deployed; however, none of them was started construction. Specifically, Le Van Tam underground parking after 7 years for procedures preparation, has recently broken pile in August 2010. Another delaying underground parking project is Trong Dong outdoor theatre on Cach Mang Thang Tam Street; which was licensed in February 2010. One of the most common reason for the delaying was lack of the ambiguity and the consistency in the orientation of projects planning.

A project to build the Ha Huy Giap Parallel Road will control traffic congestion caused by traffic from Binh Duong Province to HCMC through National Highway 13 to Binh Le Van Tam underground parking project was developed by Trieu Bridge. The Investment Development for Underground Space Corp Given the spend cut policy, the city government will focus (IUS) comprises 5 storey' with a total area of 103,225 sqm and on key transport projects only. Besides, the transport de- a capacity of 2,014 motorbikes, 1,250 cars, 28 bus and trucks. partment will strive for the completion of other civil engi- However, there are 3 storey's constructed for commercial cenneering projects such as a road linking Phu My Bridge and tre which is approximately accounted 30% of the total area. The Rach Chiec Bridge, Provincial Road 10 and 10B, Suoi Cai commercial area in Trong Dong underground parking project is Bridge, and Rach Tra Bridge. also accounted for 40% of the total area. Similarly, Tao Dan park and Hoa Lu stadium will spend at least 30-40% for commercial area. The reason is building the commercial area will cover the construction cost for underground parking to ensure the profit for developers. However, allowing the investors to offer additional services through commercial area will make a large area of the parking lot become shopping centre that serves for shopping demand rather than serves for the need of public parking. This will result in the purpose of these projects to be deformed. In addition, in case the commercial area is developed, the traffic jam in city centre will definitely be reduced but keep increasing since large numbers of vehicle to gather for parking and shopping as well. P2 | COLLIERS INTERNATIONAL www.colliers.com/vietnam Pg 4

KNOWLEDGE REPORT | Q4 2011 | INFRASTRUCTURE | HCMC

INFRASTRUCTURE DEVELOPMENTS
According to Mr Dinh The Hien, economics expert, with the significant demand for parking, investing in underground parking is kindly potential to the investors. However, he emphasizes that importantly, the Government needs to valuate the projects carefully to ensure the underground parking will be able to support the whole community, not just serving the shoppers. Thu Thiem proposes dredging lakes and canals Thu Thiem New Urban Area Project Management Unit has presented to the HCMC authorities a plan to build the central lake and canals in this area. Under the proposed plan, total capital of VND 852.2 billion will be allowed from the city's budget to build the lake and enlarge existing canals in Thu Thiem area. Construction sector faces underemployment Vietnam's construction industry is expected to continue facing underemployment danger in this year as the property market gloom has forced many project owners to halt new developments. Under the Ministry of Construction's calculation, around 17 to 25 workers are needed to build a square meter of house, not including construction materials. Meanwhile, around 10 house managing and operation jobs are created when a condo block is put into use. However, many construction enterprises are considering layoff schemes to reduce operation costs as their building projects have fallen behind schedule given economic difficulties. According to many experts, the construction sector will have to face many challenges in the coming time, especially unThu Thiem Ferry officially closed at midnight on January 1st deremployment. The enterprise has also begun its layoff 2012 after nearly 100 years serving people across the Sai- scheme and narrowed down operation areas. gon river. As difficulties if the real estate market will continue to last this Thu Thiem ferry stops operating The director of the city Ferry and Bridge Management One- year, a large number of unskilled laborers working at building Member Co Ltd, said that the service would cease to make sites will face a high danger of underemployment. way for the Thu Thiem New Urban Area Project in District 2. Overall, difficulties of the real estate market will continue to The 1.5-kilometer tunnel links District 2 to District 1 under last at least till the end of the second quarter of 2012, causing many challenges for the labor market. Saigon River and has six lanes. After the operation of the Thu Thiem Bridge and Tunnel the number of passengers using the Thu Thiem Ferry reduced by more than 90 percent and the Ho Chi Minh City People's Committee decided to stop the ferry's operations. Le Van Tam Park underground parking project

www.colliers.com/vietnam Pg 5

KNOWLEDGE REPORT | Q4 2011 | RESIDENTIAL | HCMC

Residential
Apartment for sale overview market in Q4/2011 During three quarters of 2011, the real estate market is facing with lots of difficulties; however, some developers still offer many apartment projects in Q4/2011 with the expectation of market recovery in the near future. Since Q3/2011, due to prolonged situation of highly tight monetary policies applied in real estate and high interest rate as well as lack of consumers' confidence in buying houses, there is a significant decrease in number of apartment projects to be launched. However, in the situation that all real estate sectors in HCMC facing with lots of difficulties, some developers still seize the opportunity to find their business partners and launch many apartment projects. At the beginning of December 2011, Vietcomreal announced to launch Moon Garden project in District 4 with the selling price of US$1,190 per sqm. The project is invested by Casumina with the total capital invest ment VND 758 billion and developed and distributed by Vietcomreal. During Q4/2011, a large numbers of apartment projects, villas and landlords in HCMC are offered for sell. On 11/11/2011, C.T. Land organized a mini real estate market with the title of "Buying apartment for Tet holiday" lasted until Lunar Tet 201; where many businesses such as Hoa Binh, Vietnam House, Van Phat Hung, Song Da Cuu Long, 584, Ben Thanh Duc Khai, Dat Lanh, Thuan Viet... announced to launch many apartment projects with the selling price below VND 1.5 billion. Khang Dien New Home has offered to sell Hoja Villa in District 9, HCMC with the selling price of VND 3.7 billion per villa (including the VAT). On 24/11/2011, Phuc Loc Tho Company also announced to launch Phuc Loc Tho apartment project in Linh Trung ward, Thu Duc District. Currently, Gold House apartment project in Nha Be District has discounted 20% and already sold more than 470 units among 500 units in November. Overall, even when the real estate market is facing with lots of difficulties; especially apartments for sale sector; the high quality with affordable price apartment will reasonably attract customers since in HCMC, there is a large number of projects currently under construction which supports for the development of apartment market. Diamond Island in District 2

Market Outlook According to Colliers research, the total current supply of HCMC apartments is approximately 45,000 units for high-end, mid-end and low-end apartments. The selling price is ranged from US$700-US$1,600 per sqm. The selling price of high-end apartments still reach US$4,000 per sqm. However, the selling price decreased reasonably from the last quarter, approximately from 3%; specially, the selling price of high-end apartment decreased significantly, approximately 9% in comparison to the last quarter. In comparison to the same period of 2010, the selling price has decreased approximately 7.5% Due to the difficulties in residential sector affected by downturn real estate market, some developers now changes their strategy from apartment for sale to serviced apartment units, for examples, Ben Thanh Luxury Apartment in District 1, The Vista and The Xi Riverside in District 2 as well as the Diamond Island project in District 2 to be managed by The Ascott for serviced apartment rental.

www.colliers.com/vietnam Pg 6

KNOWLEDGE REPORT | Q4 2011 | OFFICE | HCMC OFFICE SECTOR: Market Overview Rental Office Rate by Grade in Q4/2011

Based on the chart above, which indicates the HCMC office rental rate of grade A, grade B and grade C in Q4/2011. The While the demand for office leasing is increasing and the rental range for grade A offices is US$32 to US$43.5 per sqm, total supply continues to increase, the market still faces US$14 to US$32 per sqm and for grade B offices and for many challenges as existing tenants look towards a "flight grade C offices US$10 to US$25 per sqm, respectively. to quality". Many companies who took on new lease obligations 2-3 years ago are contemplating breaking their exist- Furthermore, this chart also indicates the total current supply of ing leases and incurring penalties to move out of existing grade A, B and C offices. It is calculated that the total current grade A, B and C buildings, especially in D1 into the new supply of grade A buildings is 141,246 sqm, 673,646 sqm for supply of Grade A and B buildings as the rental rate is grade B buildings and 662,442 for grade C buildings. The total comparable or in some cases less than they are currently current supply across all grades is 1,477,334 sqm. Current ocpaying for lesser quality buildings, also landlords of new cupancy rate in grade A is 89.40% and for grade B is 89.07% buildings are offering longer rent free periods and part or in with grade C approximately 88.00%. full contributions towards the fit out cost, negating the penalties incurred by breaking the lease terms early. Therefore, expanding promotions and discount policies and improving service quality have become one of the most important solutions which landlords are apply in order to attract tenants. Average Occupancy and Rental Rates across all grades in Q4/2011

(Source: Colliers International) Market Outlook The leasing market will remain competitive throughout 2012 and developers of new office buildings will have to focus on the (Source: Colliers International) design, construction quality, electrical engineering, floor layout and the ergonomics of the working environment to improve the Based on the chart above, the average rental rates across quality and continue to offer incentives to lure tenants. all grades in Q4/2011 remained at US$26.02 with the average occupancy rate of 88.85%. In comparison to Q3/2011, The suburban office market for new buildings are still attracting there is a continuing decrease in the average rental rate; tenants even before completion due to their competitive rental however, the average occupancy rate increased slightly; rates. An example would be the Thang Long Tower in Tan Binh specifically, the average rental rate has fallen approxi- District, comprising 12 storey's and 1 basement, approximately mately 2.14%, from US$26.59 to US$26.02 and the aver- 6,290 sqm NLA with rents including service charge at age occupancy rate has increased approximately 0.11%, US$14.75 has 50% occupancy and is scheduled for completion from 88.85% to 88.96% due to the availability of space. It is in December 2011. expected that in 2011-2013, the new supply will increase In conclusion, although the office market tends to face with lots rapidly, within 4 years, the supply will go up to 2.2 million of difficulties, office buildings with good location, reasonable sqm; from which the total supply of Grade A is approxirental rate, modern facilities and attentive customer care and mately 720,000 sqm, coming from developments such as incentives will be attractive to prospective tenants. Time Squares, M&C Tower, Eden A and Vietcombank Tower and along with other proposed developments.

www.colliers.com/vietnam Pg 7

KNOWLEDGE REPORT | Q4 2011 | RETAIL | HCMC In comparison to Q3/2011, there is no change in rental rate for department stores; however, there is a slightly decrease prime Current Supply keeps increasing street front, retail podiums, shopping centers of 4% - 9% reAt the end of November 2011, Crescent Mall in Dist 7, spectively. HCMC was opening added over 45,000 sqm to the total area of retail space. In addition, the commercial space of The Vista D2 and Carina Plaza D8 were inaugurated in Q4/2011, providing approximately 11,200 sqm. Beside that, Lucky Plaza D1 and Thuan Kieu Plaza D5 stopped operation for improvement which caused the decreasing in total retail space of 22,800 sqm. RETAIL SECTOR: Totally, the current supply of retail space is approximately 659,000 sqm which keeps increasing to approximately 33,400 sqm in the comparison to Q3/2011. Demand Analysis (Source: Colliers International) Currently, the increasing in high inflation and hard economic times have cut the numbers of shoppers by 15-30%, New retail entrant: Index Living Mall in District 4 these difficulties are forecasted to continue until the next On 22/12/2012, the Index Living Mall has officially opened in Lunnar Tet Holiday. 196 Hoang Dieu, Ward 8, District 4, HCMC becoming the sinLuxury retails has been strongly affected by the hard eco- gle retailer providing 7,000 sqm of retail space. nomic conditions cut into people's spending. New open Crescent Mall was supposed to be rented to 70% of capacity with brands such as Giant Supermarket, Gap, Tini Town, Nike Town, Megastar Cinemas and Entertainment Corporation 101. However, these brands are facing pressure since there is a small numbers of customers in the initial time. Index Living Mall is the first one-stop shopping mall model in Vietnam to meet all the demands of home ware and furnishings imported from Thailand. In addition, customers also have variety of choices with wide range of electronic products, electrical appliances advances for family needs.

By simulating decorated living space (room-setting), the cusIn necessary consuming demand, the numbers of customtomers will be fully convinced by the interior designer styles ers coming to retail area selling foods, household applifrom world's leading designers in Germany, Italy, England, ances and consumer goods still increase, even in the hard France and Thailand. time economic context. Average rental rate and occupancy rate Q4/2011 Based on the chart below, the average rental rate of prime street front retail is approximately $90 per sqm per month, retail podiums $68, department stores $83 and shopping centre's $43, respectively.

www.colliers.com/vietnam Pg 8

KNOWLEDGE REPORT | Q4 2011 | SERVICED APARTMENTS | HCMC SERVICED APARTMENT SECTOR: Serviced Apartment Current Supply In Q4/2011, there are currently a total of 3,428 units of serviced apartment in HCMC, of which, Grade A comprises 1,141 units, Grade B 1,341 units and Grade C 946 units. The current supply comprises 9 Grade A buildings, 17 Grade B buildings and 36 Grade C buildings. In Q4/2011, there were 93 grade A units coming into operation; which comprises 53 units in Nikko Hotel Saigon in District 1 and 40 units in Xi Riverside in District 2.

(Source: Colliers International)

There is no significant change in the average occupancy rate across all grades, remaining at 83%.

(Source: Colliers International) Market Outlook In the context that all the real estate market sector face with the difficulties, which causes bad influence on the apartment for sale market, this sector has been transferred their business to serviced apartment segment. There are units that (Source: Colliers International) were planned for selling; but due to limit sale success, have been operated as serviced apartment unit; for examples, Ben Occupancy and Rental Rate Q4/2011 Thanh Luxury Apartment in District 1, The Vista and The Xi During Q4/2011, the average rental rate for Grade A re- Riverside in District 2. mained at US$36.35, US$26.26 and US$16.80 for Grade B and Grade C, respectively. The occupancy rate for Grade A, This transaction is considered to be suitable with the current Grade B and Grade C is 93%, 83% and 73%, respectively. situation of the downturn real estate. However, serviced The average rental rate across all grade remains at apartment sector currently has to face with the strict competiUS$26.14 and the average occupancy rate for all grades is tion from individuals buying apartments for leasing. In addition, HCMC observes continued commerce boutique projects approximately 83%. which can provides a combination of central location, fiveIn comparison to Q3/2011, there is a slight decrease in rental star service and attractive design of Grade A standard. rates and the average occupancy rate for the average rental rate across all grade, approximately 2.7%, from US$26.86 to The Senla Boutique Hotel is a 18-storey building with 5-star US$26.14, amongst that, Grade A serviced apartment rental hotel standard located at 64 Le Thanh Ton, District 1 to be rate has decreased US$38.61 to $36.35, however; there is a developed by COFICO. slight increase in the average rental rate of Grade B and Grade C serviced apartments; specifically, Grade B serviced apartments rental rate increased from US$25.54 to US$26.26 and grade C from US$16.30 to US$16.80.

(Source: Colliers International)

www.colliers.com/vietnam Pg 9

KNOWLEDGE REPORT | Q4 2011 | HOTELS | HCMC In comparison to Q3/2011, there is a significant decrease in the average room rate across all grade, approximately 16.8%, from Existing and Future Supply of Luxury Hotels in HCMC, US$182 per night to US$151.40 per night. The average room rate 2011-2016. for 5-star hotels has decreased from US$331 per night to Currently, the total existing supply of luxury hotels in US$233.24 per night, approximately 2.7%, 3-star hotels from HCMC is 10,576 hotels rooms, amongst that, the total US$76.00 to US$72.50 hotels, approximately 4.6%. However, the supply of 5-star hotels is 4,649, 4-star hotels is 1,621 and average room rate for 4 star hotels has increased slightly, approximately 6.3%, from US$139 per night to US$148.45 per night. 3-star hotels is 4,125, respectively. HOTEL SECTOR: In Q4/2011, 5-star Nikko hotels comes into operation in The average occupancy rate in comparison to Q3/2011 has inDecember 2011 providing 334 hotel rooms. From now creased approximately 5.5%, from 67.5% to 73%. Amongst that, until 2016, many 5-star and 4-star hotels projects, such the occupancy rate for 5-star hotels is estimated to increase 10%, as Times Squares, Eden A, Meridian Hotel, Pullman Sai- from 70% to 80%, for 4-star hotels 2.6%, from 72.4% to 75% and gon, Liberty Que Huong etc, when completed will increase for 3-star hotels 5%, from 60% to 65%, respectively. the total supply of luxury hotels in HCMC to nearly 16,000 Tourist Arrival hotel rooms. International visitors coming into Vietnam in 2011 was 6.014,000 up 19.1% against the same period last year. Of which, visitors coming for tourist purposes were 3.651,000, up 17.4%; for business purposes 1.003,000, down 2% and for visiting relatives 1.007,300 up 75.5%. Visitors from China were 1.416,800, up 56.5%, from Republic of Korea 536,400, up 8.2%; from Japan 481,500, up 8.9%; from United States 439,900, up 2.1%; from Cambodia 423,400, up 66.3%; from Taiwan 361,100, up 8.1%; from Australia 298,800, up 4.2%; from Malaysia 233,100, up 10.3% and from France (Source: Colliers International 211,400, up 6.1%. Occupancy Rate and Average Room Rates for 3-4-5 International visitors to HCM city in December 2011 were at an star Hotels in HCMC Q4/2011 estimation of 350,000 visitors, an increase of 28% compared to During December 2011, the average room rate for 3-5 the same period in 2010. During, the numbers of visitors reached star hotels remains at US$151.40 per night. 5-star hotels to 3.5 million people, an increase by 8.4% over the same period was approximately US$233.24 per person per night. The last year. average room rate for 4-star hotels was US$148.45 and for 3-star hotels is US$72.50 per person per night, respectively. The overall occupancy rate of 3-5 star hotels is approximately 73%, specifically, 5-star hotels occupancy was 80%, 4-star was 75% and 3-star was 65% on average.

(Source: Colliers International)

(Source: Colliers International)

www.colliers.com/vietnam Pg 10

KNOWLEDGE REPORT | Q4 2011 | INDUSTRIAL LISTING

www.colliers.com/vietnam Pg 11

KNOWLEDGE REPORT | Q4 2011 | HCMC Colliers International are here to assist you with all your real estate goals from inception to completion and beyond. Colliers International advise and provide the solutions to give your development the cutting edge.

480 offices in 61 countries on 6 continents
United States : 135 Canada : 39 Latin America : 17 Asia Pacific : 194 EMEA : 95 · $1.6 billion in annual revenue · 672.9 million square feet under management · Over 10.000 professionals Vietnam HCMC Bitexco Building, 7th Fl, 19-25 Nguyen Hue, District 1, HCMC, VN Tel: + 84 8 3821 8777 Fax: + 84 8 3827 5667 Email: hcm.cs@colliers.com Hanoi Capital Tower, 10th Fl 109 Tran Hung Dao Street Hoan Kiem District, Hanoi, VN Tel: 84 4 2220 5888 Fax: 84 4 2220 1133 Email: dane.moodie@colliers.com

"ACCELERATING SUCCESS"

Colliers International provide you with the following services: · Research > Market research across all sectors and geographical locations. > Feasibility study to determine your NPV, IRR and highest and best use. · Valuation & Advisory Services > Valuations for land, existing property or development sites. > Development advice on unit sizing, phasing and selling price. · Office Services > Tenant Representation > Landlord Representation · Residential Sales & Leasing · Retail Services · Investment Services · Real Estate Management Services · Corporate Services · Industrial Leasing Colliers International provide a comprehensive service tailored to your individual needs for development, investment, sales, marketing, leasing and management.

RENEE KHA Associate Director Valuation and Advisory Services Address : 19-25 Nguyen Hue St., District 1. Vietnam TEL + 84 8 3821 8777 FAX + 84 8 3827 5667 Email: renee.kha@colliers.com

This document/email has been prepared by Colliers International for advertising

www.colliers.com/vietnam Pg 12