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Cushman & Wakefield Research

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MarketBeat Hanoi, Vietnam Industrial Snapshot - Q4 2011

Apr 06, 2012
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MARKETBEAT
HANOI, VIETNAM RETAIL SNAPSHOT

INDUSTRIAL SNAPSHOT
A Cushman & Wakefield Research Publication

Q4 2011

According to the General Statistics Office (GSO), Vietnam's GDP growth is estimated to be around 5.8% this year, lower than the 8% to 9% in the years before the global economic crisis in 2008. Inflation in the fourth quarter has eased due to the tightened monetary policy, which rose to less than 1% MANCHESTER each month, much lower than the rate a few months earlier. Inflation in Vietnam in 2011 is forecast to be 18.13%. FDI inflow to Vietnam in 2011was estimated to reach US$14.7 billion, down 26% from the previous year, but total disbursement hit US$11 billion, the same as in 2010. FDI in the real estate market this year is expected to be the lowest in five years, accounting for only 5.8% this year, ranking it fourth on the FDIattraction list. Among the investors, Singapore was the largest followed by The Republic of Korea and Japan.

MANCHESTER

ECONOMY

OUTLOOK
Till 2020, the Hanoi industrial market forecast reflects a significant additional supply of approximately 2,900 hectares, representing 160% of current supply. According to the development orientation of Hanoi, the country will focus on attracting projects involved in advanced technology; continue to develop the key industries such as electronics & informatics, mechanics, garment & textile and food processing. Hanoi is also focussed on job creating industries to fulfil future supply. MARKET STATISTICS
SUBMARKET Gia Lam Long Bien Soc Son Me Linh Tu Liem Chuong My Dong Anh Thach That & Quoc Oai TOTAL AREA (HA) 97 40 100 344 30 170 274 705 LEASABLE AREA (HA) 78 32 70 240 24 111 206 619 NO. OF IPS 1 1 1 1 1 1 1 2

MARKET OVERVIEW
Hanoi has nine operating industrial and hi-tech parks with a total scale of approximately 1,760 hectares, of which 1,380 hectares are of lettable leasable area. Thach That and Quoc Oai have the biggest industrial land area with a total leasable area of approximately 620 hectares, which occupies approximately 45% of the total current supply. The average leasing price in Hanoi has reached approximately US$113 per square meters per term (/sq.m./term) (terms generally range from 33 to 49 years, leasehold). Seven of the nine operating industrial parks have been fully occupied since 2009. Hoa Lac Hi-tech Park has the lowest occupancy rate, only 17%. As a result, the average occupancy rate across Hanoi is about 69%. The remaining LUR (Land Use Right) years in Hanoi's IPs range from 33 years to 49 years. Newly established IP, Hoa Lac Hi-tech Park has the highest remaining LUR years, at 49.

SIGNIFICANT FUTURE PROJECTS
IP NAME Phung Hiep North Thuong Tin Dong Anh DISTRICT Chuong My Thuong Tin Dong Anh AREA (HA) 401 470 470 STATUS Site clearance Site clearance Planning

RENT & OCCUPANCY BY DISTRICT Q4 2011
$180 $160 $140 $120 psm/term $100 $80 $60 $40 $20 $0 120% 100% 80% 60% 40% 20% 0%

Due to limited current supply, the rental rate quoted by developers is relatively high and gives the developer/s power to select tenants as they choose.

DIFFICULTY IN SITE CLEARANCE
It is a fact that a majority of the local people, mostly farmers, do not want to convert their farm land for IP development purpose as they worry about future employment, while others are not satisfied with the compensation. Therefore, many projects have slowed and face processing issues or postponement.

Rent

Occupancy

Unit 602, Asia Tower 6 Nha Tho Str., Hoan Kiem Dist Hanoi Tel: +(84-4) 3938 1786 www.cushmanwakefield.com

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ę2012 Cushman & Wakefield, Inc. All rights reserved.