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MarketBeat Ho Chi Minh City, Vietnam Industrial Snapshot - Q4 2011

Apr 06, 2012
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MARKETBEAT

INDUSTRIAL SNAPSHOT
HO CHI MINH CITY, VIET NAM RETAIL 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% each month, much MANCHESTER 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

have solid waste transfer stations, and all the EPZs and IPs will have to be equipped with automatic observer systems. The city has placed a priority to attract investments into four key industries: precise mechanical engineering, electricity and electronics, information technology, pharmaceutical industry and food processing.

OUTLOOK
It is predicted that the total scale of IPs in HCMC up to 2020 will be approximately 3,100 hectares, an increase of 82% from 2011. In terms of the number of IPs, it is forecasted to have 30 IPs in 2020, adding 12 IPs to 2011's number. MARKET STATISTICS
SUBMARKET District 2 District 7 District 12 Binh Tan District Tan Phu District Thu Duc District Nha Be District Binh Chanh District Cu Chi District TOTAL AREA (HA) 112 300 28 670 130 151 908 260 1,194 LEASABLE AREA (HA) 79 195 22 530 85 105 484 190 780 NUMBER OF IPS 1 1 1 3 1 3 2 2 4

OVERVIEW
Currently in HCMC, there are 18 operating IPs with a total area of approximately 3,750 hectares. The lettable area is estimated to be approximately 66% of the total scale or about 2,475 hectares. The remaining LUR (Land Use Right) years range from 30 to 47 years, with the average number of LUR years remaining being approximately 39. Most of the IPs are located in suburban districts, and mainly focused on the western districts of Binh Tan, Binh Chanh and Tan Binh. Cu Chi and Hoc Mon are the two districts that are considered new destinations for IPs as there are large available tracks of land. Most IPs in HCMC achieve an occupancy rate of 95% to100% as they are established and have been operating for some 10 to 20 years. However, five new IPs have occupancy rates under 50% when the average HCMC occupancy rate is around 67%. In terms of rent, HCMC is higher than that of provinces, with an average value of approximately square meter per term (/sq.m./term). This is two than Long An and nearly three times higher than Dong Nai and Ba Ria-Vung Tau. neighbouring US$140 per times higher Binh Duong,

SIGNIFICANT FUTURE PROJECTS
IPS Phong Phu Phu Huu AREA (HA) 148 114 STATUS Under construction Under construction

RENT & OCCUPANCY BY DISTRICT Q4 2011
$300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00 psm/month % 120 100 80 60 40 20 0

ENVIRONMENTAL CONCERNS
The industrialization process has created air and water pollution. This provides practical reasoning for Industrial zones in the city to recently re-focus to attract hi-tech and environment-friendly projects. The Ho Chi Minh City Export Processing Zone Authority (HEPZA) stated that in the near future, 100% of IZs will have concentrated waste water treatment systems, 100% to
Cushman & Wakefield Viet Nam Level 2, Pathfinder Building 52 Dong Du, District 1, HCMC Tel: +(84-8) 6291 4707 www.cushmanwakefiled.com

Rent

Occupancy

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.