CBRE MARKET INSIGHT - Q3 2015 29Th September, 2015 WE ARE FACING GROWING DISRUPTION in OUR INDUSTRY

CBRE MARKET INSIGHT - Q3 2015 29th September, 2015 WE ARE FACING GROWING DISRUPTION IN OUR INDUSTRY

TECHNOLOGY LEGISLATION

17,000 Vietnamese students in the U.S

NEW PLAYERS TRADE

2 CBRE | CBRE MARKET INSIGHTS | Q3 2015 HCMC: 15/09/2015

HANOI: 21/09/2015

3 CBRE | CBRE MARKET INSIGHTS | Q3 2015 4 CBRE | CBRE MARKET INSIGHTS | Q3 2015

1 Economy EU IS NO LONGER WORRIED ABOUT GREECE - NOW IT’S ALL ABOUT MIGRANTS AND CHINA

6 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONNECTING VIETNAM WORLDWIDE

Breaking News – Trans Pacific Partnership Agreement – Deal 98 Percent Done!

Estimated boost to real GDP from TPP is highest for Vietnam

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

-0.5%

Peru

Laos India

Chile

China

Korea

Japan

Brunei

EU_25

Mexico

Canada

Vietnam

Thailand

Australia

Malaysia

Indonesia

Singapore Cambodia RoSEAsia

Philippines

New Zealand New Rest of the world the of Rest

Source: Vietnam Institute for Economic and Policy Research

7 CBRE | CBRE MARKET INSIGHTS | Q3 2015 ASEAN ECONOMIC COMMUNITY

Number of Greenfield Investments in ASEAN Countries 1. ASEAN would be 7th largest economy 2. 600 million people, 3rd largest working population 3. Open economic: 54% of GDP is from Exports 4. 2013, 279 measures (79.7%) of the AEC Blueprint have been implemented. 5. ASEAN FTA: tariff rates on goods among ASEAN is 0% for ASEAN-6 6. Could triple per capita income by 2030, raising its citizens' quality of life to levels enjoyed today by members of the Organisation for Economic Co-operation and Development (OECD)

8 CBRE | CBRE MARKET INSIGHTS | Q3 2015 GOLD, OIL, STOCK, CURRENCY FLUCTUATIONS

Vietnam consumes 14.5 tons of gold in Q2

Oil (WTI) 51.19% y-o-y Global gold 0.6% y-o-y SJC Gold 3.45% y-o-y VN Index 5.52% y-o-y

VN Index follows when Shanghai Stock Exchange SBV will hold forex rate steady until early 2016 Composite Index Plunges

Currency recovers after the plunge in late-Aug along with Fed’s declaration of delaying interest rate hike.

9 CBRE | CBRE MARKET INSIGHTS | Q3 2015 DECREASING BANK INTEREST RATES The lowest inflation in 10 years supports further interest rate cut

Vietnam Interest Rates and Inflation

25 Mortgage rate for the first 12 months: Jan. 15 Sep. 15 20 Techcombank 9.49% 9.87% First 3 months: 6.99% 9M 2015 Average CPI: 0.4% Vietcombank 7.99% 7.2% (6 months) 15 ACB 8.90% 7.5% (6 months) VIB N/A 9.39% First 6 months: 5.99%

10 Interest rate (%) rate Interest

5 • Maximum loan tenor: 25 years • Loan to Value ratio: 0 70% - 90% 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average CPI (y-o-y) Lending rate Deposit rate

• Lending rate: Average lending rate for enterprises.

Source: Vietnamese General Statistical Office, State Bank of Vietnam.

10 CBRE | CBRE MARKET INSIGHTS | Q3 2015 DASHBOARD – PRODUCED MONTHLY

ECONOMIC 2Y 1Y 6M 3M 1M Current BANKING & FINANCE 2Y 1Y 6M 3M 1M Current INDICATORS VN-Index 473.3 640.6 592.6 569.6 621.1 564.13 CPI (%) y-o-y 7.5 5.2 0.3 1.0 0.9 0.6 USD/VND (inter-bank) 21,036 21,246 21,458 21,673 21,673 21,890

Trade balance (0.3) 0.9 (1.0) (1.2) (0.5) (0.1) Local gold (VND mil/tael) 38.2 36.3 35.6 34.9 33.0 34.0 (US$, bil) Lending Rate (%)* 13.3% 13.1% 8.8% 8.1% 8.3% 8.4% Retail & services Deposit rate (%)** 217.2 242.3 276.2 199.1 204.8 271.7 8.4% 7.1% 6.4% 6.4% 6.3% 6.2% Turnover (VND, tril) (1-year term)

Source: GSO, September 2015 Source: GSO, SBV, SJC & HSX, September 2015

REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current NEW LAUNCHES 2Y 1Y 6M 3M 1M Current

Real Estate Holding & HCMC New launches Development Listed 41.49 55.89 48.90 45.20 48.30 48.25 37,804 30,029 21,046 12,456 9,113 3,613 (unit) Companies

Real Estate Services 21.11 61.06 57.1 54.8 46.9 46.40 HN New launches (unit) 27,318 19,746 11,280 6,503 3,308 1,181 Listed Companies

Source: Stockbiz, September 2015 Source: CBRE, September 2015

(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only, However, the back-dated numbers are the average rate which was announced publicly at that point of time, applied for all sectors and all banks , The average lending rate is for reference only, (**) Deposit rate is the average deposit rate of a sample of ten banks in which the rates are announced publicly on their websites and can be tracked backwards,

11 CBRE | CBRE MARKET INSIGHTS | Q3 2015 INVESTMENT IN REAL ESTATE

Vietnam 2nd place in Greenfield FDI in 2014 HCMC FDI in Percentage of Vietnam’s Investment Share 100% China $75bn 30% 80% Vietnam $24bn 9% India $23bn 9% 60% Malaysia $19bn 7% 40% Indonesia $17bn 7% 20% Australia $14bn 6% 0% Singapore $11bn 5% 2007 2008 2009 2010 2011 2012 2013 2014 8M South Korea $10bn 4% 2015 Thailand $8bn 3% HCMC Others

FDI by Sector, 8M 2015, HCMC Significant FDI Real Estate Projects, 8M 2015, HCMC

Real Estate Name of FDI Amounts Investors Where Projects

Manufacturing Empire City US $ 1.2 billion Empire City Thu Thiem Complex Limited Liability New Urban 2011 2014 8M 2015 Company Area Real Estate 31.2% 22.3% 61.6% Commercial Manufacturing 45.9% 57.9% 25.3% US $2 billion VND 2,000 Lotte Group Thu Thiem 25.3% Thu Thiem Eco billion New Urban Commercial 13.1% 11.0% 5.0% Education Smart Complex Area 61.6% Worldon US $ 300 BVI HCMC Science & Vietnam million Technology Other

Source: World Bank, Oxford Economics, CBRE Research, FTNews12 CBRE | CBRE MARKET INSIGHTS | Q3 2015 BCI NUMBERS

Projects under construction, y-o-y change All future projects (2015 – 2030), y-o-y change

2015 YTD vs 2014 2014 vs 2013 2015 YTD vs 2014 2014 vs 2013 600% 300% 400% 200% 200% 100% 0% 0% -200%

Percentage Percentage change -100% HCMC Hanoi Da Can Khanh Vung Hai Percentage change HCMC Hanoi Da Can Khanh Vung Hai Nang Tho Hoa Tau Phong Nang Tho Hoa Tau Phong

Projects All Future Da Can Nha Vung Hai Da Can Nha Vung Hai Under HCMC Hanoi Projects HCMC Hanoi Nang Tho Trang Tau Phong Nang Tho Trang Tau Phong Construction (2015-2030)

Office 124 84 18 20 8 14 11 Office 199 198 46 25 11 30 22

Retail 72 43 15 4 5 10 6 Retail 100 112 30 4 13 16 9

Hospitality Hospitality 24 10 13 2 10 8 2 34 29 21 4 22 15 5 and SA and SA

Residential 181 68 13 4 1 12 5 Residential 255 208 37 6 11 17 12

Total 401 205 59 30 24 44 24 Total 588 547 134 39 57 78 48

Source: www.bciasia.com; CBRE Vietnam, September 2015 Source: www.bciasia.com; CBRE Vietnam, September 2015

13 CBRE | CBRE MARKET INSIGHTS | Q3 2015

2 Investment NEW INVESTMENT FROM FOREIGN & LOCAL PLAYERS

15 CBRE | CBRE MARKET INSIGHTS | Q3 2015 16 CBRE | CBRE MARKET INSIGHTS | Q3 2015 INVESTMENT HCMC: Land prices go ballistic for CBD sites

Accommodation Value: Development Sites in District 1, HCMC

Transaction completed Site on sale

$3,500

$3,000 $2,500 $2,000

$1,500 (US$ psm GFA) psm (US$

$1,000 Accommodation Value Value Accommodation $500 $0 6 8 10 12 14 Plot ratio 16 Source: RCA,CBRE Vietnam Accommodation value for Dev. Site in Singapore’s CBD: 7,200 US$ psm (GFA)

“Golden site” in Le Duan Street sold to Tan Hoang Minh for US$65 million – bidding at 2.6 times of The site was acquired at an starting price. 17indicative price of US$18,000 CBRE psm | CBRE. MARKET INSIGHTS | Q3 2015 MAJOR INVESTMENT DEALS IN 2015

INDOCHINA PLAZA 265 CAU GIAY 138 GIANG VO STARCITY CENTRE HANOI

• Location: Hanoi • Location: Hanoi • Location: Hanoi • Location: Hanoi • Seller: CEMACO • Seller: Ministry of Health • Seller: Indochina Land • Seller: Ocean Group • Buyer: FLC Group • Buyer: Van Phu Invest • Buyer: Gaw Capital • Buyer: Vincom • Property type: Dev. Site • Property type: Dev. Site • Property type: Mixed-use • Property type: Dev. Site • Amount: N/A • Amount: US$29.3 million • Amount: $45.5 million • Amount: US$97.7 million Source: Cafef.vn. Source: Cafef.vn. Source: RCA. Source: Cafef.vn.

VRG RIVERVIEW CELADON CITY FLORA ANH DAO 23 LE DUAN APARTMENTS

• Location: HCMC • Location: HCMC • Location: HCMC • Location: HCMC • Seller: Vinacon, RCC • Seller: Sacomreal, TTC, • Seller: Nam Long • Seller: Ho Chi Minh City An Phu Gia • Buyer: Adventus, Khua • Buyer: Hankyu Realty JV • Buyer: Tan Hoang Minh Kian Keong • Buyer: Gamuda Nishitetsu • Property type: Dev. Site • Property type: Apartment • Property type: Dev. Site • Property type: Apartment • Amount: $65.6 million • Amount: $43.5million • Amount: $64.2 million • Amount: $23.4 million Source: RCA. Source: RCA. Source: RCA. Source: RCA. 18 CBRE | CBRE MARKET INSIGHTS | Q3 2015

3 Infrastructure INFRASTRUCTURE UPDATE

BRT route

Vietnam-Taiwan joint venture to build US$115million interchange Nguyen Van Linh – Nguyen Huu Tho (HCMC)

HCMC’s first bus rapid transit (BRT) service ready in 2018

US$2.5 billion seaport in Hon Khoai Work started in Phuoc Khanh Island (Ca Mau) Bridge (HCMC)

Hon Khoai Island 20 CBRE | CBRE MARKET INSIGHTS | Q3 2015 INFRASTRUCTURE – HCMC Progress of Metro Line No. 1 5

4 Binh Thai section 5 Long Binh depot

3 3 Rach Chiec

Thao Dien – An Phu 2 2

1 21 CBRE | CBRE MARKET INSIGHTS | Q3 2015

Source: photos by Zing 1 Ba Son station, Opera House and Ben Thanh HANOI METRO LINE Changing face of property market

Hanoi’s two metro lines are under construction: • Cat Linh – Ha Dong (2A) (13.5km – 12 stations, Elevated) 7 • Nhon – Hanoi Station (3) (12.5km – 4 underground and 8 elevated stations

Positive effects Land PricePrice Premium Premium

Land Price Premium 8 New Commercial/mixed- 2 New Commercial/mixed- use cluster 3 Newuse clusterCommercial/mixed- 6 4 useRevitalized cluster suspended 2A 1 developments.Revitalized suspended Revitalizeddevelopments. suspended 5 Bangkok’sdevelopments. BTS and MRT • 500,000 single trips are made daily • Land price premium (residential) for every km closer to BTS or MRT:

BTS Skytrain MRT Blue Line Residential 6.5% 20.6% Non-Residential 9.5% 16.1%

Source: CBRE Vietnam, Chuiti T. 2011.

22 CBRE | CBRE MARKET INSIGHTS | Q3 2015

4 Condominium Market CONDOMINIUM MARKET Timing! Timing! Timing!

No longer easy to find good sites!

24 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET HCMC - More New Launches in the South and the East in Q3

North 25%

West East 10% 29%

Central

South 36%

Source: CBRE Vietnam, Q3 2015. Vingroup (VIC) to partner up with Sai Gon Port to develop a 32ha prime site in HCMC

25 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET Hanoi – More New Launches towards the East

Is the market moving towards the East side for Hanoi market?

Park Hill Times City 21% 21% 25%

23% New Horizon City 10%

Eco Green City West South Tay Ho South South West and CBD Midtown

Source: CBRE Vietnam, Q3 2015.

26 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET Market Maintains Momentum, Spurring Capital Flows – Q3 2015

Both new launches and sales surge, the highest in a single quarter

9,160 units 6,880 units launched sold +112% y-o-y +154% y-o-y

Hanoi 1.4% -0.2% Prices in USD up y-o-y, y-o-y q-o-q but slightly down q-o-q

HCMC 2.5% -4.0% y-o-y q-o-q

10,114 units 7,862 units launched sold +200% y-o-y +88% y-o-y

Source: CBRE Vietnam, Q3 2015.

27 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET 9-month Sales Close to previous Whole-Year Peak

HCMC – Sales volume and segment shares Hanoi – Sales volume and segment shares 25,000 25,000

20,000 20,000

15,000 15,000

10,000 sold Units 10,000 Units sold Units

5,000 5,000

0 0

9M 9M

2015

YTD

2007 2008 2009 2010 2011 2012 2013 2014 2015

4% 6% 16% 24% 18% 32% 35% 29%

84% 46% 44% 48% 37% 26% 33% 28%

2012 2013 2014 9M 2015 2012 2013 2014 9M 2015

Source: CBRE Vietnam, Q3 2015. 28 CBRE | CBRE MARKET INSIGHTS | Q3 2015

CONDOMINIUM MARKET New vs. Old Products – HCMC

Primary vs. Secondary Price of Typical Condominiums in HCMC

Primary Asking Price Secondary Asking Price

HCMC Launched Sold Absorption Rate Q3 2015 10,114 units 3,553 units 35.1% (only for new launches Should we be worried? in Q3) Source: CBRE Vietnam, Q3 2015.

29 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET New vs. Old Products – Hanoi

Primary vs. Secondary Price of Typical Condominiums in Hanoi

Primary Asking Price $2,400 Secondary Asking Price

$2,200 Royal City

$2,000 Times City

Golden Land Building

$1,800 psm Discovery Complex

US$ US$ $1,600 Park Hill

$1,400 Hoa Binh Green City

Imperia Garden $1,200 Watermark Tower $1,000 Q4 2014 Q1 2015 Q2 2015 Q3 2015

30 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET Net Absorption Rate – Should We Be Worried?

Historical Net Absorption Rate by Segment of Condominiums in HCMC

50%

40%

30%

20%

Net AbsorptionRate(%) Net 10%

0% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

Luxury High-end Mid-end Affordable

Source: CBRE Vietnam, Q3 2015.

31 CBRE | CBRE MARKET INSIGHTS | Q3 2015 The Sun Avenue Vista Verde CONDOMINIUM MARKET HCMC is developing in all directions CBD Premium Diamond Island

Existing CBD

Sala Thu Thiem

Sunrise City

Phu My Hung

SC VivoCity

Source: Jason Pineau, https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo, retrieved in September 2015. 32 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET The Historic East Side & The Developing West side of Saigon River

Vinhomes Central Park Vietcombank Tower VinGroup and Tan Lien Phat Sabeco Pearl (mixed-use) Ba Son Port (office) Landmark 81: 456 units Saigon Brewery & NovaLand Saigon Port and VinGroup Vietnam Commercial Bank

Existing CBD

Thu Thiem The New CBD

Sala Thu Thiem Khanh Hoi Port Dai Quang Minh Saigon Port and VinGroup Sarimi condominium: 450 units

Source: https://www.flickr.com/photos/jspitfire/16202674702/in/photolist-qFLWGo, retrieved in September 2015. 33 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET The North Shore Icon 56 Galaxy 9 The Gold View Novaland Novaland TNR Holdings 312 units ~500 units 1,760 units US$2,617-$3,105 psm US$1,500-$1,696 psm US$1,529-$1,609 psm 56 units per floor The Tresor RiverGate Novaland Novaland 459 units 319 căn hộ US$2,550-$3,050 psm US$2,039-$2,512 psm

District 4

District 1

*Asking prices are quoted exclusive of VAT and maintenance fee. Source: CBRE Vietnam, Q3 2015. 34 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET

Saigon South Dragon Hill Residence and Suites 2 Phu Long Real Estate Corp. Nine South Estates Hung Phat Silver Star VinaCapital Dragon Hill (Phase 1) Hung Loc Phat Co., Ltd. 381 villas | US$1,619/sm Phu Long Real Estate Corp. 447 units | US$831/sm 350 units | US$1,255/sm Phu My Hung

The Park Residence M.I.K 1,224 units | US$1,130/sm

Phu Hoang Anh 1 HAGL 802 units | US$1,020/sm Sunrise Riverside Novaland 621 units US$1,265 psm

Nha Be

Source: http://hcmland.com.vn/view-nhin-thuc-te-can-ho-sunrise-riverside.html, retrieved in September 2015. 35 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET Hanoi West – Strong Supply

Diamond Royal City HH2 Bac Ha Flower Tower Mulberry Mandarin Thang Long C14 Bac Ha Lane Garden Number One

Ecolife Seasons Avenue

Completed project

Future Thang Long Boulevard project Photo source: Hanoi’s Panorama Skyline 36 CBRE | CBRE MARKET INSIGHTS | Q3 2015 Author: Vu Long NEW LAW ON FOREIGN HOUSING OWNERSHIP What have we learnt after three months?

• Quota on apartments and villas owned by . Questions and more questions foreigners . Guidelines and Paperwork • Foreign buyers’ quota - Should be eased in localities . Loans – Bank says Yes  but in reality, it’s a No  where many foreigners currently reside, such as Phu . Foreigners use credit cards, not cash My Hung (HCMC) or Ciputra (Hanoi). . Most buyers are Vietnam-based foreigners. Foreigners • Local people’s committee should have the right to prefer drinking to buying properties on a Friday night! decide how many per cent of their area should be occupied by foreigners. • Ownership tenure of new buyers upon re-sale counted as the remaining tenure of 50 years • HOREA stated that this issue was not suitable and suggested the time limit be renewed when the house is transferred to the new owner.

• HOREA also proposed the government to grant From All-nationalities Event from one to three year visas for foreigners who ……. to Themed Event buy a house in Vietnam. for a Focus Group

37 CBRE | CBRE MARKET INSIGHTS | Q3 2015 POSITIVE INTEREST FROM FOREIGNERS FOR VIETNAM PROPERTY

VINHOMES CENTRAL PARK ESTELLA HEIGHTS

FROM 1st JULY 2015 FROM 1st JULY 2015 >400 foreign buyers foreign enquiries 30%

38 CBRE | CBRE MARKET INSIGHTS | Q3 2015 POSITIVE INTEREST FROM FOREIGNERS FOR VIETNAM PROPERTY – THE VISTA, VISTA VERDE

ENQUIRIES TRANSACTIONS

30% 15% Local Foreign

TRANSACTIONS

4BR River 70% View Preferred

39 CBRE | CBRE MARKET INSIGHTS | Q3 2015 CONDOMINIUM MARKET Bangkok Case Study – Condominium Price Growth

THB THB

40% 10% 15-18% foreign foreign foreign buyers buyers buyers

THB

40 CBRE | CBRE MARKET INSIGHTS | Q3 2015

5 Office Market OFFICE Asking Rents Q-o-Q movement in asking rent Asking rents of Grade A

40 $35.2 50

30 40

$19.7 30

20 /month HCMC

sqm 20

10 US$/sqm/month

US$/ 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 2013 2014 2015 Grade A Grade B Mature buildings New buildings

40 50

$29.1 40

$17.8 30 20

20 Hanoi

10 US$/sqm/month

US$/sqm/month 10

0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 2012 2013 2014 2015 Grade A Grade B CBD Midtown West

* New building: buildings completed since 2010

42 CBRE | CBRE MARKET INSIGHTS | Q3 2015 Source: CBRE Vietnam, Q3 2015 APAC OFFICE RENT CYCLE

Office rents hit the bottom in Q2/2015 and have been increasing since Q2/2015

Source: CBRE Research, Q2 2015

43 CBRE | CBRE MARKET INSIGHTS | Q3 2015 OFFICE Vacancy rate – decreasing trend

HCMC Hanoi

80,000 16% 60,000 40% 70,000 14% 50,000 35%

60,000 12%

40,000 50,000 10% 30% 40,000 8% 30,000 25% 30,000 6% 20,000

20,000 4% 20% Net absorption Net (sqm) Net Absorption Net (sqm) 10,000 10,000 2% 15% 0 0% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2014 2015 -10,000 2013 2014 2015 -2% -10,000 10%

Source: CBRE Vietnam, Q3 2015

44 CBRE | CBRE MARKET INSIGHTS | Q3 2015 OFFICE Tenants Target - HCMC (CBRE Enquiries)

Tenant Nationality – Local improvement Tenant Industry YTD

IT/Electronic 15%

Local 100% Trading 12% Foreign

50% 44% Finance/Banking/ 9% Insurance Q3 2014 Q2 2015 Q3 2015 Logistics 7% Location preference

Media/ 7% Q3 2015 72% Marketing

Q2 2015 65% Education 6%

Q3 2014 62% Oil & Gas 4% 0% 20% 40% 60% 80% 100% CBD Fringe -CBD (D3/D4) Decentralized Source: CBRE Vietnam, Q3 2015

45 CBRE | CBRE MARKET INSIGHTS | Q3 2015 OFFICE Tenants Target – Hanoi (CBRE Enquiries)

Tenant Nationality – FIEs dominant Tenant Industry YTD

Manufacturing 20%

Local Finance/Banking/Insurance 20% Foreign 63% 69% 53% Construction/RE 15%

Q3 2014 Q2 2015 Q3 2015 IT/Electronics 13% Location preference – Emerging Midtown

Q3 2015 35% Consulting 7%

Q2 2015 28% Pharma 6%

Q3 2014 29%

Edu 4% 0% 20% 40% 60% 80% 100%

CBD Midtown West Source: CBRE Vietnam, Q3 2015

46 CBRE | CBRE MARKET INSIGHTS | Q3 2015 OFFICE Upcoming Supply - HCMC

2,000 )

1,800 sqm 1,600 1,400 1,200 1,000 800 Grade B Expected Grade A

Future supply (thousand supply Future 600 PEARL PLAZA SAIGON SOUTH OFFICE

400 Binh Thanh Dist. Dist. 7

200 GFA: 37,434 sqm GFA: 30,000 sqm Completion: Q4/2015 Completion: 2016 0 Q3 2015 2015F 2016F 2017F 2018F

Grade A Grade B HCMC

. Grade A Supply: • No new supply in 2016 • Limited supply . Grade B Supply: Grade A Grade A • Increased steadily Grade A DEUTSCHES HAUS SAIGON CENTRE THE ONE • Quality of new buildings are improved in order to Dist. 1 (PHASE 2) Dist. 1 GFA: 40,000 sqm Dist. 1 GFA: 15,000 sqm enhance competitiveness Completion: GFA: 40,000 sqm Completion: 2018 8am Tuesday, Completion: 2018 47 1st of August 2017 CBRE | CBRE MARKET INSIGHTS | Q3 2015 OFFICE

Upcoming Supply - Hanoi

) 2,000

1,800 sqm 1,600 1,400

1,200 (thousand 1,000 800 Grade A Grade B 600

TNR TOWER DIAMOND FLOWER

Future supply Future 400 Dong Da Dist. Cau Giay Dist. 200 GFA: 56,000 sqm GFA: 20,000 sqm 0 Completion: Nov, 2015 Completion: Sept, 2015 Q3 2015 2015F 2016F 2017F 2018F

Grade A Grade B NOI HA

. Grade A Supply: • Annually increase but more stabilized • Old buildings required to renovate . Grade B Supply: • Increasingly abundant Grade B Grade B • Quality of new buildings are improved in order to HUD TOWER HANDICO TOWER Cau Giay Dist. South Tu Liem Dist. enhance competitiveness GFA: 56,000 sqm GFA: 29,040 sqm Completion: Q2/2016 Completion: Q4/2015 48 CBRE | CBRE MARKET INSIGHTS | Q3 2015

6 Retail RETAIL Development Pipeline

3 South Vietnam 5 North Vietnam

Vincom Quang Trung Vincom Bien Hoa Pearl Plaza Vincom Hung Vincom Nguyen Chi Thanh AEON MALL Vincom Plaza Hai Phong Vincom Megamall Vincom Exchange City •Location: Go Vap Dist. •Location: Bien Hoa •Dien Bien Phu Str. Vuong • Location: Dong Da • Location: Long Bien • Location: Ngo Quyen •Hanoi Highway • Location: Tu Liem •27,000 sm GFA •25,000 sm GFA •20,579 sm GFA •Location: Can • 44,500 smm GFA • 108,000 sm GFA Dist. •80,000 sm GFA • 23,140 sm GFA Tho • 11,864 sm GFA •18,000 sm GFA

2H 2015

Saigon Centre The One Berjaya Financial Center Tax Center The Parc by Gamuda Vincom Plaza Hai Phong Shophouse • Le Loi Str. •Pham Ngu Lao St • Ba Thang Hai Str. •Le Loi / Nguyen Hue Str. • Location: Hoang Mai Dist., Hanoi • Location: Ngo Quyen Dist. • 55,000 sm GFA •48,000 sm • 156,000 sm •44,000 sm GFA • 14,000 sm GFA • 6,130 sm GFA (Takashimaya:15,000 sm)

2016 – 2017

50 CBRE | CBRE MARKET INSIGHTS | Q3 2015 RETAIL Significant Supply in HCMC in next 5 Years

Vincom Megamall • Hanoi Highway Pearl Plaza • 80,000 sm GFA • Dien Bien Phu Str. • To open in 2015 • 20,579 sm GFA

• To open in Nov. 2015

Berjaya Financial Center • Ba Thang Hai Str. • 156,000 sm • To open in 2019

Tax Center • Le Loi – Nguyen Hue Str. • 44,000 sm GFA • To open in 2019 Saigon Centre

• Le Loi Str. The One • 55,000 sm GFA • Pham Ngu Lao Str. 51 (Takashimaya: 15.000 CBRE | CBRE MARKET INSIGHTS | Q3 2015 • 48,000 sm sm) • To open in 2017 • To open in mid. 2016

RETAIL Significant supply in Hanoi

Ciputra Hanoi mall • Location: Tay Ho Dist. • 130,000 sqm GFA • Opening: 2017

Vincom Nguyen Chi Thanh • Location: Dong Da Dist. Vincom Exchange City • 44,500 sqm GFA Location: Tu Liem Dist. • • Opening: Q4 2015 • 23,140 sqm GFA • Opening: Q4 2015

Vincom Starbowl • Location: Dong Da Dist. • 51,234 sqm GFA

AEON MALL • Location: Long Bien Dist. • 108,000 sqm GFA • Opening: Q4 2015 The Parc by Gamuda • Location: Hoang Mai Dist., Hanoi 52 CBRE | CBRE MARKET INSIGHTS | Q3 2015 • 14,000 sm GFA • Opening: 2016 RETAIL Development Pipeline

1,600 2016F 2H 2015F 1,400 Q2 2015 Completions

Q1 2015 Completions 1,200

1,000

800

600

400

200

0 Development Pipeline (Thousand sm) Pipeline Development

-200

Seoul

Hanoi

Tokyo Taipei

HCMC

Beijing

Jakarta

Mumbai

Bangkok

Shanghai

Shenzhen

New Delhi New

Singapore

Perth CBD Perth

Hong Kong Hong

Guangzhou

Sydney CBD Sydney

AdelaideCBD

Brisbane CBD Brisbane

Auckland CBD Auckland

GreaterManila

Wellington CBD Wellington MelbourneCBD Source: CBRE Research, July 2015.

53 CBRE | CBRE MARKET INSIGHTS | Q3 2015 RETAIL Rents by location

HCMC Hanoi

NON-CBD CBD NON-CBD CBD Q3 Q3 2015 Q2 2015 Q2 Q1 Q1 Q4 Q4 Q3 Q3 2014 2014 Q2 Q2 Q1 Q1 Q4 Q4 Q3 Q3 2013 2013 Q2 Q2 Q1 Q1 Q4 Q4 Q3 Q3 2012 2012 Q2 Q2 Q1 Q1 2011 Q4 2011 Q4 60 40 20 0 0 50 100 150 150 100 50 0 0 50 100 150

* Average retail rents exclude VAT and Service charge.

Source: CBRE Vietnam, Q3 2015. 54 CBRE | CBRE MARKET INSIGHTS | Q3 2015 RETAIL Vacancy Rate

HCMC Hanoi

60,000 20 160,000 20

40,000 15 120,000 15

80,000 20,000 10 10

40,000

Net Absorption Absorption (sm) Net

Vacancy (%)Rate Vacancy Net Absorption Absorption (sm) Net 0 5 (%)Rate Vacancy 5 0 -20,000 0 2011 2012 2013 2014 2015 -40,000 0 2011 2012 2013 2014 2015 Net absorption Vacancy rate Net absorption Vacancy rate

Source: CBRE Vietnam, Q3 2015.

55 CBRE | CBRE MARKET INSIGHTS | Q3 2015 NEW URBAN RETAIL CONCEPTS Newly opened in Hanoi. Will it expand to HCMC?

THE YARD CREATIVE CITY X98 Pho Duc Chinh, Ba Dinh District Luong Yen Street, Hai Ba Trung District Hoang Cau Street, Dong Da District GFA: 8,000 sm GFA: 17,400 sm GFA: ~9,000 sm

Opened: July 2015 Opened: September 2015 Opened: October 2014

• Target youngsters; • Creative design with graffiti; • Integrated outdoor and indoor stores: bars, entertainment, art exhibition; • With parking; • Positioning mid-end; • Affordable to young customers.

56 CBRE | CBRE MARKET INSIGHTS | Q3 2015 RETAIL Expansion of Gymnasium Operator

Asia's health-club industry is still in its infancy, with only a tiny number of fashion-conscious city dwellers keenly aware of the benefits of exercise. Only 1% to 3% of the region's urban residents belong to health clubs, as opposed to nearly 10% of U.S.

California Fitness Centers’s expansion plan New expansion

California Fitness Centers Expand to 10 more locations in 2016

Several international brands are looking for spaces to Expand

57 CBRE | CBRE MARKET INSIGHTS | Q3 2015 2015 RETAIL ASIA-PACIFIC TOP 500 5 retailers on the list No. of Sales (VND Sales per Ranking Ranking Retail outlets tn) sqm (US$) in Top in Company 500 Vietnam ‘13 ‘14 ‘13 ‘14 ‘13 ‘14 The Gioi Di Dong plans to Co.op mart 190 1 323 354 1,100 1,375 5,664 6,180 invest VND50 billion to open Mobile World 274 2 229 319 649 721 11,646 12,545 supermarket Nguyen Kim 311 3 18 22 488 603 12,163 13,434 Trading Nguyen Kim partnered with Big C 339 4 25 28 511 546 3,991 3,820 Central Group

Saigon Jewelry 400 5 158 132 484 421 30,769 31,525

Phu Nhuan 6 145 172 254 267 10,419 9,245 Jewelry

Vien Thong A 7 92 126 117 164 6,298 6,591

Parkson 8 8 8 133 161 828 1,007

Pico 9 5 4 155 127 7,565 7,698

FPT Corp 10 60 129 77 121 5,162 4,975

58 CBRE | CBRE MARKET INSIGHTS | Q3 2015 RETAIL

NEW RETAIL ENTRY DEMAND DRIVERS BY INDUSTRY, APAC

LUXURY AND BUSINESS TOKYO, SINGAPORE, HO CHI MINH CITY, HANOI, BANGKOK, SYDNEY, MELBOURNE MID-RANGE FASHION

HO CHI MINH CITY SHENZHEN, HONG KONG, SINGAPORE, HO CHI MINH CITY, HANOI

SPECIALIST CLOTHING ATHLEISURE & FOOTWEAR: BEIJING, SHENZHEN, SEOUL, HONG KONG, TAIPEI, SINGAPORE

COFFEE & RESTAURANTS GREATER CHINA, SEOUL, INDIA, SOUTHEAST ASIA, AUSTRALIA, HO CHI MINH CITY, HANOI

VALUE & DENIM GREATER CHINA, TOKYO, MANILA, JAKARTA, INDIA, AUSTRALIA

HANOI HOME WARE & DEPARTMENT STORES HOME WARE: SEOUL, AUSTRALIA DEPT. STORE: EMERGING SOUTHEAST (EX-SINGAPORE)

CONSUMER ELECTRONICS

OTHERS COSMETICS: BEIJING, GUANGZHOU, SEOUL, SINGAPORE DUTY FREE: SEOUL, TOKYO ENTERTAINMENT/SERVICES: SHANGHAI, GUANGZHOU

SUPERMARKETS SOUTHEAST ASIA (EX SINGAPORE), Source: CBRE Vietnam, Q3 2015. AUSTRALIA, HANOI

59 CBRE | CBRE MARKET INSIGHTS | Q3 2015 ASIA-PACIFIC STILL ON UP-SWING… … but China is close to peak

H H Leasing market is on a slow recovery. Growth is limited to those top locations or well- designed and managed shopping centres.

Source: CBRE Research, Q3 2015.

60 CBRE | CBRE MARKET INSIGHTS | Q3 2015

7 Industrial INDUSTRIAL LAND RENTAL

Land rental by provinces in Vietnam (2015) – US$ psm, 50-year lease $300 Southern Provinces Northern Provinces

$250

$200

$150

$100

$50

$0 Binh Dong Quang Bac Hai Hai Hung HCMC Long An Da Nang Bac Ninh Ha Noi Duong Nai Ngai Giang Duong Phong Yen Lowest rate $52 $38 $35 $45 $22 $22 $45 $50 $45 $59 $60 $68 Average rate $111 $74 $65 $69 $35 $35 $67 $101 $48 $61 $85 $79 Highest rate $270 $160 $150 $120 $45 $45 $100 $150 $55 $65 $100 $100

62 CBRE | CBRE MARKET INSIGHTS | Q3 2015 MARKET TREND New supply – Industrial land

63 CBRE | CBRE MARKET INSIGHTS | Q3 2015 OPPORTUNITIES IN SECOND-TIER CITIES Hai Phong – Better connections to Bac Ninh – Samsung’s investment Hanoi faciliate Vietnam export and supporting industries Hanoi – Hai Phong Expressway (105.5km) Hai Phong - Hung Yen (75km – Completed 09/2015) Whole project (105.5km – Expected completion Q4/2015)

Phap Van – Cau Gie Highway will be connected to Hanoi - Hai Phong Expressway via Ring Road No. 4’s 14km section, which is planed to be completed by 2017.

64 CBRE | CBRE MARKET INSIGHTS | Q3 2015

8 Hospitality market HOSPITALITY City hotels – Big names go live

HCM, Total 5-star supply in Q3 2015 Hanoi, Total 5-star supply in Q3 2015

7,000 21 6,000 16

6,000 18 5,000 14

5,000 15 12 4,000 10 4,000 12 3,000 8 3,000 9 2,000 6 2,000 6 4

Number rooms of Number 1,000

1,000 3 2 projects of Number Number rooms of Number

,0 - projects of Number 0 0 2008 2009 2010 2011 2012 2013 2014 Q3 2008 2009 2010 2011 2012 2013 2014 Q3 2015 2015 Number of rooms Number of projects Number of rooms Number of projects

Source: CBRE Vietnam, Q3 2015. Source: CBRE Vietnam, Q3 2015.

LE MERIDIEN SAIGON HOTEL DES ARTS SAIGON - APRICOT HOTEL MGALLERY COLLECTION 3CTon Duc Thang, District 1 136 Hang Trong, Hoan Kiem No. of rooms: 345 rooms 76-78 NTMK, District 3 District Grand opening: Q3/2015 No. of rooms: 168 No. of rooms: 123 Grand opening: Q3/2015 Grand opening: Q2/2015

66 CBRE | VIETNAM REAL ESTATE – TIME TO RECALIBRATE | JULY 2015 HOSPITALITY Coastal Provinces Becoming More Attractive

HO TRAM - Big investments are seeping into the area thanks to pilot law for casino regulation MUI NE - BINH THUAN - relaxation and improved infrastructure Improving infrastructure Long Thanh – Dau Giay is approaching completion

PHU QUOC - New airport boosts arrivals HOI AN – Casino project will resume construction in 2016

. Choi Tai Fook replaces Genting Berhad and take controlling state . 1st phase construction is expected to start in 2016 . 1st phase : mix-used complex includes resorts, amusement park, golf course, premium villas and apartments, worth a total of some $500 million.

67 CBRE | CBRE MARKET INSIGHTS | Q3 2015 HOSPITALITY Recovery Continues and Second Home Sales Come Back

Sales increases 12 times y-o-y Sales triple y-o-y Sales up 100% y-o-y

Da Nang 87 Nha Trang 341 Phu Quoc 264 units units units 103 7 units 0 units units 16,200 16,200 units units 2014 YTD 2015 2014 YTD2015 2014 YTD2015

Premier Village Da Nang – 111 units Vinpearl Premium Nha Trang Bay & Vinpearl Premium Phu Quoc (phase 1) Source: CBRE Vietnam, Q3 2015. Vinpearl Premium Golf Land – 264 units (544 units)

68 CBRE | CBRE MARKET INSIGHTS | Q3 2015 HOSPITALITY Phu Quoc – dynamic construction site

202 projects granted Investment Certificate in Phu Quoc as of Sep 2015

Vinpearl Resort (P2) Vinpearl Safari

Grand World

Vinh Dam Project

Sunset Sanato

Novotel Hotel JW Marriott Hotel

69 CBRE | CBRE MARKET INSIGHTS | Q3 2015 InterContinental Hotel HOSPITALITY Phu Quoc- second home property sets foot on the island

Launched second home villas

750

. Phu Quoc welcomes the first

600 second home villa for sales in 450 2015 (Vinpearl Premium Villa, Premier Villa by SunGroup). 300 . The next five years expects a 150

Number of of villas Number huge flux of five-star hotels. 0 2009 2010 2013 2014 2015 Da Nang Nha Trang Phu Quoc

Supply of 3-5 star Hotels in Phu Quoc

8,000 70

6,000 50 3 star 40 4,000 30 4 star

No. room of No. 20 2,000 hotel of No. 5 star 10 0 0 No. of hotel 2010 2011 2012 2013 2014 1H 2015e 2016f 2017f 2018f 2019f 2020f 2015 70 CBRE | CBRE MARKET INSIGHTS | Q3 2015 Source: CBRE Vietnam, . HOSPITALITY European Visitors set to rise due to Visa Waiver

Top eight guest nationalities to Viet Nam

1,800,000

1,500,000 1,200,000 900,000 600,000

Numberof arrivals 300,000 0 9M2013 9M2014 9M2015 China Korea Japan US Taiwan Cambodia Russia Australia

Source: VNAT , Q3 2015. .

71 CBRE | CBRE MARKET INSIGHTS | Q3 2015 HOSPITALITY Northern Asian tourist dominates the market Total Arrivals to Da Nang Top five guest nationalities China

3,000,000 2,500,000 17.9% Korea 2,000,000 3.8% 38.5% Japan 1,500,000 4.5% 1,000,000 8.6% America

500,000 Number of arrivals Number 0 Australia 9M2012 9M2013 9M2014 9M2015 26.7%

Domestic International Others

Q3/2013 Q2/2015 Da Nang City, 9M 2015 China China • International: 32% y-o-y

• Domestic: 18% y-o-y Da Nang Da Nang • Northern Asian guests accounts for 40%-50% 74% of guest portfolio of Da Nang 65%-70% Of weekly international flights

72 CBRE | CBRE MARKET INSIGHTS | Q3 2015 HOSPITALITY – SECOND HOME MARKET Forgotten Sapa – Developers are (still) eyeing sites

Recent and upcoming projects…

Victoria Hotels and Resort Mercure Sapa Resort & Spa Indochina International Hotel

Favourite conditions

Hanoi – Lao Cai . Hanoi – Lao Cai Highway + other Highway and infrastructure development Fanxipan cable car . Tourist arrivals +21.6% 1H2014 vs. 1H2015 . 2015: 1.2 million tourist arrivals (expected) . Favorite attraction for both domestic and foreign tourists

Vietnam Mountain Marathon. 70km trail run around Sapa 73 CBRE | CBRE MARKET INSIGHTS | Q3 2015 HOSPITALITY – SECOND HOME MARKET Ha Long Bay

Real estate market in Ha Long Bay is getting more and more vibrant, fueled by fast developing transportation and tourism infrastructure.

74 CBRE | CBRE MARKET INSIGHTS | Q3 2015 2015 OUTLOOK

HCMC HANOI SECTOR SEGMENT RENT/PRICE ABSORPTION RENT/PRICE ABSORPTION New buildings OFFICE Mature buildings

CBD RETAIL Non-CBD

High-end

CONDOMINIUM Mid-end

Affordable

Inner-city hotels HOTEL Beach hotels/resorts SERVICED APT. Grade A

Land INDUSTRIAL Factory/ warehouse

Source: CBRE Vietnam, Q3 2015. 75 CBRE | CBRE MARKET INSIGHTS | Q3 2015 AT CBRE, WE LIVE AND BREATHE THE BUSINESS OF REAL ESTATE Every quarter Ad-hoc QUARTERLY REPORT VIEWPOINT & SPECIAL REPORT

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76 CBRE | CBRE MARKET INSIGHTS | Q3 2015 THANK YOU!

© 2015 CBRE (Vietnam) Co., Ltd. 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.

77 CBRE | CBRE MARKET INSIGHTS | Q3 2015