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CBRE Vietnam HCMC PROPERTY NEWS AND VIEWS
CBRE Vietnam HCMC PROPERTY NEWS AND VIEWS No relief in sight for tenants of HCMC`s offices Ho Chi Minh City If you thought your office space was small, “You`re not alone”, according to CBRE`s Associate Director for Corporate Services, Mr Daniel Francey.According to an office survey conducted by the property consultancy company, CBRE Vietnam, exactly half of all respondents are experiencing the same problem. Despite the fact that the construction sector is booming in HCMC, the new space just doesn`t seem to come onto the market at the right quality at the right time. For example, next year 191,000 square metres is due to come online. However this figure includes Grade A, B and C quality so the tenant`s preference will reduce the available pool significantly. Additionally, the owners of the building often occupy fully, or partially, which again reduces the amount of available space. Add to that the seemingly inevitable delays that accompany building projects in this city and tenants can often feel powerless to do anything else but watch their office space shrink further. CBRE`s survey rather than examining the supply side again, targeted the demand side. Accordingly, CBRE interviewed 65 major international companies who typically, are large, existing occupiers of Grade A and Grade B office space in HCMC. Most of the companies are headquartered in northern America and Europe. Over the next 3 years, the interviewed tenants collectively estimate they will increase their head count by 46 per cent. For those tenants in Grade A buildings, they are expecting to grow their staff numbers by 62 per cent. Grade A office accommodation has been fully occupied (at 100 per cent) since 2005. With regard to the expected increase in floor space, the interviewed tenants were forecasting an increase of 54 per cent over the next three years. It is important to note that these demand figures do not include the expansion plans of other tenants including Vietnamese companies who are fast becoming major tenats in international standard buildings. Further, it does not include the new tenants who haven`t even arrived in Vietnam yet. Business is booming in Vietnam. According to Daniel Francey, new buildings are unlikely to bridge the gap with tenants` hungry expectations of additional floor space for some time to come. For further information : Marc Townsend (Mr) Mr Daniel Francey Managing Director Associate Director – Corporate Services CB Richard Ellis Vietnam CB Richard Ellis Tel : (08)8246125 HP : 0903 822 370 Marc.townsend@cbre.com danielfrancey@cbre.com
OFFICE SERVICES A new “boutique” concept for office building is arriving on the market with Empire Tower at26 – 28 Ham Nghi Boulevard. With a perfect column-free rectangular floor plate of about 165 sqm, this exclusive address is offered to full floor tenants only. Quality systems, quality finishes, and fantastic views of Thu Thiem Peninsula and the Saigon River, everything in the Empire adds to the privilege of being in the financial heart of Saigon Daniel Francey : T : 848 824 6125 M : 84 903 822 370 E : daniel.francey@cbre.com RETAIL SERVICES : In a city with few retail destinations, the opening of C.T Plaza directly in front of Tan Son Nhat International Terminal, at the corner of Truong Son and Hong Ha street, in Q1 2008 will providethe market and those passing through Tan Son Nhat Airport with a new destination for internationalstyle quality shopping. C.T Plaza is the first luxury shopping centre in Tan Binh District with gross retail area 12.185 square meters hosting Parkson Department Store, luxury retailers, and a food court. On th 30th August 2007, Thai Thinh Capital held a ground breaking ceremony for its Richland Hill Complex located on Le Van Tam Street, Hiep Phu Ward, District 9. It comprises 5 blocks with twelve buidings for office, apartment and retail. The project is scheduledto open in phases from 2009 to 2011. GFA for retail is 40000 square meters. The appearance of these two projects in the retail property market and with others planned for the near future proves that it is necessary to develop the retail market not only in CBD but districts outside. Retailers, international and local brand names alike, are seeking locations to expand their business. Currently, retailers are preparing for Christmas and Lunar New Year shopping by focusing on traditional shopping streets particularly those known for fashion such as Nguyen Trai , Hai Ba Trung, Nguyen Dinh Chieu, and Ly Tu Trong. This has pushed locations market in such area become very hot. Thao Nguyen : T : 848 824 6125 M : 84 918 031990 E : thao.nguyen@cbre.com RESIDENTIAL LEASING : The CBRE team is busy leasing the brand new Sherwood Residence located in the heart of Saigon. Interest in the building has been growing as the landscaping has been completed and with the opening of Café Central. Tenants are moving into the building now! With nicely furnished two and three bedroom units, and every unit with a balcony, you can enjoy the city views and city life at its finest. City life at Sherwood Residence also includes the children! A beautiful ground floor swimming pool is surrounded by a patio, exercise room, mini movie room, and large children`s play room. Children will enjoy the amenitiesas much as Mom and Dad. Not to be forgotten, Sherwood Residence also offers a limited number of exclusive penthouse units for those looking for the ultimate living experience. For further details or a tour, please call our Residential Leasing hotline 0903028715 or 8239886. CBRE is also proud to represent several other fine residences within the city and can serve your home living needs – call today. Gerard Tan : T : 848 824 6125 M : 84 904 322547 E : gerard.tan@cbre.com MARKET RESEARCH AND CONSULTANCY DECREE 84 – a Step in the right Direction The decree has been promulgated but what does it mean? To simplify matters it will allow developers to obtain land on a 70 year lease, renewable for another 70 years and another 70 years thereafter, in perpetuity? It`s the closest foreign developers will get to freehold rights. This should enable developers to create portfolios in Vietnam which in turn will attract property funds and REIT`s, without the state losing ownership of land. It will also allow foreigners to purchase property on the same lease terms which are obviously more attractive to individuals and investors than the current terms, which have many “grey areas”. Please don`t all rush at once, as we haven`t seen these terms in place, however it does beg the question, if you have a choice of buying property on a 50 year lease against a 70 year renewable lease, which would you choose? Naim Khan-Turk T : 848 824 6125 m : 84 908 550446 E : naim.khanturk@cbre.com RESIDENTIAL PROJECT MARKETING. From CBRE`s most recent discussions with both local and international developer clients over the previous quarter, there is still a distinct lack of quality residential condominiums available for sale in the marketplace at this time. As a result, there has been a definite trend away from developing typical Vietnamese residential buildings and towards a high quality project. Developers are becoming more aware of their competition and to the market`s growing appetite for a superior level of accommodation. Many developers are seeking to extract the highest possible price for their product therefore are now considering many extra inclusions and/or styles of architecture which can only be good for the marketplace. Currently, quality projects in well located areas are quickly absorbed as local developers are now more aware of market price escalations over relatively short periods of time and are therefore delaying their full release of stock. This trend varies from developer to developer and is usually based on their construction financing requirements. Thai Nguyen T : 848 824 6125 M : 84 909 337988 E : thai.nguyen@cbre.com INDUSTRIAL MARKET The Southern Key Economic Region industrial market continues to flourish as reflected in the amount of foreign direct investment (FDI) coming into the region. The flow of FDI into the region is showing signs of a new boom with a series of projects ranging from tens of millions to hundreds of millions of USD in capital. At the provincial level, Binh Duong province authorities recently announced that they had attracted US$ one billion dollars in FDI during the first 8 months of the year, surpassing their target of US$900 million for the entire year, with Ba-Ria-Vung Tau leading all provinces year to date.The region`s industrial production value in the first eight months of the year topped nearly 214.5 trillion VND (US$ 13.4 billion), a year-onyear increase of 12.5 percent, with twenty-five out of 27 industries enjoying growth spurts, including food and drinks, chemicals, rubber and plastic, garment and textile, electric components, and footwear. Demand for industrial land parcels continues to outpace the supply, with many of the large industrial parks working on fast track expansion projects. The rates for parcels outside of Ho Chi Minh City continue to be valued in the range of $30 - $50 USD. Binh Duong and Dong nai are the leading provinces in the region, but a migration to other provinces is beginning as infrastructural improvements continue, and investment flows increase, as evidenced by the recent Chinese Construction Corporation investment in Tien Giang province. David W.Neal T : 848 824 6125 M : 84 903 028 719 E : david.neal@cbre.com CBRE Vietnam HANOI PROPERTY NEWS AND VIEWS OFFICE SERVICES The Hanoi office market during the last two months was slightly cooler due to the anticipated opening of some grade B office buildings in October. North Asia Tower has become a good option for tenants; the building is 53% leased just two months after re-starting its marketing. Rentals of both grade A and B office have generally increased. However, due to the continuously tight supply of office space, the market has accepted higher rental rates for property(Grade A & B) as long as it is in a good location. Current Grade B office rentalsequal the grade A rental of Q1/2007, up to USD32/sqm. The office market will be more active in the coming months with the opening of new Business Centers which help to satisfy the immediate demand for tenants who are looking for small office space. Richard Leech T : 844 220 0220 M : 84 912 573 130 E : richard.leech@cbre.com SERVICES APARTMENT The My Dinh area is in a stage of rapid development with many new high rise projects such as Keangnam, Crown Plaza, HRCC, Vinaconex, Orix, and Netra planned and/or in the works. These projects will supply the city with a growing number of high quality apartments for both sale and lease. Ciputra, a leader in this area remains a prime destination for expat families with new 3 and 4 bedroom units of Ciputraùs E4 and E5 buildings are ready for occupation. Projects marketed by CBRE include the new high-end 2 and 3 bedroom apartments at Pacific Place. Exclusively marketed and leased by CBRE is Atlanta, a Grade A serviced apartment of superior quality which now has show units available for inspection. Call us for today for a viewing! Do Huong Giang T : 844 220 0220 M : 84 904148822 E : giang.do@cbre.com PROJECT MARKETING Hanoi`s new urban area is receiving more and more investments for high-rise projects. Keangnam has made an impressive debut with the Landmark Tower – the highest building in Vietnam and the 17th highest in the world. The complex will consist of a 70-storey tower of office, serviced apartments and hotel and a 47-storey tower of high-end condos on a 6-storey retail podium. Tran Hong Quan Commercial Co.Ltd held its ground breaking ceremony for the Crown Plaza Complex on the 28th of July 2007. The project on Le Duc Tho Street, My Dinh area, includes a 21-storey five star hotel and conference centre with 363 rooms, 20-storeys of offices for rent and 14-storeys of apartments for rent. Mai Trang Corporation has started its projects at Pham Hung street with a 25 storey office tower. The building will provide more than 40,000 sqm of office space, commercial space and serviced apartments. Le Minh Dung T : 844 220 0220 M : 84 905909999 E : dung.le@cbre.com RETAIL SERVICES CBRE Retail Services has been appointed by Vincom JSC as Sole Marketing Agent for Vincom City Towers. Plans are in the works for the remerchandising of this retail property by end of this year. These retail changes promise to bring more international brands to Vincom City Towers and Hanoi helping to ensure that the building stays on top of international retailing trends as well as becoming the market leader for Hanoi. With Hanoi`s rapid increase in living standards, people have become more and more interested in brand name products. In a lavish affair, Burberry recently opened their very first boutique shop in Vietnam which is located at Opera Business Centre in 6B Trang Tien Steet, Hoan Kiem District. Other upcoming additions to the retail scene in Hanoi are Sergio Rossi, Escada at the Press Club, and Calvin Klein Jeans in Dinh Tien Hoang. Locations are still difficult to find with fewer high end international brands entering Hanoi due to lack of good sites. With demand consistently greater than supply, retail rental rates are expected to continue to increase from US$80 per sqm, in the downtown and more than US$120 per sqm in the CBD. Richard Leech T : 844 220 0220 M : 84 912 573 130 E : richard.leech@cbre.com
OFFICE SERVICES A new “boutique” concept for office building is arriving on the market with Empire Tower at26 – 28 Ham Nghi Boulevard. With a perfect column-free rectangular floor plate of about 165 sqm, this exclusive address is offered to full floor tenants only. Quality systems, quality finishes, and fantastic views of Thu Thiem Peninsula and the Saigon River, everything in the Empire adds to the privilege of being in the financial heart of Saigon Daniel Francey : T : 848 824 6125 M : 84 903 822 370 E : daniel.francey@cbre.com RETAIL SERVICES : In a city with few retail destinations, the opening of C.T Plaza directly in front of Tan Son Nhat International Terminal, at the corner of Truong Son and Hong Ha street, in Q1 2008 will providethe market and those passing through Tan Son Nhat Airport with a new destination for internationalstyle quality shopping. C.T Plaza is the first luxury shopping centre in Tan Binh District with gross retail area 12.185 square meters hosting Parkson Department Store, luxury retailers, and a food court. On th 30th August 2007, Thai Thinh Capital held a ground breaking ceremony for its Richland Hill Complex located on Le Van Tam Street, Hiep Phu Ward, District 9. It comprises 5 blocks with twelve buidings for office, apartment and retail. The project is scheduledto open in phases from 2009 to 2011. GFA for retail is 40000 square meters. The appearance of these two projects in the retail property market and with others planned for the near future proves that it is necessary to develop the retail market not only in CBD but districts outside. Retailers, international and local brand names alike, are seeking locations to expand their business. Currently, retailers are preparing for Christmas and Lunar New Year shopping by focusing on traditional shopping streets particularly those known for fashion such as Nguyen Trai , Hai Ba Trung, Nguyen Dinh Chieu, and Ly Tu Trong. This has pushed locations market in such area become very hot. Thao Nguyen : T : 848 824 6125 M : 84 918 031990 E : thao.nguyen@cbre.com RESIDENTIAL LEASING : The CBRE team is busy leasing the brand new Sherwood Residence located in the heart of Saigon. Interest in the building has been growing as the landscaping has been completed and with the opening of Café Central. Tenants are moving into the building now! With nicely furnished two and three bedroom units, and every unit with a balcony, you can enjoy the city views and city life at its finest. City life at Sherwood Residence also includes the children! A beautiful ground floor swimming pool is surrounded by a patio, exercise room, mini movie room, and large children`s play room. Children will enjoy the amenitiesas much as Mom and Dad. Not to be forgotten, Sherwood Residence also offers a limited number of exclusive penthouse units for those looking for the ultimate living experience. For further details or a tour, please call our Residential Leasing hotline 0903028715 or 8239886. CBRE is also proud to represent several other fine residences within the city and can serve your home living needs – call today. Gerard Tan : T : 848 824 6125 M : 84 904 322547 E : gerard.tan@cbre.com MARKET RESEARCH AND CONSULTANCY DECREE 84 – a Step in the right Direction The decree has been promulgated but what does it mean? To simplify matters it will allow developers to obtain land on a 70 year lease, renewable for another 70 years and another 70 years thereafter, in perpetuity? It`s the closest foreign developers will get to freehold rights. This should enable developers to create portfolios in Vietnam which in turn will attract property funds and REIT`s, without the state losing ownership of land. It will also allow foreigners to purchase property on the same lease terms which are obviously more attractive to individuals and investors than the current terms, which have many “grey areas”. Please don`t all rush at once, as we haven`t seen these terms in place, however it does beg the question, if you have a choice of buying property on a 50 year lease against a 70 year renewable lease, which would you choose? Naim Khan-Turk T : 848 824 6125 m : 84 908 550446 E : naim.khanturk@cbre.com RESIDENTIAL PROJECT MARKETING. From CBRE`s most recent discussions with both local and international developer clients over the previous quarter, there is still a distinct lack of quality residential condominiums available for sale in the marketplace at this time. As a result, there has been a definite trend away from developing typical Vietnamese residential buildings and towards a high quality project. Developers are becoming more aware of their competition and to the market`s growing appetite for a superior level of accommodation. Many developers are seeking to extract the highest possible price for their product therefore are now considering many extra inclusions and/or styles of architecture which can only be good for the marketplace. Currently, quality projects in well located areas are quickly absorbed as local developers are now more aware of market price escalations over relatively short periods of time and are therefore delaying their full release of stock. This trend varies from developer to developer and is usually based on their construction financing requirements. Thai Nguyen T : 848 824 6125 M : 84 909 337988 E : thai.nguyen@cbre.com INDUSTRIAL MARKET The Southern Key Economic Region industrial market continues to flourish as reflected in the amount of foreign direct investment (FDI) coming into the region. The flow of FDI into the region is showing signs of a new boom with a series of projects ranging from tens of millions to hundreds of millions of USD in capital. At the provincial level, Binh Duong province authorities recently announced that they had attracted US$ one billion dollars in FDI during the first 8 months of the year, surpassing their target of US$900 million for the entire year, with Ba-Ria-Vung Tau leading all provinces year to date.The region`s industrial production value in the first eight months of the year topped nearly 214.5 trillion VND (US$ 13.4 billion), a year-onyear increase of 12.5 percent, with twenty-five out of 27 industries enjoying growth spurts, including food and drinks, chemicals, rubber and plastic, garment and textile, electric components, and footwear. Demand for industrial land parcels continues to outpace the supply, with many of the large industrial parks working on fast track expansion projects. The rates for parcels outside of Ho Chi Minh City continue to be valued in the range of $30 - $50 USD. Binh Duong and Dong nai are the leading provinces in the region, but a migration to other provinces is beginning as infrastructural improvements continue, and investment flows increase, as evidenced by the recent Chinese Construction Corporation investment in Tien Giang province. David W.Neal T : 848 824 6125 M : 84 903 028 719 E : david.neal@cbre.com CBRE Vietnam HANOI PROPERTY NEWS AND VIEWS OFFICE SERVICES The Hanoi office market during the last two months was slightly cooler due to the anticipated opening of some grade B office buildings in October. North Asia Tower has become a good option for tenants; the building is 53% leased just two months after re-starting its marketing. Rentals of both grade A and B office have generally increased. However, due to the continuously tight supply of office space, the market has accepted higher rental rates for property(Grade A & B) as long as it is in a good location. Current Grade B office rentalsequal the grade A rental of Q1/2007, up to USD32/sqm. The office market will be more active in the coming months with the opening of new Business Centers which help to satisfy the immediate demand for tenants who are looking for small office space. Richard Leech T : 844 220 0220 M : 84 912 573 130 E : richard.leech@cbre.com SERVICES APARTMENT The My Dinh area is in a stage of rapid development with many new high rise projects such as Keangnam, Crown Plaza, HRCC, Vinaconex, Orix, and Netra planned and/or in the works. These projects will supply the city with a growing number of high quality apartments for both sale and lease. Ciputra, a leader in this area remains a prime destination for expat families with new 3 and 4 bedroom units of Ciputraùs E4 and E5 buildings are ready for occupation. Projects marketed by CBRE include the new high-end 2 and 3 bedroom apartments at Pacific Place. Exclusively marketed and leased by CBRE is Atlanta, a Grade A serviced apartment of superior quality which now has show units available for inspection. Call us for today for a viewing! Do Huong Giang T : 844 220 0220 M : 84 904148822 E : giang.do@cbre.com PROJECT MARKETING Hanoi`s new urban area is receiving more and more investments for high-rise projects. Keangnam has made an impressive debut with the Landmark Tower – the highest building in Vietnam and the 17th highest in the world. The complex will consist of a 70-storey tower of office, serviced apartments and hotel and a 47-storey tower of high-end condos on a 6-storey retail podium. Tran Hong Quan Commercial Co.Ltd held its ground breaking ceremony for the Crown Plaza Complex on the 28th of July 2007. The project on Le Duc Tho Street, My Dinh area, includes a 21-storey five star hotel and conference centre with 363 rooms, 20-storeys of offices for rent and 14-storeys of apartments for rent. Mai Trang Corporation has started its projects at Pham Hung street with a 25 storey office tower. The building will provide more than 40,000 sqm of office space, commercial space and serviced apartments. Le Minh Dung T : 844 220 0220 M : 84 905909999 E : dung.le@cbre.com RETAIL SERVICES CBRE Retail Services has been appointed by Vincom JSC as Sole Marketing Agent for Vincom City Towers. Plans are in the works for the remerchandising of this retail property by end of this year. These retail changes promise to bring more international brands to Vincom City Towers and Hanoi helping to ensure that the building stays on top of international retailing trends as well as becoming the market leader for Hanoi. With Hanoi`s rapid increase in living standards, people have become more and more interested in brand name products. In a lavish affair, Burberry recently opened their very first boutique shop in Vietnam which is located at Opera Business Centre in 6B Trang Tien Steet, Hoan Kiem District. Other upcoming additions to the retail scene in Hanoi are Sergio Rossi, Escada at the Press Club, and Calvin Klein Jeans in Dinh Tien Hoang. Locations are still difficult to find with fewer high end international brands entering Hanoi due to lack of good sites. With demand consistently greater than supply, retail rental rates are expected to continue to increase from US$80 per sqm, in the downtown and more than US$120 per sqm in the CBD. Richard Leech T : 844 220 0220 M : 84 912 573 130 E : richard.leech@cbre.com
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