An Industry Overview

Transcription

1 Retail Real Estate in Vietnam An Industry Overview Presented by: Richard Leech Executive Director

2 AGENDA VIETNAM RETAIL REAL ESTATE INDUSTRY OVERVIEW Economic Overview Retail Real Estate Highlights Retail Real Estate Outlook CBRE Page 2

3 Economic Overview

4 VIETNAM ECONOMIC OVERVIEW THE ECONOMIC BRIGHT SPOT GDP growth by country (% y-o-y) 100% 80% 60% 40% 20% 0% Chart of household income <VND1.5 mil. VND1.5 mil. - <3 mil. VND3 mil. - <4.5 mil. VND4.5 mil. - <7.5 mil. VND7.5 mil. - <15 mil. VND15 mil. - <30 mil. VND30 mil mil. or higher 14% 38% 37% 52% 8% 11% 4% 4% 29% 27% 45% 20% 13% 36% 34% 11% Hanoi Hai Phong Da Nang Ho Chi Minh Can Tho Total 5 cities Vietnam 3% 23% 39% 26% 11% 34% 37% 12% 7% 26% 40% 20% Source: Oxford Economics Source: AC Nielsen GDP growth in 2013 is forecasted the 3 th highest Higher than the average of Asia Pacific and South-East Asia 16% - 17% has the income higher than VND 15 million Asia almost certain to benefit first and most from any global upturn CBRE Page 4

5 VIETNAM ECONOMIC OVERVIEW 2012 PERFORMANCE CPI (% y-o-y) / Interest rates (%) 25 Inflation surged 20 Monetary expansion Monetary contraction 0 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep CPI (% m-o-m) CPI, VN (% y-o-y)) CPI, VN (% m-o-m) Refinancing rate (%) Rediscounting rate (%) M/2012 GDP (% y-o-y) 5.9% 4.7 (9M/2012) CPI (% y-o-y, average) 18.58% 9.43% Exchange rate (e-o-p) 20,828 20,828 Export (US$ Bn) 96.9 (34.2% y-o-y) 104 (18.4% y-o-y) Import (US$ Bn) (25.8% y-o-y) (6.8% y-o-y) FDI Implemented (US$ Bn) 11 (0% y-o-y) 10 (-0.5% y-o-y) International Arrivals (million arrivals) 6 (19.1% y-o-y) 6 (11.2 % y-o-y) Retail and Services Turnover (USD) 95 billion (24.2% y-o-y) 100 billion (16.4% y-o-y) Source: General Statistics Office CBRE Page 5

6 VIETNAM ECONOMIC OVERVIEW KEY ECONOMIC DRIVERS Interest rates: Interest rates have been lowered by a total of 5% since the beginning of the year it is widely considered that further cuts in 2012 are unlikely. The Governor of the State Bank of Vietnam has reenforced this point highlighting that extreme caution must be taken if interest rates were to be reduced further. SBV Interest rates (%) Base rate Re-discounting rate Re-financing rate Source: State Bank of Vietnam Improvement in trade balance thanks to low imports: For 11M/2012, export is almost equivalent to import Import growth rate in the 11M/12 was 6.8%, which is a notable decrease y-o-y (11M/2011: 26.4%) US$ billion Vietnam Trade Deficit (US$ Billions) January April July October Source: Vietnamese General Statistics Office CBRE Page 6

7 VIETNAM ECONOMIC OVERVIEW KEY ECONOMIC DRIVERS 25 CPI (y-o-y, Vietnam) CPI (m-o-m, Vietnam) 4 CPI (% y-o-y) Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Source: Vietnamese General Statistics Office CPI (% m-o-m) Inflation: Increased at the end of the third quarter end with rising costs in healthcare, education, transports costs and food prices. M-o-m inflation in September was the highest since May 2011, with interests rates recently softened the situation must be carefully managed. The inflation has been controlled again in November (0.47% m-o-m; 7.08% y-o-y) CBRE Page 7

8 Vietnam Regional and International Comparisons

9 THE GLOBAL RETAIL DEVELOPMENT INDEX WINDOW-OF-OPPORTUNITY analysis Vietnam s Ranking in A.T Kearney Retail Survey Source: A.T Kearney Analysis 2008: No : No : No : No : Not included on the list CBRE s ranking: #3 for new market entries, tied with Ukraine #55 Vietnam is the fifty-fifth most attractive country, up four places from 2011 #146 HCMC the one hundred forty-sixth most attractive city, up 12 places from 2011 CBRE Page 9

10 VIETNAM RETAIL REAL ESTATE MARKET Retail space per capita in key Asian market 0.8 Retail stock per capita sm Beijing Shanghai Jakarta Seoul Kuala Lumpur (Klang Valley) Taipei Bangkok Hanoi HCMC China Indonesia Korea Malaysia Taiwan Thailand Vietnam Source: CBRE In comparison with other key markets in Asia, HCMC retail market is still untapped and has considerable potential for growth, which also requires a compatible growth in the economy and income per capita F&B, entertainment and essential goods are driving the retail industry in terms of the number of enquires. Limited quality supply of large space (over 1,000 sm) while there is demand from foreign companies for such. CBRE Page 10

11 VIETNAM RETAIL REAL ESTATE MARKET Share of modern trade 88% 64% China Shanghai 53% Malaysia 63% Kuala Lumpur 46% Thailand 70% Bangkok 43% Indonesia 66% Jakarta Greater Vietnam Hanoi 13% 16% HCMC 37% China Malaysia Thailand Indonesia Vietnam Source: AC Nielsen There is still scope to develop modern trade in Vietnam when benchmarked against other Asian countries Expansion from digital retailer is witnessed from FPT, Sony, Blackberry, and HTC. Many new foreign brands entered the Vietnam market for the first time (Sisley, Christian Dior, Banana Republic, Burger King) CBD rents remain stable Landlords become more flexible with commercial terms CBRE Page 11

12 Vietnam Retail Real Estate Market

13 HCMC RETAIL REAL ESTATE MARKET 2012YTD SNAPSHOT DEPARTMENT STORES SHOPPING CENTRES TOTAL Continued occupier demand from both domestic and international retail brands. Total supply (GFA, sm) 115, , ,731 Vacancy rate (%) 2.3% 15.4% 12.3% CBD average asking rents (US$ psm per month) $ $ Q-o-q change (%) 0.0% -3.4% Y-o-y change (%) -5.8% -11.6% Non-CBD average asking rents (US$ psm per month) $47.47 $29.93 Q-o-q change (%) -2.5% 0.0% Y-o-y change (%) -8.2% -9.5% * All rents are quoted on NLA, exclusive of VAT and service charges Source: CBRE CBRE Page 13

14 HCMC RETAIL REAL ESTATE MARKET Shophouses continue to absorb retail demand Further demand for retail on Le Van Sy, Hai Ba Trung, Ly Tu Trong, Mac Thi Buoi, as well as outside CBD such as, Cao Thang, Vo Van Tan, Nguyen Trai, Tran Hung Dao Vincom A and Pandora City increased retail supply in 2012 Only 2 retail centres came online in 2012 but provided a large supply in terms of retail GFA area. Both centre supplied over 75,000 sm. Still enough demand to fill this new supply. Continued occupier demand from both domestic and international retail brands for commercially viable retail space. CBRE Page 14

15 NEW TO MARKET RETAILERS NEW BRAND/NEW ENTRANCE CATEGORY New brands in F&B: New Retail brands centre in Fashion (Department Store, Shopping centre, Supermarket/ Hypermarket) NAME Takashimaya Aeon NTUC FairPrice SC Vivo City Payless Convenient Store F&B Health, Beauty & Fashion Luxury Brands Uncle Bill Mini Shop & Go (Trung Nguyen) Burger King Pepper Lunch Baskin Robbins Paris Baguette The Pizza Company (in HCMC) Banana Leaf 7 for all mankind Banana Republic Sisley Hugo Boss Hermes (in HCMC) Christian Dior Ermenegildo Zegna CBRE Page 15

16 HCMC NEW SUPPLY 2012 VINCOM CENTER A 38,000 sm of retail GFA; 3 basements and 3 floors; Opened on 10 Oct 2012; Successfully attracted flagship stores as well as new luxury brands; Currently operates at 95% committed occupancy; Strong evidence to support the need for a high-end shopping experience; With a good location, proper tenant mix and layout, the market can still absorb new supply. Anchor tenants: CBRE Page 16

17 HCMC NEW SUPPLY 2012 PANDORA CITY 40,000 sm of retail GFA; 1 basement and 5 floors; Opened November 2012; Operating at 80% committed occupancy; Located in Tan Phu District, the project is unique in the surrounding area. Anchors: Big C, Nguyen Kim Electronics, Megastar Cinema Anchor tenants: PowerBowl 388 CBRE Page 17

18 HCMC MAJOR NEW SUPPLY BY 2015 Times Square RETAIL DEVELOPMENT FORWARDING Cantavil Premier Saigon Centre Tokyu Becamex 4,000 sm Expected to open in Q1/2013 tenants inc D&G 30,000 sm Expected to open in Q3/2013, Tenants include Parkson Department Store Thao Dien Pearl SC VivoCity 50,000 sm Expected to open in 2015 tenants include Takashimaya Department Store Saigon Airport Plaza Under Planning but expected to open 60,000m2 in phases between Aeon Celadon City 20,000 sm Expected to open in Q2/ ,000 sm Under construction but expected to open in 2015, Coopmart JV with FairPrice CBRE Page 18 Under planning 40,000 sm Under planning, expected to open in 2014

19 CBRE Page 19 HCMC RETAIL REAL ESTATE MARKET

20 HANOI RETAIL REAL ESTATE MARKET Q3/2012 SNAPSHOT Larger pressure on newer projects anticipated as vacancy increased DEPARTMENT STORES SHOPPING CENTRES RETAIL LOBBIES TOTAL Total supply (NLA, sm) 46, ,309 10, ,619 New supply (NLA, sm) 0 17, ,209 Vacancy rate (%) 7.0% 18.1% 2.9% 15.7% Avg. asking rents (US$/sm/month) $62.8 $37.8 $76.8 $45.9 * CBD (US$/sm/month) - $54.2 $145.9 $88.1 Y-o-y change (%) % 4.9% -0.1% Q-o-q change (%) - 3.8% 0.0% -0.4% * Non-CBD (US$/sm/month) $62.8 $34.4 $24.6 $34.5 Y-o-y change (%) 16.3% -8.6% 16.9% -1.4% Q-o-q change (%) -1.7% 11.1% 0.0% 9.1% Note: All rents are quoted on NLA, in ground floor areas, inclusive of service charges but exclusive of VAT. Source: CBRE CBRE Page 20

21 HANOI RETAIL REAL ESTATE MARKET Supply still increased, although at a slower pace than 2011 Throughout 2011: ~140,000 sm from 5 projects 2012YTD: ~49,000 sm from 2 projects, including Indochina Plaza Hanoi (17,209 sm) and Melinh PLAZA Ha Dong (31,700 sm) Still reasonable demand: 50% occupancy in 2 newly-opened projects Popularity between CBD and non-cbd centre's is drifting further apart Rental rates generally stabilized y-o-y CBD: US$88 psm Non-CBD: US$34.5 psm Consumers still more conservative with their spending - Retail sales growth rate in 9M/12: 10.2% y-o-y after inflation CBRE Page 21

22 HANOI RETAIL REAL ESTATE MARKET NEW SUPPLY IN 2012 Indochina Plaza Hanoi Developer : Indochina Land Concept : Specialty shopping and entertainment plaza. NLA: 17,209 sm Opened Aug basements, 5 retail floors Currently 77% committed and 50% occupied Successfully attracted famous fashion brands (Nike Town, Sembonia, Vivi boutique London, etc.), new F&B brands (Burger King, Tous Les Jours) and strong anchors (Citimart, Elite) Rents range from US$15 to US$70/m2/mth CBRE Page 22

23 HANOI RETAIL REAL ESTATE MARKET Melinh PLAZA Ha Dong Developer : Eurowindow Holdings Concept : Big Box Trade Centre GFA: 45,000 sm 5 Levels of retail + 1 level basement parking Opened Oct 2012 Located in Ha Dong Dist., a fast developing area to the West of Hanoi targeting to midand lower-income customers Anchors: Metro, Top care, World Games, M2, Lotte Cinema, Hoan My Furniture, KFC NEW SUPPLY IN 2012 CBRE Page 23

24 HANOI RETAIL REAL ESTATE MARKET MAJOR SUPPLY IN 2013 CBRE Page 24 Trang Tien Plaza Expected to open Q1/13 Approx 12,000 GLA Location : City Centre Concept : High end specialty retail Vincom Mega Mall Royal City Expected to open July 2013 Approx 230,000 GFA Location : Dong Da District Concept : Underground regional mall Vincom Mega Mall Times City Approx 230,000 GFA Expected to open Q4/13 Location : Hai Ba Trung District Concept : Regional Mall

25 CBRE Page 25 HANOI RETAIL REAL ESTATE MARKET

26 WHERE ARE ALL THE SHOPPERS? 100% 10% 14% VIETNAMESE CONSUMER TRENDS Changes store based on best promotion 80% 60% 56% 38% Very seldom changes store, but look actively for promotion Regularly buy different brands because they are on promotion 40% 27% Only buy promotions if they already like brands 20% 0% Source: AC Nielsen Vietnam 21% 15% 9% 4% 6% Promotion do not influence on brand choice Economy remains the top concern for Vietnamese consumers Vietnam consumers confidence has gone flat leading to belt tightening Wet markets are still important for shoppers but there is an increasing trend toward modern retail centre. 80% of the shopper change store and brands according to promotion. CBRE Page 26

27 Vietnam Retail Outlook

28 VIETNAM RETAIL REAL ESTATE OUTLOOK FOR VIETNAM Vietnam Government commits to develop 1,500 trade centres in the next 7 years and phase out the informal sector; Hanoi has recently awarded Asia Games for 2019, which should see major infrastructure improvements in Hanoi of approximately US$30 billion; ENT remains an unclear challenge to foreign retailers; Unstable economy, most specifically in terms of GDP growth rate and inflation during this current economic crisis; Modern retailing well represented in HCMC and Hanoi but very little in second tier cities such as Hai Phong, Da Nang, Nha Trang and Can Tho; The QUANTITY of modern retail space increases regularly but not yet the QUALITY; Poor distribution/logistics infrastructure, important for deciding where to locate, build a factory, or establish an outlet; Expensive retail space for example at prime locations in HCMC, the rents usually are from US$100 to US$200 psm per month; CBRE Page 28

29 VIETNAM RETAIL REAL ESTATE OUTLOOK FOR VIETNAM Renovation and improvement of shop house retail will continue to put pressure on rents, especially outside the city centre. The issues faced by non-cbd retail centres highlights issues of tenant mix. More projects may turn to master leases with professional retailers (department store, mall operator) More luxury retailers to enter the market as they expand across borders Continued international-style retailing: fast-food chains set to expand Conversions of wet markets into formal trade centres. Growing demand to come from: Expanding Vietnamese retail chains nationwide rollout such as FPT, Trung Nguyen Coffee F&B, daily necessities (C Stores), FMCG and entertainment will continue driving the market CBRE Page 29

30 INTERNATIONAL RETAIL REAL ESTATE LESSONS FROM ICSC WORLD SUMMIT & MIPIM ASIA Global Retail Expansion Emerging Middle Class Plateau of development in mature markets surge of development in emerging markets Retail Real Estate as an Investment Strategy Employment Needs Public Space as the New Anchor Tenant Shopping Centre s providing unique roles in society Social Networking & On Line Shopping CBRE Page 30

31 PLEASE FILL IN THE EVALUATION/ ENQUIRY FORM

32 CBRE Global Office Locations THANK YOU 2012 CB Richard Ellis (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CB Richard Ellis (Vietnam) Co., Ltd. We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources and make no guarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful considerationoffactorsknowntousfor example only, and they may not represent current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis. CBRE Page 32