savills.com.vn VIETNAM CHART BOOK 216
Vietnam Chart Book Savills Global Network 3, employees across a network of over 7 offices in more than 6 countries 62 Americas & Caribbean UK 135, Ireland & C hannel Islands E urope 13 272 Middle E as t & Africa As ia P acific 134 Savills World-leading property services 2
216 Our services Our services are delivered by people who combine entrepreneurial spirit and a deep understanding of specialist property sectors with the highest standards of client care. Through our advice, our property management capabilities and the transactional services we provide, we help our clients to fulfil their real estate needs whatever and wherever they are. + Advisory Services + Valuation & Research + Retail Consultancy + Industrial Services + Investment Brokerage + Commercial Leasing 3
Vietnam Chart Book Regional Overview GDP Savings and Consumption Consumer Confidence Population GDP ASEAN COUNTRIES In 215, Viet Nam had the 4 th highest GDP growth rate in ASEAN at 6.4 percent. The cumulative nominal GDP of ASEAN in 215 was approximately US$2.5 trillion, equivalent to the world s 6 th largest economy. 1,4 US$ bn GDP - ASEAN From 216 to 218, Viet Nam is forecast to achieve GDP growth of 6.5%, 6.4% and 6.3%, approximately 1 ppt ahead of ASEAN average growth but remaining 4 th in the region. 1,2 1, 8 6 4 2 Savings and Consumption 21 211 212 213 214 215 216f 217f 218f Indonesia Malaysia Philippines Singapore Thailand Viet Nam Brunei Cambodia Laos Myanmar Source: FocusEconomics, May 216 From 21, ASEAN household consumption grew on average 3.53% pa, with Viet Nam exhibiting the greatest growth in the region at approximately 2 ppts above average. 6 5 4 3 US$ bn Household Consumption ASEAN While savings and basic expenditure are limited for Vietnamese in the bottom 4 th percentile income brackets, those from the 5 th 9 th (VND 65 18 million pa) tend to not increase their overall expenditure as their income rises, instead saving more. 4 2 1 21 211 212 213 214 Indonesia Malaysia Philippines Singapore Thailand Viet Nam Brunei Cambodia Laos Source: FocusEconomics, May 216
216 Consumer Confidence From Q4/214 to Q4/215, Viet Nam was one of three Asia Pacific countries with an improved CCI and one of two in ASEAN, increasing 2 points. This is a positive sign particularly as confidence levels across Asia continue to decline. As the end of 215, the VCCI had increased 9.2 points YoY, equivalent to an approximate improvement of 7%, reinforcing signs of consumer optimism. Philippines Indonesia Thailand China Hong Kong Viet Nam Singapore Malaysia Taiwan Japan South Korea Nielsen CCI CCI Score 5 1 15 Q4/215 Q4/214 Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions Population Roy Morgan VCCI The ASEAN average ratio of working to non-working is 1.82, from highest to lowest: Singapore (1.99), Viet Nam (1.98), Thailand (1.97), Malaysia (1.97), Indonesia (1.78), Myanmar (1.75), Cambodia (1.6), and Philippines (1.55). Meanwhile, Singapore and Thailand s working age population is diminishing quickly, with Viet Nam in it s golden population window but soon to follow. 15 145 14 135 13 125 12 115 VCCI Score 143.1 123.3 133.7 144.8 14.9 135.6 At 1.98, Viet Nam has almost two workers for every dependent, driving economic growth as a relative competitive advantage in factors of production for labour intensive industries such as processing and textiles. 11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 215 214 Source: ANZ-Roy Morgan Research 214-215 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Population Spread, 215 7 7 9 8 9 16 11 1 5 18 24 26 22 19 3 31 29 32 3 39 4 35 34 35 4 34 33 37 35 34 27 27 25 41 32 32 28 28 25 18 23 25 16 16 Philippines Cambodia Myanmar Indonesia Malaysia Thailand Viet Nam Singapore Europe ASEAN Africa 6+ 35-59 15-34 -14 Source: United Nations Department of Economic and Social Affairs 5
Vietnam Chart Book Property Drivers GDP Age Pyramid Workforce Allocation Urbanisation Income & Expenditure Consumer Price Index Tourism GDP Viet Nam s GDP growth over the past decade averaged 13% pa, with 215 at 6.7%, and a GSO forecast for 6.6% in 216 and 6.7% in 217. In 215, the industrial and construction sector was the greatest contributor, accounting for 3.2% of GDP growth, followed by service at 2.4% and agriculture at.4 percent. The soft real growth in retail turnover over the period of 211 through 214 reflected the negative impact on the retail market created by the economic downturn. This figure has been slowly improving, up 2 ppts YoY in 215, but still faces difficulties such as high rate of inventory, low absorption capacity from fresh investment and weak consumer demand. Viet Nam - Economy US$ bn 3 25% 2% 2 15% 1% 1 5% % 21 211 212 213 214 215 GDP Retail sales GDP real growth rate Retail real growth rate Inflation Source: GSO, May 216 % GDP by Sector 1% 13 11 1 1 1 8% 37 37 37 39 39 6% 4% 2% % 32 32 34 33 33 18 2 19 18 18 21 211 212 213 214 Agriculture Industry Service Tax subsidies on production Source: GSO, May 216 6
216 Age Pyramid From 29 to 215, Viet Nam s population grew by approximately 5.7 million, equivalent to approximately 1% pa with a cumulative increase of 7 percent. The working age population of 15-64 has ceased to grow, leveling out at 7% of the total population and marginally decreasing YoY. With decreased workers and increased dependents, Viet Nam s economy will be relatively unaffected as the social security system remains insubstantial and many superfluous positions will be replaced by those more specialised. 5 4 3 2 Male - 215 Source: GSO, May 216 1% Age Pyramid, 29 v. 215 8 + 75-79 7-74 65-69 6-64 55-59 5-54 45-49 4-44 35-39 3-34 25-29 2-24 15-19 1-14 5-9 -4 1 1 2 3 4 5 Male - 29 Female - 29 Female - 215 Workforce by Sector 8% Workforce Allocation From 21 to 214, overall job growth in Viet Nam was positive as annual cross-sector gains exceeded losses and unemployment dropped 1 ppt to 3.4 percent. Approximately 5% of Vietnamese are employed in the primary sector, yet decreasing 2% pa, whilst both the secondary (3%) and tertiary (2%) sectors are increasing by approximately 2% pa. 6% 4% 2% % 21 211 212 213 214 Agriculture, forestry & fishing Industry Automobile Construction Accomodation and F&B Education & Training Source: GSO, May 216 million 3 25 2 15 1 5 Population - ASEAN 1% 8% 6% 4% 2% % Population % Urban population Source: FocusEconomics, May 216 Urbanization 1 million Urbanisation - Viet Nam 5% The urbanization rate from 25 to 21 was relatively low at 3.5%, yet rocketing back to 4.% as the economy stabilised. 8 6 4 4% 3% 2% Industrial zones throughout Ho Chi Minh City have attracted thousands of labourers from nearby provinces, contributing to a high population growth rate in suburban areas. 2 26.5 27.7 28.3 28.9 3. 21 211 212 213 214 Urban pop. Rural pop. Urbanization s Rate Source: GSO, May 216 1% % 7
Vietnam Chart Book Income and Expenditure Since 24, the Viet Nam average monthly expenditure has increased 16% pa, mirroring rural growth but exceeding urban growth by 2 ppts; the rural represents 2/3 of Viet Nam s population. In 24, the average citizen spent approximately 92% of their monthly income, while in 214 this figure was 72 percent. US$ 18 16 14 12 1 8 6 4 2 4 6 8 1 12 14 4 6 8 1 12 14 4 6 8 1 12 14 Rural Urban Viet Nam Income Expenditure Source: GSO, May 216 CPI 29=1 13 Income v. Expenditure, 24-214 CPI by Item - Viet Nam 125 12 Consumer Price Index (CPI) 115 11 15 1 21 211 212 213 214 CPI Food and foodstuffs Clothing Construction materials In 214, Viet Nam s headline inflation (4.1%) further converged toward core inflation (3.3%), partly reflecting more credible monetary policy commitment to maintaining low and stable inflation. Source: GSO, May 216 Arrivals (millions) 1 Tourism, 21-214 Tourist arrivals growth rate 4% Since 21, traditionally volatile commodities such as Food and foodstuffs, and Energy have decreased quite significantly, with the former decreasing by approximately 14 ppts to 2.61% in 214. The brent crude spot has decreased dramatically since 215 to current rates of approximately US$5 per barrel, though such depressed pricing looks only transitory. 8 3% 6 2% 4 1% 2 % 21 211 212 213 214 Domestic arrivals International arrivals Domestic arrivals growth rate International arrivals growth rate Source: GSO, May 216 From 213 to 214, international tourist arrivals growth decreased by 7% to 4%, the lowest figure since the economic downturn from 28-29. The top 7 tourist source countries represent 64% of total recorded arrivals, with China representing 26%, the top 4 all being Asian countries and Russia overtaking Malaysia for the 5 th spot with a 45% pa growth since 21. 8 Tourism
216 Regional Property Prime Retail Prime Office Prime Serviced Apartment Prime Retail Regional Prime Retail, 215 In 2H/215, the prime retail benchmark for Ha Noi was US$124/m 2 and Ho Chi Minh City was US$118/m 2. From 21-215, Ha Noi s benchmark decreased -3.5% pa, while HCMC s increased approximately 1% pa. 1,4 1,2 1, 8 6 4 US$/m 2 /mth NET Comparatively, Ho Chi Minh City and Ha Noi are in the nascent stages of retail development, with both offering a benchmark of approximately 1% of Hong Kong, meanwhile this city remains an outlier, offering one of the highest benchmarks in the world and nearly 5% higher than the next highest in the region, Singapore. 2 Hong Kong Singapore Tokyo Beijing Shanghai Taipei Sydney Seoul Kuala Lumpur Source: Savills Research & Consultancy 25 US$/m 2 /mth NET Regional Prime Office, 215 Ha Noi HCMC Prime Office In 2H/215, the prime office benchmark of Ha Noi was US$39/m 2 and HCMC was US$51/m 2. From 21 to 215, Ha Noi s benchmark decreased -4.2% pa, while Ho Chi Minh City s increased.7% pa. 2 15 1 5 Hong Kong Tokyo Beijing Singapore Seoul Shanghai Taipei Sydney HCMC Ha Noi Kuala Lumpur Source: Savills Research & Consultancy Prime Serviced Apartment 16 12 US$/m 2 /mth NET Regional Prime SA, 215 In 2H/215, the prime serviced apartment benchmark of Ha Noi was US$42/m 2 and Ho Chi Minh City was US$31/m 2. From 211 to 215, Ha Noi and Ho Chi Minh City s benchmarks decreased -1.2% pa and -.3% pa respectively. 8 4 Hong Kong Singapore Tokyo Seoul Manila Shanghai Beijing Ha Noi Taipei HCMC Kuala Lumpur Source: Savills Research & Consultancy 9
Vietnam Chart Book Viet Nam Property Retail Rents Retail Density Office Office Tenant Breakdown Retail Rents Ho Chi Minh City retail rent has increased on average 2% pa since 212, with the greatest rises coming from the non-cbd at 2.62%, the new focus of many developers due to the demand for entertainment which requires areas with large available land bank. 18 16 14 12 1 8 6 4 2 Retail Rents *Excluding VAT US$/m 2 /mth NET* Prime CBD Non-CBD Prime CBD Non-CBD HCMC Ha Noi In contrast, Ha Noi retail rent has decreased -6.8% on average since 212, with large downward adjustments across the three categories, the largest being the Prime Benchmark which has decreased by approximately -7.8% pa due to the launch of high-quality retail centres in non-cbd areas which requite lower rents, hence depressing the overall figure. Source: Savills Research & Consultancy Source: Savills Research & Consultancy 212 213 214 215 Q1/216 Retail Density From the eight largest cities in Viet Nam there is a recorded 2.8 million m 2 of retail space, of which Ho Chi Minh City and Ha Noi account for 75%. However, other regional cities such as Bangkok, Singapore and Kuala Lumpur far exceed the cities of Viet Nam, providing.9,.7 and.7m 2 /person. 1..8.6.4.2. m 2 retail/person Bangkok Singapore Kuala Lumpur** Retail Density, 215 Ha Noi Da Nang HCMC Jakarta* Hai Phong Retail Density Retail Area Source: Savills Research & Consultancy; United Nations Department of Economic and Social Affairs Source: Savills Research & Consultancy; United Nations Department of Economic and Social Affairs m 2 retail 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, * 214 data ** Population of Klang Valley 1
216 Office From 21 to 215, Ho Chi Minh City office supply increased approximately 5% to 1.5 million m 2, with Grade A, B and C increasing 8%, 6.8% and 1.2% pa. Rents have remained stable and occupancy has increased by 27 ppts, and even though Grade A supply expanded approximately 1, m 2 from the entrance of the Bitexco Financial Tower, Times Square and Vietcombank Tower, it had the greatest occupancy increase at 14 ppts. HCMC Office Performance Occupancy US$/m 2 /mth NET 1% 6 95% 5 9% 85% 4 8% 3 75% 2 7% 65% 1 6% 21 211 212 213 214 215 A Occupancy B Occupancy C Occupancy A Rent B Rent C Rent Source: Savills Research & Consultancy Office Tenant Breakdown From Q1/212 to 216, the biggest gainers were Finance, Banking & Insurance at 3 ppts and IT at 2 ppts. In Q1/216, new and existing FDI projects registered US$2.7 billion, of which Manufacturing & Processing accounted for 72% and Real Estate for 6%, two high growth industries with relatively low demand for office space but large demand for capital. HCMC Office Tenancy 1% 3 5 6 9% 6 6 6 8% 7 6 7% 9 7 6% 11 11 5% 23 26 4% 3% 2% 35 33 1% % Q1/212 Q1/216 Source: Savills Research & Consultancy IT Transportation & Logistics Real Estate Consultancy Distribution Manufacturing & Processing Finance, Banking & Insurance Other 11
Vietnam Chart Book Market Insights Consumer Spending Passenger Automobile Sales E-Commerce Consumer Spending With rising discretionary income and time, hygiene awareness, and demand for entertainment coinciding with decreased nuclear family sizes, modern Vietnamese consumer spending is focused on improving their family s day to day living standard as well as upward mobility. Home Appliances Personal Care Products Household Care Products Personal Devices Transportation Entertainment & Dining Out Communications Household Utilities Food & Beverage Products Health Care Products/ Services Education 2 2 4 4 4 4 3 6 8 1 2 Consumer Spending, 215 Source: TNS Vietnam Consumer Confidence Tet Spending, 215 41 53 59 58 63 64 79 79 74 71 49 % 2% 4% 6% 8% 1% Less Same More 56 42 37 38 33 29 3 17 18 19 2 Regional Car Sales Personal vehicle ownership in Viet Nam is still a luxury. 1,, 8, 6, 4, 2, Yearly car auto sales (#) Passenger Car Sales, 21-215 US$ 6, 5, 4, 3, 2, 1, From 21 to 215, Viet Nam had cumulative passenger car sales growth of approximately 1% with an average yearly growth of 15%, much higher than that of Indonesia, Thailand and Malaysia at 7.6%, 5.5% and 3.7% respectively. 12 E-Commerce As of 215, e-commerce turnover in Viet Nam reached US$4.7 billion, increasing 37% YoY to 2.8% of total retail sales. 21 211 212 213 214 215 Viet Nam Thailand Malaysia Indonesia Viet Nam GNI Per Capita Source: International Organization of Motor Vehicle Manufacturers E-Commerce Purchases, 1H/215 1% 5% 3% Clothing 6% Fashion & Accessories Cosmetics 6% 38% Food 7% Personal devices Restaurant vouchers Home appliances 11% Books Beverages 1% 13% Accommodation Source: TNS VietCycle, 215
216 Certain cities Ha Noi Quang Ninh Hai Phong Da Nang Nha Trang Ho Chi Minh City Dong Nai Binh Duong Can Tho Ha Noi Drivers: Political centre Growing population Steady increase in GDP Strong foreign trade links Improved public infrastructure Main Industries: Trade Textiles Tourism Electronics Metallurgy Prime Retail Malls: Press Club Vincom Centre Metropole Arcade Vincom Mega Mall Opera Business Centre Major Retail Streets/Areas: Chua Boc Cau Giay Trang Tien Hang Bong Hang Ngang 215 Units Value YoY Growth City population million 7.5 3.2% Area km 2 3,328.9 - GDP US$ billion 27.6 9.2% GDP per Capita US$ 3,6 6.87% Retail space m 2 1,114,47 14,34% Retail sales of goods and services US$ billion 11 12% CPI 215 over 214.7% 13
Vietnam Chart Book Quang Ninh Drivers: Rich natural mineral resources: coal, limestone, clay, kaolin, granite and white sand. Main Industries: Mining Tourism Prime Retail Malls: Ha Long Centre Vuon Dao Center Mega Market Viet Nam Ha Long Supermarket Major Retail Streets/Areas: Le Thanh Tong 215 Units Value YoY Growth City population million 1.19.42% Area km 2 6,12 - GDP US$ billion 1,523 11% GDP per Capita US$ 3,7 9.2% Retail space m 2 11,2 N/A Retail sales of goods and services US$ billion.9 25.5% CPI 215 over 214.34% Hai Phong Drivers: The largest 1 st tier city. Economic, industrial, retail and educational centre. Deep-water ports which develop maritime transport. Main Industries: Light industries Heavy industries Food processing Prime Retail Malls: Big C Parkson Co-op Mart Major Retail Streets/Areas: Le Hong Phong 215 Units Value YoY Growth City population million 2.1 1.1% Area km 2 1,523 - GDP US$ billion 5.8 9.52% GDP per Capita US$ 2,857 N/A Retail space m 2 189,255 - Retail sales of goods and services US$ billion.33 12.6% CPI 215 over 214.9% 14
216 Da Nang Drivers: Major port city in the central coast. Retail and education centre of central Viet Nam. Main Industries: Fishing, Forestry Tourism, Agriculture Prime Retail Malls: Big C Mega Market Viet Nam Co-op Mart Indochina Riverside Tower Major Retail Streets/Areas: Hoang Sa Street Pham Van Dong Bach Dang Street Dien Bien Phu Street 215 Units Value YoY Growth City population million 1.29 2.7% Area km 2 1,286 - GDP US$ billion 2.992 8.7% GDP per Capita US$ 2,98 7.9% Retail space m 2 167,271 29% Retail sales of goods and services US$ billion 2.64 9.42% CPI 215 over 214.5% Nha Trang Drivers: High tourism and revenue growth. New hospitality investments. Main Industries: Fishery, tourism, services. Prime Retail Malls: Big C, Co-op Mart Vinpearl, Maximark Nha Trang Center Mega Market Viet Nam Major Retail Streets/Areas: Tran Phu, Thong Nhat Thai Nguyen, Le Thanh Ton Nguyen Thien Thuat 215 Units Value YoY Growth City population million 1.874 3.9% Area km 2 2,694.4 - GDP US$ billion 2.74 -.9% GDP per Capita US$ 2,28 6.9% Retail space m 2 71,4 - Retail sales of goods and services US$ billion 1.2 15% CPI 215 over 214.94% 15
Vietnam Chart Book Ho Chi Minh City Drivers: Skilled workforce Economic Hub of Viet Nam Comparatively high incomes High population growth rate Main Industries: Trade Tourism Finance Software Construction Prime Retail Malls: Parkson Vivo City Lotte Mart Crescent Mall Diamond Plaza Vincom Centers Aeon Mall Tan Phu 215 Units Value YoY Growth City population million 8.2 1.7% Area km 2 2,95.5 - GDP US$ billion 43.7 9.9% GDP per Capita US$ 5,318 7.28% Retail space m 2 1,51,185 17% Retail sales of goods and services US$ billion 8 11.6% CPI 215 over 214 -.2% Major Retail Streets/Areas: 16 Le Loi Dong Khoi Nguyen Trai Nguyen Hue Hai Ba Trung
216 Dong Nai Drivers: One of the key economic zones of the southeast. High population growth rate. Many industrial parks. Attracted a large number of FDI projects. 215 Units Value YoY Growth Main Industries: Industrial and agriculture City population million 2.84 2.5% Area km 2 5,97.2 - Prime Retail Malls: Big C, Co-op Mart Vincom, Lotte Mart Pegasus Plaza Mega Market Viet Nam Major Retail Streets/Areas: Dong Khoi Vo Thi Sau Pham Van Thuan GDP US$ billion 6.85 8.51% GDP per Capita US$ 3,47 8.9% Retail space m 2 123, - Retail sales of goods and services US$ billion 5.6 11.6% CPI 11M/215.4% Binh Duong Drivers: One of the key economic zones of the southeast. High population growth rate. Many industrial parks. Attracted a large number of FDI projects. Main Industries: Industrial Prime Retail Malls: Big C Becamex Centre Minh Sang Plaza Aeon Mall Canary Major Retail Streets/Areas: Binh Duong Boulevard 215 Units Value YoY Growth City population Million 1.9 4% Area km 2 2,694 - GDP (*) US$ Billion 5.9 12.8% GDP per Capita (*) US$ 2,878 15.5% Retail space m 2 9, - Retail sales of goods and services US$ Billion 5.7 26% CPI - - - (*) 214 data 17
Vietnam Chart Book Can Tho Drivers: Economic and education centre of Mekong Delta. Main Industries: Industrial Agriculture Prime Retail Malls: Big C Mega Market Viet Nam Sense City Lotte Mart Vincom Hung Vuong Major Retail Streets/Areas: Le Loi Tran Van Hoai Nguyen Van Cu Nguyen Thai Hoc Xo Viet Nghe Tinh Nguyen Viet Hong 215 Units Value YoY Growth City population million 1.238 1% Area km 2 6,12 - GDP US$ billion 3.7 14% GDP per Capita US$ 3,584 8.68% Retail space m 2 74, N/A Retail sales of goods and services Q1/216 US$ billion 1.1 11% CPI 215 over 214 - -.35% 18
216 Savills Vietnam Troy Griffiths Deputy Managing Director Tel: +84 () 933 276 663 Email: TGriffiths@savills.com.vn Ho Chi Minh City Pham Van Dai Head of Research Tel: +84 () 973 859 165 Email: PVanDai@savills.com.vn Ha Noi Do Thu Hang Head of Research Tel: +84 () 912 53 Email: DThuHang@savills.com.vn 19