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Vietnam Real Estate Report Q1 2011


Vietnam Real Estate Report Q1 2011

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Additional Information
Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Aug 1, 2011
Quick Overview
Vietnam’s commercial real estate market has been overshadowed by a property glut. Rental rates fell bydouble-digit rates through 2009 – in each of the three cities for which we gathered data (Hanoi, Ho ChiMinh City and Da Nang) and across all three sub-sectors. Vacancy rates are generally running at around30%.
Normally, in an economy that has been growing so quickly that the authorities are tightening both fiscaland monetary policy in order to curb inflationary pressures, rents and capital values would fall until muchof the vacant space is absorbed.
Although the government intervened to re-regulate the commercial real estate sector in early 2010, it wasnot clear that this process of adjustment was under way in Vietnam. At present there are clear signs thatthe market is stabilising but uncertainties still remain. Our in-country sources indicated that Da Nangoffice and Hanoi industrial rents had increased dramatically since 2009. Elsewhere, rents trackedsideways or rose by single digit amounts. Looking forward, our sources anticipate that rents will continueto move sideways through 2011 before picking up towards the end of the forecast period in 2015. Theyare less optimistic about the prospects for higher rents in Hanoi than in Ho Chi Minh City or Da Nang.Our view is that the government has allowed market forces to operate in at least some of the market. Oneof the key findings from our mid-2010 interviews was that yields had risen sharply in the office andindustrial sub-sectors of Hanoi and Da Nang. The implication is that there has been a major adjustment inthese sub-sectors – in the form of a slump in capital values.
It may well be that 2010 comes to be seen as the year in which the key trends in Vietnam’s commercialreal estate sector became much clearer. A substantial over-supply of property is being absorbed –although official intervention is still preventing across the board adjustments in rents, yields and capitalvalues. Conditions in particular sub-sectors remain volatile – but yields are in general likely to movesideways or downwards over the coming four years.
Table of Contents
Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 6
Vietnam Real Estate/Construction SWOT ............................................................................................................................................................. 6
Vietnam Economics SWOT ................................................................................................................................................................................... 7
Vietnam Business Environment SWOT.................................................................................................................................................................. 8
Regional Real Estate Overview ....................................................................................................................... 9
Table: Asia Pacific’s Office Markets At A Glance – Rents, 2009-2011 (US$ per square metre per month) .......................................................... 9
Table: Asia Pacific’s Retail Markets At A Glance – Rents, 2009-2011 (US$ per square metre per month) ......................................................... 11
Table: Asia Pacific’s Industrial Markets At A Glance – Rents, 2009-2011 (US$ per square metre per month)................................................... 13
Real Estate Market Overview ........................................................................................................................ 15
Table: Vietnam Real Estate Markets – Rentals in m²/month, 2008 And 2009 (US$) ............................................................................................ 16
Table: Vietnam Real Estate Markets – Net Yield (%) ......................................................................................................................................... 16
Vietnam Real Estate Markets – Terms of Contract/Lease ................................................................................................................................... 17
Vietnam Real Estate Markets – Available Space (m²) and Vacant Space (%) ...................................................................................................... 17
Forecast Scenario ......................................................................................................................................... 18
Real Estate Outlook ............................................................................................................................................................................................ 18
Table: Vietnam Real Estate Markets - Rentals in m²/month, 2009-2011 (US$) ................................................................................................... 20
Table: Vietnam Real Estate Markets – Forecast Net Yield, 2009-2015 (%) ......................................................................................................... 21
Construction Industry Outlook ............................................................................................................................................................................ 21
Table: Vietnam Construction And Infrastructure Industry Data, 2007-2015 ....................................................................................................... 21
Table: Vietnam Construction And Infrastructure Industry Data, 2012-2020 ....................................................................................................... 23
Construction and Infrastructure Forecast Scenario ............................................................................................................................................ 24
Vietnam’s Macroeconomic Outlook .................................................................................................................................................................... 26
Vietnam – Economic Activity, 2007-2015 ........................................................................................................................................................... 28
Business Environment ................................................................................................................................. 29
Real Estate/Construction Business Environment Ratings ................................................................................................................................... 29
Table: Asia Real Estate/Construction Business Environment Ratings ................................................................................................................. 29
Vietnam’s RECBER ............................................................................................................................................................................................ 30
Project Finance Ratings: Outlook For Asia Pacific ............................................................................................................................................ 31
Table: Design And Construction Rating ............................................................................................................................................................. 33
Table: Commissioning And Operating Rating .................................................................................................................................................... 34
Table: Overall Project Finance Rating ............................................................................................................................................................... 35
Vietnam’s Business Environment ........................................................................................................................................................................ 36
Table: BMI Business And Operational Risk Ratings ........................................................................................................................................... 37
Table: BMI Legal Framework Ratings ............................................................................................................................................................... 40
Table: Labour Force Quality .............................................................................................................................................................................. 44
Table: Annual FDI Inflows Into Asia, 2006-2008 ............................................................................................................................................... 47
Table: BMI Trade Ratings .................................................................................................................................................................................. 48
Table: Vietnam Top Export Destinations, 2001-2008 (US$mn) ........................................................................................................................... 49
Company Monitor .......................................................................................................................................... 52
Becamex IDC Corp ............................................................................................................................................................................................. 52
COTECCONS Group .......................................................................................................................................................................................... 53
Housing And Urban Development Corp (HUD) ................................................................................................................................................. 54
Nam Cuong ......................................................................................................................................................................................................... 55
Song Da Construction Corporation .................................................................................................................................................................... 56
Vietnam Construction And Import-Export Corporation (Vinaconex)................................................................................................................... 58
Vietnam Construction And Machinery Installation Corporation (Lilama) ........................................................................................................... 59
Vincom ................................................................................................................................................................................................................ 60
BMI Methodology .......................................................................................................................................... 61
How We Generate Our Industry Forecasts ......................................................................................................................................................... 61
Construction Industry ......................................................................................................................................................................................... 62
Bank Lending ...................................................................................................................................................................................................... 63
Real Estate/Construction Business Environment Rating ..................................................................................................................................... 63
Table: Weighting Of Indicators .......................................................................................................................................................................... 64
Project Finance Ratings Indicators .................................................................................................................................................................... 66
Table: Design And Construction Phase .............................................................................................................................................................. 66
Table: Commissioning And Operating Phase – Commercial Construction ......................................................................................................... 67
Table: Commissioning And Operating Phase – Energy And Utilities .................................................................................................................. 68
Table: Commissioning And Operating Phase – Transport .................................................................................................................................. 69
Sources ............................................................................................................................................................................................................... 70




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