QUARTERLY MARKET REVIEW HANOI Q4/2016 QUARTERLY MARKET REVIEW HCMC Q1/2017

Transcription

1 QUARTERLY MARKET REVIEW HANOI Q4/216 QUARTERLY MARKET REVIEW HCMC Q1/217

2 ECONOMIC OVERVIEW Exchange rate GDP: lowest Q1 rate in 3 years Retail Sales: lowest Q1 real growth in 3 years Exchange rate 5.1% (.4) ppts 3.7% Real Estate $4.4bil growth 6% YoY 22,8 4% YoY Trade deficit CPI FDI: impressive growth of registered capital $1.9Bil In Q1 17 ~5% Highest in 3 years 73% YoY registered capital Korea 48% contribution 3% YoY FDI disbursement International visitors } Mortgage rate Newly established businesses ~3.2mil 11% ~26,48 Increased 29% YoY 1ppt YoY Increased 11% YoY 2

3 RETAIL Supply Opened: 1 shopping centre and 3 supermarkets One supermarket closed. Total stock: ~1.1 million m 2, stable QoQ, 1% YoY Saigon Centre Crescent Saigon Centre Mall Market performance Avg. occupancy: 94%, stable QoQ, YoY Avg. gross rent: US$53/m 2 /mth, 1% QoQ, stable YoY Shopping centre: US$51/m 2 /mth, 2% QoQ, 1% YoY Department store: US$63/m 2 /mth, 2% QoQ, 7% YoY Retail podium: US$37/m 2 /mth, 1% QoQ, 7% YoY Outlook 217: ~17, m : ~61, m 2 3

4 OFFICE Supply 1 new Grade C project (~4,4 m 2 ) 2 Grade C buildings closed (~7,3 m 2 ) Total stock: ~1.6 million m 2, stable QoQ, 1% YoY Saigon Centre Market performance Avg. occupancy: 97%, stable QoQ, 2 ppts YoY Avg. gross rent: Grade A: US$49/m 2 /mth, 2% QoQ, 7% YoY Grade B: US$28/m 2 /mth, stable QoQ and YoY Grade C: US$19/m 2 /mth, stable QoQ, 2% YoY Office Index: 87, 1 ppt QoQ, 3 ppts YoY Outlook 9M/217: ~123, m 2 Q2/ : ~39, m 2 4

5 SERVICED APARTMENT Supply One new Grade C project (65 units) Two existing Grade B projects adjusted supply Total stock: >4,6 units, 2% QoQ, 6% YoY Grade A (7), Grade B (25) and Grade C (52) Ibis Saigon Airport Market performance Avg. occupancy: 87%, stable QoQ, 5 ppts YoY Avg. gross rent: Grade A: US$32/m 2 /mth, stable QoQ, 4% YoY Grade B: US$26/m 2 /mth, 1% QoQ, 3% YoY Grade C: US$17/m 2 /mth, 1% QoQ, 7% YoY Outlook 9M/217: >54 units Q2/ : ~ 1,8 units 5

6 HOTEL Supply Opening: one 3-star and one 4-star (33 rooms) Closure of one 3-star (5 rooms) Total stock: ~16,2 units, 2% QoQ, 8% YoY 5-star (2), 4-star (24), 3-star (87) Central Palace Saigon Market performance Average occupancy: 68%, 1ppt QoQ, stable YoY Average room rate by grade: 5-star: US$121/room/night, 3% QoQ and YoY 4-star: US$69/room/night, stable QoQ and YoY 3-star: US$47/room/night, stable QoQ, 7% YoY Outlook Q2/ : ~2, rooms 6

7 APARTMENT Supply Twelve new projects and next phase of one active project (~5,2 units) Primary stock: ~42,5 units, 6% QoQ, 14% YoY Secondary stock: ~145, units, 6% QoQ Market performance Transaction volume: ~8,8 units, 13% QoQ, 4%YoY Absorption rate: 21% 1 ppt QoQ, 4 ppts YoY Transaction volume by grade: Grade A: 5% QoQ, 1% YoY Serenity Mid-Town Grade B: 35% QoQ, 1% YoY Grade C: 1% QoQ, 78% YoY Apartment Index: 92 unchanged QoQ, 1 points YoY Outlook Q2/ : 62,2 units 7

8 VILLA TOWNHOUSE Villas & townhouses 7 new projects (~59 dwellings) Primary stock: ~2,6 units, 14% QoQ, 25% YoY Absorption rate: 34%, 1 ppt QoQ, 12 ppts YoY Transaction volume: ~88 units, 11% QoQ, 94% YoY Merita Land plot Six new projects plus launch of 1 active project (~71 plots) Primary stock: ~2,1 plots, 13% QoQ, 53% YoY Absorption rate: 44%, 1 ppt QoQ, 17 ppts YoY Transaction volume: ~91 plots, 12% QoQ, 23% YoY Valora Kikyo Outlook Q2/ : ~ 14,1 dwellings/plots 8

9 QUARTERLY MARKET REVIEW HANOI Q4/216 TOURISM AND HOSPITALITY

10 VIET NAM COMPETITIVENESS Tourism competitiveness, 215 Competitiveness index: ASEAN Vietnam Ranked 6 th in ASEAN Natural resources Cultural resources & business travel Business enviroment Safety & security Health & hygiene Government spending prioritization: marketing campaigns and National branding Less international openness: Visa exemption policy, VN (23) vs. Thailand (58) Air transport & Tourist service infrastructure 3 International arrivals: Tourist service infrastructure 2 1 Human resources Ranked 5 th in ASEAN Strong potential: 26% growth Ground & port infrastructure ICT readiness International arrivals, % Air transport Prioritization of tourism % 1% 5 Environmental sustainability International openess Thailand Malaysia Singapore Indonesia Viet Nam Phillipines Cambodia % Price competitiveness Number of arrivals (mil)-lhs Tourism growth (%)-RHS Source: Weforum, 216 Source: Statistics agencies of surveyed countries 1

11 SOURCE MARKETS Source markets, % 4% China: 1 st source market: 2.7 mil arrivals Middle class high affordable demand Strong fluctuating growth (5% YoY) 1 East Asia (other than China) Source: VNAT China Europe Asean Russia Others Tourist (mil)-lhs Growth rate (%)-RHS Airline capacity and domestic (million trips) 7 2% % Russia: Ruble depreciation driving destination choice Stable growth, nearly 3% pa Domestic tourism: Booming demand: affluent class to double; middle class increase by half by 22 Low-cost airlines growth Source: GSO and VNAT Airline passengers Domestic trips 11

12 SUB-MARKETS International arrivals to major cities, HCMC Ha Noi Da Nang Nha Trang Phu Quoc International arrival (million trips)-lhs Growth rate (%)-RHS Source: Provincial tourism departments Hotel market performance, 216 2, 6% 5% 4% 3% 2% 1% % 9% HCMC & HN: highest arrivals Economic hubs: MICE and business travelers Gateways to Sapa, Ha Long Bay, Mekong delta Coastal cities: outperforming growth International airports Nha Trang: tops supply and performance Da Nang leads arrivals volume Phu Quoc: Early-development stage (4% YoY) LOS: Nha Trang 3.5 days vs Da Nang 2.8 days vs Phu Quoc 2.6 days 15, 8% 1, 7% 5, 6% HCMC Ha Noi Da Nang Nha Trang Phu Quoc 5% Hotel supply (rooms)-lhs Source: Savills Research & Consultancy Occupancy (%)-RHS 12

13 AIRPORT CAPACITY Airport capacity % 3% 25% 2% 15% 1% 5% Airports under pressure: HCMC 13%, Nha Trang 32%, Da Nang 113% Government efforts: TSN airport: upgrading 25 to 38 mill pax/year Da Nang airport: an additional 4-6 mill pax/year Cam Ranh airport: 1.5 to 2.5 mill pax/year. % HCMC Ha Noi Da Nang Nha Trang Phu Quoc Airport capacity (million passengers)-lhs Operating capacity (%)-RHS US$5.6 bill required to 22 Government budget? Source: ACV and other sources HCMC, Da Nang and Nha Trang supply increases 3% pa in three years Hospitality development evaluation? 13

14 Vietnam has come a long way in only 7 years Then (21) Now (216) 5 Million International tourist arrivals 28 Million Domestic tourist arrivals 35.5 Million passengers Total capacity of 5 main airports 4 International direct flight routes Operated by 3 domestic carriers 5 International airports HCMC Hanoi Danang Cam Ranh Hai Phong Restrictive visa policy - Visa exemptions: 15 countries - Onerous and expensive visa application 1 Million International tourist arrivals 62 Million Domestic tourist arrivals 6 Million passengers Total capacity of the same 5 main airports 7 International direct flight routes Operated by the same 3 domestic carriers 9 International airports HCMC Hanoi Danang Hue Phu Quoc Cam Ranh Hai Phong Can Tho Vinh Relaxed visa policy - Visa exemptions: 22 countries - e-visa system: 4 countries eligible - Visa fee reduction of 4% compared to 21 14

15 Supply (Rooms) Supply (Rooms) Supply (Rooms) Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Growth Rate y-o-y (%) Hospitality Development Proceed with caution The Hospitality Market is Volatile International Tourist Arrivals Growth Rate (Month on Month) Source: Vietnam Tourism Department Demand & Supply Dynamics: Very strong supply growth but is demand keeping up? 25, Nha Trang & Cam Ranh Hotel & Resort Supply (Midscale to Luxury Segment) 16% 25, Da Nang Hotel & Resort Supply (Midscale to Luxury Segment) 25, Phu Quoc Hotel & Resort Supply (Midscale to Luxury Segment) 2, 57% 2, 42% 2, 15, 18% 15, 36% 15, 1, 1, 14% 1, 65% 7% 15% 5, 5, 5, Existing Supply Future Supply Arrivals CAGR 15% ( ) Existing Supply Future Supply Arrivals CAGR 21% ( ) Existing Supply Future Supply Arrivals CAGR 33% ( ) 15

16 Hospitality Development Proceed with caution Second Home vs Hotel and Resort Future Supply Coastal Destinations ( ) 44% 56% Second Home Hotel & Resort Second Home Supply Coastal Destinations by Type (Forecast 219) 15% 3% 3, 25, 2, Second Home Supply in Coastal Destinations (Launched vs Completed Units) 17% 65% 15, 1, 5, Condotel Second Home Condominium Branded Villa Non-Branded Villa Accumulated Launched Units Accumulated Completed Units (*) Coastal Destinations include: Da Nang, Khanh Hoa, Phu Quoc, Ho Tram, Ha Long & Quang Nam. 16

17 Loss Profit Loss Profit Hospitality Development Proceed with caution 25 The false perception many condotel developers have of project GOP Beak even with guarantee return Typical Guaranteed Returns: Vietnam: 1% for 5-1 years Phuket: 7% for 3-5 years Bali: 7% for 2-3 years -5 2 Beak even Operational Year The likely reality of project Gross Operational Profit (GOP) Beak even with guarantee return Beak even Operational Year 17

18 US$ 1M US$ 74.9M US$ 49M US$ 48.7M US$ 46.7M Deal Size Everyone wants a piece of Vietnam Hospitality Hotel Operators Branded Properties 57 Branded Properties (27 additional properties with many new brands) Investors Notable Hotel M&A Transactions in 216 World Leaders Kong 18

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