What do we need to get right next time for a sustainable property market in Vietnam? - Marc Townsend

What do we need to get right next time for a sustainable property market in Vietnam?<br /> Presented by: Marc Townsend Managing Director Monday 21st September 2009<br /> <br /> Risks<br /> -Inflation -Infrastructure -Transparency -The past was too good to give up -NPLs -Valuations -Capital gains tax issues on the transfer of property -Speculation is so easy -Land clearance and tender and auction process<br /> <br /> 2<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Asia economic outlook - 2009<br /> GDP growth -3.1% Clouds over growth but positive prospect Clouds over growth and dimmer prospect -5.3% Recent deterioration and uncertain outlook Continued deterioration<br /> TAIWAN HONG KONG<br /> <br /> CHINA<br /> <br /> SOUTH KOREA<br /> <br /> JAPAN<br /> <br /> 6.0%<br /> INDIA<br /> <br /> -5.6% -2.5%<br /> <br /> 6.5% -3.1%<br /> <br /> THAILAND VIETNAM<br /> <br /> 3.5% -2.5%<br /> SINGAPORE MALAYSIA INDONESIA<br /> <br /> PHILLIPPINES<br /> <br /> 1.4%<br /> <br /> -6.5%<br /> Source: IMA (April 2009)<br /> <br /> 2.8%<br /> <br /> 3<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Asia economic outlook - 2010<br /> GDP growth 3.2% Clouds over growth but positive prospect Clouds over growth and dimmer prospect -1.0% Recent deterioration and uncertain outlook Continued deterioration<br /> TAIWAN HONG KONG<br /> <br /> CHINA<br /> <br /> SOUTH KOREA<br /> <br /> JAPAN<br /> <br /> 7.0%<br /> INDIA<br /> <br /> -0.5% 3.6%<br /> <br /> 7.5% 2.9%<br /> <br /> THAILAND VIETNAM<br /> <br /> 4.9% 2.1%<br /> SINGAPORE MALAYSIA INDONESIA<br /> <br /> PHILLIPPINES<br /> <br /> 3.0%<br /> <br /> 3.0%<br /> Source: IMA (April 2009)<br /> <br /> 4.5%<br /> <br /> 4<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Linked Markets<br /> Real estate capital values trend closely with domestic gold and stock prices<br /> VN Index Closed at 556.75 15 Sept 2009<br /> <br /> 130%<br /> <br /> Source: HSC Securities<br /> <br /> Vietnam Gold<br /> <br /> 15%<br /> <br /> Source: Giavang<br /> <br /> 5<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Office Rent Cycle<br /> <br /> 6<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Complexity of deals<br /> Investment Sales change shape Foreigners to Locals Locals to Foreigners Sale of Shares of single asset companies En-bloc Sales during construction Sale of the Retail Podium of mixed-use developments Sale of 1 tower (out of several) MORE assets have changed hands but transactions are below the radar screen More inside deals Investors have become more particular with their requests and have tighter budgets No A.A. in Vietnam<br /> <br /> 7<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Increased competition<br /> Pressure on owners, land lords and investors Little differentiation of design, style and the theme Commoditization of small office buildings Stand out in the crowd Small tenants still looking for space Pay fees<br /> <br /> 8<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Yields<br /> Yield compression as rents fall Tighter expected spreads Longer paybacks Developers will need creativity to create more value but compared to Singapore, Hong Kong and China, they are still high<br /> <br /> 9<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br /> Adding Value<br /> Building Design Refurbishment options Example of retail developers in Causeway Bay (HK) and Ginza (Tokyo)<br /> <br /> 10<br /> <br /> CB RICHARD ELLIS VIETNAM<br /> <br /> Where are we going? What have we learned? |September 2009<br /> <br />