Southeast Asia Outlook 2023

MARKET STATISTICS

RETAIL (SHOPPING CENTER)

READY-BUILT FACTORIES, (HANOI)

READY-BUILT WAREHOUSE (HANOI)

RESIDENTIAL APARTMENTS (MID END TO HIGH-END)

OFFICE (GRADE A&B)

$2.30 *

$3.80 *

$0.43

$0.42

Rents Q4 2022 (USD psf pm) 2023 Forecast

Selling Price: $173.3 psf **

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VIETNAM: HANOI MA R K E T S NA P S H OT

Vacancy/Sales Rate Q4 2022 2023 Forecast

12.9%

12.9%

17%

27%

Sales Rate: 51.4%

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Current Inventory

17.6 Million SF

12.1 Million SF

29.6 Million SF

21 Million SF

194,045 Units

Pipeline Supply (2023-2027)

5.0 Million SF

3.6 Million SF

2.9 Million SF

6 Million SF

70,959 Units

ECONOMY

% of Current Inventory (Pipeline Supply over Current Inventory)

28.5%

29.4%

10%

29%

36.5%

2022 witnessed a recovery of Vietnam’s economy, with GDP growth recorded at 8%, exceeding previous forecast by most economic institutions (6.5-7.5%). In 2023, despite gloomy global economic outlook, Vietnam’s economy is still expected to maintain stable growth as GDP growth is forecast between 5.9% – 7.3%. However, caution and uncertainty remains the general sentiment coming from various anticipated challenges such as Vietnam’s reliance on trade activity with global partners, increasing inflationary pressure, and tightening monetary and fiscal policies in many countries.

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Capital Value Outlook

* Office and retail rentals are inclusive of service charge ** Primary Selling Price

INVESTMENT OPPORTUNITIES

RECENT SIGNIFICANT DEALS

1. OFFICE: With limited space left in the CBD, new business hubs that are still in development has increased in popularity among developers and tenants alike. Expectant new projects in upcoming years are also distributed on non-CBD area, especially in the western urban districts. High-quality supply that can satisfy large-scale lease demand becomes more favourable options for companies that consider and can afford expansion. Interested investors should look out for the upcoming revision of Land law, as well as focus on developing high-quality projects that can attract tenants and deliver higher potential for returns on investment. 2. READY-BUILT-WAREHOUSES: Northern Vietnam is positioning as “China +1” destination with expanding key manufacturers, improving connecting routes, and enlarging logistics ports are the main factors driving industrial demands into the region; where international

diplomatic conflict helps to catalyst further demands, as Vietnam is the preferred substitute re-location. While the majority of 2023 is expected to decelerate Vietnam’s industrial growth due to inflation and market uncertainties, the pressure is expected to lighten by year-end. Investors looking for opportunistic strategies should consider this period as there are many divesting assets to acquire and to prepare for the incoming market expansion. 3. RESIDENTIAL: Due to the Government’s credit control on Vietnam’s real estate industry, rising interest rate, project legal issues, and bond issuance tightening, Hanoi’s residential market is expected to experience a down trend in 2023. However, segments close to real housing demand such as mid-end and high-end still received high attention in the market.

PROPERTY NAME

PROPERTY TYPE

PRICE (MIL USD)

BUYER

SELLER

DATE

CN03 Plot at Hanoi Supporting Industry Industrial Park

N&G Investment and Development Corporation

Inventec Corporation

Industrial Land

23

Q4 2022

Parcel of Land at Hoai Duc

Keppel Land

Phu Long RE Co

Residential Land

116

Q3 2022

Viva Land Investment & Development Joint Stock Company

Mitsubishi Estate, CapitaLand Development

Capital Place

Office

557

Q1 2022

Source: RCA, Cushman & Wakefield Research

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Southeast Asia Outlook 2023: Bouncing Back Stronger | 22