CBRE Vietnam - Eurocham

HCMC 2011… ChangesTaken on January 2, 2011Vietcombank Tower VietinBank BIDV TowerTaken on January 12, 2012CBRE Vietnam | Page 3 CBRE Vietnam Fearless Forcast 2012

HCMC 2011… ChangesSaigon Centre(phase 2)Taken on January 2, 2011Ben Thanh TowersTaken on January 12, 2012CBRE Vietnam | Page 4 CBRE Vietnam Fearless Forcast 2012

2011 MOST Fearless Forecasts• Office Tenants• Multiple choices and softening rents• Hospitality• Ritz Carlton, St. Regis, Mandarin Oriental, Shangri-La and FourSeasons to enter market within the next 5 years• Retail• Refurbished retail areas appear (Saigon Square #3) –Shipyards moving towards development• Growth of mini-malls due to lack of land (< 3,000 sm)• Larger retail areas coming up outside of traditional areas –District 5 (Tan Da Shopping Center), and Binh Duong(Becamex New City)CBRE Vietnam | Page 5 CBRE Vietnam Fearless Forcast 2012

2011 MOST Fearless Forecasts• Investors• Property investment remains dangerous for your health• Change in asset class as gold dips and people moved in other directions• Developers• Marketing spend TRIPLES as developers search for new ways to sell / leasetheir units• Increased use of technology in property – building management systems, CRMsystems• Local companies seek capital through IPO’s and more sophisticated financialstructures• Some residential developers will convert units for sale to units for lease due tounsold units in completed buildings, or instituting rental pools (guarantees)• Demand for data centres grows due to the continuing movement online, as ourbusinesses become more immediate with wi-fi, smart phones and iPads.Developers prepared to deliver with the requirements needed to support thesetrends will profit.CBRE Vietnam | Page 6 CBRE Vietnam Fearless Forcast 2012

2011 Vietnam Economic OverviewGDPGrowth Rate (y-o-y)Lending Rate 12%Inflation(Average, y-o-y)2008 2009 2010 2011 e 2012 f6.2% 5.3% 6.8% 5.9 1 6.3 312.75%Down from 21%in Q316%-17.0%(Late 2010)22.9% 6.9% 1 9.2%(Dec‘10: 11.8%)22% - 25% 2 N/A18.58% 1 12.1% 3Exports US$62.7 bil US$57.1 bil US$71.6 bil US$96.3 bil US$105.4 5Imports US$80.7 bil US$69.9 bil US$84.0 bil US$105.8 bil US$113.3 5Gold Price(per Tael)VND17.8 mil(Dec. 31, 2008, up7.2% y-o-y)VND26.7 mil(Dec. 31, 2009,up 50% y-o-y)VND36.1 mil(Dec. 31, 2010, up35.2% y-o-y)VND41.8mil 4(Dec. 30,2011. up15.8% y-o-y)N/AUS$/VND(Commercial banks)17,400(Dec. 31, 2008)18,497(Dec. 31, 2009)19,500(Dec. 31, 2010)Devalued by 5.4%vs. Dec. 200921,036(Dec.31, 2011)Devalued by 7.9%vs Dec. 2010)21,735 7US$/VND(Unofficial market)17,510(Dec. 31, 2008)19,470(Dec. 31, 2009)21,010(Dec. 31, 2010)21,275(Dec. 31, 2011)N/ACommitted FDI US$71.7 bil US$22.6 bil 1 US$18.6 bil(US$6.8 bil realestate)US$14.7 bil 1(US$845.6 mil realestate)US$15 - 16 bil 6Implemented FDI US$11.7 bil US$10 bil US$11 bil US$11 bil 1 N/ASource: Historical data by GSO, 1 GSO , 2 SBV, 3 IMF, 4 SJC, 5 World Bank, 6 Ministry of Investment, 7 Oxford EconomicsCBRE Vietnam | Page 7 CBRE Vietnam Fearless Forcast 2012

2011 Regional Economic ComparisonHong Kong Thailand Singapore China Malaysia Vietnam IndonesiaGDPGrowth Rate4.9% 1.6% 5.0% 9.0% 4.9% 5.9% 6.3%Consumer PriceIndex5.3% 3.9% 5.0% 5.6% 3.2% 18.6% 5.4%Gold Price( per gram inUS$ equivalent)US$51.80 US$50.50 US$52.18 US$51.88 US$52.17US$53.002.2% higherthan regionalaverageUS$52.72Trade Balance -$55.4 bn $27 bn $48.3 bn $111.9 bn $47.1 bn -$9.5 bn $38.2 bnFDI (net inflowin current US$,2010)$68.9 bn $6.3 bn $38.6 bn $185.1 bn $9.5 bn$8.0 bn(Source: WorldBank)$13.3 bnSource: Oxford Economics, Vietnamese General Statistics Office, World Bank, Goldprice.org, goldpricethai.com, pecunix.comCBRE Vietnam | Page 8 CBRE Vietnam Fearless Forcast 2012

A look ahead to 2012• With demand from the eurozone and USexpected to remain weak for some time,emerging East Asia should continue to worktoward increasing intraregional trade andfinancial integration, and expanding linkswith other emerging economies.- ADB, Asia Economic Monitor, December 2011 -2012GDP(% y-o-y)Vietnam 5.8 11.5Hong Kong 3.5 3.6Thailand 4.5 2.9Singapore 3.3 2.8China 8.1 3.5Malaysia 4.9 2.8Indonesia 6.2 5.0CPI(% y-o-y)10%8%6%4%2%0%-2%-4%-6%-8%2000 Q1Source: Oxford Economics. Note: GDP growth for Vietnam in 2012, The World Bank, IMF and ADB range between 6.1% – 6.5%.2001 Q12002 Q1CBRE Vietnam | Page 9 CBRE Vietnam Fearless Forcast 20122003 Q12004 Q12005 Q12006 Q1World Western Europe Asia-Pacific United States2007 Q12008 Q12009 Q12010 Q12011 Q12012 Q12013 Q1

2011 Economic Overview – FDIImplemented FDICOMMITTED FDI, 2010COMMITTED FDI, 201124.9%36.8%Real estateProcessing Manufacturing Industry5.8%34.3%Real estateProcessing Manufacturing Industry1.7%ConstructionConstruction9.3%Hotels and restaurants2.9%48.5%Hotels and restaurants27.3%Others8.5%OthersSource: Ministry of Planning & InvestmentCBRE Vietnam | Page 10 CBRE Vietnam Fearless Forcast 2012

2011 Vietnam Stock MarketIndex• At the beginning of 2011, some expected a rise. Going into 2012,some are wondering where the bottom is.• VN Index drops 27.5%, real estate companies fell by approx. 45%• Little support from those holding gold.5505004504003503004-Jan 1-Feb 1-Mar 29-Mar 26-Apr 24-May 21-Jun 19-Jul 16-Aug 13-Sep 11-Oct 8-Nov 6-Dec2,0001,8001,6001,4001,2001,0008006004002000Trading Value (Billions VND)Trading valueVNIndexSource: FPT SecuritiesCBRE Vietnam | Page 11 CBRE Vietnam Fearless Forcast 2012

2011 International ArrivalsMillions• 2011: 6 million international arrivals to Vietnam (19.1% y-o-y) and3.5 million to HCMC (13% y-o-y)765432102000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011VietnamSource: General Statistics Offices; bistrochic.netHCMCTourism arrivals by country 2011China 1,416,804South Korea 536,408Japan 481,519US 439,872Cambodia 423,440Taiwan 361,051Australia 289,762Malaysia 233,132France 211,444Thailand 181,820Others 1,438,779CBRE Vietnam | Page 12 CBRE Vietnam Fearless Forcast 2012

The Original Golden Sites• Of the 20 Golden sites:• 2 completed• 2 under development• 16 sites awaiting actionCBRE VietnamCBRE VietnamCBRE Vietnam | Page 15 Fearless Forcast 2012

Infrastructure 2011 Milestones• Roadways• T3 – Thu Thiem Tunnel• The ten year Nhieu Loc - Thi Nghe Canal Roadwidening project is completed• On August 24, the first Bus Rapid Transport (BRT)route in the city opened from Ben Thanh Market, toMien Tay Bus Station.• Metro lines• The expected cost of Metro Line 1 has almost doubled,with progress in compensation.• Tramway Line No. 1 is being restructured into a BusRapid Transit (BRT) system at reduced cost.• Air• Da Nang’s new airport terminal opens!• Prime Minister Dung officially approved Long ThanhInternational Airport’s master plan.• The airport has an area of 5,000 hectares withinvestment capital of US$6.7 billion for the first phase.• Vietjet Air, a new private airline, started operation. (1Airbus, 2 on order).CBRE VietnamCBRE VietnamNhieu Loc - Thi NgheCanal RoadSource: www.info.vnDa Nang New TerminalSource: Tuoi TreCBRE Vietnam | Page 16 Fearless Forcast 2012

2012 Infrastructure• Roads:• Construction of the four main roads in the ThuThiem new urban area will start in July, 2012 Completion is expected 2015.East – West Highway• Bridge:• Saigon Bridge No. 2, with four lanes, will startconstructed in April, 2012, and will take 22months to be completed.• Bus system:• In 2012, the city will focus on improving the bussystem and services, implementing solutions toimprove the backbone of the city’stransportation.CBRE Vietnam | Page 17 CBRE Vietnam Fearless Forcast 2012

According to BCI Asia…All Future Projects HCMC Hanoi Da Nang Can ThoNha Trang(Khanh Hoa)VungTauHaiPhongOffice 267 245 43 22 16 35 13Retail 86 33 18 7 4 11 5Hospitalityand SA44 53 28 12 37 19 6Residential 311 268 134 10 22 32 9Projects UnderConstructionHCMC Hanoi Da Nang Can ThoNha Trang(Khanh Hoa)VungTauHaiPhongOffice 166 88 15 15 6 19 7Retail 42 24 6 6 3 1 3Hospitalityand SA25 32 17 5 10 8 2Resi 142 104 19 3 5 14 5Source: www.bciasia.com; CBRE VietnamCBRE Vietnam | Page 18 CBRE Vietnam Fearless Forcast 2012

Office - RentsGrade A Rents (US$ psm)$60$50$40$30Rents 3 year 1 year 1 quarterGrade A -55.0% -8.3% -5.8%Grade B -44.0% -7.5% -1.5%Grade C -41.5% -8.5% -3.0%$202009 2010 2011$30Grade B Rents (US$ psm)$25$20$15$102009 2010 2011Grade C Rents (US$ psm)$30$25$20$15$102009 2010 2011CBRE Vietnam | Page 19 CBRE Vietnam Fearless Forcast 2012

Vacancy 3 year 1 year 1 quarterGrade A 23.4 pt -14.6 pt -6.1 ptGrade B 14.4 pt 3.3 pt -0.7 ptGrade C -2.6 pt -1.9 pt -0.1 ptOffice - Vacancy40%30%20%10%Grade A Vacancy0%2009 2010 201120%Grade B Vacancy15%10%5%0%2009 2010 2011Grade C Vacancy20%15%10%5%0%2009 2010 2011CBRE Vietnam | Page 20 CBRE Vietnam Fearless Forcast 2012

Luxury Condominium (US$ psm)$4,5003 Year Residential Price MovementHigh-end Condominium (US$ psm)$4,400$1,950$4,300$1,920$4,200$1,890$4,100$1,860$4,000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011Secondary Asking Price (US$/sm)$1,830$1,800Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011$6,000LuxuryMid-endHigh-endAffordable$4,000$2,000Mid-end Condominium (US$ psm)$02007 2008 2009 2010 2011Affordable Condominium (US$ psm)$1,020$990$960$930$900Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011CBRE Vietnam | Page 21 CBRE Vietnam Fearless Forcast 2012$730$710$690$670$650Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011

Take-up vs. Hangover100%90%80%70%60%50%40%30%20%10%0%Take-Up Rate (%)Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011Luxury High-end Mid-end AffordableUnsold Units Accumulated (Units)Some are waking up with their headin their handsUnsold Units by Segment9,0008,0007,0006,0005,0004,0003,0002,0001,0000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q420,00018,00016,00014,00012,00010,0008,0006,0004,0002,0000Total Unsold Units2009 2010 2011Luxury High-end Mid-end Affordable TotalCBRE Vietnam | Page 22 CBRE Vietnam Fearless Forcast 2012

The Residential NightmareDong Devaluation(9.3%)More strictly control ondolarisation price list inVNDResolution 11Q15,078 launches2,229 salesQ24,926 launches1,390 salesInt’l banks stoppedmortgage lending2012Death,Discount orOpportunity?Discount Headlines1,096 launches846 salesQ4Goldora Villasold to ICC864 launches1,867 salesQ3More incentives tostimulate salesProperty sector, the most attractiveinvestment channel, but morecautious to invest in 1-3 years(survey by Grant Thornton Vietnam)Doc. 8844 /NHNN-CSTT: Remove 4real estate groups out of the nonproductiveouttsatnding loan categoryThe Ascott signedDiamond Island (D.2)CBRE VietnamCBRE VietnamUS$6,000/unitin Binh DuongCBRE Vietnam | Page 23 Fearless Forcast 2012

• The past 18 months has seen shopping centrerentals create a buzz;• 2012, we expect department store rentals to comeback to the forefront:• Lack of quality space in the CBD;• Still a softening on rents• 2012, shopping centre rentals in the CBD to remainsoft;• Saigon Centre phase 2, the CBD retail hub on thehorizon;• First new supply in CBD with department store;Non-CBD Asking Rents (US$/sm/month)RetailDepartment Store vs. Shopping CentreCBD Asking Rents (US$/sm/month)$140$120$100$80$60$40$20$0Source: CBRE VietnamDepartment Store2008 2009 2010 2011Shopping Centre$100$80$60$40$20Department StoreShopping Centre• 1 st quality shopping centre outside the CBD –Crescent Mall;• However, rentals still softening as retailers havemultiple options and established SHOPHOUSElocation remain popular;$02008 2009 2010 2011Source: CBRE VietnamCBRE VietnamCBRE VietnamCBRE Vietnam | Page 24 Fearless Forcast 2012

Hotels 2012• Occupancy and RevPAR bothshowing signs of growth in 2011.• Coastal markets such as Phu Quoc,Nha Trang and Da Nang showed a higherRevPAR growth rate than HCMC:605550454035302520RevPAR (US$/room/night)2009 2010 2011FHCMC Da Nang Phu Quoc Nha TrangPhu Quoc continues to lead the coastalmarket with 20% y-o-y increase inRevPAR, expected to be an attractivedestination for investors in 2012.The operation of new Da Nang InternationalAirport terminal in December,2011facilitates more direct internationalflights to Da Nang from locations suchas Seoul and Kuala Lumpur.CBRE Vietnam | Page 25 CBRE Vietnam Fearless Forcast 2012

Da Nang Hotels/Resorts/2 nd Home 2012• 2011 y-o-y increase in visitors was 34%, of which international visitorsincreased 44% y-o-y• The Hyatt Regency came online in Q4 with 200 five-star rooms, 2012expects InterContinental, Le Meridien, Melia and Pullman to enter DN• In 2012, the DN hospitality market will target Russian tourists with directRussia – Da Nang flights in consideration• Da Nang market continues to perform with 60% of the 40 villas launchedat The Point sold within three months• No construction expected in 2012 without pre-sales• Projects away from the coast see action too – WTC leasing (anchorsalready signed) and Azura to complete Q2CBRE Vietnam | Page 26 CBRE Vietnam Fearless Forcast 2012

Serviced Apartments 2011• Demand derived from 3 sources:• Professional expatriates – main source– Both from Asia and the West– Hanoi: employees in the Embassies• Returning Overseas Vietnamese• Wealthy Vietnamese ← a new and growing trendProportion of Requested Area (sm)0 -60 60 -100 100 -160 160+100%80%60%• “Vietnam will be the 11th most commondestination of companies sending staff oninternational assignments up to 2013. Therefore,this is likely to ensure that the demand foraccommodation from companies sending staff intoVietnam is likely to remain strong in the next threeyears”.--- Trends in Managing MobilitySurvey 2010, ECA International40%20%Proportion of Housing Budget (US$/month)0%Q1/2011 Q2/2011 Q3/2011 Q4/2011Source: CBRE Residential LeasingTOP DEMAND!$0 -$1200 $1200 - $2500 $2500 - $3500 $3500+• H1/2011 work permits issuedto foreigners in HCMC:• Achieved 85.1% of entire 2009• Down 16.5% against H1/2010Q4/2010 10.0% 40.0% 40.0% 10.0%Q1/2011 17.9% 41.5% 29.2% 11.3%Q2/2011 20.5% 48.2% 24.1% 7.2%Q3/2011 11.7% 52.1% 26.6% 9.6%Source: CBRE Residential LeasingCBRE Vietnam | Page 27 CBRE Vietnam Fearless Forcast 2012

ILS 2012 Forecast• Logistics component becomes a must inindustrial park zoning.• Logistics to grow as Asian regional tradebuoys economy through Eurozone crisisand slower US growth.• Japanese investment KEY. Both fromJapan directly, and from Japanesecompanies relocating out of Thailand.• Potential growth areas:• Food & Beverage for South Vietnam• Electronics for North Vietnam.• Ready Built Factory rental rates comedown as more supply than ever before.• With the increasing profile of industrial inVietnam, more investors seek wholesalepurchases of operating IPs.CBRE Vietnam | Page 28 CBRE Vietnam Fearless Forcast 2012

The Rise of Investment - The Institutional DealAnd a notable variance in yieldPacific Place, HanoiQ4 2010 – Reported 12%CentrePoint, HCMCQ2 2011 – Reported 10.6 – 11.3%Saigon Tower, HCMCQ4 2011 – Reported 8.5%At least threemoreinstitutionaldeals to comein 2012CBRE VietnamCBRE VietnamCBRE Vietnam | Page 29 Fearless Forcast 2012

On December 31, 2012…1. Nguyen Trai still the retail king!CBRE’s 10 Most Fearless Forecasts2. Square office buildings back in fashion! The best tenant deals will have happenedin the first half of 2012.3. Any residential project that hasn’t broken ground will gravitate to the affordable(new middle class, less than 21,000,000VND psm) segment.4. Luxury residential in the CBD WILL sell.5. Golf – Boom or Bust?!?6. Revenue from cleared sites skyrockets as they are converted into drive-in movietheatres and Circle K.7. Burger King opens at Da Nang airport and Sushi Bar opens in Phu Quoc asoverseas visitors increase a further 20%.8. In the short-term the new Pudong is not Thu Thiem, it is District 4.9. Gold price declines with new supply from Vietnam’s two gold medals at theLondon Olympics 2012.10. Registered FDI into real estate triples in 2012 as Vietnam sees 20 new foreigninvestors.11. Jack Dorsey to spend Christmas 2012 in Vietnam, @Townsend_Marc to have50,000 followersCBRE Vietnam | Page 30 CBRE Vietnam Fearless Forcast 2012

2012: Gold Supply in Vietnam Increases• The magic from Trinh Duc’s performance in theRugby World Cup is overshadowed by:• Quy Phuc is expected to win the gold in 100 mfreestyle• Anh Tuan is expected to win the gold in

CBRE Vietnam - HCMC & Hanoi Quarterly Reports• The most insightful real estate publication in Vietnam!• Plan your future with two quarter and eight quarter forward looking analysis.Contact for free sample:quarterlyreports@cbrevietnam.comTHANK YOU© 2012 CB Richard Ellis (Vietnam) Co., Ltd. This report has been prepared in good faith and with due care by CB Richard Ellis (Vietnam) Co., Ltd. We obtained some of theinformation above from sources we believe to be reliable. However, we have not verified the accuracy of the information which we obtained from other sources and make noguarantee, warranty or representation about it. We include projections, opinions, assumptions or estimates which are made with careful consideration of factors known to us forexample only, and they may not represent current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot bereproduced without prior written permission of CB Richard Ellis.CBRE Vietnam | Page 32 CBRE Vietnam Fearless Forcast 2012