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Office Accommodation in Vietnam
Unit Vietnam's economic liberalization (also referred to as "Doi Moi / Open Door"
policy) that began with the 6th Party Congress of 1985, there was no foreign direct
investment (FDI) in real estate, and so the country had no “International Standard” office
properties until the latter half of the 1990’s. The “First Wave” of FDI brought with it a
number of speculative investors, who pinned their hopes on Vietnam’s rapid integration
into the world economy. These hopes didn’t materialize and the wider regional ‘Asian
Economic Crisis’ put an end to any existing investors’ hopes of making a ‘quick-buck’. It
also put a halt to all of the projects that were still on the drawing board (even if already
licenced) and many that were already underway. Ten years later, the skyline of HCMC
still shows several concrete skeletons (such as the Holiday Inn), though most of these are
now either being completed (such as PetroVietnam Tower) or have recently been
completed (such as the Hyatt). Many of the projects licenced in the mid to late 1990’s
never made it the construction stage and are now ‘long-delayed’ and have been leased out
to sub-investors, typically for 10 terms as coffee shop / restaurants, or have / are being relicenced to new foreign investors, such as the USD$525 million ‘Black Hole of Saigon’;
Saigon ‘Space-Ship’; or Asiana Plaza. A couple of the better sites have been acquired by
new investors and are now under construction, such as Avalon and Times Square.
As a direct consequent of the total absence of FDI in real estate for about 10 years from
@1995, Vietnam’s cities are now facing a chronic shortage of all types of space,
including office accommodation. However, with a few (relatively) very large projects
now underway the future looks better for tenants,,.. BUT these buildings will take 2-3
years to construct, and so space shortages and inevitably rental increases look set to
continue in the short term. Thus, office rentals have roughly doubled over the past 5 years
and are now roughly on par with Singapore.
In Vietnam there are a wide variety of office standards, from “Institutional Standard”
Grade A buildings to potential ‘death-traps’ with, for example, no adequate fire escapes,
and so which in many countries would be closed and immediately redeveloped. It seems
inappropriate to us to classify this group of buildings as Grade C since they cannot be
regarded as being “International Standard” and so we catagories office properties from
Grades A-E with only genuinely “institutional standard” properties being classified as
Grade A properties.
Classifying office properties by grades must, by definition, be a subjective exercise.
Some investors would argue that mixed-use buildings are expensive to manage and a bit
of a ‘Jack-of-all-trades and master of none’. However, since most of Vietnam’s larger
office buildings incorporate either residential and / or retail elements, this would seem to
be being unnecessarily pedantic, especially in the context of Vietnam where
considerations such as location, management and on-going maintenance programmes
need to be given additional weighting to compensate for any such perceived design
deficiencies. Having taken all of relevant factors into account, one is than able to make
some sort of sensible assessment of the quality of one building against others in the
locality. We have concluded that ‘international standard’ buildings can best be described
as being those that have been designed and constructed in accordance with widely
recognized international standards (Grades A-C) with the others as Grades D-E. This
does not necessarily infer that all of the many such locally designed and built buildings
are unsuitable for occupation by most foreign invested enterprises (FIE), but that they are
usually unsuitable for multi-national corporations (MNC).
Hanoi
Hanoi is a relatively small province (921sq.km compared with HCMC’s 2,095 sq.km)
with 12 Districts : Soc Son, Dong Anh & Gia Lam - northeast of the Red River (663
sq.km) - and Tu Liem, Thanh Tri, Tay Ho, Cau Giay, Thanh Xuan, Hai Ba Trung, Dong
Da, Hoan Kiem and Ba Dinh – of which the last 7 represent the central and ancient core
(84 sq.km)
General Overview
This central part of Hanoi is densely populated with about 1.5 million people. There are
very few buildings above 4-6 floors and almost all were built since 1975 and most in
dreadful condition. Infact, according to a recent survey 5% must be destroyed as soon as
possible and 62% in need of upgrades. Because of the small nature of the building stock,
the small roads, and the flat geography, there are very few genuine landmark buildings
except for the few with lakeside locations.
The imminent construction of the country’s tallest building on Lieu Giai Street in Ba
Dinh near the Daewoo Hotel will signal a change as the capital city starts to develop
some buildings worthy of its capital status. The USD$114.6 million 65 floor Hanoi City
Tower is being developed by Coralis Vietnam (a venture between the Luxembourg
registered Coralis SA & LOHR Industrie) which has, exceptionally, received a 49 year
100% FIE (foreign invested enterprise) licence. It is capitalised at USD$114.6 million
with USD$53 million in legal capital and will provide 200,000 sqm of office
accommodation, apartments & retail space. Extraordinarily, in itself this one building has
the potential to triple to amount of Grade A office space in Hanoi, since the cumulative
total stock in 2005 was only about 80,000 sqm. This risibly low figure is both an
indictment of the foreign investment laws (regarding real estate) and of the ability of the
Hanoi People’s Committee ability to attract investment. However, the new Land Law and
the granting of a 100% FIE licence to Coralis are hopefully signals of a new beginning;
of a new “Second Wave” of foreign investment in real estate.
The capital city's population has increased remarkably in recent decades. The city was
home to more than 3 million in 2004, with an average density of 17,868 people per
kilometre. However, this rate is much higher in the central districts. The most densely
populated is Hoan Kiem District and especially Hang Bo Commune. The high density
population results from the fact that each person in these areas have an average living
space of only 2 square metres. This has hit the city's infrastructure system hard,
especially in the Old Quarter, where many generations still live in the same house
together. Because almost all of the narrow, twisty roads are lined with tiny shop-houses
with ground floor retail accommodation, development sites for ‘international standard’
buildings ie @1,000 sqm, are almost impossible to assemble. The only large sites are
typically owned by current or former (post equitisation) SOEs (State Owned Enterprises),
the Communist Party, the People’s Committee, or the military, none of whom have any
desire what-so-ever on selling nor much more motivation to do so. However, as and when
the new Bankruptcy Law is enforced some of these sites shall inevitably become
available, albeit probably by way of limited 30-50 year Joint Ventures, which need to be
compared to the situation in China where Joint Ventures can be for 70 years and where
foreigners can own 49% of any domestic company. By contrast, in Vietnam – even after
the Enterprise Law – foreigners are able to own zero percent of local real estate /
development companies, since it is regarded as a ‘sensitive’ sector, which presumably
infers that no foreign investment is a good thing?
International Standard Office Accommodation
Until 2004 the cumulative total of international standard office accommodation stood at
only about 50,000 sqm virtually all of which were developed by foreign invested joint
venture buildings between 1994 & 1997 - which means that they were / are 1st
Generation property investments. Because virtually no new accommodation was added
until 2004 vacancy rates have always been low and there has / is / will always be a large
core of affluent MNC (multi-national companies) who consider it appropriate to have
their country manager and / or head office in the capital city, close to the Ministries, who
demand and can afford international standard office accommodation.
In 2004 the USD$32.9 million Vincom City Towers (by a group of Viet Kieu from the
Ukraine who operate as Vietnam General Commercial JS Co - Vincom) & USD$18
million Ocean Park (by the Ha Noi Maritime Holding Co - Marina Hanoi) added about
65,000 sqm of international standard accommodation, perhaps unsurprisingly, all of
which leased within about a 6 months, reflecting the degree of pent-up demand for
‘quality’ office space at (the then) ‘relatively’ affordable prices of between USD$17-22 /
sqm depending upon floor level, size, term, etc.
Occupancies have been over 90% at all of the larger established, foreign invested
properties since about 2000, which in many respects should be regarded as full
occupancy, given the short-term nature of most FIEs business plans in Vietnam eg
Allianz, and the short term nature of leases in Vietnam. Rental rates are therefore high,
and given the absence of significant additions to the total stock for a couple more years,
look set to rise even more as demand for city centre accommodation will continue to far
outstrip the supply – especially given WTO accession and the continuing impact of
Vietnam’s “ASEAN Free Trade Area” (AFTA) implementation, with effect from 1st
January 2006, and the increasing demand from domestic enterprises to up-grade to
international standard accommodation.
However, there are an ever increasing supply of Grade B and the smaller Grade C-D
buildings being built that are suitable for those companies willing to be based @15-30
minutes drive from the central ‘ancient’ core of Hanoi, such as Hoa Binh Towers on
Hoang Quoc Viet in Cau Giay or Bitexco’s Manor complex near the new national
assembly & national sports stadium in Tu Liem District.
Infact, 2006-2007 will see over 1250,000 sqm of such space built which may / should
have a dampening effect on rentals for Grade B-C-D accommodation including,
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In 2006 space at : Pacific Place @18,500 sqm at 83b Ly Thuong Kiet in Hoan
Kiem District; Hoa Binh Towers @1,500 sqm on Hoang Quoc Viet in Cau Giay
District; ICC Building @4,500 sqm on Nguyen Chi Thanh; VIT Tower @15,000 sqm
at 519 Kim Ma in Ba Dinh District; Opera Business Centre @4,000 sqm on Ly Thai
To; Dragon Building @5,500 sqm on Tran Duy Hung; Devyt Building @3,000 sqm at 5
Dao Duy Anh; North Asia Building at 9 Dao Duy Anh; Toserco (Tourist Service
Company) on Kim Ma in Ba Dinh; Hacinco Building & DMC Tan Long Building;
In 2007 space at : the USD$2.2 million Artexport Building No.2 @3,500 sqm at
Pham Su Manh; Viet Tower (A & B) @42,000 sqm at 1 Thai Ha in Dong Da District;
In 2008 space at : the USD$43.67 million BIDV SMART Tower @33,000 sqm
at 194 Tran Quang Khai by the BIDV bank & Sinapore’s Bloomhill Holdings Pte Ltd;
Bitexco’s USD$32 million the Manor Garden Officetel in Tu Liem; and Cau Giay
Plaza at 260 Cau Giay; and in 2009 the Hanoi City Complex @50,000 sqm; and the
Vinaconex Building at Trung Hoa in the Nhan Chinh New Urban Area.
Thereafter, one can expect considerable quantities of stock to be constructed at
the USD$1.1 billion 148 hectare South Thang Long Urban project which will cover
four wards in Tay Ho & Tu Liem Districts; the USD$1 billion residential complex on a
400 hectare area in Dong Anh District around Vinh Ngoc & Tam Xa; the USD$236
million Northbridge Residential Project in Dong Anh; and at the USD$240 million
Red River City.
However, in the short term, another interesting recent development has been the selling
of long-term leases of office and apartment accommodation, under the pre-text that the
‘owners’ can then sub-lease,....which is debatable!
Pacific Place was the first foreign invested property to introduce such a scheme in mid-
2004, with the intension of selling over 17,000 sqm of office space for 37 year terms at
only USD$4.5 / sqm and apartments for between USD$1,800-USD$2,200 / sqm for 15,
25 or 42 years in order to quickly recover their investment. However, by the end of 2005,
the owners realised that “there was no need to sell the lease rights any more as the
company would be able to recover investment capital within 4 years” by leasing space in
the convential manner on the usual 2-3 year leases at @USD$30 / sqm per month plus
management fees. Cheaper Grade C-D buildings are currently available for @USD$20+ /
sqm per month, typically plus 10% VAT and service / manangement charge.
Ho Chi Minh City
HCMC has a rapidly developing economy, well educated population and modern
facilities. Average municipal economic growth is forecast to be 11.5% in 2005, compared
to the country's average over the past 10 years of 7.4%. Residence’ average per capita
income was US$1,800 in 2004 (compared to USD$420 nationally), and city authorities
estimate that it will reach USD$3,000 by 2010
HCM City covers 2,095 sq.km, divided into 24 districts hosting an official population of
more than 6.12 million. The southern business capital is a major transport centre, well
connected by road, rail, water and air to the rest of the country, and internationally. The
city has a network of rivers and canals spanning 2,900 hectares, which are convenient for
both navigation and irrigation. The city's power, water and telecommunications are
reliable. There are 14 industrial parks (IPs) and export processing zones (EPZs) in HCM
City: Tan Thuan, Linh Trung 1&2, Tan Tao, Hiep Phuoc, Le Minh Xuan, Tay Bac Cu
Chi, Cat Lai, Phong Phu, Binh Chieu, Tan Binh, Vinh Loc and Tan Thoi Hiep.
What most people (and maps) refer to as Ho Chi Minh City, infact only accounts for
some 26% of the total area. The remaining 74% is basically split between the southeastern mangroves & swamps of Nha Be, Binh Chanh & Can Gio Districts; and the
northern-western low lands of Cu Chi & Hoc Mon. The city is undergoing ‘urbanisation’
so rapidly, that by 2020 the 17 inner city districts are expected to have a population of 5.8
million to 6.4 million, while the suburban area will have 3 million to 4 million residents.
Between 1999-2004 Ho Chi Minh City’s population experienced an increase of more
than 1 million people or an average of 200,000 inhabitants a year, according to Municipal
Economic Institure & the city’s Planning and Construction Institue, which also said that
migrants account for 30% of the city’s 7 million people.
General Overview
As in Hanoi, development sites for ‘international standard’ buildings ie @1,000 sqm, are
almost impossible to assemble with the only large sites typically owned by the
Communist Party, the People’s Committee, the military, or current or former (post
equitisation) Saigon based SOEs, of which the largest include the ‘Big S’s : 1-SRECO or RESCO : - Saigon Real Estate Corp has a large land bank and numerous
projects and intensions but, obviously finite & insufficient financial resources. In many
ways, they have an unenviable job since, by their ‘quasi-governmental’ nature, they are
expected to assist the local authorities in implementing their plans to build countless
residential units & infrastructure projects. Since June 2004, RESCO has been a holding
company (a bit like a chaebol) with many subsidiaries including the Housing & Trading
Co; Binh Thanh District Housing Co; Go Mon Real Estate Co; District 3 Housing Co;
Tan Binh District Housing Co; District 8 Housing Services Co; District 11 Construction
& Trading Co; Building Materials Can Gio District Construction & Housing Co; Saigon
Construction & Housing Co; Saigon 5 Construction & Trading Co; District 10
Construction & Real Estate Services Co; and Cho Lon Construction Housing Co.
2-Satra : - Saigon Trading Corporation is the owner of the prime 9,200 sqm corner site
on Nguyen Hue & Le Loi that currently owner occupied as Tax Plaza. A USD$121
million redevelopment project of the site promises a 43 floor mixed use development.
They also own good sites on Hai Ba Trung; have stakes in industrial parks; a site on Phan
Dang Luu in Binh Thanh; a site on Tran Van Kieu in District 6; the Saigon Supermarket
on Ba Thang Hai in District 10; co-owner of the An Giang Commercial Center; the Artex
Saigon building (Artex is another member of SATRA); a trade centre in Tien Giang
province; and the former owner of the Diamond Towers project on 3,800 sqm bordered
by Nam Ky Khoi Nghia, Nguyen Trung Truc, Le Thanh Ton & Le Loi (now owned by
Saigon Jewelry Holding Company - SJC), to name just a few.
3-SaigonTourist : - Owner of the Continental; Majestic; Grand; Kimdo & JV partners in
Saigon Domaine; New World; Sheraton;……it is a very long list including the prime
6,000 sqm ‘Flag Pole’ / Saigon Space s Ton Duc Thang that is about to be developed as a
USD$64 million retail & apartment complex. SaigonTourist have projects in many
projects from Phu Quoc in the south to Hue in the centre & Ha Long in the north.
4-Sunimex : - Otherwise known as Ben Thanh Tourist have a large mixed property
portfolio including Cat Lai Industrial Park; stakes in Norfolk Mansion & Riverside
apartments; the USD$8.5 million 15 floor Heritage House apartment project; the
@USD$77 million 35 floor Vietcombank Tower on a 3,000 sqm site overlooking the
Saigon River surrounded by Ton Duc Thang, Hai Ba Trung, Mac Thi Buoi & Phan Van
Dat; the US$18 million 25 floor Le Loi Plaza on 1,500 sqm at 4-6 Le Thanh Ton; the
long scheduled USD$524 million Saigon Cultural & Commercial Center project covering
10.4 hectares on 23rd September Park including a 5 star hotel, a 38 floor skyscraper, a
72,000 sqm commercial centre and many other state-of-the-art business & leisure
facilities; an office development at 174 Ky Con; and several tourism projects nationally.
5-SAVICO : - Saigon General Service JS Co (SAVICO) is an affiliate of Sunimex and
has large many prime sites and is an investor in the Times Square development and
tourism projects like Ben Thanh – Non Nuoc; Long Hoa – Can Gio (with Fideco); Can
Gio Eco-Tourism Resort and developer of a 3,000 sqm trading centre; several apartments
& offices in District 1; a USD$10m housing project in Thu Duc; and a commercial centre
in Danang.
Between them and their affiliates and partners, these conglomerates control most of the
‘best’ sites by virtue of their historic and current links with the local authorities and each
other.
International Standard Office Accommodation
Ho Chi Minh City only has a combined stock of international standard office
accommodation of about 250,000 sqm, an inadequate number relative to the ever
increasing demand. Thus rentals have almost doubled in less than 5 years to the current
levels. However, local investors have recently seen the investment opportunities available
and are thus now rapidly filling the supply gap with a wide variety of new developments,
both big and small.
Opinions vary as to how rentals at Grade A – B buildings will move over the next few
years although most concur that Grade C – E rentals will fall. By how much is good
question given the still small size of most requirements of foreign firms (very few occupy
over 250 sqm); the declining to stable number of expats employed coupled with strict
new foreign employment registration stipulations; and the dramatic increase of total
stock, countered against the inevitable increases in demand as more FIEs turn a profit and
expand; the inevitable positive impact of Vietnam’s accession to the WTO; the
continuing increase in interest from other ASEAN businesses following Vietnam’s
implementation of AFTA (ASEAN Free Trade Association); and the increasing desire of
local companies to ‘up-grade’ to purpose built office buildings with all the ancillary
facilities & services that they provide in terms of security, back-up power and parking.
However, it is own view that ultimately office rentals cannot be higher that those charged
in Bangkok (which for reference are currently @USD$19 sqm / month – after 15-25%
increases in 2005 from @USD$16), which at the end of the day is far more developed
physically, economically & legally and so far more attractive to foreign investors.
Afterall, the only reason why rents are as high as they are today is because supply has not
matched demand, which is a reflection not only of a general lack of foreign interest in
Vietnam’s real estate market from @1996-2005; the limited financial capacity of
Vietnamese developers (the entire stock market is only worth @USD$140 million of
which about a third are only worth @USD$2 million combined); but mostly for legal
reasons (see “Foreigners & Land” information sheet on the website) and the almost total
unavailability of sites. Land has not been made available because Vietnamese people and
companies have an almost irrational ‘affection’ for owning land, which partly stems from
the fact that there is no landlord & tenant legislation; no statutory rights to renew; no cost
to ownership; few investment alternatives; absence or failure to implement & enforce the
bankruptcy laws; and the perceived kudos.
Local Standard Office Accommodation
The other segment of the market is building developed by local investors to local
standards. In this respect, they can generally be considered as Grade D-E buildings.
Usually, they have small floor-plates of less than 500 sqm and / or are in secondary or
tertiary locations. Parking, back-up power, fire systems & escapes, and the general
capability of the management and / or landlord are also considerations. Quality varies, as
one would expect, but in common with their larger and more prestigious foreign invested
counterparts, most have occupancies of over 90% and so are in a powerful position to
dictate terms and conditions.
Short Term Future
Since the bottom of commercial property market cycle in 1999, when international
standard serviced apartment accommodation rentals were as low as USD$14 per square
metre a month, the average occupancy has steadily increased to the point was reached
when average occupancies reached around 95%, which in many respects can be regarded
as full occupancy given the periodic voids that come with short term leases. Naturally,
landlords have and will continue to increase rentals to exploit the existing demand-supply
imbalance, and demand 2-3 year contracts with large up-front rental payments and / or
security deposits.
Although there are an increasing number of foreigners interested in developing sites especially large plots close to the city centre where many perceive that rentals and values
will continue to increase and remain consistently strong - most insist on ‘owning’ 100%
FIE licences of at least 50 years. The unavailability of suitable sites and the numerous
legal obstacles have sufficiently deterred most from investing and so rentals have now
climbed in both the main cities to above USD$20 / sqm / month with the better / larger
foreign invested buildings even above USD$30 / sqm / month +/- 10% VAT (Value
Added Tax) & @5% Management / Service Charge.
New Supply – sqm : International Standard Office Accommodation
HANOI HCMC
2006
100,000
25,000
2007
50,000
75,000
2008
75,000
300,000
2009
300,000+
300,000+
On a world-wide comparison, London’s West End was the most expensive city for Grade
A office space as at December 2004, recording about USD$125 per sqm / month, with
Tokyo the most expensive in Asia at USD$80, and New York the most expensive in
North America at USD$50. Other Asian cities recorded rentals of around : - USD$36 in
Hong Kong (10% vacancy rate); USD$32 in Sydney (10% vacancy rate); USD$30 in
Mumbai; USD$27 in Singapore (18% vacancy rate); USD$22 in Shanghai (10% vacancy
rate); USD$15.50 in Bangkok; and USD$10 in Kuala Lumpur (22% vacancy rate).
Medium Term Future
As Vietnam further integrates into the world global economy and as the financial services
sector better develops, inevitably more capital will be found for investment into
commercial real estate. Because of the demand and supply imbalance and because office
properties are the preferred real estate investment of many developers, we anticipate an
enormous of new stock to be put onto the market over the next 10-20 years. Much of this
will be in small Grade C – E buildings as existing properties are redeveloped, but a lot
will also be comprised in large mixed use developments, such as the 200,000 sqm Hanoi
City Complex and the 100,000 sqm Financial Tower in HCMC.
Hanoi
The capital’s latest urban development plan envisages the city expanding on both sides of
the Red River, so that by 2020 it can accommodate an extra 4.5-5 million people. To this
end, the People’s Committee is seeking about USD$3.2 billion in investment capital for
16 property construction projects to 2010 to develop several new urban & residential
areas, housing, trade centres, office buildings and transport facilities. From 2003 to 2010,
the urban area is expected to increase about 2-fold and the area and demand for housing
increase 4.5-fold. One of the city's main targets is expanding to the north & north-west,
and west & south-west, with a new 8,000 hectare new modern town to the north along the
Red River a main priority.
The following schemes are being planned : 
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The long delayed Red River City has recently been reactivated and will include
several high rise office buildings.
Luxembourg’s Coralis SA are developing the Hanoi City Complex project.
The Vietnam Construction Import & Export Co (Vinaconex) are planning to
develop a new Head Quarters building.
The Manor Officetel will provide small, budget accommodation.
Sacombank are developing a 9 floor office building on Ly Thuong Kiet at a cost
of about USD$4 million, some of which will be leased out.
Cau Giay Plaza will provide budget office space in Cau Giay district.
The 25 floor BIDV Tower on a 2,544sqm site on Tran Quang Khai.
The Viet Towers on Thai Ha in Dong Da will open in 2008.
The 15,000 sqm VIT Tower on Kim Ma in Ba Dinh.
The 5,000 sqm Dragon Building on Tran Duy Hung.
The 4,000 sqm Opera Business Centre on Ly Thai To.
The 3,000 sqm Devyt Tower on Dao Duy Anh
Ho Chi Minh City
The city is now home to more than 7 million people, and the figure is expected to reach
10 million by 2020. It has approximately 350,000 sqn of office accommodation, which by
way of comparision with other major cities in South East Asia, is much smaller than
central Bangkok’s over 2.5 million sqm; Makati City’s (in Manila) 2.6 million sqm; and
Greater Jakarta’s 4 million sqm. Things are and will continue to change however, and
some of the current & on-going development projects are :-
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Thu Thiem Peninsula New Town : - This project is arguably the most important
for the city’s future economic development (a bit like Shanghai’s Pudong in this
respect), as it will link the existing long French-established District 1 with the 770
hectares banana-palm covered swamps on immediately other side of the river. The new
town comprises An Khanh, Thu Thiem & An Loi Dong Wards and part of Binh An &
Binh Khanh Wards in the city’s District 2.
Saigon Pearl : - Situated on Nguyen Huu Canh in Binh Thanh District between
District 1 and the Saigon Bridge / Highway No 1, the site is being developed by a 50%50% JV between Hong Kong’s Vietnam Land & SSG Construction & Real Estate
Company (Vietnam Land SSG Ltd) to provide 8No. apartment blocks of upto 37 floors
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and 2-4 officer towers of between 13-25 / 40 floors each & 126 villals. The 10.4 site on
river opposite the Thu Thiem peninsula was acquired at action for USD$56 million ie
@USD$540 / sqm and will be developed to provide a total of 2,112 apartments between
82-328 sqm. Viet Trang Import Export JS Company is heading a conglomerate of
enterprises who have clubbed together to pay for the USD$156 million project. The
Bank for Agriculture & Rural Development (BIDV) have loaned USD$32.3 million,
accounting for 60% of the investment price. Vietnam Land is a JV between seven
Vietnamese and a Hong Kong partner that includes the Sun Wah group and Japan's
Marubeni Corporation. Prices are being quoted at between USD$1,200-USD2,000 / sqm.
Bitexco Commercial Complexes : - The Binh Minh Trade Import Export
Company (Bitexco) is planning to develop two huge high rise office & apartment
complexes covering about 10 hectares in the down-town areas of Ma Lang & Ben
Thanh. The buildings will be between 40-55 floors and the investment required is
estimated in the region of USD$460 million. More than 1,800 houses and 13 offices will
be affected and compensation is anticipated to be about USD$80-100 million.
Saigon M&C Tower (formerly ‘Saigon Spaceship’ site) : - At the end of 2001
Saigontourist bought out the foreign partner (Cibex International & Societe de
Development Hotel Pointe des Blageurs) in the mid-1990’s dormant USD$76 million
JV, that had a licence to build a hotel, office, shopping & apartment complex. The site is
arguably the most central in Sai Gon since it is at the end of Ham Nghe opposite the Cot
Co Thu Ngu flag-pole. A new @USD$31.8 million JV has been formed between
Saigontourist (30%) and Saigon M & C Real Estate Co (60%) and Thu Do Land
Company (10%), to develop the 6,000 sqm plot with revised USD$65 million plans for a
striking looking 40 story shopping mall, apartment complex & office tower. The
apartments will all have 3 bedrooms and range in size from 150 to 200 square meters and
are provisionally being quoted at @USD$2,700 / sqm making the them the most
expensive in the country.
e-Town 2 : - Darling of the stock-market REE (Refrigeration Electrical
Engineering Corp) have recently increased the number of their popular shares to realise
capital to develop the 26,400 sqm USD$15.7 million property next to e-Town 1 in Tan
Binh by the airport.
Le Loi Plaza : - Gemadept, Vietnam's largest shipping agency, has bought a 45%
stake from Hong Kong's Keangnam Enterprise Ltd in Le Loi Plaza to develop a 25 floor
office building on Le Loi Boulevard.
Fideco VSC Building : - Foreign Trade Development & Investment Corporation
(Fideco) is developing a 20,968 sqm 18 floor property on Ham Nghe after taking over
VSC Properties of Thailand interest in the Building Investment & Services (BIS) JV
project.
Sunimex OVC Building : - Ben Thanh Tourist Company (a subsidiary of
Sunimex), has taken over the 60% Singaporean owned stake in the mid-1990’s USD$8.5
million Orient Vacation Company (OVC) JV and is teaming-up with AA Architect
Construction Company to form a new USD$10 million JV to build a 15 floor office
block.
Vietcombank Tower : - A JV between Ben Thanh Tourist & Vietcombank with
Hong Kong Bonday Investments are looking to revive a long dead project to develop a
3,232 sqm site for USD$55 million as a 35 storey office & retail building with 77,000
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sqm of space on land at Me Linh Square bordered by Ton Duc Thang & Hai Ba Trung.
Financial Tower : - Bitexco is investing USD$100 million in building a stunning
looking 60 floor steel & glass walled commercial & financial centre just off Nguyen Hue
on a site bordered by Hai Trieu, Ho Tung Mau & Ngo Duc Ke which will provide
100,000 sqm of space in the tallest building in HCMC if not Vietnam.
Sacombank Tower : - The HCMC based bank are developing a 17 floor 17,700
sqm office building adjacent to their current HQ on Nam Ky Khoi Nghia (the airport
road), in District 3 at a cost of about USD$6.4 million with the Tan Dinh JS Im-Ex Co –
Tadimex at a cost of USD$15 million..
Manor Officetel : - This USD$35 million development is the Phase 2 of the
Manor HCMC development and is being designed as a combination of office &
residence space. The development, located on Nguyen Huu Canh street, will feature 456
units of between 35-50-148 sqm. The concept is that a business can use part of the
apartment as office space during the daytime while lodging in the other part with family
at nighttime.
BTH Building : - Construction Company 586 (a subsidiary of Cienco 5), are
developing a 3.55 hectare site at the corner of Le Dai Hanh & Ba Thuag Hai in District
11 at a cost of about USD$190 million.
Southern Seed Tower : - The stock market listed Southern Seed Company is
planning to invest USD$40 million to develop a 20 floor office & apartment building on
a 7,000 sqm site on Le Van Sy, where the company has its headquaters.
New World Tower : - A joint venture between New World Hotels Holdings
Hong Kong & Saigontourist Holding Company (which built the 560 room New World
Saigon Hotel), is looking at developing the adjacent 1,850 sqm corner plot as a 25-35
floor office building for about USD$25 million.
Gemadept Tower : - Stock market listed Gemadept (General Forwarding &
Agency), are still planning to develop a long discussed USD$18 million office building
on a small site on Le Thanh Ton.
Quang Trung Software City (QTSC) : - Situated about 12 km north-west of the
city center, work is about to start on 4 projects to build 6 office and residential buildings.
Three companies will spend USD$13 million building the 4 office blocks with total floor
space of 44,000 sqm including the Saigon Intelligence & Sunrise buildings. The park’s
director recently also claimed plans of developing a total of 200,000 sqm of office
accommodation for tenants.
LCT Apartments : - ASC-An Phu Development Company is developing a 17
floor USD$6.4 million office and apartment building on a 2,000 sqm on District 3’s Ly
Chinh Thang. The 1st-2nd floors will provide office space with 80 fully furnished
apartments on the 15 floors above. The price of apartments is quoted at @US$1,500 /
sqm.
September 23rd Park : - This long ‘dead’ JV earned the pseudonym ‘The Black
Hole’ due to its scale and decade of inactivity. Located on 10 hectares of the 23rd
September Park that is surrounded by Cong Quynh, Pham Ngu Lao, Ton That Tung &
Nguyen Trai near Ben Thanh Market, this 1995 70-30% USD$525 million Vijico JV
(Saigon Cultural & Commercial Complex - SCCC), between Taiwan’s Jin Wen
Corporation and the Urban Development Service Company – UDESCO - (15%), the
Public Park & Greenery Company (9%), and Ben Thanh Tourism Service Company
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(6%)/ went 100% locally owned in 2005 when SRECO (Saigon Real Estate Corporation)
took over / were told to take over the foreign partner’s stake in this long ‘dead’ project.
The JV envisaged developing a 5-star hotel with a 38 floor skyscraper, a 72,000 sqm
commercial centre and many other state-of-the-art business & leisure facilities. In 2006,
Korea’s LG Engineering & Construction (LG E&C) negotiated a deal as an incentive as
part of developing the new 14 km Tan Son Nhat-Binh Loi outer beltway new ‘airport
road’, the rights over a 1.2 hectares plot in the former SCCC JV. There are reports that
they now plan to develop a mixed use commercial residential scheme on the site
including a Xi (Extra Intelligent) Park Tower – one of Korea’s top serviced apartment
brand-names.
SPN Tower : - Situated on Nguyen Thi Minh Khai the property is being
developed by Sao Phuong Nam and will provide about 16,000 sqm of office space.
Artex Building : - This wonderfully located 800 sqm site opposite the Opera
House and Caravelle on the corner of Le Loi & Dong Khoi is being developed by
RESCO for Artex Saigon (a subsidiary of SATRA) as a 7 floor USD$3.6 million
building, partially for owner occupation. The ground floor, mezzanine & 1st floor will be
to accommodate this handicraft company’s products with offices in the 5 floors above.
Petro-Vietnam Tower : - This wonderful site & extraordinary building at the
end of Le Duan opposite the zoo was bought by Petro-Vietnam in mid-2002 off the
HCMC government for its oil & gas management southern Head Quarters and other
subsidiaries. The building will require a reported USD$30 million and has been a
concrete skeleton for about 8 years, though slow progress is now being made on
completing it. The local government had previously intented the tower to become home
to the representative offices of the Hanoi based Ministries\
Broadway 2 : - The Broadway Office Park about 15 minutes drive from the
centre, comprises 5No small 3 floor blocks with more being developed. Blocks A & B
provide about 3,200 sqm and Blocks C-E about 9,700 sqm and have been designed to
specifically accommodate the needs of large space users with the ground-floor space
used for showrooms & stores.
South Saigon New Urban Area : - This huge project covers part of Ward 7 in
District 8 - Tan Phong & Tan Phu Wards of District 7 - An Phu Tay, Phong Phu, Binh
Hung & Hung Long Communes of Binh Chanh District, and has so far attracted 17No.
foreign invested projects with a total registered capital of over USD$850 million and
79No. local investors with @USD$685 million. In 2006, the People's Committee
approved the areas expansion from 2,612 hectares to 2,975 hectares. This addition /
southern section has many advantages due to recent infrastructure improvements such as
the Tan Thuan 2, Nguyen Tri Phuong & Nhi Thien Duong bridges, and the future
1,171m Nguyen Van Cu Bridge.
Phu My Hung (PMH) : - The formation of the Saigon South urban area on 2,600
hectares is meant to create conditions for urban and rural districts in the surrounding
areas of District 7, District 8, Nha Be and Binh Chanh to develop. After years of relative
inactivity, the 600 hectare @USD$250 million PMH Joint Venture started have
construction of the first of many planned apartment buildings and houses. Several
international schools; the Franco Vietnam hospital; RMIT (Royal Melbourne Institute of
Technology) University; and other such ancillary service suppliers & facilities have also
committed to a future amongst the landscaped greenery. The government have now also
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approved the construction of the 1,950m long USD$114 million Phu My bridge, that will
connect the city ring road (that runs through PMH) with the CBD via the 770 hectare
USD$632 million Thu Thiem New Urban Area of District 2.
Phuong Nam Plaza : - Situated in the Saigon South new urban area, this
USD$50 million property is being developed by the privately run Phuong Nam
Company as 3No. 20 floor “U” blocks on a 6,000 sqm site. Phuong Nam are co-operating with Switzerland’s Tradco Global Engineering & Construction on the project.
BIDV Tower : - The state run Bank for Investment & Development of Vietnam
is developing a 40 floor building that will provide over 100,000 sqm of accommodation
at over USD$100 million.
Times Square : - This long delayed 1996 JV between Larkhall & Savico will
cost an estimated USD$95 million and provide high end retail, residential, office & hotel
accommodation on a 4,500 sqm site on Dong Khoi in the very centre of District 1.
BaoViet Tower : - The state insurance company is developing a prime site
adjacent to the Metropolitan on Dong Khoi in a USD$11.3 million 15 floor office
building that will cover about two-thirds of the site and provide about 18,000 sqm of
accommodation, partially for owner-occupation.
Hoang Quan Plaza : - Situated in the District 8 section of the Saigon South
Urban Area, the USD$44 million complex is being developed by Hoang Quan (95%) &
Lang Thanh to provide 9 high-rises of 15 to 18 storeys with 653 apartments of between
90-222 sqm, with 14,000 sqm of office accommodation, and a 20,000 sqm shopping
centre on a 3.76 hectare site. The quoted price for apartments is between USD$1,200USD$1,400 / sqm and purchasers obtain 10 year 60% loans from the Mekong Housing
Bank.
Asiana Plaza : - The 13,600 sqm Kumho Saigon JV was licensed in 1996 to
build a USD$223 million complex on the corner of Le Duan & Hai Ba Trung comprising
a luxury apartment & office building with a 5-star hotel and shopping centre. Korea’s
Kumho 65% stake was purchased by Saigontourist and the District 1 Housing
Development Company in 2005.
Satra Commercial Centre : - The Saigon based conglomerate are planning to
redevelop a 6,000 sqm super-prime site next to Tax Plaza on the corner of Nguyen Hue
and Le Loi at a cost of USD$100-120 million. The 30-35 floors of space will include a
commercial section, offices, conference facilities & a car-park and reports says investors
from Malaysia, Singapore, US & Switzerland have showed interest in Joint Venturing
including Malaysia's Shangri-La, Thailand's Central Plaza, Hong Kong Land.
Hung Vuong Plaza : - Situated in bustling District 5, the USD$33 million
property is being jointly developed by local companies M&C Corporation and Kinh Do
and will have two 29 floor towers with 276 apartments from the 8th-29th floors of
between 117-128 sq.m. Kinh Do will occupy the first 7 floors of the plaza for a
department store with luxury shops, offices, 20 restaurants and cafes, and five cinemas
with a combined 1,500 seats. The Eastern Asia Commercial Bank (EAB) will provide
50% loans to purchasers repayable over 10 years.
VP Bank Tower : - This beautiful 1,000 sqm site on the corner of Ham Nghi &
Pasteur is being developed by the bank as an 18 floor office building for its HMC Head
Quarters and leasing, having been leased, presumably from a distressed customer, at the
bargain price of only USD$1 million per annum on a 40 year lease
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Saigon Sports City : Situated in District 2’s popular An Phu about 5kn from
central District 1, the project is being developed by Chiap Hua (Hong Kong) & Keppel
Land (Singapore) to provide over 3,000 condominiums with office and retail / leisure
facilities on about 75 hectares
ABOUT COMPANY
The Landmark is a prestigious development of residential accommodation and office
space
The Landmark offers 65 elegantly furnished and fully equipped studio, one-bedroom and
two-bedroom serviced apartments, many of which have balconies overlooking the Saigon
River, affording spectacular views.
The apartments range from US$1,700 to US$3,300 per month for long-term lease and
US$100 to US$190 a night for short-term stays.
The Landmark offers its residential tenants a wide range of facilities and services which
include:
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Complete furniture and fittings and fully equipped kitchen with utensils
Free access to The Landmark Club: swimming pool, gymnasium, squash court,
sauna
IDD telephone system, voicemail facilities
Dedicated Internet access
DVD, video and cable television
Maid and laundry service
Grocery delivery service
Car parking facilities
Airport transfers plus daily car and driver rental
International standard restaurant with poolside bar and cafe
Room service
100% backup power
Full-time security guards and systems
24-hour lobby reception
Central air conditioning
Automatic sprinkler and smoke detector system
Complete water purification
Public Addressing System
ABOUT ITS PARTNER –HONGKONG & SHANGHAI GROUP
HSH was a pioneer of world-class hotels in Asia, forming the first hotel group in 1866. It
has pursued innovation and continues to set high standards of service and hospitality that
are highly regarded internationally.
The company's two residential properties are The Repulse Bay in Hong Kong, and The
Landmark in Ho Chi Minh City in Vietnam.
The company has a number of commercial properties that are either independent, such as
The Peak Tower or are part of hotel or residential properties.
The company has three office properties available for lease, The Peninsula Tower in The
Peninsula Hong Kong; St John's Building in Hong Kong; and The Landmark in Ho Chi
Minh City, Vietnam
Strategy and Outlook
I am delighted that, with the support of our Board and our management team, we
have been able to focus on a consistent strategy over the past five years and I believe
that it is this focus which has helped to generate the pleasing trend of results which
the Company has achieved. Therefore, once again, I am able to report that our strategy
remains largely unchanged with an emphasis on:
1. building our brand quality and image,
2. enhancing service delivery through staff training, development and empowerment,
3. focusing on prime locations, asset quality and design and build standards, and
4. enhancing the value and functionality of all space within our existing assets.
ABOUT COMPETITORS
Competitors & Market:
Part I: Serviced Apartments
Market:
No. of international and local serviced apartments for lease in HCMC: 2391
Market is relatively small in comparison to other major cities in the region
Grade: A,B,C (cai nay giong nhu danh gia ve muc do sang trong va tien nghi. A la cao
nhat, C la thap nhat)
Competitors: (phan nay em co nhieu tai lieu. Mai se dem cho chi Trang neu chi thich viet
them)
Grade A:
Diamond Plaza
Supply area (SA): 6127 m2
Number of units (NoU): 42 (leased 98%)
Service charge (SC): $22.12 (US$/m2/month)
Norfolk Mansion
SA: 12744 m2
NoU: 124 (leased 95%)
SC: $23.18
Sheraton Saigon
SA: 8205 m2
NoU: 96 (leased 99%)
SC: $31.26
Grade B: (company cua minh nam trong group nay^^)
Riverside Apartments
SA: 20463 m2
NoU: 189 (leased 99%)
SC: $19.54
Saigon Sky Garden
SA: 15486 m2
NoU: 154 (leased 96%)
SC: $24.81
Somerset HCMC
SA: 20388 m2
NoU: 167 (leased 100%)
SC: $24.22
The Landmark
SA: 5105
NoU: 66 (leased 100%)
SC: $23.15
Grade C:
Pacific Garden
SA: 12669 m2
NoU: 115 leased (83%)
SC: $12.73
City View
SA: 5080 m2
NoU: 69 (leased 99%)
SC: $23.34
Victoria Court
SA: 2405 m2
NoU: 29 (leased 79%)
SC: $10.80
Part II: Office space
Market:
Total: 324000 m2
Most buildings have high occupancy rates and rents have been rising steadily
Competitors:
Grade A:
Diamond Plaza
Net Area (NA): 15461 m2 (leased 100%)
SC: $33.00
Metropolitan Tower
NA: 15200 m2 (leased 100%)
SC: $35.45
Saigon Center
NA: 10846 m2 (leased 100%)
SC: $34.12
Sun Wah Tower
NA: 20800 m2 (leased 100%)
SC: $36.71
Grade B:
Saigon Riverside Office Center
NA: 10000 m2 (leased 100%)
SC: $20.91
Saigon Trade Center
NA: 31416 m2 (leased 90%)
SC: $30.26
Central Plaza
NA: 6094 m2 (leased 100%)
SC: $24.00
The Landmark
NA: 8000 m2 (leased 100%)
SC: $27.50
Grade C:
Zen Plaza
NA: 5000 m2 (leased 88%)
SC: $22.22
Parkson Plaza
NA: 2500 m2 (leased 100%)
SC: $23.00