New opportunities for Tenants in the Danang Office Market

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1 CBRE Danang Office Services First Tenant Evening Rain in Saigon Pouring in Danang New opportunities for Tenants in the Danang Office Market Phan Le Hang, Senior Manager, CBRE 17 November 2010

2 Content 1. Danang office market 2. Opportunities in the market 3.Who is here and who is coming 4. Leasing strategies CB Richard Ellis Page 2

3 1. Danang Office Market DANANG QUARTERLY REPORT OCTOBER 2010 CB Richard Ellis Page 3

4 Danang Office Market DANANG QUARTERLY REPORT OCTOBER 2010 CB Richard Ellis Page 4

5 Danang Office Market DANANG QUARTERLY REPORT OCTOBER 2010 CB Richard Ellis Page 5

6 CB Richard Ellis Page 6 Danang Office Market

7 CBD Vinh Trung (12F) Tech Building (15F) CBD (12F) Nguyen Van Linh Light House (8F) Indochina Riverside (12F) ACB Building PVFC (15F) CB Richard Ellis Page 7

8 CB Richard Ellis Page 8 Danang Office Market

9 Danang Office Market 1. Total Area: 65,000sm 2. Increase 38% y-o-y 3. Average occupancy: 56% (Grade A: 59%, B:51%, C:71%) 4. Average Rent: US$11.7/sm/month 5. Rent Range: US$13-20/sm/month (incl SC, excl VAT) 6. Service Charge: US$3-5/sm/month Grade A: US$18-20/sm/month (incl SC, excl VAT) Grade B: US$ /sm/month (incl SC, excl VAT) Grade C: US$8-15/sm/month (incl SC, excl VAT) DANANG QUARTERLY REPORT OCTOBER 2010 CB Richard Ellis Page 9

10 Danang Office Market 1. Supply increase Q4 2010: +7,000sm 2. Supply 2011: #72,500 sm 3. Supply 2012: #120,000 sm 4. With Grade A office in many mix-used projects: Vien Dong Meridien (Hung Vuong Hai Chau) World Trade Center (Tran Hung Dao Son Tra) Blooming Tower (Thuan Phuoc Hai Chau) Danang Center (Hung Vuong Hai Chau) Da Phuoc New Town (Da Phuoc Hai Chau) DANANG QUARTERLY REPORT OCTOBER 2010 CB Richard Ellis Page 10

11 Danang Office Market Monthly enquiries are up Landlords are now setting leasing targets Business confidence is positive Companies reconfiguring office space - efficiency Selective buildings are filling up quicker than others Price Sensitive Increased competition = higher service level Continued shift from old to new High technologies & good quality buildings CB Richard Ellis Page 11

12 2. More opportunities for the tenants Better image, retaining the talent, cost control More choices More windows to negotiate More solutions More reasonable with quoting on the net area CB Richard Ellis Page 12

13 2. More opportunities for the tenants Up to and sometimes more than 20% is saved on Rent Service charge Deposit - cash flow Extra air con Greater clarity on Usable space paying for what you use / fit out purposes Real lease value Fit out costs CB Richard Ellis Page 13

14 2. Opportunities 1. Branding & building image locally & globally 2.Right staff, right job: recruiting expatriate CEO, recruiting 8x generation studying abroad, retaining the talent 3.Willing for big investment with high efficiency and cost control. CB Richard Ellis Page 14

15 Any benefits from modern office buildings? Vietnamese Enterprises 1. Branding & building images locally & globally 2. Right staff, right job: recruiting expatriate CEO, recruiting 8x generation studying abroad; retaining the talent 3. Willing for big investment with high efficiency and cost control Modern office buildings 1. Expression by branding & building attractive image to partners and clients 2. Effectiveness by interviewing successfully, attraction & retaining the talent 3. Efficiency by big investment to quality office with high efficiency (advantageous location, good management, good environment); with cost control (use big floor plate, all on 1 floor & consolidation) CB Richard Ellis Page 15

16 Any benefits from modern office buildings? GOALS FOR ADOPTING ALTERNATIVE WORKPLACE STRATEGIES CB Richard Ellis Page 16

17 Expression - Branding 16 floors 21 floors House 12 floors CB Richard Ellis Page 17

18 Effectiveness Attracting & Retaining (please change the photos) 1. Attraction 2. Business resilience 3. Security CB Richard Ellis Page 18

19 Convenient Location Vinh Trung (12F) Tech Building (15F) CBD (12F) Nguyen Van Linh Light House (8F) Indochina Riverside (12F) ACB Building PVFC (16F) CB Richard Ellis Page 19

20 Efficiency - Floor plan Flexible Floor Plans 5 Tenants 4 Tenants CB Richard Ellis Page 20

21 3. Who s here and who s coming? Here: Banks, Insurance, MNC s Some local Coming: Bank, Education, more Local CB Richard Ellis Page 21

22 4. Leasing strategies Rent Free Periods 1 month per year Longer fit out periods Free or reduced parking Free or reduced signage Termination options Expansion options first rights of refusal Contraction options CB Richard Ellis Page 22

Quarterly Reports for Ho Chi Minh City and Hanoi Quarterlyreports@cbrevietnam.

23 Quarterly Reports for Ho Chi Minh City and Hanoi m Available for each city, in English or Vietnamese Covers: National and City Economic Overview Office Retail Hotel Residential for Sale Investment Serviced Apartments Construction Costs CB Richard Ellis Page 23

24 CONTACT David Scribner, Branch Manager Cell: Luu Thuy Tien, Leasing Executive Cell: CB Richard Ellis Page 24

www.cbrevietnam.com Over 300 markets in more than 50 countries 49 Thank You 33 We obtained the information above from sources we believe to be reliable.

25 Over 300 markets in more than 50 countries 49 Thank You 33 We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction. CB Richard Ellis Page 25

CBRE Seminar. 30 th March Creating Shareholder Value. Budgeting Operational Expenses Commercial

CBRE Seminar. 30 th March Creating Shareholder Value. Budgeting Operational Expenses Commercial CBRE Seminar Creating Shareholder Value Budgeting Operational Expenses Commercial 30 th March 2010 General Structure Share Holder Value Free Cash Flow Market Update - Changes Impacts on Budgeting Procedures