Bao Cao Thi Truong Bds VN - Lehman Brothers - 2007

REAL ESTATE GLOBAL EQUITY RESEARCH
Vietnam/Cambodia Property ASIA
Vietnam/Cambodia Property Primer

Cap Rate Compression to Drive Total Return
After an initial building boom in the early 1990s, the Vietnam property market has
seen little new development since the Asian Crisis. However, with Vietnam’s recent
entry into the WTO opening up a number of key sectors to foreign participation
Paul Louie
(LBAL, Hong Kong) and MNCs pursuing a ‘China plus-one’ strategy, demand for space is rising and
852.2252.6189 has resulted in near full occupancy in the office, serviced apartment and retail
plouie@lehman.com markets. While the fundamental outlook is positive, the key challenge is that of
market transparency. Going forward, we expect increasing foreign participation
Jackie Choy and market maturity to help compress the current 13-15% cap rates to lower levels
(LBAL, Hong Kong)
and help boost total returns. We believe the imperative in this market should be to
852.2252.6226
jackie.choy@lehman.com invest ahead of the eventual cap rate compression. This report serves as a primer
to highlight the current: 1) supply and demand picture in Vietnam and Cambodia,
2) land ownership regulations, and 3) market participants.
Vietnam per capita GDP now at China’s 1996 level – Vietnam’s economy is
expected to grow at 8.5% p.a. in the next few years. Vietnam’s per capita GDP
currently stands at US$729, a similar level to China’s 1996 level.
Little available stock – In Ho Chi Minh City (HCMC), there are only 407,749sqm
of offices, 124,000sqm of shopping malls and 2,669 serviced apartments. Grade-
A office stock is even more limited at only 77,935sqm. This has resulted in full
occupancy in offices and 97.5% occupancy for serviced apartments.
Yields at 12.8-14.8% – CBRE estimates that retail and residential yields stand at
14.8% and 12.8%, respectively, in HCMC. We believe cap rates should
compress in the coming years as increasing foreign participation should help boost
transparency and lower risk premium. Looking at Shanghai as guide, since 1994,
residential yields have compressed from 10% to 7% while office yields have fallen
from 15% to 8%.
Figure 1: GDP/Capita: Vietnam vs Figure 2: Vietnam Yields vs its Asian

China vs Cambodia Neighbours
Retail Residential Risk Free Retail Res.
Cambodia's consumption Yield Yield Rate Spread Spread
2,000
pow er at China's 1994 HCMC 14.8% 12.8% 7.7% 7.1% 5.1%
Hanoi 13.5% 13.0% 7.7% 5.8% 5.3%
Analyst Certification 1,500 Vietnam's consumption Phnom Penh 13.5% 13.0% NA NA NA
Indochina Avg 13.9% 12.9% 7.7% 6.2% 5.2%
pow er at China's 1996
We, Paul Louie, Jackie Choy, Jakarta 15.0% 10.7% 9.2% 5.8% 1.5%
Bangkok 11.9% 4.8% 3.6% 8.3% 1.2%
1,000
hereby certify (1) that the views Makati 11.5% 7.4% 6.6% 4.9% 0.8%
Shanghai 11.3% 7.0% 3.7% 7.6% 3.3%
expressed in this research report 500
Mumbai 11.0% 3.5% 8.1% 2.9% -4.6%
Kuala Lumpur 10.3% 7.1% 3.2% 7.1% 3.9%
accurately reflect our personal Delhi 9.5% 3.0% 8.1% 1.4% -5.1%
Beijing 7.8% 8.4% 3.7% 4.1% 4.7%
-
views about any or all of the Seoul 7.0% 4.5% 5.3% 1.7% -0.8%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Macau 6.1% 3.6% NA NA NA

subject securities or issuers Singapore 5.8% 2.8% 2.7% 3.1% 0.1%
Cambodia (US$) Vietnam (US$) Hong Kong 3.9% 3.2% 4.1% -0.2% -0.9%
referred to in this report and (2) China (US$) Tokyo 3.6% 5.1% 1.7% 1.9% 3.4%
Ex-Indochina Asia Avg 8.8% 5.5% 5.0% 3.8% 0.5%
that no part of our compensation
Source: CEIC Source: CB Richard Ellis (CBRE), Jones Lang LaSalle (JLL)
was, is or will be directly or
indirectly related to the specific
recommendations or views Lehman Brothers does and seeks to do business with companies covered in its research reports. As a result, investors should be
contained in this report. aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.
June 11, 2007
With the exception of research analysts based in our Taiwan branch, Lehman Brothers research analysts based outside the United
States are employed by foreign affiliates and are generally not qualified as research analysts by the NYSE or the NASD.
http://www.lehman.com
PLEASE SEE IMPORTANT DISCLOSURES INCLUDING FOREIGN AFFILIATE DISCLOSURES BEGINNING ON PAGE 32
Table of Contents
Executive Summary......................................................................................... 3
Key Risks...................................................................................................... 5
Low Transparency of Indochina Real Estate Market ............................................. 5
Foreign Enterprise Participation Risks ................................................................ 5
Taxes Regulations under Development .............................................................. 5
Industry Outlook............................................................................................. 6
Vietnam Economic and Regulatory Framework ................................................... 6
Cambodia Economy and Regulatory Framework ................................................ 8
Vietnam Property Market Outlook .................................................................... 11
Serviced Apartment Market.......................................................................... 12
Retail Market Outlook................................................................................. 13
Office Market Outlook................................................................................ 16
Residential Market Outlook .......................................................................... 18
Yields and Capitalization Rates .................................................................... 18
Cambodia Property Market Outlook................................................................. 20
Serviced Apartment Market.......................................................................... 20
Retail Market Outlook................................................................................. 22
Office Market ........................................................................................... 23
Appendix 1: Regulations on Land in Vietnam ..................................................... 24
Appendix 2: District of Ho Chi Minh City and Major Developments........................ 25
Appendix 3: Vietnam’s WTO Provisions ........................................................... 26
2 June 11, 2007

Executive Summary
Figure 3: Vietnam and Ho Chi Minh City

Sapa Babe
CHINA
Lang Son
Dien Bien Phu Binh Thanh District
HANOI Halong Bay
Hoa Lu
GULF OF TONKIN
Vinh
LAOS
Hue
Da Nang
Hoi An
Buon Me Thuot
CAMBODIA Nha Trang
Dalat
Tay Ninh
HO CHI MINH Mui Ne
My Tho District 5 District 7 District 2
Phu Quoc
Can Tho
District 3 District 1
GULF OF THAILAND SOUTH CHINA SEA
Source: CBRE
Vietnam at Right Phase of Investment Cycle – Over the past five years, the Vietnamese
economy has grown rapidly at 11.8% p.a. Vietnam’s GDP per capita is standing at the
same level as China in 1996. With Vietnam’s entry into the World Trade Organization
(WTO) in 2006, a number of sectors, such as retail and banking, will begin opening up
to foreign investments and we expect Vietnam’s economy and incomes to continue to
grow rapidly. The Asian Development Bank expects Vietnam’s economy to grow at 8.5%
p.a., putting it just behind China and India for overall growth.
Figure 4: GDP/capita: Vietnam vs China vs Cambodia Figure 5: HCMC Service Apt Rents and Occupancy
2,000 Cambodia's consumption 45.00 100

pow er at China's 1994 40.00
1,500 Vietnam's consumption 35.00 80
pow er at China's 1996 30.00
25.00 60
1,000
20.00 40
15.00
500 10.00 20
5.00
- 0
-
Q4.96
Q4.97
Q4.98
Q4.99
Q4.00
Q4.01
Q4.02
Q4.03
Q4.04
Q4.05
Q4.06
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Cambodia (US$) Vietnam (US$) China (US$) Rent (US$/sqm/mth) (LHS)

Occupancy (%) (RHS)
Source: CEIC Source: CBRE
June 11, 2007 3

After an initial building boom in the early 1990s and until two years ago, there had
been few new developments in Vietnam since the Asian Crisis. For instance, in Ho Chi
Minh City, there are only 407,749sqm of offices (with only 77,935sqm considered to
be Grade-A), 124,000sqm of shopping malls and 2,669 serviced apartments.
Occupancy is very tight at 100% for offices and 97.5% for serviced apartments. While
the fundamental outlook on Vietnam property is positive, in our view, investing in Vietnam
real estate does have its challenges – the key one being market transparency.
Better Understanding Should Drive Cap Rate Compression and Boost Total Returns –
Vietnam currently ranks last in Jones Lang LaSalle’s (JLL) Global Real Estate Transparency
Index. It is precisely because of this lack of transparency that real estate investments in
Vietnam offer high potential total returns. CB Richard Ellis (CBRE) estimates that current
retail and residential yields stand at 14.8% and 12.8%, respectively, in HCMC. Similar
to China’s development over the past decade, as the Vietnamese markets open to
foreign investments and multinational corporations (MNCs), this should not only boost
incomes and the demand for quality space, but it should also increase market
transparency, in our view. As understanding of Vietnam’s real estate market matures, the
removal of the current risk premiums should lead to cap rate compression, which should
help boost total returns, in our view.
Figure 6: Vietnam Yields Versus Asia Countries Figure 7: Shanghai Property Yields Show the Way
Residential Risk Free Retail Residential
Retail Yield
Yield Rate Spread Spread
18.0%
HCMC 14.8% 12.8% 7.7% 7.1% 5.1%
Hanoi 13.5% 13.0% 7.7% 5.8% 5.3% 16.0%
Phnom Penh 13.5% 13.0% NA NA NA
Indochina Average 13.9% 12.9% 7.7% 6.2% 5.2% 14.0% Yield compresses as market matures
Jakarta 15.0% 10.7% 9.2% 5.8% 1.5%
12.0%
Bangkok 11.9% 4.8% 3.6% 8.3% 1.2%
Makati 11.5% 7.4% 6.6% 4.9% 0.8% 10.0%
Shanghai 11.3% 7.0% 3.7% 7.6% 3.3%
Mumbai 11.0% 3.5% 8.1% 2.9% -4.6% 8.0%
Kuala Lumpur 10.3% 7.1% 3.2% 7.1% 3.9%
6.0%
Delhi 9.5% 3.0% 8.1% 1.4% -5.1%
Beijing 7.8% 8.4% 3.7% 4.1% 4.7% 4.0%
Seoul 7.0% 4.5% 5.3% 1.7% -0.8%
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Singapore 5.8% 2.8% 2.7% 3.1% 0.1%
Hong Kong 3.9% 3.2% 4.1% -0.2% -0.9%
Tokyo 3.6% 5.1% 1.7% 1.9% 3.4% Residential (High-end) Of f ice - Puxi Of f ice - Lujiazui
Ex-Indochina Asia Average 8.8% 5.5% 5.0% 3.8% 0.5%
Source: CBRE, JLL Source: JLL
If we were to look at the Shanghai market as a guide, over the past ten years, residential
yields have compressed from 10% to 7%, while office yields have compressed from 15%
to 8%.
Cambodia: A Few Years Behind Vietnam – Compared to Vietnam, the Cambodian

property market is at an even earlier stage of development. Its properties reflect the state
of the Cambodian economy with segments such as hotels and serviced apartments for
NGOs (non-governmental organizations) being the more developed segments. At present
we are just starting to see some new offices and retail stock being built in Phnom Penh.
4 June 11, 2007

Key Risks
Low Transparency of Indochina Real Estate Market
According to Jones Lang LaSalles’ Global Real Estate Transparency Index for 2006,
Vietnam ranked last out of the 56 countries surveyed, with an “opaque” transparency level.
There is a risk of over-regulation and a lack of transparency. In Vietnam and Cambodia,
current land and property laws are still unable to overcome fundamental issues related to
the legal nature and rights of land ownership and usage, as well as to fully implement the
mechanism and procedure for land distribution and transfer. Furthermore, new
developments often require construction permits and other licenses from the city government
before any structure can be built on land or a building can be substantially remodeled. We
believe the low transparency of the Indochina real estate market is one reason behind the
current high yields of properties in those markets. However, as more developments take
place and transparency improves, we believe this is a potential plus as the reduction of the
current risk premium could lead to cap rate compression.
Foreign Enterprise Participation Risks
In Vietnam, foreign entities are currently allowed to invest in up to 49% in listed

enterprises. Under the Old Enterprise Law, foreign equity participation in domestic non-
listed Vietnamese enterprises was limited to 30%.
In Cambodia, ownership of land is restricted only to Cambodian citizens and

Cambodian legal entities. Foreign ownership is limited to 49%. Holding structures,
whereby the company can enjoy 100% of the equity interest and effective management
control whilst only owning 49% of a Cambodian’s company’s shares, may be held in
breach of Cambodian law and may be required to be unwound.
Taxes Regulations under Development
Tax regulations in Vietnam and Cambodia are still under development. In Cambodia,
unused land is subject to a 2% unused land tax, but the definition of unused land is still
evolving and it varies by province. Ineffective enforcement and uncertainty created by
this tax could mean that many plots of land might be subject to tax assessment on them
for the past years, which could create uncertain tax liabilities on properties.
Similarly, there is also a 4% tax on the transfer of ownership of immovable property in

Cambodia, which is based on the value of land assessed by the tax department. There
is no mechanism to assure a fair valuation by the tax department. Buyers may face tax
liabilities if the transferor of land pays an insufficient transfer tax: if the transfer tax is not
paid by transferor, then the liability rests with the transferee.
June 11, 2007 5

Industry Outlook
Vietnam Economic and Regulatory Framework
According to 2005 statistics, Vietnam, with a population of 83mn, ranks as the 13th
most populous country in the world. Vietnam has a young population, with 65% under
the age of 35. The Vietnam Commerce and Industry Reports and the International Labor
Organization estimate that between 2001 and 2010, 1.8 mn people would have
reached the labor age with about 350,000 people retiring each year.
In 1986, the Vietnamese Government embarked on the Doi Moi (reform) policy and ever
since it has gradually started to replace the centrally planned economy, bureaucracy and
subsidy mechanism with a socialist-oriented market economy. Since 1991, the
Vietnamese economy has grown at an average of 15.4% p.a. Vietnam’s per capita
GDP now stands at US$729, roughly the same level as China in 1996. By 2010, the
Vietnamese government expects Vietnam’s per capita GDP to rise to US$1,100.
Figure 8: GDP/Capita – Vietnam vs Cambodia vs China Figure 9: Key Statistics Around Vietnam
Vietnam HCMC Hanoi
2,000 Cambodia's consumption Area (sq km) 329,600.0 2,093.0 921.0
pow er at China's 1994 Population (m) 83.1 7.0 3.2
1,500 V ietnam's consumption GDP per capita (US$) 729.0 2,185.0 1,400.0
pow er at China's 1996 GDP growth rate (%) 8.20% 12.02% 11.16%
1,000
500
-
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Cambodia (US$) Vietnam (US$) China (US$)
Source: CEIC, Lehman Brothers research Source: General Statistic Office
In addition to its labor force and stable political environment, another factor behind
Vietnam’s attractiveness is the MNCs’ ‘China-plus-one’ strategy, in which they seek to
reduce their dependence on China and spread their business risk. In 2006, Vietnam’s
exports totaled US$39.6bn. Vietnam’s main export items are garments and textiles,
footwear, seafood, wood products, coffee, rubber, coal and handicrafts, etc. In addition
to exports, foreign direct investments (FDI) and overseas remittances are also key
contributors to Vietnam’s GDP growth. In 2006, Vietnam received US$10.2bn in FDI,
US$1.8bn in official development aid disbursements and US$4.7bn in overseas
remittances.
6 June 11, 2007

Figure 10: Vietnam FDI, Development Aid and Overseas Remittance
18.0
16.0 Overseas remittance
14.0
Official development aid -
12.0 disbursements
10.0 FDI
8.0
6.0
4.0
2.0
-
2000 2001 2002 2003 2004 2005 2006
Source: General Statistic Office
On November 7, 2006, Vietnam joined the WTO and became its 150th member. In
2007 a number of industries will begin to open up to foreign investments, such as
banking, telecoms, distribution retail services, electricity and finance. Vietnam’s entry into
the WTO is expected to help sustain its economic growth and the Asian Development
Bank expects Vietnam’s GDP to register growth of 8.3% and 8.5% in 2007 and 2008,
respectively.
Inflation and Exchange Control
Driven by strong economic growth and rising incomes, inflation in Vietnam stood at 6.6%
in 2006. Under current foreign exchange control regulations, any person, including
offshore funds, are allowed to exchange Dong into foreign currency at the official rate
provided that they declare the intended use of money. There are no restrictions on
inward remittance of foreign currency in Vietnam, but outward remittance of foreign
currency by domestic enterprises may only be made for imported goods and services, to
repay registered offshore loans or to make overseas investments. Foreign companies are
generally allowed to repatriate profits from their business operations in Vietnam. Upon
termination of a business, investors may repatriate capital, but permission is required from
the Ministry of Planning and Investment if the amount to be repatriated exceeds the
original investment amount.
June 11, 2007 7

Figure 11: Inflation in Vietnam Figure 12: Dong Exchange Rate Against USD
12.0% 16,500
10.0% 16,000
8.0% 15,500
6.0% 15,000
4.0% 14,500
2.0% 14,000
0.0% 13,500
Jan-1999
Jul-1999
Jan-2000
Jul-2000
Jan-2001
Jul-2001
Jan-2002
Jul-2002
Jan-2003
Jul-2003
Jan-2004
Jul-2004
Jan-2005
Jul-2005
Jan-2006
Jul-2006
Jan-2007
Jul-2002
Jan-2003
Jul-2003
Jan-2004
Jul-2004
Jan-2005
Jul-2005
Jan-2006
Jul-2006
Jan-2007
Source: CEIC Source: CEIC
Land Ownership and Restrictions on Foreign Investments
All land in Vietnam is owned by the people and administered by the state. While all
land theoretically belongs to the state, everyone (including foreign investors) is entitled to
land-use rights. Vietnamese individuals are entitled to indefinite “freehold” of the land and
property, while foreign individuals are only entitled to a 50-year leasehold ownership (in
some cases up to 70 years).
For a foreign enterprise, the two main avenues to acquire land-use rights are: 1) getting a
land lease from the state or other legitimate organization holding a land-use right for a
maximum of 50 years (70 years in some cases) or 2) contribution of land use rights by a
Vietnamese partner as their share of capital in a joint venture. In terms of land leases, if
100% of the land rental for the entire term was paid in one lump sum, the foreign
enterprise would enjoy full rights over the land, in line with Vietnamese organizations,
which include the right to assign, sell their land-use rights and sub-let their land-use rights
and assets.
While foreign enterprises are allowed to acquire land-use rights, there are still foreign
ownership limits for listed and unlisted companies. Generally, foreign equity participation
in domestic non-listed Vietnamese enterprises established under the old Enterprise Law, as
opposed to FIEs (Foreign Invested Enterprises) that are established under the Law on
Foreign Investment, is limited to 30% for unlisted enterprises and 49% for listed
enterprises.
Cambodia Economy and Regulatory Framework

Cambodia’s economy has registered double-digit GDP growth over the past three years.
Since Cambodia joined the ASEAN Free Trade Area in 1999 and signed numerous trade
agreements with countries in the South-East Asia, Canada, South Korea, India and the US,
its real GDP growth has been at 6-13%. Cambodia’s GDP per capita now stands at
US$493, nearly the same as that of China in 1994. The IMF (International Monetary Fund)
expects Cambodia’s GDP per capita to rise to US$594 by 2008.
8 June 11, 2007

Cambodia also enjoys favorable demographics as it has an extremely young population

– 50% of its population is under 21 years of age, with a literacy rate of 74%. Wealth is
on an upward trend with GDP per capita growing at 10% YoY, while deposit growth in
the banking sector is estimated to have exceeded 45% in 2006.
Figure 13: GDP/Capita – Cambodia vs Vietnam vs China Figure 14: Real GDP Growth by Sector
2001 2002 2003 2004 2005 2006E
2,000 Agriculture 4.5% -2.1% 11.9% 1.1% 16.4% 4.0%
Cambodia's consumption
Industry 11.7% 17.7% 12.5% 16.8% 12.3% 14.0%
pow er at China's 1994 …Garments 28.4% 21.3% 16.8% 24.9% 10.3% 22.8%
1,500 V ietnam's consumption Services 8.7% 6.3% 4.4% 11.7% 12.1% 8.8%
pow er at China's 1996 …Tourism 22.6% 18.8% -16.7% 23.4% 17.3% 11.9%
Total GDP 7.7% 6.2% 8.6% 9.9% 13.4% 8.5%
1,000 Non-Agriculture GDP 9.5% 10.7% 7.0% 14.5% 10.3% 10.6%
500
-
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Cambodia (US$) Vietnam (US$) China (US$)
Source: CEIC, Lehman Brothers research Source: National Institute of Statistics for 2001-05, EIC Projection for 2006
While 75% of the labor force is involved in agriculture, it only contributes 31% of GDP.
Tourism and garment/textiles are the other major industries driving Cambodia’s
economic growth. Exports rose at a CAGR of 16% from 2001-06, while growth in
tourist arrivals was strong at 20% YoY in 2006.
Figure 15: Cambodia Exports Up 16% YoY in 2006 Figure 16: Cambodia Tourist Growth Remains Strong
4,000 40% 1,800,000 60%

1,700,000
3,500 35% 50%
1,600,000
3,000 30%
1,500,000 40%
2,500 25% 1,400,000
30%
1,300,000
2,000 20%
1,200,000 20%
1,500 15%
1,100,000
10%
1,000 10% 1,000,000
900,000 0%
500 5%
Dec-2004
Feb-2005
Jun-2005
Oct-2005
Dec-2005
Feb-2006
Jun-2006
Oct-2006
Dec-2006
Apr-2005
Aug-2005
Apr-2006
Aug-2006
0 0%
2000 2001 2002 2003 2004 2005 2006
Exports (US$m) YoY Change (RHS) 12 mth moving total (person) YoY Change
Source: CEIC for 2000-05, EIC for 2006, Lehman Brothers research Source: CEIC, Lehman Brothers research
Garments and textiles are major export items for Cambodia, accounting for nearly all of
its export revenues. With China and Vietnam’s rising costs, Cambodia is likely to be an
increasingly popular sourcing destination for garments.
June 11, 2007 9

Despite Cambodia’s strong growth, inflation has been subdued. Inflation has moderated
from 5.9% in March 2006 to 3.5% in March 2007. After hitting the year’s low in
October 2006, the Cambodian Riel strengthened 2% against the dollar in the three
months leading to January 2007
Figure 17: Cambodia Inflation – At 3.5% in March 2007 Figure 18: Cambodia Riel Recovering Against US Dollars
vs 5.9% in March 2006 (1 USD to Reil)
7.0% 4,200
4,150
6.0%
4,100
5.0% 4,050
4.0% 4,000
3,950
3.0%
3,900
2.0% 3,850
3,800
1.0%
3,750
0.0% 3,700
Oct-2005
Dec-2005
Feb-2006
Jun-2006
Oct-2006
Dec-2006
Feb-2007
Aug-2005
Apr-2006
Aug-2006
Jan-1999
Mar-2000
Oct-2000
May-2001
Dec-2001
Jul-2002
Feb-2003
Nov-2004
Jun-2005
Jan-2006
Sep-2003
Aug-1999
Apr-2004
Aug-2006
Source: CEIC, Lehman Brothers research Source: CEIC, Lehman Brothers research
In 2004, Cambodia was admitted as the 148th member of the World Trade
Organization. Although progress has been slow in enacting the remaining 28 laws in
the WTO work program, many of the acts are at advanced stages in draft forms. Since
2002, Cambodia’s legal reform has been proceeding. Current work is focused on the
creation of a new fundamental legal framework, which will form the basis for all legal
arrangements and dispute resolutions.
Land and Property Ownership in Cambodia
Cambodia places restrictions only in a few business sectors for reasons of national
security, social safety or necessity of the national economy. In 1989, the land reform
legislation allowed each household to own up to five hectares of land for cultivation,
which was the first step to the process of privatization and this almost brought an end to
state or communal ownership of farmland. In 2001, the Cambodian Land Law was
enacted, which clarifies various types of rights relating to land as well as the process by
which land is transferred by sale or succession and the registration of the transfer. The
Ministry of Land Management, Urban Planning & Constructions has set out in its Annual
Workplan and Budget 2007 that its immediate objective is on ensuring titles to land,
access rights to land and resources secured, through strengthening of land policy and
legal and regulatory framework.
Under the current legislation, ownership of real property in Cambodia is limited to

Cambodian citizens, or Cambodian entities which have 51% of voting shares owned by
one or more Cambodian citizens, or by Cambodian legal entities.
10 June 11, 2007

Vietnam Property Market Outlook
The Vietnam property market is still in its infancy. After an initial build-out in the early
1990s, the Asian Crisis virtually put a stop to new developments in Vietnam. It is only in
the past few years that new development has resumed. With Vietnam’s economy
expected to grow at 8.5% p.a. and the influx of MNCs to Vietnam due to WTO and the
China-plus-one strategy, there is rising demand for quality properties that meet
international standards. Across the office, retail, serviced apartment markets, there is a
general lack of available stock at present, which has resulted in very high occupancy
rates and steady rental increases.
Figure 19: Vietnam and Ho Chi Minh City

Sapa Babe
CHINA
Lang Son
Dien Bien Phu Binh Thanh District
HANOI Halong Bay
Hoa Lu
GULF OF TONKIN
Vinh
LAOS
Hue
Da Nang
Hoi An
Buon Me Thuot
CAMBODIA Nha Trang
Dalat
Tay Ninh
HO CHI MINH Mui Ne
My Tho District 5 District 7 District 2
Phu Quoc
Can Tho
District 3 District 1
GULF OF THAILAND SOUTH CHINA SEA
Source: CBRE
While the current supply-demand imbalance has helped boost rental levels, demand is
also evolving as Vietnam’s market begins to open up on its ascension to the WTO. The
entry of MNCs should boost demand for both office space and serviced apartments,
while the relaxation on foreign participation in retail should boost demand for organized
retail space. CBRE expects that the amount of retail space should more than double in
the coming three years, while the supply of serviced apartment market should also
double. Although new supply is rising, we do not expect rentals to come under pressure
as: (1) the current stock is at a low base and (2) demand is also rising quickly. We
believe the demand for newer properties built with better specifications should be even
stronger due to upgrading demand from local and foreign enterprises alike.
June 11, 2007 11

Serviced Apartment Market

For expatriates in Vietnam, they usually find their accommodation in either: 1) locally
developed and often substandard apartments, villas or townhouses that are locally owned
and managed, or 2) international standard serviced apartments. The supply of Grade-A
and B serviced apartments is very limited. For instance, as at 1Q07, CBRE estimates that
there were only 1,290 serviced apartments in Hanoi and only 2,669 serviced apartments
in HCMC. Occupancy is very tight at 97.56% in Hanoi and 95% in HCMC.
Figure 20: Service Apartment Stock in HCMC (units) Figure 21: Service Apartment Stock in Hanoi City (units)
3,000 3000
New Supply Existing New
2,500 2500
Existing Supply
2,000 2000
1,500 1500
1,000 1000
500 500
- 0
2007F
2008F
2009F
2010F
1996
1997
1999
2000
2001
2002
2003
2004
2005
2006
96
98
00
02
04
06
4.
4.
4.
4.
4.
4.
Q
Source: CBRE Source: CBRE
In HCMC, the most marketable size serviced apartments are those between 60sqm and
80sqm. Achieved rentals per month have ranged from US$28psm to US$35psm for
Grade--A serviced apartments and these are expected to fetch US$40psm in the next
three years, according to CBRE. In the short term, due to limited supply, there should be
continued upward pressure in serviced apartment rentals. However, as housing budgets
remain low for some expatriates, CBRE does not expect the increase to be significant.
Figure 22: Current Service Apartment Rental Rates in HCMC and Hanoi (USD)
Grade Rental (psm) 1-bedroom 2-bedroom 3-bedroom 4-bedroom 5-bedroom
HCMC - A 28-35 1,700-2,500 2,500-4,500 3,000-6,700 4,000-9,000 NA
HCMC - B 22-31 1,100-2,300 2,100-3,400 2,800-6,000 3,800-7,000 NA
HCMC - C 15-23 800-1,800 1,300-3,100 2,100-3,000 3,800-4,300 NA
Hanoi-A&B NA 1,300-3,300 1,800-4,600 2,600-5,200 3,200-6,000 5,500-6,000
Source: CBRE
In terms of pure serviced apartment supply in the next three years, CBRE expects a total
700 apartments will come on stream in Hanoi City and some 1,200 will come on
stream in HCMC. In addition to the supply of serviced apartments, as Vietnam’s
residential market continues to develop, we believe the availability of better appointed
rental stock should increase and may draw some demand away from serviced
apartments. That said, serviced apartments under single ownership and management
should still be attractive to new and existing expatriates. In the near term, we expect
rental growth of 10% p.a., about 2% higher than Vietnam’s projected GDP growth rate
due to supply-demand imbalance.
12 June 11, 2007

Figure 23: Serviced Apartments in HCMC – Saigon Sky Garden, District 1
Source: Lehman Brothers research
Retail Market Outlook
Since the economic reforms in the 1980s, the retail market has been one of the faster
developing sectors in Vietnam. According to AT Kearney, retail trade in Vietnam reached
US$23bn in 2005 and is expected to surpass US$50bn by 2010 with a compound
annual growth rate of nearly 30%. AT Kearney ranks Vietnam as the third most attractive
market for retail development behind India and Russia.
Figure 24: Vietnam’s Retail Sales
700,000 35.0%
600,000 30.0%
500,000 25.0%
400,000 20.0%
300,000 15.0%
200,000 10.0%
100,000 5.0%
0 0.0%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Retail Sales (VND bn) YoY Change
Source: CEIC, Lehman Brothers research
June 11, 2007 13

According to CBRE, traditional retail stores, such as wet markets and mom-and-pop
shops, still capture the bulk of retail spending in Vietnam, occupying nearly an 80%
market share. As of end-2005, Vietnam had 9,063 traditional markets, including 165
wholesale markets. Modern distribution channels, such as supermarkets, were introduced
about a decade ago and have gained acceptance by many consumers. Compared to
1995 when there were only ten supermarkets operating in six cities, there are now close
to 200 supermarkets operating in 25 cities in Vietnam. CBRE estimates that there are
20 supermarkets and 35 trading centres under construction across the country.
While traditional markets still dominate retail spending, anecdotal evidence suggests a
growing acceptance and preference for organized retail. For instance, a survey by
VnExpress, a Vietnam newspaper, in December 2005 indicated that 55% of 1,747
respondents preferred supermarkets to traditional retail stores.
CBRE classifies shopping formats in Vietnam under five categories: 1) wholesale markets,
2) supermarkets, 3) convenience stores i.e. trading area <500sqm, 4) shopping centers
> 10,000sqm and 5) shop houses.
As more traditional shop houses give way to modern retail stores in Vietnam, it is
believed that lower-priced retailers, such as supermarkets and hypermarkets, will attract
more customers initially due to their lower price points. For traditional shopping malls, the
current stock is very limited. For instance:
Ho Chi Minh City – The shopping centre market in HCMC is currently very small with
around 124,000sqm spread over ten shopping centers. Occupancy rates are high at
nearly 92% with average rental rates of US$40psm per month. In the next three years,
CBRE estimates that HCMC’s retail stock should more than double with nearly
140,000sqm of net lettable area (NLA) coming on stream.
Hanoi – Similar to HCMC, the stock of shopping centers in Hanoi City is limited at only
95,000sqm spread over six shopping centers. Occupancy rates are high at 95% with
average rent at US$40psm per month. Future supply is more significant as compared to
HCMC, as 300,000sqm of retail space in Hanoi is currently under construction.
14 June 11, 2007

Figure 25: HCMC Current & Future Retail Centers (sqm) Fig. 26: Hanoi City Current & Future Retail Centers (sqm)
Centre Developer Type Completion Area Centre Developer Type Completion Area
Current Supply Current supply
Diamond Plaza Posco Dept Store 1999 8,000 Trang Tien Plaza Vinaconnex Shopping Centre 1999 12,000
Parkson Saigon Tourist Dept Store 2005 18,000 Vincom City Towers Vincom JSC Shopping Centre 2005 17,400
Zen Plaza Hasegawa Dept Store 1999 6,817 Trun Hoa Nan Chinh Casino Group Hypermarket 2005 16,000
Saigon Centre Keppel Office/Retail 1996 6,265 Melinh Plaza T&M Trans Trade Centre 2006 42,000
Saigon Tax Plaza SATRA Shopping Centre 14,760 Pacific Place Ever Fortune Mixed use 2007 7,000
Saigon Superbowl SUTL - Singapore Shopping Centre 1996 6,000 Opera Business Centre Bac Ha Office w/retail 2007 1,100
Saigon Factory Outlet Outlet Mall 2006 30,000 Future supply
Eden Mall Eden Co - Vietnam Shopping Precint 2006 5,000 Viglacera Tower Viglacera Office/Retail 2007 4,000
Thuan Keiu Plaza Hong Kong Shopping Mall 2000 21,797 Syrena Res/Retail 2007 1,000
An Duong Plaza Van Thi Phat Market Kiosk 2004 7,000 Ruby Plaza Specialty 2007 3,300
Future Supply Viet Tower Peace Co Office/Retail 2008 15,000
Saigon Paragon Paragon Crop Shopping Centre 2007 15,000 The Gardens Bitexco Land Shopping Centre 2009 50,000
Opera View Artex Saigon 2007 1,280 Ciputra Mall Ciputra Regional Mall 2010 103,000
Tan Da Court Norfolk Group/Invesc Res/Shopping 2007 4,380 Hanoi City Complex 2010 50,000
Hung Vuong Plaza M&C/Kinh Do Dept Store 2008 33,000
Sailing Tower 2008 2,560
Times Square Larkhall Res/Shopping 2009 12,367
Happiness Square Fei-Yueh Vietnam Mixed use 2009 11,882
Asiana Plaza Kumho Mixed use 2009 6,880
SJC Tower M&C Corp Mixed use 2010 8,292
Saigon Pearl Vietnam Land SSG Res/Shopping 2010 30,000
Figure 27: Parkson, District 1, HCMC Figure 28: Diamond Plaza, District 1, HCMC
Source: Lehman Brothers research Source: Lehman Brothers research
Compared to other South-East Asia countries, Vietnam’s monthly retail rents are still very
low at US$73psm. This compares to Bangkok’s US$560psm and Singapore’s
US$290psm.
June 11, 2007 15

Figure 29: Prime Retail Rents in SE Asia (US$ psm/month) Figure 30: Prime Retail Rents in HCMC
0%
0%
0%
0%
800 727 140 110%
%
10
10
10
10
%
97
700
%
96
95
120
%
%
100%
93
93
93
92
560
91
600 100
90%
73.1
500
62.6
80
52.2
400 80%
45.9
290
42.3
60
39.8
37.7
33.9
300
32.4
32.4
32.4
185 191 70%
35
200 133 40
100 20 48 73 70
20 60%
0 0 50%
Jakarta
Minh City
Bangkok
Taipei
Manila
Hong
New Delhi
Shanghai
Singapore
Beijing
Kong
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Ho Chi
Avg Rental (US$psm) Occupancy (%)
For retail businesses, with Vietnam’s WTO entry, foreign retailers can now set up JVs with
Vietnamese and are allowed to invest up to 49%. The 49% limit will be abolished on
January 1, 2008 and from January 1, 2009 onwards, the foreign party will be able to
buy out the Vietnamese partner. The table below shows a list of retail chains that are
active in Hanoi.
Figure 31: Retail Chains Active in Hanoi

Supermarket/Hypermarkets F&B Other Trade
Intimex (2001) Trung Nguyen - Coffee Nettra Mobile
FiviMart (1997) Highland Coffee Nino Maxx - Fashion
Metro Cash & Carry (2002) New Window - Coffee Blue Exchange - Fashion
Big C Supermarket (1998) Nang Sai Gon - Coffee Shisheido
Parkson Vietnam (2005) Pho 24 - Noodle Piaggio
G7 Mart (2006)
Hapro(2006)
Dairy Farm (licence 2006)
Lotte Shopping (licence 2006)
Source: CBRE
Over the short term, as new retailers enter the Vietnamese market and with the addition
of better quality retail property stock, we believe Vietnam’s retail rentals should reprice
higher (to reflect the better quality malls) before moderating to rise at a rate in tandem to
the income growth of the locals. We expect medium-term rental growth of 8% p.a.,
which is in line with Vietnam’s expected GDP growth.
Office Market Outlook
HCMC is the business hub for Vietnam. CBRE estimates that there are 92 medium to
high quality office buildings in the city, providing a total 407,749sqm office space.
Grade-B and -C office buildings make up the bulk of the stock with NLA of 200,089sqm
and 129,725sqm, respectively. Grade-A office stock is limited at only five buildings,
providing an NLA of 77,935sqm.
16 June 11, 2007

The average monthly rent for Grade-A office space is currently around US$38psm,
including service charge but excluding the 10% VAT. Grade B office rents range US$20-
US$32psm, while Grade C office rents are at US$14-20psm (including VAT and service
charge). The leasing market is very tight with occupancy running at 100% for Grade-A
office, 99% for Grade-B office and 97% for Grade-C office.
Figure 32: HCMC Office Supply (sqm) Figure 33: HCMC Office Rentals and Occupancy
450,000 60 120%
400,000
A B C 50 100%
350,000
300,000 40 80%
250,000 60%
30
200,000
150,000 20 40%
100,000 10 20%
50,000
0 0%
-
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Current 2007 2008 2009 2010
Rents (US$psm pm) Occupancy
Figure 34: Bitexco Building, District 1, HCMC Figure 35: Asian Plaza, District 1, HCMC
Building site ->
2009 Completion ->

June 11, 2007 17

The Hanoi office market is similarly small with Grade A offices limited to nine buildings.
Total lettable stock has stood at 84,172sqm since 2002. The average rent of Grade-A
office stands at US$27psm per month with a occupancy rate near 100%.
With various sectors opening up post-WTO, more foreign enterprises are expected to set
up offices in Vietnam. However, at this stage, demand for average office space remains
small. According to a survey by CBRE, some 79% companies currently occupy less than
300sqm of office space, while only 4.9% occupy over 1,000sqm. CBRE expects
Grade-A office rents to rise until 2008 when new supply starts to come on stream. New
and expansion needs should provide strong demand for both Grade-A and Grade-B
office space.
While a significant amount of office space is forecast to come on stream by 2010, a

number of projects have witnessed delays. Given the existing tight occupancy, CBRE
believes Grade-A office rents may reach US$40psm per month by 2008.
Residential Market Outlook
According to the HCMC Department of Housing and Land Management Services, there
are 1 mm houses and apartments in HCMC with a combined housing area of 52.7 mn
sqm, implying an average area per capita of around 10.27 sqm. The city plans to
increase total housing space to 103m sqm by 2010 and increase per capita space to
14.2 sqm. Most of the housing units are of low to mid quality. The first high quality
apartment/condominium, My Canh in Phu My Hung, was only built in 1999.
Generally, luxury apartments can be classified under two price segments, those with
sales price of over US$1,000psm and those that go for US$600psm-US$1,000psm.
The total stock of high quality apartment in HCMC is only estimated at 35 projects with
7,900 units. CBRE estimates that there are currently 91 projects under construction with
30,603 units expected to be for sale between 2007 and 2009.
Yields and Capitalization Rates
To date, there have been very few transactions of investment-grade assets in Vietnam.
Many of the existing office buildings were developed prior to the Asian Crisis and have
only now recovered to their pre-crisis levels.
CBRE and JLL estimate current retail yields to come in between 13.5% and 14.8% and
serviced apartment yields to reach between 12.8% and 13.0%.
18 June 11, 2007

Figure 36: Major Asian Cities – Net Income Yield Comparison

Residential Risk Free Retail Residential
Retail Yield
Yield Rate Spread Spread
HCMC 14.8% 12.8% 7.7% 7.1% 5.1%
Hanoi 13.5% 13.0% 7.7% 5.8% 5.3%
Phnom Penh 13.5% 13.0% NA NA NA
Indochina Average 13.9% 12.9% 7.7% 6.2% 5.2%
Jakarta 15.0% 10.7% 9.2% 5.8% 1.5%
Bangkok 11.9% 4.8% 3.6% 8.3% 1.2%
Makati 11.5% 7.4% 6.6% 4.9% 0.8%
Shanghai 11.3% 7.0% 3.7% 7.6% 3.3%
Mumbai 11.0% 3.5% 8.1% 2.9% -4.6%
Kuala Lumpur 10.3% 7.1% 3.2% 7.1% 3.9%
Delhi 9.5% 3.0% 8.1% 1.4% -5.1%
Beijing 7.8% 8.4% 3.7% 4.1% 4.7%
Seoul 7.0% 4.5% 5.3% 1.7% -0.8%
Singapore 5.8% 2.8% 2.7% 3.1% 0.1%
Hong Kong 3.9% 3.2% 4.1% -0.2% -0.9%
Tokyo 3.6% 5.1% 1.7% 1.9% 3.4%
Ex-Indochina Asia Average 8.8% 5.5% 5.0% 3.8% 0.5%
Source: CBRE, JLL
Figure 37: Major Property Market Participants in Vietnam

Vietnamese Foreign
Major players in market w/o
Residential Office Residential Office
active development
Fico RESCO Phu My Hung (Taiwan) Luks Industrial (HK) Lotte (Korea)
Refico REE Corporation Daewon (Korea) CT&D (Taiwan) GS Construction (Korea)
BMC Bitexco Keppel Land (Singapore) Centrepoint (SG) Rajawali (Indonesia)
Construction Co No 1 Savico Capitaland (Singapore) Kotobuki (Japan) Sumitomo (Japan)
Thu Duc Housing Development FICO Posco (Korea) SP Sethia (Malaysia)
FIDECO Artex Saigon East Asia Property (HK)
RESCO Nam Long Construction Marubeni (Japan)
COTEC Sun Wah Group (HK)
Bitexco Chiap Hua (HK)
Hoan Cao Keppel Land (SG)
Larkhall (HK)
Kumho (Korea)
Fu Tsu Construction (Taiwan)
Source: CBRE
June 11, 2007 19

Cambodia Property Market Outlook
Compared to Vietnam, the Cambodian property market is at an even earlier stage of

development. Its properties reflect the state of the Cambodian economy with segments such
as hotels and serviced apartments for NGOs being the more developed ones. At present,
we are just starting to see some new office and retail stock being built in Phnom Penh.
Figure 38: Map of Cambodia and Phnom Penh
Cheomksan Siempang
Phnom
Potpet Thbeng Boung
Meanchey Long
Siem Reap
Sicophon
Slung Treng
Lumphal
Battambang
Kampong Thom
Polin
Pursat
Senmoncrom
Kampong
Chhneng
Kampong Snoul
PHNOM PENH Cham
Krong
Koh Kong Kampong Ta Khmau
Speu
Sie Ambel Banam
Sway
Sihanoukville Kampol Takeo
Rieng
Source: CBRE
Serviced Apartment Market
The serviced apartment market in Cambodia is a very niche market. In Phnom Penh,
CBRE estimates that there are only five completed projects of international quality,
providing 279 units of serviced apartments. The major tenants of serviced apartments are
expatriates, who could also rent villas owned by locals or seek hotels accommodation as
alternatives.
In Phnom Penh, the tenants of serviced apartment are charged US$1,400-US$2,200 per
month for a 1-bedroom unit and US$2,400-US$5,100 for 2-3 bedroom units. While
hotels could be an alternative to serviced apartments, the rates currently stand at some
US$2,800 per month (discount given for longer stay) for a standard room in the city centre.
As such, serviced apartments appear to be more cost efficient for expatriates. Villas are
another alternative for expatriates. However, villas are either occupied as office premises in
the city centre or are located further from the city centre. The average rental per month for a
200-345sqm villa approximates US$1,000-US$3,500. While the rent is comparable to a
serviced apartment, the villa offers a bigger living space. The trade off, however, is the
serviced apartment offers cleaning services and has a better location.
20 June 11, 2007

Figure 39: Existing Supply of Serviced Apartments Figure 40: Hotel Stocks
Number of Rents Rents Room Rate Est.
Project Units Unit Size (US$/month) (US$psm pm) Number of (US$ per Occupancy
Phnom Penh
Himawari Apartments 116 55-175 2,142-5,100 29-39 Rating Units night) Rate
Intercontinental Apartments 37 65-110 2,200-3,500 32-35 Phnom Penh
Colonial Mansion 44 24-231 1,200-3,500 15-50 4 and 5 Star 1,461 70-350 60%-80%
Embassy Place 50 70-124 1,400-2,400 18-20
3 Star/Boutique 387 25-130 50%-85%
Les Jardins du Bassac 32 70-217 1,600-4,000 23-18.35
Figure 41: Serviced Apartments in Phnom Penh – Colonial Mansion
In terms of future supply, CBRE estimates that 200 serviced apartment units are currently
under construction in Phnom Penh. Despite the ramp-up in building serviced apartments,
the overall stock remains low and demand from expatriates should remain high (as noted
by the further build-out of office buildings).
With NGOs making up the bulk of expatriate demand in Phnom Penh, we expect
serviced apartment rentals to rise by 8% p.a. in the medium term, between Cambodia’s
GDP growth and inflation rates.
Figure 42: Future Supply of Serviced Apartments Figure 43: Future Supply of Hotels
Number of Number of
Project Units
Phnom Penh
Rating Units
Colonial Mansion Group's Project on Street 102 64 Phnom Penh
Colonial Mansion Group's Project opposite Amanjaya Hotel 80 5 Star 620
The Royal Group's Project 40-45
June 11, 2007 21

Retail Market Outlook
The retail market is still at its infant stage. In addition to the traditional shop houses and
open air markets, the first retail outlet, Lucky Market, started operation in Phnom Penh in
1994, which is not drastically different from a supermarket. Since then, several other
shopping outlets have been built, which cater to the daily necessity needs of residents,
offering supermarkets, restaurants, fashion, among others. Currently, the largest retail
outlet in Phnom Penh is the six-storey high Soriya Shopping Center. At 27,000sqm, the
shopping center also houses a cinema and a roller-skating rink. Tenants at shopping
centres are charged US$10-$80psm per month, and most centres achieve high
occupancy rates.
CBRE notes that supermarkets are constantly looking for new opportunities and retailers
are queuing for retail space in Phnom Penh. The future supply of retail outlets, estimated
by CBRE, would come from four projects, providing some 141,000sqm. Two of the
projects are under construction, whereas the other two are yet to start construction.
Figure 44: Current Shopping Centers in Phnom Penh

Number of Floor Plate Total GFA
Centre Floors (sqm) (sqm) Occupancy Major Tenants
Phnom Penh - Existing
Supermarket,
Soriya Shopping Center 6 4,500 27,000 100% Citymart, The
Pizza
p Co.,
Paragon
Some lines
Supermarket,
Paragon Cambodia 3 3,000 9,000 shops
Black Canyon
available
Coffee
BS Department Store 4 1,000 7,000 50% KPK Supermarket
Supermarket,
Lucky Market 1 2 1,500 3,000 100%
Lucky Berger
Supermarket,
Lucky Market 2 2 1,200 2,400 100% Lucky Beurger,
Fashion Store
Lucky market with
Lucky Market 3 (Soriya) 1 1,290 1,290 n/a
Lucky burger
Source: CBRE
Compared to Vietnam, the Cambodian retail market is less mature. Despite its earlier
entry into WTO, there are presently no foreign retailers operating in Phnom Penh.
Although we expect foreign retailers to start to enter the Cambodian market, supermarket
and department store operators are likely to prefer longer lease terms with fixed rental
payments. Overall, we believe Cambodia’s retail rents (excluding anchor tenant leases,
which are at fixed rates) should rise 5% p.a. in the medium term, in line with the inflation
rate in Cambodia.
22 June 11, 2007

Figure 45: Shop Houses Under Construction in Phnom Figure 46: Inside Soriya Shopping Center
Penh
Office Market
At present, there are no tall office buildings in the city of Phnom Penh as the majority of
companies utilize villas or shop houses as office premises, which usually charge a monthly
rental of US$4,000. According to CBRE, there are only two Grade-C office buildings in
the city, namely Hong Kong Centre (4,000sqm) and Intelligent Office Centre (3,750sqm),
which charge monthly rents of US$10-15psm and US$7-9psm, respectively. Both have full
occupancy. The city is only expecting new office supply in 2008-10 – the Vattanac Bank
Building (15,300sqm, 18 storeys), Canadia Bank’s OCIC Tower (100,000sqm,
27 storeys) and The Royal’s Group mixed-development (7,470sqm).
Figure 47: Construction Site of OCIC Tower
June 11, 2007 23

Appendix 1: Regulations on Land in Vietnam
Figure 48: Regulations on Land in Vietnam

Law on Real The Law on Real Estate Business permits foreign investors to:
Estate (i) construct houses and buildings for sale or lease out,
Business (ii) enhance the land and develop infrastructures on leased land with a view to subletting them
(2007) (iii) provide real estate business services such as real estate consultancy, management, brokerage and management.
Law on Domestic organisations and individuals can purchase houses in Vietnam regardless of their registered place of business or
Residential registered place of permanent residence.
Housing (2006)
Overseas Vietnamese who have resided in Vietnam for 6 consecutive months may buy one residential house or apartment.
For those that fall under certain categories, they can own an unlimited number of houses.
Foreign investors, who invest in the construction of residential housing for lease in Vietnam, may own such residential housing
for the duration of their investment certificate. This limited duration must be recorded in their certificate of residential housing
ownership.
The Law on Residential Housing affirms the ability of foreign organisations and individuals permitted to remain in Vietnam for
more than 3 months and overseas Vietnamese to lease residential housing in Vietnam.
The Law allows developers to accept up to 70% of value of house lease or price from potential lessee/buyer, provided the
foundations for the house have been completed.
Decree 2 Developers of new residential centres have to satisfy the following conditions:
(2006) - Business license comprise real estate field.
- Project's developers have finance capability at least 20% of total investment capital of projects.
Decree 17 Developers have to complete the engaging developments as well as infrastructures before transferring LURs of projects or
(2006) partial projects.
Permits housing developers in rural districts to transfer land plot completed infrastructure without construction development.
Decree 181 Legal entities, overseas Vietnamese, foreign entities, foreigners which carry out housing projects for lease and sale have the
(2004) right to transfer the LUR’s just in case they have already completed the constructions in accordance with approved projects.
Developers have to complete housing construction before transferring or selling to the others/purchasers.
Housing projects which have not been carried out or delayed the constructions will be taken back the LURs.
New Land Law The New Land Law recognises and makes provisions for the developing real estate market.
(2003) Provided that land rental is paid for the entire term and certain conditions are satisfied:
- Foreign investors may transfer, mortgage and contribute the LUR and assets attached to the land.
- Foreign investors may sell and/or lease residential housing.
Old Land Law All land theoretically belongs to the state, but everyone (including foreign investors) are entitled to LUR.
(1993) Vietnamese people may be entitled to indefinite “freehold”, and foreign investors may only be entitled to “leasehold” terms of
50 years (or 70 years in special cases).
LUR may be leased, mortgaged, exchanged, transferred and/or inherited in certain cases.
Source: CBRE, International Financial Law Review, Freshfields Bruckhaus Deringer, Economist Intelligence, Vinaland's Prospectus
24 June 11, 2007

Appendix 2: District of Ho Chi Minh City and Major Developments
Adopted from CBRE Vietnam Property Market Overview Report
District 1 and 3 – City centre where most government authorities and foreign businesses
are headquartered. The current CBD is generally accepted as areas in District 1 along
major thoroughfares such as Le Loi, Nguyen Hue, Le Duan, Dong Khoi and within 1-km
radius around City Hall and Notre Dame Cathedral.
District 2 – Located in the North-East gate of Ho Chi Minh City, the district is adjoining
to several districts including District 1, 7, Binh Tanh, Thu Duc and the Dong Nai
province. District 2 has great advantages in transport communication, either by road or
by rai. It also has a new urban centre in Thu Thiem peninsula situated opposite the City
Centre by the Saigon River.
District 4 – Situated at the South East gateway of Ho Chi Minh City, District 4 has
become a maritime transport junction. District 4 is to become the centre for maritime-port
commence and hence trade and transport centre.
District 5 – Known as China Town (Cho Lon). District five is often the unofficial link to the
Chinese speaking countries
District 7 – Situated at the Southern gateway of Ho Chi Minh City, District 7 is a new
urban centre for HCMC and includes the new urban centre of Phu My Hung or Saigon
South.
District 9 – Situated to the south of District 2, District 9 is also a new urban centre for Ho
Chi Minh City.
Thu Duc District – New urban centre situated to the north-east of HCMC, Thu Duc is an
industrial centre as well as education centre where many universities are located.
June 11, 2007 25

Appendix 3: Vietnam’s WTO Provisions
Adapted from CBRE Vietnam Property Market Overview Report
Tariff Reduction
Over the next 5-12 years for 4,000 items across many industries.
Automobiles: 90% lowered to 52%
Televisions, air conditioners and washing machines: 50% lower to 20%
Beers and Wines: lower to 45%
Agriculture products: 23.5% lower to 20.9%
Garments and textiles: no quotas, 37.3% lower to 13.7%
Footwear: 50% lower to 30%
Computers/ IT products: 0% in 2012
Market Access
(a) Legal, accounting and auditing and bookkeeping services:
On accession, 100% foreign-invested enterprises can be established.
(b) Taxation services:
For the period of 1 year from the date of accession, the licensing shall be made on the
case by case basis and the number of service providers shall be decided by Ministry of
Finance subject to the need and development scope of Vietnam's market.
(c) Urban planning and urban landscape architectural services:
After 2 years from the date of accession, 100% foreign-invested enterprises may be
established.
(d) Computer and Related Services:
For the period of 2 years from the date of WTO accession, 100% foreign- invested
enterprises may only provide services to foreign-invested enterprises in Vietnam. After 3
years from the date of accession, branching is allowed.
(e) Research and Development Services:
Unbound
(f) Advertising services, Market research services:
Upon accession, joint ventures shall be allowed with foreign capital contribution not
exceeding 51% of the legal capital of the joint venture. As of 1 January 2009, there
shall be no limitation on foreign capital contribution in the joint ventures.
26 June 11, 2007

(g) Supply of equipment, materials and chemicals, supply base services,

offshore/marine support vessels, accommodation and catering, helicopter services:
Upon accession, joint ventures with foreign capital contribution not exceeding 49% shall
be permitted. After 3 years from the date of accession, this limitation shall be 51%. Two
years thereon, 100% foreign-invested enterprises shall be permitted.
(h) Services incidental to manufacturing:
After 3 years from the date of accession, only joint ventures with foreign capital
contribution not exceeding 50% shall be permitted. Five years thereon: 100% foreign
invested enterprises shall be permitted.
(i) Courier Services:
Unbound, except that foreign ownership in joint ventures may be limited to 51% within
the first 5 years after accession. After 5 years from the date of accession, 100% foreign-
invested enterprises shall be permitted.
(j) Telecom:
Unbound but under control.
(k) Motion picture:
Only through business cooperation contracts or joint venture with Vietnamese partners
who are authorized to provide these services in Vietnam. Foreign capital contribution
shall not exceed 51% of legal capital.
(l) Construction and related engineering services:
For the period of 2 years from the date of accession, 100% foreign-invested enterprises
could only provide services to foreign-invested enterprises and foreign-funded projects in
Vietnam. After 3 years from the date of accession, branching is allowed.
(m) Wholesale trade services and Retailing services:
A joint venture with a Vietnamese partner is required, and foreign capital contribution
shall not exceed 49%. As of 1 January 2008, the 49% capital limitation shall be
abolished. As of 1 January 2009, unbound.
(n) Franchising services:
None, except a joint venture with a Vietnamese partner is required and foreign capital
contribution shall not exceed 49%. As of 1 January 2008, the 49% capital limitation
shall be abolished. As of 1 January 2009, unbound.
After 3 years from the date of accession, branching is allowed.
June 11, 2007 27

(o) Education services:
Upon accession, only in the form of joint-ventures. Majority foreign ownership of such
joint ventures is allowed. As of 1 January 2009, 100% foreign-invested education
entities are permitted. After 3 years from the date of accession: unbound.
(p) Insurance and Insurance-Related Services:
As of 1 January 2008, unbound for motor vehicle third party liability, insurance in
construction and installation, insurance for oil and gas projects, and insurance for
projects and construction works of high danger to public security and the environment.
After 5 years from the date of accession, non-life branches of foreign insurance
enterprises shall be permitted, subject to prudential regulations.
(q) Banking services:
Upon accession, foreign credit institutions are allowed to issue credit cards on a national
treatment basis. Beginning on 1 April 2007, 100% foreign-owned banks are permitted.
For capital contribution in the form of buying shares, the total equity held by foreign
institutions and individuals in each Vietnam's joint-stock commercial bank may not exceed
30% of the bank's chartered capital, unless otherwise provided by Vietnam's laws or
authorized by a Vietnam's competent authority.
(r) Securities:
Upon accession, foreign securities service suppliers shall be permitted to establish

representative offices and joint ventures with Vietnamese partners in which foreign capital
contribution not exceeding 49%.
After 5 years from the date of accession, securities service suppliers with 100% foreign-
invested capital shall be permitted.
(s) Health related and social services:
Unbound with minimum requirement on investment capital.
(t) Travel agencies and tour operator services:
Unbound
(u) Entertainment services:
Unbound except after 5 years from the date of accession, joint ventures with foreign
capital contribution not exceeding 49% are permitted.
28 June 11, 2007

This page intentionally left blank
June 11, 2007 29

This page intentionally left blank
30 June 11, 2007

Guide to Lehman Brothers Equity Research Rating System
Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2- Equal weight or 3-Underweight (see definitions below) relative to the country index of the country in which a stock is listed.
In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-Negative (see definitions below). A rating system using terms such as buy, hold and sell is not the
equivalent of our rating system. Investors should carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone.
Stock Rating
1-Overweight – The stock is expected to outperform the unweighted expected total return of the relevant country index over a 12-month investment horizon.
2-Equal weight – The stock is expected to perform in line with the unweighted expected total return of the relevant country index over a 12-month investment horizon.
3-Underweight – The stock is expected to underperform the unweighted expected total return of the relevant country index over a 12-month investment horizon.
RS-Rating Suspended – The rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in certain circumstances including when Lehman Brothers is acting in an advisory capacity in a
merger or strategic transaction involving the company.
Sector View
1-Positive – Sector coverage universe fundamentals/valuations are improving.

2-Neutral – Sector coverage universe fundamentals/valuations are steady, neither improving nor deteriorating.
3-Negative – Sector coverage universe fundamentals/valuations are deteriorating.
Distribution of Ratings
Lehman Brothers Equity Research has 2052 companies under coverage.
42% have been assigned a 1-Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating. 40% of companies with this rating are investment banking clients of the Firm.
41% have been assigned a 2-Equal weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating, 27% of companies with this rating are investment banking clients of the Firm.
12% have been assigned a 3-Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating, 21% of companies with this rating are investment banking clients of the Firm.
GLOBAL EQUITY RESEARCH
FOR CURRENT IMPORTANT DISCLOSURES REGARDING COMPANIES THAT ARE
MENTIONED IN THIS RESEARCH REPORT, PLEASE SEND A WRITTEN REQU EST TO:
LEHMAN BROTHERS CONTROL ROOM Lehman Brothers Inc. and its Foreign
Affiliates involved in the Production of
745 SEVENTH AVENUE, 19TH FLOOR
Equity Research
NEW YORK, NY 10019
OR New York
REFER TO THE FIRM'S DISCLOSURE WEBSITE AT www.lehman.com/disclosures Lehman Brothers Inc. (LBI, New York)
745 Seventh Avenue
Important Disclosures New York, NY 10019
The analysts responsible for preparing this report have received compensation based upon various factors including the Firm's total revenues, a portion of which is 1.212.526.7000
generated by investment banking activities. Member, NYSE and NASD
Taiwan
Lehman Brothers Inc., Taiwan Branch
(LBI, Taiwan)
Cathay Financial Center, 12th Floor
7 Sungren Road, Shin-Yi District
Taipei, Taiwan
886.2.8723.1600
London
Lehman Brothers International (Europe) Ltd.
(LBIE, London)
25 Bank Street, 5th Floor
London E14 5LE England
44.20.7102.1000
Regulated by FSA
Lehman Brothers produces a number of different types of research product including, amongst others, fundamental analysis, quantitative analysis and short term Tokyo
trading ideas. Recommendations contained in one type of research product may differ from recommendations contained in other types of research product, Lehman Brothers Japan Inc. (LBJ, Tokyo)
whether as a result of differing time horizons, methodologies, or otherwise. Should you wish to receive any research product of a type that you do not presently Roppongi Hills Mori Tower, 31st Floor
receive, please contact your Lehman Brothers sales representative who will be pleased to assist you. 10-1 Roppongi 6-chome, Minato-ku
Tokyo 106-6131 Japan
This material has been prepared and/or issued by Lehman Brothers Inc., member SIPC, and/or one of its affiliates (“Lehman Brothers”) and has been approved 813.6440.1674
by Lehman Brothers International (Europe), authorised and regulated by the Financial Services Authority, in connection with its distribution in the European
Regulated by FSA
Economic Area. This material is distributed in Japan by Lehman Brothers Japan Inc., and in Hong Kong by Lehman Brothers Asia Limited. This material is
distributed in Australia by Lehman Brothers Australia Pty Limited, and in Singapore by Lehman Brothers Inc., Singapore Branch (“LBIS”). Where this material is
distributed by LBIS, please note that it is intended for general circulation only and the recommendations contained herein does not take into account the specific Hong Kong
investment objectives, financial situation or particular needs of any particular person. An investor should consult his Lehman Brothers representative regarding the Lehman Brothers Asia Limited – Hong Kong
suitability of the product and take into account his specific investment objectives, financial situation or particular needs before he makes a commitment to
purchase the investment product. This material is distributed in Korea by Lehman Brothers International (Europe) Seoul Branch. This document is for information (LBAL, Hong Kong)
purposes only and it should not be regarded as an offer to sell or as a solicitation of an offer to buy the securities or other instruments mentioned in it. No part of Two International Finance Centre
this document may be reproduced in any manner without the written permission of Lehman Brothers. With the exception of disclosures relating to Lehman 8 Finance Street, 26th Floor
Brothers, this research report is based on current public information that Lehman Brothers considers reliable, but we make no representation that it is accurate or Central, Hong Kong
complete, and it should not be relied on as such. In the case of any disclosure to the effect that Lehman Brothers Inc. or its affiliates beneficially own 1% or more 852.2252.6000
of any class of common equity securities of the subject company, the computation of beneficial ownership of securities is based upon the methodology used to Regulated by SFC
compute ownership under Section 13(d) of the United States' Securities Exchange Act of 1934. In the case of any disclosure to the effect that Lehman Brothers
Inc. and/or its affiliates hold a short position of at least 1% of the outstanding share capital of a particular company, such disclosure relates solely to the ordinary
share capital of the company. Accordingly, while such calculation represents Lehman Brothers’ holdings net of any long position in the ordinary share capital of the Seoul
company, such calculation excludes any rights or obligations that Lehman Brothers may otherwise have, or which may accrue in the future, with respect to such Lehman Brothers International (Europe)
ordinary share capital. Similarly such calculation does not include any shares held or owned by Lehman Brothers where such shares are held under a wider Seoul Branch (LBIE, Seoul)
agreement or arrangement (be it with a client or a counterparty) concerning the shares of such company (e.g. prime broking and/or stock lending activity). Any
Hanwha Building, 12th Floor
such disclosure represents the position of Lehman Brothers as of the last business day of the calendar month preceding the date of this report.
110 Sokong-dong, Chung-Ku
We do not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. It is provided Seoul 100-755 Korea
with the understanding that Lehman Brothers is not acting in a fiduciary capacity. Opinions expressed herein reflect the opinion of Lehman Brothers and are 82.2.317.5000
subject to change without notice. The products mentioned in this document may not be eligible for sale in some states or countries, and they may not be suitable Regulated by FSC
for all types of investors. If an investor has any doubts about product suitability, he should consult his Lehman Brothers representative. The value of and the
income produced by products may fluctuate, so that an investor may get back less than he invested. Value and income may be adversely affected by exchange
rates, interest rates, or other factors. Past performance is not necessarily indicative of future results. If a product is income producing, part of the capital invested Mumbai
may be used to pay that income. Lehman Brothers may, from time to time, perform investment banking or other services for, or solicit investment banking or Lehman Brothers Inc., India Branch
other business from any company mentioned in this document. © 2007 Lehman Brothers. All rights reserved. Additional information is available on request. (LBI, India)
Please contact a Lehman Brothers entity in your home jurisdiction. Winchester, Off High Street, 9th Floor
Lehman Brothers’ policy for managing conflicts of interest in connection with investment research is available at www.lehman.com/researchconflictspolicy. Hiranandani Business Park,
Ratings, earnings per share forecasts and price targets contained in the Firm's equity research reports covering U.S. companies are available at Powai, Mumbai 400 076, India
www.lehman.com/disclosures. 91.22.3053.4626
Complete disclosure information on companies covered by Lehman Brothers Equity Research is available at www.lehman.com/disclosures.
HK-2933

Bao Cao Thi Truong Bds VN - Lehman Brothers - 2007

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Bao Cao Thi Truong Bds VN - Lehman Brothers - 2007

Загружено:

Авторское право:

Доступные форматы

REAL ESTATE GLOBAL EQUITY RESEARCH

Vietnam/Cambodia Property ASIA

Vietnam/Cambodia Property Primer

Figure 1: GDP/Capita: Vietnam vs Figure 2: Vietnam Yields vs its Asian

Macau 6.1% 3.6% NA NA NA

2 June 11, 2007

Figure 3: Vietnam and Ho Chi Minh City

2,000 Cambodia's consumption 45.00 100

Cambodia (US$) Vietnam (US$) China (US$) Rent (US$/sqm/mth) (LHS)

Source: CEIC Source: CBRE

June 11, 2007 3

Source: CBRE, JLL Source: JLL

Cambodia: A Few Years Behind Vietnam – Compared to Vietnam, the Cambodian

4 June 11, 2007

Foreign Enterprise Participation Risks

In Vietnam, foreign entities are currently allowed to invest in up to 49% in listed

In Cambodia, ownership of land is restricted only to Cambodian citizens and

Taxes Regulations under Development

Similarly, there is also a 4% tax on the transfer of ownership of immovable property in

June 11, 2007 5

Cambodia (US$) Vietnam (US$) China (US$)

Source: CEIC, Lehman Brothers research Source: General Statistic Office

6 June 11, 2007

Figure 10: Vietnam FDI, Development Aid and Overseas Remittance

Source: General Statistic Office

Inflation and Exchange Control

June 11, 2007 7

Land Ownership and Restrictions on Foreign Investments

Cambodia Economy and Regulatory Framework

8 June 11, 2007

Cambodia also enjoys favorable demographics as it has an extremely young population

Cambodia (US$) Vietnam (US$) China (US$)

4,000 40% 1,800,000 60%

June 11, 2007 9

Land and Property Ownership in Cambodia

Under the current legislation, ownership of real property in Cambodia is limited to

10 June 11, 2007

Vietnam Property Market Outlook

Figure 19: Vietnam and Ho Chi Minh City

June 11, 2007 11

Serviced Apartment Market

Source: CBRE Source: CBRE

12 June 11, 2007

Figure 23: Serviced Apartments in HCMC – Saigon Sky Garden, District 1

Source: Lehman Brothers research

Retail Market Outlook

Figure 24: Vietnam’s Retail Sales

Retail Sales (VND bn) YoY Change

Source: CEIC, Lehman Brothers research

June 11, 2007 13

14 June 11, 2007

Source: CBRE Source: CBRE

Source: Lehman Brothers research Source: Lehman Brothers research

June 11, 2007 15

Avg Rental (US$psm) Occupancy (%)

Source: CBRE Source: CBRE

Figure 31: Retail Chains Active in Hanoi

Office Market Outlook

16 June 11, 2007

Rents (US$psm pm) Occupancy

Source: CBRE Source: CBRE

Building site ->

Automobiles: 90% lowered to 52%

Televisions, air conditioners and washing machines: 50% lower to 20%

Beers and Wines: lower to 45%

Agriculture products: 23.5% lower to 20.9%

Garments and textiles: no quotas, 37.3% lower to 13.7%

Footwear: 50% lower to 30%

Computers/ IT products: 0% in 2012