GDP growth reached 6.9%, the highest 9M/2018 growth in eight years. In 2018, the government forecast GDP growth to reach 6.7 percent. Manufacturing and processing grew 13% YoY and continued to be a key GDP contributor.

Strong export momentum continued up 15% YoY to US$179 billion, delivering a US$5.4 billion trade surplus.

The US remains the largest export market with US$35 billion, increasing 13% YoY.

Total registered FDI reached over US$25billion, while FDI disbursement increased 6% YoY to US$13.3 billion with Japan being the largest contributor.

CPI growth was well controlled at 3.6%, approximately 4% under the limit.

International visitors strongly grew 23% YoY to 11.6 million, Asian tourists continued to be the main source market.

1. RETAIL: RENOVATIONS INCREASE APPEAL

Total stock was 1.2 million m², with over 55,000 m² added due to the entry of three shopping centers and two supermarkets. One department store downsized, withdrawing 7,300 m². 

Average gross rent decreased -1% QoQ and -3% YoY. New supply in the non-CBD offered competitive rent. Average occupancy increased 1ppt QoQ even after the entry of new supply.                                

Retail sales had strong growth at 12% YoY, in which F&B grew 13% YoY. High retail density in the CBD and NUAs are encouraging retailers to renovate and revise the tenant mix for wider appeal. In Q4/2018, over 100,000 m² will be added in non-CBD districts, which will pressure overall performance.

2. OFFICE: STRONG PERFORMANCE

One new Grade B and one new Grade C office provided approximately 9,000 m². Total office space reached over 1.8 million m², increasing 1% QoQ and 6% YoY. 

Overall performance continued to improve with average rents increasing 3% QoQ and 7% YoY. The surge was due to rent increments across all grades, especially Grade A. Average occupancy was 97%, up 1ppt QoQ. Given the very low vacancy rates and lack of new supply in upcoming quarters, the office segment expected to continue its strong performance.   

By 2020, approximately 387,000 m² will be added.

3. SERVICE APARTMENT: ROBUST UPSCALE SEGMENT

One new project and four new phases added approximately 450 units, whilst one project withdrew. Total stock was more than 5,500 units, up 6% QoQ and 16% YoY. 

Average occupancy was 84%, increasing 1ppt QoQ due to the improved performance of CBD projects. The majority of take-up was from Grade A and B. Average rent increased 1% YoY. 

From Q4/2018 to 2020, more than 1,500 units from 11 projects will enter the market. Six are located in the CBD and will provide approximately 780 units; accounting for 50% of future supply.

4. HOTEL: ROOM RATE RECOVERY

One 5-star and two 3-star hotels closed for renovation, equivalent to 393 rooms. Room supply was down -3% QoQ and -4% YoY to approximately 15,800 rooms from 127 hotels. 

The low season saw average occupancy dropping -1ppts QoQ but stable YoY. Meanwhile, overall ARR gained 3% YoY, a significant improvement in the context of increasing competition between tourism destinations. 

To 2020, 3,000 rooms from 15 projects are expected to come online.

5. APARTMENT: LIMITED NEW SUPPLY

Fourteen new projects and 10 launches of new phases provided over 7,700 units. Primary supply dropped -26% QoQ and -47% YoY to 18,800 units. 

There were over 10,000 sales, down -30% QoQ and -13% YoY. Absorption was 53%, down -3ppts QoQ but up 21ppts YoY. Grade C continued to dominate with a 54% market share. Grade A sales increased 58% QoQ. 

Until 2020, supply is expected to be approximately 124,000 units from 94 projects; District 9 is expected to have the largest share at 32 percent.

6. VILLA/TOWNHOUSE: SUPPLY SCARCE

Six new small-scale projects and one new phase added 650 dwellings. Primary stock was approximately 1,200 dwellings, dropping -26% QoQ and -39% YoY. Transactions decreased

-66% QoQ and -67% YoY due to scarce supply. Townhouses with small land sizes (< 75m²) accounted for 65% of sales. 

Primary land supply was 1,860 plots with high quarterly absorption of 64 percent. Suburban districts led due to low investment entry. 

From Q4/2018 to 2020, 20,200 dwellings/plots are expected to enter the market. District 9, Binh Tan and Binh Chanh will contribute 60% future market supply.