THE BULLETIN

The Real Estate News & Information Source

March 14th, 2011 • Issue 10 www.coldwellbankervn.com

IN THIS NEWSLETTER:
5 Reasons Housing Prices Will Continue To Increase Currency Markets
Interest Rates Soar, Where To Put Your Money? Tricon Towers Update
Stock Market Real Estate Market
Gold Markets

5 REASONS HOUSING PRICES WILL CONTINUE TO INCREASE

According to experts, the real estate market in 2011 is less likely to see discounts

General predictions for the real estate market in 2011 say major cities will continue to boost the real estate markets.
that the situation will continue to face difficulty. Despite this,
experts are predicting housing prices to rise. Here are some 3. Exchange rate USD/VND rose
While new policies by the government have required all real estate to
of the reasons why:
be listed in the local currency, the reality is that there are still many
developers who track their projects’ finances with USD. Therefore, the
1. Rising input costs recent adjustment of exchange rates between VND and USD will cause
This is considered a major factor for increasing property prices. For some developers to adjust prices so as not to lose as much expected
real estate, inputs include construction materials, land prices, land profit. Furthermore, developers taking out loans in USD will now have
compensation rates, labor costs, management costs and project the burden of higher borrowing costs, eventually driving prices up to
implementation costs. In terms of construction materials, steel prices avoid potential losses.
for brands such as Pomina, VN Kyoei Steel South rose to
17,800VND/kg in mid January 2011. Last January, the steel market
and many other construction materials in bulk prices increased an 4. Volatility in other investment channels
average approximately of 20% -30%. The prices for cement, brick and Instability of other investment channels, such as gold, securities and
tile are also high, increasing from 10% -20%. As the prices of inputs foreign currencies is causing investors to turn towards real estate for
are increasing across the board, so will the price of real estate. more stability and secure investments. Furthermore, real estate
investments remain a viable solution for investors to reach their target
returns. The added activity of smaller investors adds to the already
2. Increasing demand
high demand and is compounded by their inclination to follow each
According to the results of the census of population and housing
others’ footsteps. Property prices will once again increase as a result.
conducted in 2009, Vietnam's population increased by more than 1
million people in a year. The average housing area per capita in Vietnam
is just over 13sqm, while the target by 2020 as decided by the Prime 5. State Policy
Minister is 20sqm. According to estimates, achieving this goal will Many experts agree that State policies are another important factor
require an average of about 100 million sqm of new housing each year. affecting real estate prices. Policies such as regulations on the owner-
ship, use, lease or transfer, other related policies and financial obliga-
In addition to the favorable demographic indicators, the world and tions will all have an impact. Control policy of total loans in real estate
local economies are set to continue developing sustainably. With this investment up to 10%, results in better control and stability for the
comes higher incomes and increased demand for real estate owner- real estate market compared to the financial markets. Thus, the real
ship. Furthermore, the increasing trend of urbanization seen in the estate market is set for even further growth and price increases.

Interest rates soar, where to put your money?

Chi Minh City, the picture was similar. The securities market is almost
stagnant, and also not a safe place for amateur investors.

Property market going to be stirred, will you make

profit from it?
Wait a minute… how about investing money back into your own
business? Is this a safe investment?

In short, yes it is. Then again, according to Andy Xie, an independent

economist who once worked in Hong Kong as Morgan Stanley’s top Asia
analyst has said that “When you sit down with a table of businessmen,
the story is usually how they got lucky from a piece of land. No one
talks about their factories making money these days.” A proper example
is how the housing fever in 2010 brought plenty of profits to those who
were in the right place and at the right time to invest.
Will you save your money in the bank?
Despite all of the news in early 2011 indicating a quiet market,
Today’s investors and entrepreneurs are carefully considering potential waves could still stir up this market.
their options to get the best returns, but traditionally measure
up three main areas: financial products (savings accounts, The first one is focused on apartments for lease, recorded in national
gold and securities), capital investments for their businesses, housing development plan from now to 2020. Demand is already high
and real estate. The rate of inflation in Vietnam has an effect and supply is expected to need to increase 25% in urban areas;
on these choices, and has recently been a hot topic. However, especially in HCMC which holds 25-30% of the total gross floor area.
inflation has taken second stage to today’s hot topic: interest Both developers and city officials will work together to ensure that the
rates for VND savings accounts. needs for housing are met in the future.

With those high interest rates, will you save your The second wave will be from the supply side, which is also defined in
money in the bank? 2020 development plan. The goal is raising the minimum housing area
At some banks, the savings interest rate has jumped to 17-18% per per capita to 25sqm by 2020 and to 30sqm by 2030. Therefore, the
annum. This rate has been described as abnormally high; however it urban areas will need more than 10 million apartments by 2015 and
did not attract people as usually. The dong deposit balance actually 13.5 million apartments by 2020. Moreover, there is an estimated
dropped by 4.12%, which showed that investors were no longer keen 50,000 couples get married each year, contributing to the ever
on VND savings. One reason for this is the fear of the dong’s continued increasing housing demand.
devaluation.
Commenting on property market this year, Mr. Le Hoang Chau,
Gold and USD deposits therefore became the attractive market for Chairman of the Ho Chi Minh City Real Estate Association (HoREA),
investments. However, trading in gold bars will soon be banned and said that this year would be favorable time for home buyers. Is this
the Hanoi markets have stopped trading dollars since March 7. In Ho your chance to catch the wave?

stock market

Stock Market Summary 28 February – 11 March 2011:

Information about the State Bank’s resolutions on tightening the monetary policy had a strong influence on the stock market in the first
week of March. The Government’s interventions addressed two key issues: inflation and exchange rates; however the market plummeted

28 February to 4 March: The market did recover slightly by the end of trading on 4 March.

The recovery then continued the following week as investors showed great optimism during the consecutive rallies. In particular, 10 March
showed some of the most impressive growth in the last three months. Experts explain that the limited information regarding the policies of
free dollar and gold trade caused investors to shift capital towards the stock market.

28 February: Activities took place to cut losses at the last minute. The VN-Index closed down 1.19% at 461.37 points.

2 March: The market received fairly positive information: State Bank (SB) announced that increased reserve requirement is unrealistic at
this time and would cause tightened credit for real estate and a securities shock. However, the trading session on 2 March still saw "panic"
selling. VN-Index lost another 8.29 points, closing at 457.83 points.

3 March: The State Bank issued Circular No. 02/2011/TT-NHNN prescribing that the interest rates of credit institutions shall not exceed 14%.

4 March: Markets began to regain confidence, the VN-Index recovered slightly.

8 March: The State Bank decided to increase the discount interest rate, refinancing and overnight loans rates. The news brought the
market off of its gains.

9 March: The updated information from banks did not cause much surprise, but investors still sold off their 3-day gains. The VN-Index
closed at 470.51 points.

10 March: The market saw its best performance in three months as investors picked up on the week’s earlier rallies after losses on 9
March. TheVN-Index closed at an impressive 482.5 points.

11 March: More gains were seen as the market was up 35.83 points for this week, a 7.8% increase week-on-week.

GOLD markets
(mill/tael)
38.00
37.70 37.7 37.74
37.64 37.63 37.62
37.63
37.38 37.45
37.50
37.57 37.62 37.62 36.95
37.60 37.56 37.50
37.45
37.29 37.37
37.00

36.85
36.50

36.09
36.01 36.01 36.02 36.01 selling
36.00
35.74 buying
35.65
int'

35.50
35.53 35.53 35.53

35.00

34.50

34.00
28.02.11 01.03.11 02.03.11 03.03.11 04.03.11 07.03.11 08.03.11 09.03.11 10.03.11 11.03.11

GOLD MARKETS 28 February – 12 March 2011

Recent information from the Government about its plans to manage the free gold trade markets had a strong impact on the gold markets.
Prices have dropped as a result and activity has subdued.

28 February: Gold fell by VND100,000/tael compared to the previous week.

1 March and 2 March: Gold prices continued to decline locally while global prices grew. According to a SJC representative, domestic
prices 01/03 and 02/03 in two days, gold prices continue to decline while world gold price is growing. According to company representatives
SJC, domestic gold prices down by three factors: strong urges to sell gold, foreign exchange rates and overall market sentiment.

3 March: the world gold price hit a record, exceeding $1,440 per ounce while gold price in Vietnam rose to VND37.72 million/tael.
Political unrest in the Middle East, North Africa and especially Libya are considered the main reason for the record price.

4 March: Domestic gold prices fell slightly, approximately VND100,000/tael.

On the same day, State Bank Governor Nguyen Van Giau said the bank is planning the roadmap to gradually reduce and eventually ban the
free gold markets for purchasing and lending, adding to the bleak domestic gold market sentiment.

World gold prices also fell 1.5% as investors took profits on the positive news from the U.S. economy and European Central Bank President
Jean Claude Trichet’s announcement of possible interest rate hikes.

7 March: World gold prices once again set new records when political tensions in the Middle East and North Africa showed no signs of
improvement. Meanwhile domestic prices saw little change on this day nor the following, a sign that the state’s administrative measures
had a certain effect.

9 March: Domestic gold prices fall slightly.

10 March: The domestic gold price continued to decline while world gold price remained high.

11-12 March: Domestic gold prices plummeted further to around VND37.1 million/tael, a three-week low.

It is expected that the market sentiment will carry on to next week, bringing prices down even further.

CURRENCY MARKETS
20,885

20,880 20,880
20,880
20,875 20,875 20,875
20,875
20,875
20,870
20,870
20,870 20,870 20,870 20,870 20,875
20,870 20,865
20,865 20,865 20,870 20,870

20,865 20,870 Bid

20,860 20,860 Ask

20,860 20,860
Poly. (Bid)
20,860
Poly. (Ask)
20,860
20,855
20,855 20,855

20,850

20,845

20,840
28/02/2011 03.01.11 2.3.2011 3.3.2011 4.3.2011 5.3.2011 6.3.2011 7.3.2011 8.3.2011 9.3.2011 10.3.2011 11.3.2011 12.3.2011

Exchange Rate USD/VND in the last 2 weeks

CURRENCY MARKETS from 24 February – 12 March

24 February, the Government announced Resolution 11 requesting banks to disclose the holding of dollars of state-owned enterprises
(SOEs) before 3 March. This is regarded as a signal that the Government will request the decision to sell part of SOEs’ foreign currency
holdings to the market.

From 28 February – 03 March, the exchange rate continuously decreased on both free markets and interbank markets.

1 March - The Foreign Investment Department (Ministry of Planning and Investment) announced FDI disbursements for the first two
months in 2011 reached $1.15 billion, up 4.5%.

3 March - The exchange rate in Hanoi increased by VND70/USD compared with late Wednesday afternoon.

4 March - Governor Nguyen Van Giau said the State Bank is on a roadmap to gradually reduce and eventually ban the mobilization and
lending of gold.

7 March - The foreign exchange market in Hanoi abruptly stopped transactions. About 2 days later, the foreign exchange market in Ho Chi
Minh City was in a similar situation.

VND on the free market has been strong. This is the result of the strong intervention of the government to restrict foreign currency loans
as well as the prohibition of foreign currency business of foreign exchange trading in Hanoi.
Rates on the interbank market continued to decline slightly.

8, 9 and 10 March - The average interbank rate rose continuously, and then reduced in two consecutive days on 11 and 12 March.

9 March - The free foreign exchange markets in Hanoi and Ho Chi Minh City were almost frozen after the inspection requirements to
strengthen the foreign exchange market by the State Bank.

Remedial measures will be proposed such as the confiscation of material evidences, not only administrative sanctions as previously.

10 March – The frozen gold markets in Ho Chi Minh City have also caused USD trading to slow down significantly due to gold shops
shutting down trade.

The State Bank announced USD exchange rate reference for banks is VND20,673 per dollar. This is the 3rd consecutive increase of the
average exchange rate in the interbank system.

11 March - The domestic foreign exchange market has no big changes. Free foreign currency trade in Hanoi was still frozen. Most of the
gold shops stopped trading.

12 March - Eximbank unexpectedly announced it cut interest rates by 0.1% to 0.25% per annum for USD. Banks previously noticed that
higher USD interest rates drove more people to the banks.

TRICON TOWERS UPDATE

MVIC Selects Mitsubishi for Tricon Towers

On 7 March, 2011, Minh Viet Investment Corporation (MVIC) officially selected Thanh Long Elevator & Equipment Ltd. to provide, install,
operate, and maintain Mitsubishi elevator and escalator systems in Tricon Towers, the new urban enclave in Splendora, Hanoi.

The Mitsubishi elevators were made in 2010, meeting the requirements of ISO 9001 and ISO 14001. They feature a modern design and VVVF
Inverter Control which provide maximum comfort and safety for the residents.

MVIC selected Mitsubishi for its unrivaled security standard as well as its prestigious mark in environmental protection and energy conserva-
tion. Mitsubishi elevators have many other advantages including: expediency (faster movement); space saving (minimum space for elevator
room and enclosure); and user-friendly design.

Mr. Edward Chi, the Chairman and CEO of MVIC stated they aimed to provide the users with the highest safety and convenience by
selecting the leading brand in elevators and the most reputable contractor for Tricon Towers.

One feature in Tricon Towers is the individual elevator system for penthouse with an intelligent electronic operator, capable of ensuring privacy
and mobility for the owners.

Located in the urban area of Splendora, Hanoi, Tricon Towers possesses the perfect incorporation between the innovative green structure and
modern landscape. Each unit, with at least two views, can overlook the city vista. Tricon Towers by MVIC is combines luxury apartments with
first-class retail and commercial services.

REAL ESTATE MARKET SUMMARY

Hanoi
PROJECTS
Phu My complex zone (in Cau Giay District, Hanoi) has completed its planning and design phase. This VND9 trillion project includes
12 tall buildings (21-45 stories) with 104,235sqm in area.

National standard school project at Co Nhue area was approved.The project includes a pre-school, junior and senior high school with
27,496sqm in area and VND189 billion for investment.

864 low-income apartments in Kien Hung project (belonging to Vinaconex Xuan Mai) are being sold. In addition, there are 460
apartmens in Vinh Yen, 352 apartments in Binh Tri Dong (HCMC) and over 400 apartments in Ha Dong to be sold.

Japan-styled Zen resort makes debut with an investment of VND220 billion and an area of over 50 hectares. It islocated in Yen Bai
(38 km from Hanoi’s center).

Savico Mega Mall project was presented with an area of 60,000sqm and included two parts. Block A is the trading center, expected
to finish in November 2011; block B is office area, already in use since December last year.

BIDV Tower has 10% office for lease remaining. This 25-story building is located in Tran Quang Khai Street, Hoan Kiem with a total
of 23,800sqm in area and priced at USD40-43 sqm/month(including VAT). BIDV cooperated with Bloomhill Holdings PTE Ltd.
Singapore.

HUD3 – Hanel Building will start in Q2/2011 with a total of 58,700sqm of floor space in Hoang Mai, HN. Profits are expected to reach
VND25.6 billion.

Melody Villas 3 were offered for sale on March 12 priced from VND2.2 billion/unit. The project is located in Hoa Binh Province, 55km
away from Hanoi in the west.

Hanoi: More than VND41 billion for construction services office building -
The building will be located at Doi Can Street, Ba Dinh District, by Hoan Kiem Import - Export Corporation. The project has a total
area of 653.5sqm, estimated to be constructed from Q1/2011 to Q3/2012.

Hanoi started work on 5-star hospital -

VinMedicare Hospital is an international standard 5-star facility with 500 rooms and clinics and a central system of high-end medical
technology. The first phase of the project is expected to be completed in Q1/2012.

Fiveluxury apartment towers to be developed in Hai Ba Trung District -

The complex of luxury apartments, offices for lease and shopping center at 378 Minh Khai, Hai Ba Trung District, Hanoi, is expected
to be built in 2011 by Daewon-Thu Duc House Development JSC with a total investment of VND1.5 trillion. Total area is 28,726sqm
and includes five luxury apartment towers and one office tower from 18-22 stories.

PLANNING/INFRASTRUCTURE
Hanoi considers building tunnels crossing the Red River -
The tunnels are expected to be positioned at the end of Tran Hung Dao and Hoan Kiem Street crossing the Red River and connected
to the transport network in Long Bien district.Total length is 3km with 1km across the river and a width 18-20m and four lanes.
VinGroup JSC and Truong An Co had proposed to deploy this project in BT contract form ( Construction-Transfer)

Hanoi proposed building six new highways - Including:

Belt II: Buoi - Nga Tu So - Vinh Tuy;
Belt III: Nam Thang Long - Thanh Xuan - Phap Van;
Line QL32 - Hoang Quoc Viet - Buoi;
Line Phu Do - Yen Hoa – Belt II;
Line Ton That Tung – Belt line III - Belt 3.5;
Line Phap Van - Minh Khai

Preparing to build Belt 2 at Vinh Tuy-Nga Tu Vong -

The road width will be expanded to 53.5m and extended 3km in length.
Investment is VND7.05 trillion by Ta Ngan- Project Management Department. Estimated completion is in Q4/2011.

Hanoi: 1/500 plan to build Culture & Sport Center -

Total land area of 6.9 hectares including items such as a sporting event hall, outdoor sports area, swimming pool, cultural house,
exhibition area, gardens and ancillary constructions.

POLICIES

Hanoi will pay hundreds of billions of dong to destroy super thin houses - Ultra-thin houses in the city will be revoked and cleared.
The total number of houses is about 300, gathered mostly in Thanh Xuan, Ba Dinh and Cau Giay District.

Ho Chi Minh City

PROJECTS
Can Gio urban-tourist area project is expected to start in June 2011. Location is 50km Southeast of central HCMC. The project is
expected to complete its basic technical infrastructure in June 2013 and total structure in June 2016.

64,000sqm housing area in District 9 was approved for its detailed plan. Located in Phu Huu Ward, this project will provide houses, a
school, public parks and sports yard for 500 people.

TDH Apartment – Phuoc Binh opened for the sale for its first 46 units. This project started on September 2009 and is expected to be
handed over in Q4/2011.

C.T Group to start on CT Plaza - The 27-storey C.T Plaza includes three basements, 24 floors of luxury commercial area, a high-end
apartment area with 200 units and a 5-star-hotel. The project covers 4,257sqm at 117 Nguyen Dinh Chieu (District 3) and will be
completed in early 2013.

HAGL hands over Hoang Anh River View Apartment - Hoang Anh River View includes 600 apartments, located on the banks of Saigon
River, Thao Dien area, District 2. It has been handed over & moved-in.

PLANNING/INFRASTRUCTURE
Expanding Southwest gateway - The expansion project for Truong Chinh Street and Tan Ky Tan Quy Street with a total investment of
VND1.2 trillion is expected to solve traffic jams at the city’s Southwest gateway and promote the local economies in both Tan Binh
and Tan Phu Districts. The line from Tham Luong to Cong Hoa will be widened to 60m, and Tan Ky Tan Quy will be widened to 30m
(currently 12m).

1/2000 planning for area next to Thu Thiem new urban - HOK International Limited (USA) is planning to develop an area of 335
hectares with about 90 projects planned at the moment.

Adjusted plan of South New Urban Area - The 1/500 plan of two plots will be adjusted with area of 58,500sqm and 59,300sqm. The
two plots to be adjusted are Plot 2 & Plot 4, at Block 9A & B, Binh Hung Commune, Binh Chanh District.

HCMC invests tens of trillions of dong in transport system - Six metro routes, three tramways, monorail and bus systems will be built.
These transport projects will be finished along with the renovation of the central bus station.

Binh Tien Bridge project will start on May 2011 at 3.2 km in length. It begins at Pham Van Chi Street (District 6) and stop at Binh
Chanh. This project has an investment of VND3.285 trillion and is expected to finish in late 2013.

Germany’s KfW signs deal to fund city’s metro line - KfW signed an agreement valued at EUR28 million that will be used for the metro
line No. 2. In the second agreement, the Norway Government agreed to provide via KfW a total EUR34 million for six water supply
projects in the country.

Tien Giang
Truong Dinh Residential Area project (in Go Cong town) has commenced. It covers 14.2 hectares with 430 apartments and 72 villas.
The project has VND107.5 billion of capital and its infrastructure will be finished in 2011.

Can Tho
Southern Urban Area at Can Tho River - This project is a $3 billion investment scheduled to start construction in early 2012. The area
will have 100 luxury villas, a 5-star international hotel (32 floors), 30 office buildings (25-30 stories) and an amusement park.

Vung Tau
Ho Tram Elder Care Resort (in Vung Tau) - Capital investment of $32 million with an area of 42 hectares. Development will begin in June
and expected to be completed in 2015.

Viet Han 5 ResidentialArea granted Investment Certificate -

Ba Ria - Vung Tau People’s Committee issued the investment certificate for the Viet Han 5 Residential project with a scale of nearly 17
hectares and a total investment of VND700 billion. The project is by Viet Han Trading - Advertisement - Construction - Real Estate Co., Ltd.

Quang Ninh
Upgraded Uong Bi City, Quang Ninh Province -
On 25th Feb, the Government issued the Resolution of Establishment of Uong Bi City, Quang Ninh Province based on the total area,
population and administrative units directly under Uong Bi town.
Uong Bi city strives in to reach an average personal income $3,000 or more by 2015 while reducing poor households to less than 1%.

Lang Son
Sales of 1400 land lots of Nam Hoang Dong 1 project begins -
1400 land lots of New Urban Area Nam Hoang Dong 1, Lang Son City,went up for sale on Feb 26 with a price of VND5.5-10 million/sqm.
At the time, project had essentially finished the infrastructure such as electrics, water, telecommunication and urban transport and is
expected to be fully completed in 2013.

Investment and development of Lang Son-Ha Noi- Hai Phong- Quang Ninh corridor -
The two trading centers of Tan Thanh and Coc Nam (Lang Son) will be international trading centers.
Projects include 16 retail centers, seven transshipment centers; 25 commodity exchanges; 20 farmers’ markets and 62 shopping centers.

Da Nang
Investing in resettlement building at Phuoc Ly -
The low-income apartment project by Da Nang JSC consisting of seven floors and building area of 30,783 sqm and 545 units has a total
investment of VND185.5 billion. This project will be built under a BT form in 2011-2012.

Phan Thiet
Sunny Villa in Mui Ne (25 km away from Phan Thiet) - An investment of $34 million, the project has 31.7 hectares in area within the 200
hectares Hon Rom golf course. This project will be in use by 2014.

Dong Nai
Japan finances Vietnam’s two mega projects - Long Thanh International Airport (Dong Nai) in the south as well as the Lach Huyen
seaport (Hai Phong) in the north.

Da Lat
Paradise Garden luxury area in Da Lat City has 38 hectares in area is expected to start in March 2011 and finish in 2015.

NATIONAL POLICIES
Vietnam’s stock market to be restructured on 24 Feb 2011, the stock market restructuringfor 2011 proposal was submitted in a meeting
to outline ways to develop the stock market in 2011in Hanoi.

Accordingly, the State Securities Commission (SSC) will gradually restructure the stock market in 2011 by improving the listed, OTC and
government bond markets.

The SSC will increase its listing standards and expand the OTC market.

Vietnam to scrap gold bullion trade on free market

In Q2/2011, the State Bank of Vietnam will submit its proposals regarding the regulation of gold trading with the view towards abolishing
bullion trade on the free market.

State bank of Vietnam to better control the monetary market

On 1st March, Th State Bank of Vietnam issued Directive No. 01/CT-NHNN on the implementation of measures of monetary policy and
banking.

The measures are: control rates and manage foreign exchange markets, control the gold market closely and tightly control currency
markets.

The Ministry of Construction has presented the draft strategy of the National Housing Development Planto 2020 with vision to 2030. This
draft focuses on increasing the supply of apartments for rent as well as improving the standards of housing today.

The information and comments provided in this newsletter are based on an assessment of the writer at the date of the newsletter. This newsletter is not for investment purposes but only for reference to assist investors with
more complete information in making decisions and can change at any time without prior notice. The information in this newsletter is based on the available information gathered from various sources which are believed to
be reliable and accurate, therefore perfection cannot be guaranteed. COLDWELL BANKER Vietnam is not responsible for the investment decisions made when using the information contained in this newsletter.

Newsletter • Issue 10