CBRE RESEARCH

OCCUPIER FLASH SURVEY

VIETNAM
 VIETNAM OCCUPIER FLASH SURVEY
The Vietnam Occupier Flash Survey was launched between 9 to 10 April 2020.
A total of 180 responses were received.

79% 43% 98%

expect business environment to expect REVENUE TO CONTRACT has business AFFECTED
DETERIORATE IN 2H 2020 WITHIN 10-30% in 2020 BY COVID-19

61% 27% 25%

have NOT BEEN OFFERED RELIEF EXPECT LANDLORDS TO BE Claim that their CLIENTS’
MEASURES from landlords MORE ACCOMMODATIVE as DECISION was
the business has been largely delayed/changed
disrupted by COVID-19

Source: CBRE Research, April 2020.

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 REVENUE TO CONTRACT IN 2020 BUT NOT AT HIGH MAGNITUDE
About 79% of respondents expect revenue to contract in 2020 but mostly contained within 30% range. However, as the discussions are still in
progress, over 60% of respondents have not yet been offered any relief measures by landlords.

Q1. What percentage do you expect revenue Q2. Have you been offered any relief
to grow or contract in 2020? measures by landlords?

Expected Change in Revenue (Y-o-Y)

70%

3% 60%
12%
61%

Decrease more than 50% 18% 50%

Decrease 31-50% 40%

Decrease 10-30% 23% 30%

27%
Decrease less than 10%, 20%
OR unchanged
Increase 10% 13%

0%
43% Yes, and we are satisfied Yes, but we expect No
with these measures landlords to be more
accommodative

Source: CBRE Research, April 2020.

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 COVID-19 HAS CAUSED DELAYS/CHANGES IN BUSINESS PLAN
There are rising concern over cashflow for operations, leading to delays or changes in business plan.

Q3. What has been the biggest impact on your business so far in 2020?

Delays/changes in clients’ decisions 25%

Travel and gathering restrictions 22%

Concern over cashflow for operations 20%

Delays/changes in your firm’s investment decisions 18%

Staffing and HR 9%

Obligations with lenders/other stakeholders 4%

Not much impact so far 2%

Source: CBRE Research, April 2020.

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 4

OCCUPIER FLASH SURVEY
ASIA PACIFIC
 ASIA PACIFIC OCCUPIER FLASH SURVEY - EXECUTIVE SUMMARY
The Asia Pacific Occupier Flash Survey was launched between 23 March to 5 April 2020.
A total of 264 responses were received; of which 5% is from Vietnam.

51% 2/3 84%

expect business environment to Will DELAY IN LEASING DECISIONS, mainly will INCREASE INVESTMENT IN
DETERIORATE IN 2H 2020 on site visits and expansionary plans; but TECHNOLOGY to support remote working
one-third said no impact at all. after the outbreak and as Business
Continuity Plan (BCP)

24% 51% 77%

still EXPECT REVENUE TO GROW have DISCUSSED WITH LANDLORDS about Will increase the ADOPTION OF FLEXIBLE
in 2020; tech sector is most relief measures, including direct WORKING style
optimistic. reductions, rental holiday, longer rent
free and fit-out allowance

86% 71% 44%

Adopted REMOTE WORKING have NOT BEEN OFFERED RELIEF Said COVID-19 will prompt them to increase
along with the lockdown MEASURES from landlords their preference to buildings with WELL /
measures GREEN FEATURES

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

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 BUSINESS ENVIRONMENT TO DETERIORATE IN H2 2020
Markets that were hit by COVID-19 earlier in the year are turning more positive to the business environment in the second half.
In Vietnam, 25% of respondents expect a better H2. This is aligned with the improved sentiment on the ground as most corporates have
resumed business.
Q 1 . C o m p a r e d To H 1 2 0 2 0 , D o Yo u E x p e c t T h e B u s i n e s s E n v i r o n m e n t I n H 2 2 0 2 0 To B e ?

Mainland China
Wuhan Lockdown On 23/1
Taiwan

27% Foreigner restrictions on

19/3
Korea
About the same Daegu Lockdown on 25/2
Hong Kong SAR
Stricter restrictions on25/3
22% Vietnam
National Lockdown on 31/3
Better
India
National Lockdown on
24/3

51%
Australia
Close non-essential business on 24/3
Japan
Worse Declare a state of emergency on 6/4
Singapore
Close non-essential business on
7/4 0% 20% 40% 60% 80% 100%
Better About the same Worse
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

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 REVENUE TO CONTRACT IN 2020 BUT NOT AT HIGH MAGNITUDE
About 65% of respondents expect revenue to contract in 2020 but mostly contained within 30% range. A quarter of respondents expect
further revenue growth this year. Technology and telecommunications sector is most optimistic, aligned with the boosted demand for tech
solutions during COVID-19 outbreak.
Q2. What percentage do you expect revenue to grow or contract in 2020?

40% 65% OF RESPONDENTS EXPECT Technology and

Telecommunications
REVENUE TO CONTRACT
35%
Manufacturing
30%

25% Healthcare and Life Sciences

20%
Professional Services

15%
Real Estate
10%

Retail
5%

0% Banking and Finance

Grow Grow Grow Flat Contract Contract Contract
more 10-30% below less than 10-30% more
than 30% 10% 10% than 30% 0% 20% 40% 60% 80% 100%

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020. Grow Flat Contract

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 8

 HOME WORKING AS THE MAJOR RESPONSE TO COVID-19
The high response is to align with government measures to reduce travelling and measures to close non-essential businesses.
For markets that do not have lockdown, companies are adopting split team and staff rotation measures.

Q3. What responses/measures did you implement after the COVID -19 outbreak?

Remote/home working 86% Market Work from home ?

Mainland China No, resuming office
Non-urgent government staff;
Hong Kong SAR
Flexible working hours 61% discretionary for private sector
Taiwan Discretionary
Singapore Compulsory
Staff rotation (e.g. Team A & B) 45% India Compulsory
Japan Avoid work in office
Korea Discretionary
Split offices to separate key personnel 30%
Australia Encourage
New Zealand Compulsory
Ceased desk-sharing and/or activity- Thailand Compulsory
9%
based working (ABW)
Malaysia Compulsory
Vietnam Discretionary
Use of flexible office centres 6%
Philippines Compulsory
Indonesia Encourage
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

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 SITE VISITS & EXPANSION PLANS HAVE BEEN PUT ON HOLD
The retail sector is mostly affected in terms of stopping expansion plans. The effect of delaying real estate leasing decisions will last in
the coming months as well. Interestingly, about one-third of the respondents said their decisions have NOT been impacted, and a
higher percentage is from tech sector.
Q4. How have your real estate leasing decisions been impacted by the COVID -19 outbreak?

Site visits have been delayed/cancelled 36% 40% FOR RETAIL OCCUPIERS
Expansion/new set up plans have been put on
hold
35%
50% FOR RETAIL OCCUPIERS
Not at all 33%
40% FOR TMT TECH OCCUPIERS
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.
Relocation plans have been put on hold 26%

Capex for fit out has been reduced 23%

Renewals have been delayed 20%

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 NEGOTIATIONS BETWEEN TENANTS AND LANDLORDS ARE HAPPENING
Occupiers in Vietnam started discussions. Besides rental reduction, tenants are also asking rental holiday, longer ren free and fit-out
subsidies in wake of delays in construction work and material supply.

Q5. Have you held discussions with landlords on any the following aspects of lease
agreements?

No discussions have taken place 49%

Breakdown by market
0% 50% 100%

Japan
Negotiated rental reductions 36%
Korea

Singapore
Requested rental holidays (For existing tenants) 24%
Taiwan

Australia
Requested longer rent-free periods (For new lease) 17%
India

Requested fit-out subsidies Vietnam

14%

Mainland China

Used flexible space provided by landlords 2% Hong Kong SAR

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 11

 NOT MUCH RELIEF MEASURES HAS BEEN OFFERED YET BY LANDLORDS
As the discussions are still work in progress, over 70% of respondents have not yet been offered with any relief measures by landlords. For
those being offered, 22% expect landlords to be more accommodative as the business has been largely disrupted by COVID-19.

Q6. Have you been offered any relief measures by landlords?

Yes, and we Percentage of respondent have not been offered any relief
are satisfied measures by landlords
with these
measures 100%
7% 90%
No
80%
Yes, but we expect 71%
landlords to be 70%
more 60%
accommodative
50%
22%
40%
30%
20%
10%
0%

Taiwan

India
Mainland China
Japan

Hong Kong SAR

Korea

Australia

Singapore
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

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 TECHNOLOGY AND FLEXIBILITY TO HAVE LONG-TERM IMPACT
About 84% of respondents will increase investment in technology to support remote working, along with 77% wanting to increase the
adoption of flexible working style. The COVID-19 also raises awareness of WELL / Green features of office buildings.

Q 7 . To w h a t e x t e n t d o y o u e x p e c t t h e r e t o b e a s h i f t i n l o n g - t e r m o c c u p i e r s t r a t e g y i n t h e
following areas after the COVID -19 outbreak?

Investment in technology to support remote working

Adoption of flexible working

Preference for buildings with WELL/Green features

Use of coworking space or serviced offices

Density of office space

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Increase No change Decrease

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

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 REMOTE WORKING WILL BE THE KEY SUBJECT FOR BUSINESS CONTINUITY PLAN
The adoption of technology is the top priority among different industries, including technology. Interestingly, manufacturing sector has more
respondents considering diversification of operating risks between markets (55%). Over half of the banking and finance sector consider splitting
teams across multiple buildings

Q8. Which of the following Business Continuity Planning (BCP) measures do you expect to
adopt after the COVID -19 outbreak?

85% 37% 30%

Adpot technology to Review consolidation strategy to Evaluate the use of ABW

support remote working mitigate over-concentration risk during future outbreaks

24% 22% 14%

Consider splitting teams Further diversity operating risks Increase use of coworking
across multiple buildings between markets space/ serviced offices

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

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 SURVEY PROFILE
• The Asia Pacific Occupier Flash Survey was launched on 24 March 2020.
• In total, we received 264 responses as of 7 April 2020

RESPONDENT BY COUNTRY Respondent by Industry

Others, 6% Real Estate

Korea, 4%
Technology and Telecommunications
Vietnam, 5%
Banking and Finance
Mainland
Japan, 5% China, 36% Professional Services

Retail
India, 5%
Manufacturing

Healthcare and Life Sciences

Hong Kong
SAR, 9% Transport and Logistics

Insurance

Singapore, Energy and Resources

Taiwan, 11%
10%
Australia, Flexible space operators
10%
Others

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020. 0% 5% 10% 15% 20% 25%
*Others includes: Education firm, Entertainment, Trading firm etc..
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 FOR MORE INFORMATION ABOUT THIS REGIONAL REPORT, PLEASE CONTACT
Research
Desmond Sim Dung Duong Thanh Pham An Nguyen
Head of Research, SEA Head of Research & Consulting, Head of Research & Consulting, Head of Research & Consulting,
Vietnam Ho Chi Minh City Hanoi
Desmond.sim@cbre.com dung.duong@cbre.com thanh.pham@cbre.com an.nguyen@cbre.com

Advisory & Transaction Services (A&T)

Hieu Le Mai Vo
Director, Office & Industrial Associate Director, Retail Services,
Services, Vietnam Vietnam

tronghieu.le@cbre.com mai.vo@cbre.com

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CBRE RESEARCH
This report was prepared by the CBRE Asia Pacific Research Team, which forms part of CBRE Research—a network of preeminent researchers who collaborate to provide real estate market research and econometric
forecasting to real estate.

All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources
believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently
assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only exclusively for CBRE clients and professionals, and is not to be used
or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it,
may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorized publication or redistribution of CBRE research reports is prohibited. CBRE
will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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© 2020 CBRE, Inc

 DISCLAIMER

CBRE RESEARCH
This report was prepared by the CBRE Asia Pacific Research Team, which forms part of CBRE Research – a network of
preeminent researchers who collaborate to provide real estate market research and econometric forecasting to real
estate investors and occupiers around the globe.

All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE.
Information contained herein, including projections, has been obtained from materials and sources believed to be reliable
at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty
or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness
and currency of the information of this publication. This report is presented for information purposes only exclusively for
CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or
subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its
content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without
prior express written permission of CBRE. Any unauthorized publication or redistribution of CBRE research reports is
prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using
or relying on information in this publication.

To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway
at www.cbre.com/research-and-reports

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 THANK YOU

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