Overview of Danang Real Estate: Where is the most attractive segment?

Previously, the apartment segment was thought not to attract investors with resort villas or land plots, but the fact showed that the price and rent of apartments in Da Nang, especially coastal projects were upward trend


Savills Vietnam has just released the Danang Real Estate Market Report in the first 6 months of 2019, analyzing 6 typical segments of the market: retail, office, hotel, hotel and apartment for sale, and resort villas. Based on the latest research data in the report, Ms. Do Thi Thu Hang, Director of Savills Hanoi Research Department, gave an in-depth and in-depth overview and analysis of the real estate market in Danang. We would like to quote Ms. Hang's article:


"If you only look at the segment of apartments, condotels and resort villas, the Da Nang real estate market is going through a quiet space with a very limited number of newly launched projects in 2019. However, besides the deep features, the market still recorded very positive developments, showing the great potential of this central city.”


The hotel grew by tourism


Hotels - the "elder" segment leading the real estate market in Da Nang are benefiting directly from the very good performance of the tourism industry. International visitors to Danang in the first half of 2019 reached 1.8 million, increasing 26% year on year - a high growth rate. Besides, the domestic demand was very stable with 2.5 million visitors, an increase of 8.3% year on year. The accessibility of air routes in recent years has been helping Da Nang to easily separate tourists and market orientation for medium-high-class objects.


As of the first half of 2019, Da Nang had 31 international routes to the city (frequency of 419 flights/week) and 11 domestic routes (frequency of 654 flights/week). The entry of new airlines, new routes/flights boosted demand for the hotel market. International tourists arriving in Danang by air in the first 6 months of 2019 reached 1.5 million passengers, increasing 45.8% year on year.


Accordingly, the supply of the hotel market as of the first 6 months of 2019 has increased by 20% year on year, reaching approximately 15,400 rooms from 121 3-5 star hotels. In the first half of 2019, the market had about 2,000 more hotel rooms. From the second half of 2019, more than 8,000 rooms will be put into operation.


Hotel market supply

Hình 1


Korean guests account for the majority of nearly 50% of international visitors, ranked second is Chinese guests accounting for about 19%, Thailand is ranked third with about 7%. The average length of stay for international visitors is 2.7 days.


Apartments are increasing attractiveness


Previously, the apartment segment was thought not to attract investors with resort villas or land plots, but the fact showed that the price and rent of apartments in Da Nang, especially coastal projects were upward trend. In the first half of 2019, the cumulative average absorption rate of the apartment segment was 94% and the average asking price was US $ 2,500/m2, an increase of 39% compared to US $ 1,800/m2 in H12018 due to limited supply. In the first 6 months of 2019, a project launched approximately 110 apartments, creating new supply and bringing the total supply to more than 5,300 units from 20 projects.


Supply of apartments for sale

Hình 2


In 2019, the new supply of the apartment segment is limited. It is expected that in the second half of 2019, more than 900 apartments will enter the market.


The villa is well absorbed


The total supply from 17 projects. Ngu Hanh Son District leads the supply with 92% market share from 14 projects. In the second half of 2019, 45 villas will enter the market.


Limited new supply and stable demand lead to high absorption rates to the present. A newly launched project in the first phase has been very successful thanks to the combination of factors such as beautiful location, close to the sea, reputation of the investor, operator, and legal.


Supply of resort villas

Hình 3


With limited coastal land fund, and the orientation to adjust the general planning of Da Nang city with one of two key directions: the Southeast - Son Thuy beach area, Ngu Hanh Son scenic area and Co Co river, In the future, the villa segment, in addition to coastal villas, is expected to receive more riverside villas.


Retail recorded a strong development of F&B


The total supply of retail space in Danang as of the first half of 2019 is approximately 212,000 m2, an increase of 20% year on year. The market has not only focused on shopping centers but also diversified development in both downtown and coastal areas with the market entry of three projects in Hai Chau and Ngu Hanh Son districts.


Retail sales reached VND 27.4 trillion, up 13% year on year. F&B industry has strong growth; Many F&B brands have not yet entered the Hanoi market but are already present in Danang.


Retail market operations

Hình 4


In the second half of 2019 and 2020, the market will receive nearly 96,000 m2, concentrated mainly in Ngu Hanh Son district - the coastal area, giving tourists and local residents new options in shopping entertainment activities.


Prospects


Danang is a tourist city with many natural and artificial advantages. Favorable weather conditions, with beautiful beaches, and diverse terrain to develop both sea, mountain and river tourism. Development orientation, planning are interested in investing in "quality" towards green urban space and sustainability. Transport infrastructure has developed synchronously.


Besides, high-class facilities such as golf course and casino help attract more tourists. Hotels will therefore be the segment with the most significant development in the future with a diverse supply; The area close to the sea does not have much room, so the area located on the Vo Nguyen Giap and Truong Sa coastal routes will have the opportunity to develop 3-4 star hotels.


According to Lan Nhi