Danang real estate market sees upbeat developments

Illustrative photo. (Source: VOV)

Savills Vietnam said on August 19 that the total stock of the retail segment aggregated to some 212,000 square meters, up 20 per cent on year after three new projects in the two districts of Hai Chau and Ngu Hanh Son were launched to the market during the six-month period.

The retail segment saw its average ground floor gross rent rise by 8 per cent on year while its occupancy dropped by 1 percentage point (ppt) on year. The retail podium segment made the most improved performance thanks to the entry of new projects.

Retail sales reached VND27.4 trillion (US$1.17 billion), up 13 per cent on year. In the second half of 2019 and 2020, an estimated 96,000 square meters will enter the Danang market, mainly in Ngu Hanh Son district.

Regarding the office segment, its total stock remained steady on year, with approximately 94,000 square meters. In the past five years, the stock edged by an average 7 per cent per annum. Some 75 per cent of the supply came from Hai Chau district.

The average gross rent of office space gained an annual rise of 1 per cent while the occupancy was down 5 ppts on year. Grade A office showed the most improved performance.

The central city had 2,594 enterprises newly registered during the six-month period, up by 8 per cent on year. One new project is expected to debut in Hai Chau district within the remainder of 2019 and another in 2020, cumulatively providing some 13,000 square meters.

Hotel is another segment enjoying the increasing supply with approximately additional 15,400 rooms from 121 three to five-star hotels, a year on year hike of 20 per cent. There were 2,000 new rooms in the first half of 2019 while the average occupancy fell by 3 ppts on year and the average room rent downed by 9 per cent on year.

International arrivals to Danang reportedly reached 1.8 million in the first half of 2019, jumping by 26 per cent on year while the average length of stay was 2.7 days.

An estimated 8,000 rooms will enter the market from the second half of 2019 onwards. 

Meanwhile, condotel sustained the slow performance as the market-wide absorption in the first half of 2019 stood at 90 per cent due to limited primary supply, while prices ranged from US$2,100 - US$4,800 per square meters.

This segment saw one project enter in the first half of the year. As many as 14 condotel projects are predicted to come online during the remainder of 2019 and beyond.

Elsewhere, the apartment segment suffered limited new supply. The total stock amounted to over 5,300 units from 20 projects. Ngu Hanh Son led the primary market with a 52 per cent share. In the second half of 2019, more than 900 units will enter from two projects.

The first-half absorption stayed high, at 94 per cent, while the average asking price posted US$2,500 square meters.