The consecutive waves of Covid-19 epidemic and the order to restrict foreign tourists have had a great impact on the real estate market in Da Nang, especially the resort, hotel and retail sectors. However, residential real estate, commercial and industrial real estate, still have certain bright spots.
Mr. Matthew Powell, Director of Savills Hanoi commented: “Covid-19 has had quite a large impact on the Da Nang real estate market, especially resort real estate – a field that has faced certain difficulties because of successive waves of epidemics and orders. restrict foreign tourists. The hotel segment in general and 3 to 5 star hotels in particular are also affected. The market capacity decreased -44 percentage points year-on-year, the lowest in the past 10 years, the average room rate decreased -50% year-on-year. However, other markets such as Residential real estate, Commercial real estate, Industrial real estate, still have certain bright spots. Some projects have also been completed and introduced to the market such as SHB Tower, Savills is honored to be selected as the Management Unit of those projects.”.
More specifically: The industrial real estate sector has quite positive developments. Convenient location and reasonable investment incentives are leverage for businesses to promote industrial investment promotion activities in Da Nang. Industrial real estate here is forecasted to continue to expand in the near future, thanks to cost advantages as well as government incentives for industrial development. Currently, many businesses have been actively investing in this field.
Housing real estate benefits, with the newly announced urban development and planning, the market will be developed more diversely in the residential real estate portfolio, serving the purpose of long-term living. of people in the city instead of just focusing on coastal resort real estate. About 850 hectares from 14 projects with villas and townhouses will be deployed in the coming years, most of which will come from the next phase of existing projects. In Da Nang, many projects are being built and introduced to the market in the near future, including housing products such as apartments, townhouses, and urban areas.
Office real estate sector kept stable. Fear of instability and travel restrictions caused the number of transactions to decrease compared to the same period last year. However, besides the group of business tenants who could not bear the cost of premises and operation for a long time leading to closure, the market still recorded a certain amount of demand for space expansion or opening. more branch office in Da Nang. The rent of retail and office space in Da Nang in this period decreased slightly compared to the time before Covid-19 (there are places with nearly 40% reduction in rent) to attract guests. This is also motivation
for businesses with stable business lines and solid cash flow to continue participating in long-term lease contracts in this market.
Assessing the resilience in the context of a re-epidemic outbreak, Mr. Matthew Powell said, we need to see Da Nang as not only a tourist destination, but also a lot of potential for the real estate segment. other products. It can be said that we believe in the resilience of the Da Nang market after the epidemic. The market also began to recognize the demand from investors in the city, not just the demand from investors from other localities as before. The Housing market in Da Nang has grown strongly thanks to a large demand from investors for the segments of apartments, villas, townhouses or even branded residences (Branded Residences). The asking price of apartments in this market has grown well over the past 5 years, bringing sustainable long-term profits. The absorption rate of the villa/townhouse category has so far reached 92% although the market has slowed down after a period of strong growth from 2016 to 2019.
“In the long term, the Da Nang market will have more active activities with the recent Government approval of the Adjustment of the general planning of Da Nang City to 2030 with a vision to 2045, the goal of building a Da Nang city has become one of the major socio-economic centers of the country and Southeast Asia.Da Nang also owns advantages such as convenient location for transportation, developed infrastructure and facilities. plans to develop and expand roads and airports”, this man said.