|The facade of one of the three Ocean Villas at the Da Nang Beach Resort. Around 1,300 villas and nearly 17,000 apartments are expected to enter the Da Nang market this year. — VNA/VNS Photo Van Son
DA NANG (VNS)— Da Nang City has approximately 76,300sq.m of office space stock spread across 21 buildings and has remained unchanged quarter-on-quarter (QoQ) but increased by 12 per cent year-on-year (YoY).
According to a report from Savill Vietnam, a property consultancy firm, with approximately 55,700sq.m from 17 projects, the central Hai Chau district continues to be the main supplier of office space, accounting for 73 per cent market share. Thanh Khe district has 20,600sq.m from four projects.
The average occupancy rate during the first half of this year was 86 per cent, up three points (ppts) QoQ but down minus 1 ppt YoY. Grade A's occupancy was 97 per cent, with QoQ remaining unchanged but YoY increasing three ppts. Grade B occupancy rate was at 84 per cent, up 5 ppts QoQ, while Grade C was 85 per cent occupied, up 1 ppt QoQ.
Do Thu Hang of Savills Vietnam said: "Although it is still adjusting to new developments, Da Nang's real estate market is considered to have great potential for a number of factors. Da Nang now has an international airport offering many direct flight services. It also has golf courses, casino, and a lot of large-scale entertainment centres, in addition to beautiful coastlines and several heritage sites in the centre of Vietnam. With the Amended Housing Law coming into effect from July 2015, demand is expected to soar."
The report also revealed that the total area leased was approximately 65,400sq.m, up 4 per cent compared with 2014. At 75 per cent, demand for office space in Da Nang was mostly focussed in Hai Chau District.
According to the Vietnam Chamber of Commerce and Industry (VCCI), Da Nang has continuously ranked first on the Provincial Competitiveness Index (PCI) 2014, reflecting its attractive investment location.
Savills Vietnam expects that from the second quarter, some 15 projects will offer some 93,600sq.m of office space. However, their launch dates are unclear because of the slow pace of the construction of a number of these projects.
In 2015, one new project is expected to enter Da Nang's office market, supplying some 20,400sq.m
Meanwhile, in the residential sector, no new villa or apartment projects were introduced in the central city during the first quarter this year.
Villa stock remained stable at 927 dwellings from 16 projects, unchanged since 2012. Compared with the second half of last year, the primary market saw 11 projects with 395 dwellings, down minus 5 per cent and the secondary market introduced 16 projects with 532 dwellings, up approximately 4 percent.
There were approximately 3,100 apartments across 14 projects and 678 units across 12 projects in the primary market, down minus 14 per cent against the second half of 2014. The secondary stock consisted of 2,431 units from 14 projects, up approximately 49 per cent against the second half of last year.
Despite the good performance, the villa absorption rate remained soft at 4 per cent due to a low market sentiment. The average villa price was approximately VND25 million ($1,190) per sq.m, up 11 per cent against the second half of 2014.
The apartment absorption rate was 11 per cent during the first quarter of this year due to transactions in central and affordable projects with prices below VND20 million ($952.4) per sq.m. The average price was up 17 per cent against the second half of last year. The prices of apartments in and around the city's centre ranged from VND13 million to 51 million ($619-$2,428) per sq.m, while beachside apartments ranged from VND21 million to 73 million (from $1,000 to $3,476) per sq.m.
According to the real estate consultancy company, some of the key factors that may affect buying decisions include developers' reputation, construction status, price and location. Several recent purchases had been done by foreign or buy-to-let investors.
The company has noted that starting 2015, 1,300 dwellings offered by 12 villa projects and 16,870 units across 15 apartment projects will enter Da Nang's market. While Son Tra District continues to have the largest future villa supply, Hai Chau District remains the top future apartment supplier. Most future villa and apartment projects are in the planning stage and do not have clear construction schedules; this makes it difficult to forecast their launch dates.
The total retail stock in the first quarter remained at approximately 136,000sq.m, up 5 per cent (QoQ) and stable year-on-year (YoY), due to the entrance of Parkson Vinh Trung Plaza.
Modern retail zones are centred across three districts: Thanh Khe with 41 per cent share, Hai Chau with 35 per cent share, and Cam Le with 24 per cent share.
In the first three months of this year, both occupancy and average rates improved QoQ but fell YoY. Occupancy rate was up 5 ppts QoQ thanks to the good performance of Parkson Vinh Trung Plaza, but down minus 1 ppt YoY. The average rent increased 6 per cent QoQ and minus 7 per cent YoY. — VNS