Savills Vietnam reports on Da Nang real estate market H1/2018

1. RETAIL: Increase in rent and occupancy

Total stock decreased -5% YoY as Big C temporarily stopped leasing. Hai Chau district retained the largest market share and highest retail density, followed by Thanh Khe district.

Average ground floor gross rent reached a three-year high after a 6% increase compared to 1H/2017 whilst occupancy grew 1 ppts. Hai Chau district had the most improved performance.

2H/2018 will welcome one project of 2,400 m². Hai Chau district is expected to remain the most favored area by developers.

2. OFFICE: Improved supply and rent

Total stock increased by 3% YoY due to the launch of Hilton Bach Dang with approximately 3,000 m². Hai Chau district continued to dominate with 75% share. Over the past four years, stock has grown at an average 8% pa.

Average gross rent increased 12% YoY while occupancy decreased -4 ppts YoY. Hai Chau district registered the most improved performance.

One new project providing 5,700 m² will come online in 2019. From 2020 onwards, over 48,000 m² will enter the market, mostly in Hai Chau district.

3. HOTEL: Strong demand

Total stock from the 109 three- to five-star hotels was approximately 12,900 rooms.

Da Nang continues to establish itself as a leading destination for domestic and international tourists. In 1H/2018, Da Nang welcomed four million visitors, up 29% YoY. International visitors were up 47% YoY to 1.6 million.

In 2H/2018, approximately 1,400 three- to five-star rooms will come online.

4. CONDOTEL: Higher price

Total stock came from 15 projects. Ngu Hanh Son district was largest supplier with a 57% market share.

New projects and next phases provided approximately 1,570 units to the market, most from a project by The Empire Group.

In 1H/2018, the average primary price was US$2,100/m2, increased 19% YoY but the absorption decreased -8 ppts YoY to 86%.

5. APARTMENT: Limited primary supply

Total apartment stock increased 19% YoY from 20 projects.

Three new projects provided 830 units to the market. Son Tra led the primary market with a 68% share.

In 1H/2018, the average absorption rate was relatively high at 93% with sales nearly three times higher YoY. The average asking price was US$1,800/m², up 28% YoY due to limited primary supply.

6. SECONE-HOME VILLA: High absorption

Total villa stock was from 15 projects. Ngu Hanh Son district was the largest supplier, representing a 91% share from 12 projects.

No new supply and stable demand resulted in market-wide absorption of 86 percent. Developer reputation, guaranteed returns and beach proximity were key success drivers.

In 2H/2018, 45 dwellings will come online.