Developers to Pump More Rooms in Da Nang as Foreign Visitors Surge: Savills

Tuan Minh

07:00 19/07/2016

BizLIVE - Da Nang city will see an increase of supply in hotel rooms in the future as foreign tourists flock to the locality, according to Savills.

Developers to Pump More Rooms in Da Nang as Foreign Visitors Surge: Savills

A view of Da Nang Administrative Center. (Photo:

Real estate developers will launch three new projects with 1,320 rooms in the second half of this year and 35 future projects are set to enter the market from the third quarter (Q3) of 2016 onward, Savills Vietnam has said in a report.
According to the Da Nang Tourism Department, there were approximately 795,646 international visitors in Q2/2016, up 29.7% year-on-year (YoY).
Hotel stock increased 4% quarter-on-quarter (QoQ) and 15% YoY due to the entrance of one four-star and three newly ranked three-star hotels.
Average occupancy was up two percentage points (ppts) QoQ but down eight ppts YoY. The average rent rate decreased 4% QoQ but increased 6% YoY.
According to Savills, the retail real estate segment in the city performed better in Q2/2016.
Total retail stock was stable QoQ but down 5.7% YoY due to the closure of Nguyen Kim supermarket for repair in Q1/2016.
The average rent increased 7.3% QoQ and 11.5% YoY. Retail podiums and department stores had large increases of 19.2% and 13.1% QoQ respectively, whereas shopping centers decreased 2.8%.
In the second half of 2016, one project is expected to come online supplying 18,000 square meters (sq.m) and in 2017 two projects will open and cumulatively provide approximately 15,000 sq.m.
In Q2/2016, the total office stock was stable both QoQ and YoY. Average rent was up 2% QoQ but down 5% YoY. Average occupancy increased two ppts QoQ and nine ppts YoY.
While Grade A occupancy decreased two ppts both QoQ and YoY, Grade B increased four ppts QoQ and three ppts YoY. Grade C remained stable QoQ but significantly increased 15 ppts YoY.
Demand for office space is expected to increase as Da Nang aggressively encourages start-ups.  In the first five months of 2016, 2,015 new enterprises were registered, doubling YoY.
In Q2/2016, the total villa stock was stable QoQ but up 33% YoY with 17 projects providing 410 dwellings to the primary market. Apartment stock also remained unchanged QoQ but up 7.4% YoY with 12 projects providing 575 units to the primary market.
Developer reputation, construction progress and proximity to the beach were key factors amongst the best performing projects this quarter. Guaranteed returns have been widely offered in many projects’ pre-sales programs. A large supply of over 7,000 apartments/condotels is expected toward the end of 2018.