First half GDP up 8.1% over 1H/2016. Registered FDI surged 269.5% year on year (YoY) with US$14.3 million disbursed. Nearly 2,400 new businesses were established. Retail sales up 17.1% YoY to US$ 2.1 billion.
SAVILLS REPORT ON DANANG REAL ESTATE MARKET
H1 2017
First half GDP up 8.1% over 1H/2016. Registered FDI surged 269.5% year on year (YoY) with US$14.3 million disbursed. Nearly 2,400 new businesses were established. Retail sales up 17.1% YoY to US$ 2.1 billion. International visitors up 72.2% YoY to 1.2 million. Total inbounds up 33.2% YoY. 1H/2017 credit growth of 7.5% a 6-year high.
1. RETAIL: Softer Performance
Total retail stock increased 17.3% YoY with the new F Home shopping centre entry in Q3/2016 and Nguyen Kim supermarket reopening in Q4/2016. Hai Chau district remained the largest supplier with a 35% market share, followed by Thanh Khe district with 30 percent.
First half average ground floor rent eased -0.2% YoY and occupancy decreased -1.7 ppts YoY, mainly due to slightly weaker performance in the retail podium segment.
No supply is expected to the end of the year. Three projects with 22,000 m² are scheduled for 2018. Future supply will be mainly concentrated in Hai Chau district.
2. OFFICE: Increased Rent But Decreased Occupancy
Total office stock increased 6% YoY with one project closure and another opening. Hai Chau district has 74% of stock.
Average rent gained 11% and occupancy decreased -4 ppts YoY to 87%. Grade C had improved performance but Grade A softened a little.
In the second half, no new project is expected. Next year, one project with more than 3,000 m² is scheduled to launch in Hai Chau district.
3. HOTEL: Five-Star Performs Best
Total stock from the 86 three- to five-star hotels was approximately 9,400 rooms. ARR increased 11% YoY. RevPAR was up 22% YoY.
Average occupancy was 72%, up 7 ppts YoY with five-star the highest performer, and best performance to date.
Da Nang continues its establishment as one of the leading local destinations for domestic and international tourists. In 1H/2017, there were 3.2 million visitors, up 33% YoY. International visitors were up 72% YoY to 1.2 million. In 2H/2017, over 1,300 four- to five-star rooms will come online.
4. APARTMENT | CONDOTEL: Stable Performance
There was one newly launched condotel project in the first half.
Total apartment stock increased 3% YoY with one newly launched project.
Apartment average absorption rate was approximately 33 percent. Average apartment primary price was US$1,690/m², down YoY. By year end, two projects will launch 1,200 apartments.
Condotel absorption was relatively high at around 70 percent. High and committed yields up to 12% pa and the more recent developer buy-back commitment is increasingly resonating with buyers.
Large condotel supply mainly from domestic developers is expected to year end and into 2018.
5. SECOND-HOME VILLA: High Absorption
Total villa stock was 801 dwellings, of which 169 were from the primary market. Ngu Hanh Son district was the largest supplier with 728 dwellings, representing a 91% share, followed by Son Tra district with 73 dwellings and a 9% share.
Market-wide absorption was 81% to mid year. Seven projects were fully sold. Developer reputation, guaranteed returns and beach proximity were key success drivers.
Fully finished villa land prices were from US$650/m² to approximately US$3,000/m².
In the second half 45 dwellings will enter the market. As of Q4/2016, the market-wide absorption was 80 percent. Among the 14 projects, 6 were fully sold. Developer reputation, guaranteed returns and proximity to the beach were the key success factors of all projects.