Second-home market blossoms in Danang

Danang is now ripe for 5-star hospitality success

The 16th edition of the Asian Route Development Forum (Routes Asia 2022) was held in Danang on June 6 for the first time. Routes Asia brings together policymakers from the world’s leading airlines, airports, destinations and aviation suppliers, and this time around the event wants to realise action plans and accelerate Asia-Pacific economic recovery.

“We see this as a significant opportunity to exchange information and seek partnership, as well as to invest in the development of aviation, tourism, and logistics,” Chairman of Danang People’s Committee Le Trung Chinh stated at the event. “This is also an opportunity for the city to showcase our natural beauty, people, and socioeconomic achievements and the tourist industry in particular, to investors and visitors from across the world.”

According to research by Savills World Research last year, the coastal city is one of the leading destinations for major international brands in the hospitality industry, which will help add more high-quality projects to the market. The first positive signal to investors is that Danang is to spend $2 billion between 2020 and 2025 to build and upgrade its infrastructure. This is in line with the government’s long-term ambition to transform Danang into the socioeconomic hub of Vietnam and Southeast Asia between 2030 and 2045.

Among recent achievements, Danang obtained the Vietnam Smart City Award for the past two consecutive years, presented by the non-profit Vietnam Software and IT Services Association.

“The Savills report shows that Danang is among the top 20 markets in the world for luxury real estate. Amidst the economic recovery, second home properties in Danang are on the rise,” said Nguyen Duc Them, senior manager of International Residential Sales at Savills Hanoi.

He noted that despite having higher prices than the market average, branded property products have attracted the attention of foreign investors due to brand value. First, the projects are managed and operated by world-renowned hotel operators like Marriott and Accor, which bring international standards into their services, ranging from operation processes to human resource training. This will significantly improve the quality of customer care.

“Second-home products can generate yields for investors in the long term. With the arrival and expansion of international brands, second home property in Danang has become the top choice for investment,” he added.

On June 1, Japanese-based Mikazuki Hotel Group opened its first 5-star hotel in Danang - the Mikazuki Danang Resorts & Spa, three years after investing $167.9 million for implementation. The 22-storey facility boasts 294 rooms across 13 hectares. The group will develop a footbridge and a night street in 2023 to attract more tourists to the complex.

At a reception with Secretary of Danang Party Committee Nguyen Van Quang in April, chairman of Mikazuki Hotel Group Odaka Yoshimune said it would consider expanding its investment in other tourism projects in the central city.

According to Quang, the completion of the project offered an opportunity to promote the city’s image. He hoped that the group would continue to come up with more business in Danang in the near future.

“The city supports Mikazuki’s plan to develop the night market and footbridge and the city will give the most favourable conditions to facilitate progress,” he added.

Elsewhere, Nguyen Van Binh, chairman of Sun Group in the central region said, “We are looking to transform the landscape with untapped potential by creating timeless landmarks. Sun Group has built an ecosystem of top-notch products and services, including entertainment, hospitality, and real estate. Over the past two years, we have been striving to upgrade the facilities of our resorts and hotels. In 2022, we will unveil new attractions within our projects in Danang.”

The city is undergoing a major planning overhaul for 2021-2030, with a vision for 2050. In the general plan, Danang will focus on building and developing the city, focusing on tourism and high-tech industries, and the marine economy.

Economists estimate that real estate market trends have been reversed towards the positive after the city planning project was announced, opening up breakthrough opportunities for this market.

Danang is also looking to develop luxury ecological tourism in the west. The city has greenlit several eco-resorts worth trillions of VND, including the Lang Van resort-cum-entertainment complex at the foot of Hai Van Pass in Lien Chieu district. Vinpearl will invest about $1.5 billion in the complex, which is slated to start construction in September.

Savills World Research reveals that branded real estate has recorded a growth rate of 230 per cent globally over the past decade. Vietnam and Mexico are taking the lead in the upper-upscale segment, which has posted impressive growth worldwide. The average price disparity ratio between branded and unbranded properties is about 289 per cent, while this figure is 44 per cent for the emerging markets.

In anticipation of the long-term development orientation and rising housing demand, the Danang real estate market has witnessed a wave of investment relocation to the northwest. Besides the launch of Mikazuki’s resort, Trung Thuy Group also kicked off the Nam O ecological resort and Vingroup is implementing a 5-star Vinpearl Lang Van project in Lien Chieu.

Furthermore, Gotec Land is developing a high-end apartment and commercial project called Asiana Danang in the northwest. This, coupled with the rise of ecological real estate, could transform the northwest area into the intersection of trade and tourism in the central region connecting Danang, Hue, and Hoi An.

Danang not only boasts a seaport and international airport but also acts as a gateway to world heritage sites in the central region.