Luxury real estate descends on Danang

Luxury real estate in Danang will continue to develop strongly and diversify in the coming time, according to property consultants.

Danang authorities recently published a list of 11 luxury apartment projects eligible to sell its products that will take shape in the future. Construction on these projects commenced in the period 2019 to the first quarter of 2022.

Outstanding projects include The Filmore apartment project in Hai Chau district invested by Filmore Real Estate Development, and the residential project on the east of Tran Dang Ninh Street invested by Dat Xanh Mien Trung.

Other projects include the Central Coast luxury hotel and apartment complex in Son Tra district, the Sang Residence project in Ngu Hanh Son district, and the Asiana apartment project in Lien Chieu district.

Consultancy DKRA Vietnam recorded a relocation of new residential complexes to Danang's coastal districts, including Lien Chieu and Ngu Hanh Son.

The city also witnessed seven apartment projects open for sale in 2021, providing 910 units, up 76% from 516 units in 2020. Consumption reached 591 units or 65% of new supply, 2.2 times higher than 2020, according to a DKRA report.

DKRA Vietnam predicted that additional supply would range from 1,000 to 1,300 units in 2022, concentrated in Ngu Hanh Son and Hai Chau districts. The number of Grade A apartments is expected to rise, while Grade B apartments are unlikely to change from 2021.

Luxury apartments will revert to VND100 million ($4,330) per square meter, concentrated mainly in Hai Chau district. The primary selling price remains stable, with supporting programs in place to stimulate buyers. While the city's gradual recovery and resumption of tourism activities also signal a promising secondary market, DKRA stated.

Danang is an appealing market for the luxury apartment segment due to its geographical location as well as the title of "Vietnam's most livable city", an investor who is implementing a luxury apartment project told The Investor.

“However, the market has grown quiet due to tightened tourism regulations and challenges in easing these policies following the Covid-19 outbreak. If those hurdles are overcome, it will burst and catch up faster than other regional markets," he said.

Danang is currently one of the world's top 20 cities in terms of branded residences, according to Savills World Research.

Matthew Powell, director of Savills Hanoi, said that the branded real estate sector is a niche market for both investors and buyers due to limited supply and high pricing. "Despite its minor influence, branded residences still have a positive impact on the market by introducing high-class design standards, the brand’s quintessence, and high-class management services."

Powell mentioned the Ritz-Carlton Residence, a luxury brand under Marriott International, and Hyatt Regency, another relatively affordable project.

According to Savills analysts, the branded real estate model requires strong capital inflows. Investors should also consider the feasibility of including the brand in its products. Different locations and projects have distinct characteristics, so the scale for branded residences will also be more diverse.

"For the Vietnamese market, the question is whether the super-luxury real estate model can meet the market's needs and capacity. Despite numerous brands in the world, investors should carefully evaluate to make the best decision for their real estate project,” Powell said.