Traditionally seen as the “big brother” of the Central region’s resort real estate market, Da Nang has always been a focal point for many investors. With the condotel model expected to “rejuvenate” in the new development cycle of real estate, is this expectation realistic?
Opportunities for Condotels in Da Nang: An Insider’s Perspective
Recently, at the seminar “Da Nang – Unlocking Potential, Elevating International Standing,” co-organized by Bản Việt Real Estate – VCRE, Nobu Danang, and CBRE, Master Trịnh Tuấn Bảo, representative of the Da Nang Department of Tourism, stated that tourism has been a standout feature in the economic development of Da Nang over the past six years.
In addition to focusing on human resources, land, and urban infrastructure, the business environment is also a key driver in enhancing the city’s status. “Da Nang is confident in its high-quality tourism infrastructure, which strongly attracts top international hotel brands,” he emphasized.
Echoing this view, Mr. Nguyễn Văn Đính, President of the Vietnam Association of Realtors (VARS), believes that Da Nang’s tourism is prioritizing the high-end segment, with several international brands establishing a presence in the city. Therefore, there is significant room for growth when comparing Da Nang to more established markets closer to Vietnam, such as Phuket (Thailand).
Currently, branded apartments in Phuket average around 200,000 THB (approximately 6,100 USD) per square meter. In contrast, internationally branded apartments in Da Nang average just over 4,000 USD per square meter, not including incentives from developers.
He mentioned that property prices in Da Nang have been relatively stable over the past 3-4 years. Given the recent approval by the National Assembly of special mechanisms and policies for the development of Da Nang, the enactment of three major real estate laws effective from August 1, 2024, and the tourism stimulus program, there remains ample opportunity for both price increases and supply expansion in the resort sector in Da Nang.
Mr. Đính analyzed that Phuket’s success story, transitioning from a tourism-dependent economy to a branded real estate powerhouse, is an interesting case for Da Nang to consider for the next phase. “Currently, the dwindling land supply in central Da Nang creates favorable conditions for price increases for investors, if viewed in the long term,” emphasized the expert.
According to Dr. Cấn Văn Lực, an economic expert, the most positive change in resort real estate, particularly in Da Nang, is the improvement in legal frameworks and the issuance of clear, transparent guidelines for certifications.
Specifically, Government Decree No. 10 of 2023 allows the issuance of land use certificates for various types of properties such as condotels, officetels, and tourism villas on commercial service land. This is expected to open a new development chapter for condotels. This model not only meets the lifestyle needs of clients but also provides a stable income from widespread demand for resorts.
A representative from VCRE, which is collaborating with Nobu Hospitality on a high-end branded real estate project on My Khe Beach, stated that condotel products affirm their value by becoming investment solutions within a comprehensive, multi-functional experience environment that enhances the overall experience.
The company also highlighted that the limited number of units is part of the solution for developers to optimize profit, increase, and maintain value in the medium and long term. In reality, if the number of apartments is too large, it can lead to difficulties in rental performance, capital returns, and liquidity.
In the current context, the question “Are there still opportunities for condotels in Da Nang?” is frequently raised by investors. Experts believe that, given its cash flow investment nature, the condotel model is a trendsetter and requires a long-term vision. Many believe that once the final legal hurdle for ownership certification is resolved, condotels will have a chance to rebound. In fact, looking 10-20 years ahead, the value of condotels could become a different story in an investor’s portfolio.
Strong Support but Many Challenges
First and foremost is the support from tourism. According to the General Statistics Office, in the first half of 2024, the total number of guests served by accommodation establishments in Da Nang reached 5.1 million, a 25.6% increase compared to the same period last year. Of this, international guests totaled 2 million, a 40.3% increase; domestic guests reached 3.1 million, a 17.7% increase. Revenue from dining and accommodation services reached nearly 13,000 billion VND, up 22.2%; and retail sales exceeded 37,000 billion VND, up 14.6%…
As tourism continues to recover, there are high expectations for improved performance in the tourism and resort real estate sector in the near future.
The second pillar of support is the recent approval by the National Assembly of a resolution to pilot several special mechanisms and policies for the development of Da Nang. Accordingly, the Prime Minister has decided to establish, adjust, and expand the boundaries of Da Nang’s free trade zone.
In a meeting on August 25, the Da Nang People’s Committee announced that on August 31, the city will hold a conference to implement Resolution No. 136 of the National Assembly on urban governance and pilot several special mechanisms and policies for city development, with the participation of approximately 500 central and local representatives, diplomatic agencies, and businesses.
Key areas of focus include the investment in infrastructure construction and business activities in the functional zones of Da Nang’s free trade zone; investment in the construction and business of inland waterway tourism projects with capital of 8,000 billion VND or more; and the development of the comprehensive Liên Chiểu seaport project with capital of 45,000 billion VND or more.
However, from the perspective of resort real estate, Da Nang needs more time to regain its momentum. Although the tourism sector in Da Nang is showing positive signs, the presence of numerous problematic projects, slow construction progress, and the erosion of investor confidence following the CocoBay commitment issue have impacted market liquidity.
In the long term, Da Nang’s resort real estate has significant development potential, but in the short term, there is little prospect for a breakthrough in demand. In the real estate market journey, the resort segment still needs to gather strength to keep up with the new development cycle.
