Since the first tourism properties were launched around five years ago, the local second home market segment has changed significantly.
Though in its infancy, the segment has managed to attract significant interest from local and international investors coming from international resort operators wishing to enter the domestic market. Thousands of villas and condominiums worth hundreds of thousand dollars each have gone up on the market in recent years.
In comparison to other parts of the country, the central coast city of Danang has emerged as a promised destination for not only international and local property developers but also for individual investors and well-to-do people to invest in a second home property. The second home market there is actually witnessing an increasingly strong supply given a large number of projects in the pipeline.
CB Richard Ellis Vietnam (CBRE) in its recent market research said a majority of tourism properties underway are found on the central coast, particularly in Danang City where a record high of 5,200 villas and condos were launched in the central region last year.
Among the properties underway, VinaLiving, a new residential lifestyle brand of VinaCapital, is developing The Azura luxury apartment project on Ngo Quyen Street, alongside the Han River in Son Tra District in the heart of Danang.
The 32-storey apartment building, whose project management is overseen by VinaProjects, has 213 units of one to four bedrooms condominiums and 12 penthouses, in addition to other service facilities such as swimming pool, gym, retail center, convention center and four-star hotel.
The residential project is part of VinaCapital’s World Trade Center Danang project, and one of the several current VinaLiving offerings in Danang including Norman Estates, Ocean Villas and Cham Condominiums at Danang Beach Resort. Part of this integrated project also includes the Greg Norman designed Dunes Golf Course which is now in full operation and receiving very positive international press including the most recent accolade “top 10 best new golf courses developed in the world for 2010 as voted by golf.com”.
Explaining why the group has chosen Danang for investment, Matthew Koziora, sales and marketing director of VinaCapital Real Estate Co, says unlike Hanoi and HCMC, Danang itself has a number of qualities making it the perfect location for a second home property and investment. Danang, as a location, has beautiful natural surroundings and environment and benefits from advanced infrastructure and urban planning. Therefore, it is a good place for tourism based property investments that is seeing huge growth from both domestic and international visitors to the area.
“Second home or holiday home retreats have long been considered a status symbol of the rich in the Western world, not just as a holiday house used from time to time but also as a secure investment capable of generating annual returns for the owner,” Koziora says.
To ensure the best possible chance of securing regular income for the owner, an experienced professional management company must be engaged to ensure an adequate business plan is adopted to capitalize on both increasing domestic and foreign tourist numbers coming to Danang.
Koziora is upbeat about the future leasing market in the region, saying that the tourism industry has seen steady improvement with tourist numbers last year 10% higher than forecast, according to CBRE’s research. Given its location on the “World Heritage Road” convenient to natural and cultural UNESCO World Heritage Sites, Danang is one of the favorite holiday destinations for tourists.
For these reasons, luxury apartments in The Azura project have received positive feedback from the market since it was marketed last year, says the sales and marketing director. He reveals some 40% of the total number of apartments in the project have been sold out with prices starting from US$105,000 per unit. Most buyers are residents in HCMC and the capital of Hanoi, and overseas Vietnamese. There has been some sales to local Danang residents as well.
Commenting on the local second home market, Marc Townsend, CBRE’s managing director, said in a statement that the past number of years had seen significant activity in the second home market in terms of construction and interest coming from international resort operators looking to enter the market, but it was yet to see the true effect of this on the market due to lack of completions. Only a handful of second home projects have reached livable status in recent times.
“We are pushing construction progress on time to make clients feel secure about their investment,” Koziora says, adding that construction of The Azura has reached the 15th floor for the main areas. As scheduled, the project will be finished by Q1 2012.
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