“Danang hospitality lures FDI”, by Thanh Van, Vietnam Investment Review, 26 Sept – 2 October 2016.
The article reproduced below, reports on AusCham’s Vietnam Real Estate Market Symposium 2016 held at the New World Hotel, HCMC on 22 September 2016.
Da Nang on the radar of foreign investors
By Thanh Van
Foreign investors have showed their keen interest in hospitality market in the central city of Danang.
This information was stressed at the fourth annual symposium held by The Australian Chamber of Commerce in Vietnam (AusCham) last week. The conference aims to create a playground for key real estate players from inside and outside Vietnam to gain insights and updates on real estate investments in Vietnam.
The topic of Da Nang’s hospitality market has gained the most attention of property developers, investors, and experts.
Felix Lai investment director of Gaw Capital said that Da Nang has recently been on the radar of foreign investors due to its long white sandy beaches and increasing international connectivity.
“Foreign companies looking at investment opportunities in Da Nang can be from Asian, US and even Middle East countries. As a result, Gaw Capital has faced an intensive competition in its search for resorts and site developments around the city’s coastal line,” he noted.
In the latest report released by Savills Vietnam, Da Nang has pioneered luxury coastal homes and is second behind Nha Trang in total stock with 1,199 villas and 3,367 apartments. Surveys have shown that more than 80 per cent of purchasers are from Ha Noi, attracted by wide a variety of products, completed infrastructure, bright tourism prospects and sales policies, and the image of a young, dynamic and green city.
Successful cases include Ba Na Hill, Ocean Villas, Hyatt Regency, Furama, Intercontinental, and Azura. Large-scale upcoming projects include Soleil Da Nang, Coco Bay, Da Phuoc, Han Riverside, Ariyana, Central Coast, Vinpearl Han River, and Ocean Suites & Estates.
According to Adam Bury vice president, investment sales at Asia JLL Hotel & Hospitality Group, the occupancy rate in Vietnam is around 60-70 per cent which is not comparable to Bangkok or Singapore. From investment point of view, it is not too late for investors to cash in on the market to get higher returns.
He emphasized that Vietnam is one of the hottest investment destinations in the region. Hotel performance has improved very strongly over the past 12 months. There also remains room for increased international operator presence in tourism hotspots like Da Nang city.
On the same note, Tony Chisholm, area general manager of Accor Hotels said that more international direct flights from Da Nang have been launched to promote tourism and investment in the city. Da Nang’s hospitality market is just warming up with opportunies opening up fast for investors.
“Driven by all positive on offer, some Accor hotels in Da Nang have reached a high level of occupancy and thereby helping the firm maximize returns for businesses and owners,” he noted.
Gonzalo Maceda vice president for Asia Pacific at Melia Hotels is upbeat about the city’s prospect, “Our first hotel launched last year in Da Nang has achieved impressive performance. We did not expect this kind of result three years ago when investment and tourism activities in Da Nang were still subdued.”
In 2015, there were 73 three to five star hotels with 8,485 rooms, of which seven of the 11 five-star hotels and four of the 14 four-star hotels were managed by international operators. Accor Hotels and Resorts Group is the largest international operator in Da Nang, managing approximately 944 rooms.
Major upcoming hospitality projects include Crowne Plaza Phase 2, Hilton Danang Hotel, and Four Points by Sheraton. The $4 billion Hoi An South casino resort expected to be put into partial operation by 2019 will create a huge push for the formation of hospitality strip from Da Nang to Hoi An, as indicated in the report.
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