Ho Quang Dung, general director of Indochina Riverside Towers, is proud the complex will be a landmark of the central city’s real estate market with apartment prices hitting $2,700 per square metre.
Although it has not all been smooth sailing for the riverside land plot that over the last 13 years attracted two developers but failed to lay bricks, Indochina Land’s $27 million development will eradicate the image of American atrocities that was once showed in a museum on the site.
A few hundred metres away, an ugly three-wheeled taxi station has been replaced by another twin tower. The Vinh Trung Plaza is also a mix-used development with a Big C supermarket already operationalwhile builders are putting finishing touches on 108 serviced apartments and 6,800sqm office. The developer, Duc Manh Company, recently announced it would increase the total investment of the complex to $100 million to add a four-star hotel and a luxury retail centre.
The two properties are indications local authorities are eager to transform the cityscape of low, cramped, narrow town houses into modern high-rises of a dynamic, fast growing city. In the middle of a real estate boom across major cities, Danang is blipping on investor radar screen and becoming one of the hottest commercial real estate markets. Home to one of the world’s most luxurious beaches, Danang is enticing various hotel developers such as Hyatt, InterContinental and Raffles.
But, tourism is not the only draw.
Danang is Vietnam’s fourth largest city and the largest city in central region. It is the gateway of the 1,450 kilometre East-West Corridor linking Vietnam, Laos and Thailand and has an international airport.
Local authorities are getting more active in recent years, aiming to build a modern city. Infrastructure projects like roads, bridges and ports continue to improve while construction on an international airport terminal has recently begun and is expected to complete in the next three years.
Peter Ryder, chief executive officer of Indochina Land, said Danang officials were investor-friendly and their supportive attitude and policies would not only draw in real estate developers but also manufacturers.
With a population of nearly one million people, an economy growing at 14-15 per cent annually and a lack of quality properties, demand for housing accommodation, offices, shops and hotels is picking up.
There is an increasing presence of high-rise commercial developments in the city with corrugated iron sheets fencing off large plots in the downtown and inside cranes sticking up to the sky.
A sign shows three towers to be built on a one-hectare plot surrounded by Nguyen Thai Hoc, Nguyen Chi Thanh, Pham Hong Thai and Yen Bai streets. Dong A Real Estate Company will spend $60 million on the Golden Square that once completed in the next four years will feature 240 apartments, 300 hotel rooms, an office and commercial centre.
Dong A general director Cao Ngoc Vu said the company initially intended to build an office tower and a commercial centre, but then revised the plan as it saw the prime location of the site in a fast developing city.
In Hung Vuong street, another high-rise complex is under designed by Korean firm Mooyoung. The Vien Dong Meridian will be developed by Ho Chi Minh City-based Vien Dong Land on a 11,168sqm site to the cost $180 million. The developers plan to build a twin 48-floor towers with total floor space of 254,000sqm.
Hoang Anh Gia Lai Group, which now owns the tallest building in the city, the 23-storey Plaza Hotel, has announced it will invest $150 million in a residential, hotel and office complex in Hai Chau district and another $30 million in a residential tower in Thanh Khe district.
One of the biggest properties along the western bank of the Han River will take shape near a deserted water park. Kreves, a Korean developer, is talking with local government on a plan to invest $200 million to build 1,600 apartments, five-star hotel, office tower and shopping centre on a nine hectare site.
As prime locations in the western bank of the Han River are getting scarcer due to dense population developers are moving to the eastern bank, which is sandwiched between the river and Eastern Sea and about three to five kilometres wide. Large land plots in this area are being fenced off to make way for construction of high-rise buildings.
VinaCapital last week broke ground for construction of a $325 million development next to the Han River Bridge, one of three major links between the two river banks. The 9ha project will be phased out with the first one to be carried out in the next three years building a high-end apartment complex, a five-star hotel, a shopping centre and an office building. The later phases will build more apartment blocks, a school, villas and an international convention centre. The waterfront development will be complimented by a marina on the Han River able to anchor 300 boats.
Don Lam, managing partner of VinaCapital, is confident the Capital Square Danang will become a “world trade centre” in Asia. Hot on the heels of VinaCapital, Vu Chau Long Real Estate Company broke ground for construction of 30-storey twin towers on the northeastern side of Han River bridge at the cost of $110 million in addition to the $125 million residential and hotel project it is building in the downtown called Danang Centre.
Meanwhile, Nam Viet A is talking with Korean firms Rombus and Union Network to develop a 20ha site to the south of Tuyen Son bridge at the estimated cost of $600-700 million.
Koreans are one of the most active developers in Danang.
Daewon recently broke ground for construction of Da Phuoc City and Golf Course. The $250 million project will have 8,500 apartments, a five-star hotel, offices and an 18-hole golf course built on 280ha encroaching onto the sea. This is Daewon’s second project in the central city after a $30 million development it is building near Tuyen Son bridge.
The city’s ambitious plan to develop infrastructure on the two banks of Han River is facilitating real estate development on the eastern bank. In addition to Thuan Phuoc bridge under construction, the authorities are working on plan to build two more bridges, including the $62.8 million Tran Thi Ly and $35 million Dragon.
All real estate developers are hoping to cash in on rising demand for real estate in Danang. Although housing prices in the city are far lower than in Hanoi and Ho Chi Minh City, the prices have doubled and tripled over the last couple of years. Land in Pham Van Dong street is now priced at around $1,680 a square metre, more than double the rate a year ago. Apartments at Indochina Riverside Towers now sells for average $2,200 on the secondary market, almost double compared to two years ago.
While demand from local residents is picking up, developers are eager to draw in buyers from Hanoi and Ho Chi Minh City. “Just 20 per cent of our buyers are from Danang and the rest from Hanoi, Ho Chi Minh City and foreigners,” said Indochina Riverside Towers’ Dung.
The city has a limited amout of top office space, reaching around 50,000sqm while rents remain much lower than in Hanoi and Ho Chi Minh City. Monthly rents at Vinh Trung Plaza and Indochina Riverside Towers are from $17-21 a square metre. Most tenants are leasing small space as Danang has not drawn large companies to set up production facilities. Currently the city has no serviced apartments and Vinh Trung is expected to lease its one block for starting price of $900 a unit.
It will take a couple of years for Danang to get more high rise buildings and to take property prices to a new height.
Danang Real Estate