Danang developers reach out to Hanoians .
10/12/2009
Hanoians are proving to be the knights in shining armor for Danang property developers hunting for apartment and condominium buyers.
Five years ago, when first beach resort projects selling condominiums and villas, such as Aquaba Resort and The Nam Hai, appeared in Vietnam most developers targeted foreigners and Ho Chi Minh City residents with higher incomes who were more likely to invest in a holiday home. Now these projects are cashing in on the wealthy Hanoians.
Projects such as Indochina Riverside Towers, Son Tra Resort & Spa and Hyatt Regency have all attracted a high percentage of buyers from Hanoi and other developers such as the Korean Investment & Development Co (KID) and VinaCapital are actively targeting the Hanoi market, launching their projects such as Blooming Tower and Danang Beach Resort in Hanoi to tap this fertile market.
Blooming Tower Danang, developed by KID and located at the apex of Han River and Danang bay, has one of the best views of downtown, Danang beaches and Ba Na mountain. It has had a successful launch, with more than 50 per cent of its customers coming from Hanoi.
Following the trend, the luxury apartment tower Azura, developed by VinaCapital and Dong A Real Estate Joint Stock Company’s Golden Square project have planned to launch in Hanoi in the near future. These large-scale projects will be situated at prime locations in Danang and are expected to be finished by the end of 2011.
“Danang projects are now targeting people from Hanoi since the successful launch of Hyatt Residences,” said Richard Leech, executive director of CB Richard Ellis Vietnam. “Danang projects have found a good market in Hanoi to sell their projects, with some developers registering interest and even sales from 80 per cent Hanoi-based investors, with 20 per cent Ho Chi Minh City-based or Viet Kieu,” he added.
Colliers International Hanoi head of agency David Brunt agreed, saying that it was evident with the successful launch of Hyatt Regency in Danang earlier this year that investors from Hanoi were actively seeking to expand their real estate portfolios into Danang and other secondary cities.
“They also wanted to buy condominiums and villas as second homes. “Throughout the summer months Danang has become an increasingly popular holiday destination for Hanoians seeking to escape the oppressive city heat, flight times of one hour and more airlines operating the route with increasingly competitive fares,” said Brunt.
Leech said Hanoi people regarded Danang as their closest southern located beach resort and were quite familiar with taking a flight rather than driving for their weekend or longer holiday.
Nguyen Cong Thi, marketing and sales manager of Blooming Tower, said: “Danang property projects are less attractive to Ho Chi Minh City people, as they are offered more choices in Vung Tau, Nha Trang and Mui Ne.”
The second home market in these places has dramatically developed with a series of impressive projects such as Best Western Nha Trang Plaza and Ba Ria-Vung Tau province’s Sanctuary Ho Tram and Laguna Long Hai, linked to Ho Chi Minh City by a flexible highway network.
“Hanoians like Danang because they have fewer options,” Thi added. In fact, only Danang is offering international standard beach resorts with condominiums and villas, while other projects in the northern region such as Cat Ba Resort are still selling land or have not started construction.
Brunt said the resident market of wealthy investors in Danang was a lot smaller than that of Hanoi and Ho Chi Minh City. Also, individuals in Danang were more likely to purchase land and build their own house, villa or local apartment than invest in foreign or locally owned developments.
Current laws only permit foreigners to own an apartment as a residence if they meet specific conditions and they are not permitted to lease the property. As a result of these limitations some developers have chosen to focus on the local market and given the buoyancy, Hanoian’s have been the obvious choice, said Brunt.
“They offer a proven track record and straight forward purchase,” he said. Brunt said many Hanoians had made substantial profits on the stock market over the past couple of years and given the recent volatility in both the stock market and the price of gold, many were now choosing to diversify their risks and invest in real estate.
Leech added: “Hanoi investors appear to be favouring property investment at present.” Brunt said given the emerging tourist potential and summer rental market investors in Danang could benefit from a second home, tourist rental and potential capital increases.
By Vu Thanh Thuy - VIR
