From the recently approved special mechanism…
Vietnam’s National Assembly has recently passed a resolution on the organization of urban administration and the pilot of several special mechanisms and policies for the development of Danang City. As a result, the Prime Minister has decided to establish, adjust, and expand the boundaries of the Danang Free Trade Zone.
The resolution comprises 4 chapters and 18 articles, regulating the organization of urban administration and the pilot of several special mechanisms and policies for Danang’s development in the following areas: state financial and budget management; investment management; planning, urban, resource, and environmental management; priority sectors and industries for attracting strategic investors to the city; establishment of the Danang Free Trade Zone; and investment in the development of semiconductors, artificial intelligence, information and communication technology, science and technology management, and innovation.
Alongside this resolution, Danang is also the first city in Vietnam to pilot the establishment of a Free Trade Zone (FTZ), offering tax, credit, and land incentives. The awards for “Smart City Vietnam 2023”, with numerous outstanding titles, also bring Danang closer to its 2030 growth target, aiming to become a regional hub for innovation, technology, and high-value industries to enhance efficiency and resilience.
Recently, new indices on Danang are noteworthy. In the first five months of 2024, Danang attracted nearly VND 14,000 billion in investment, including 27 new FDI projects with a registered capital of over $22 million (accounting for 70% of the 2024 budget). The sector that attracted the highest FDI was accommodation and food services with a rate of 26.5%, alongside a GRDP of over VND 72,303 billion, an increase of VND 7,050 billion compared to the same period in 2023.
According to experts, the city’s internal strength – formed by its strategic location, economic potential, unique nature and culture, professional tourism services, leadership will, and practical implementation – is the decisive reason for Danang to be granted this opportunity. It can be said that the preferential mechanism also corresponds to the expectations, responsibilities, and mission to lead the real estate market – especially in the resort segment – in the coming time.
As shared by Ms. Truong Thi Hong Hanh, Director of Danang Department of Tourism, the city’s development orientation focuses on “high quality” in all types of products and services for tourism, prioritizing the luxury and ultra-luxury segments, with well-prepared international promotion plans for each specific target market.
With its many advantages, Danang’s position is a special case in Vietnamese real estate, granted the right to lead the market.
Previously, Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, commented that Danang itself is already a quality market, with values that have been affirmed, and these new breakthrough mechanisms will further enhance the city’s attractiveness. Looking at the long term, Danang real estate possesses positive opportunities for tourism recovery, technology development orientation, and leverage from land law policy changes.
In addition, the open-minded approach to investment attraction by the local leadership is also a factor that makes Danang one of the most diverse real estate markets. It is undeniable that this city was once the golden cradle of tourism apartments and has maintained its position until now. This market has a full range of property types, including villas, offices, commercial centers, complexes, retail, and industrial properties, to meet all demands.
Recently, the emergence of distinctive segments, such as branded real estate from a series of internationally operated brands, also contributes to the diversification of models and testifies to the dynamic development potential of this city. Notably, Danang has always been a pioneer market for many new and unique real estate products and mechanisms, more so than any other region.
…To the future with the new Law taking effect from August 1st
According to Ms. Do Thu Hang, Senior Director of Research and Consulting at Savills Hanoi, the entry into force of three important laws related to land and business from August 1, 2024, is unblocking bottlenecks.
Currently, the novelty of the Law on Real Estate Business 2023 holds particular significance as it indirectly recognizes the tourism real estate type – with a mixed function of tourism and accommodation – as meeting the conditions for business operations. This provides a basis for the legal system to issue additional circulars and decrees guiding in detail the management and business of this asset class, thereby promising to boost the potential for a vibrant condotel market in Danang and stimulate tourism in areas with condotel project investments across the country.
Previously, according to Decree No. 10/2023/ND-CP of the Government on amending and supplementing a number of articles of the decrees guiding the implementation of the Land Law 2013, which took effect from May 20, 2023, regulations were made on the granting of pink books for tourism apartments (condotels, officetels, tourist villas…) formed on commercial land. Along with the new Law coming into operation, the resolution on piloting special mechanisms for Danang City and the city’s own policy support are expected to pave the way for a better new cycle for Danang’s real estate market.
Danang real estate is gradually regaining its “form” after a period of decline. Source: Batdongsan.com.vn
This is also an essential boost for Danang to regain its competitive position, even compared to the largest markets of Hanoi and Ho Chi Minh City. Ms. Hang affirmed that the current special mechanism conditions could help Danang’s real estate sector thrive again. In this context, enterprises with strong potential will surely pursue higher-quality and more distinctive resort real estate as they enter the new cycle.
A representative from VCRE – the unit collaborating with the American brand Nobu Hospitality for a branded real estate project on My Khe beachfront – shared that the growing economy and strategic location make Danang an attractive destination for businesses and investors. Many foreign experts also choose Danang because they find interest in its peaceful yet dynamic and convenient lifestyle, and they easily integrate and feel at home here.
This representative also believes that partnering with reputable and distinctive international operating brands not only brings unique experiences to resort projects but also restores multi-national customers’ faith in their investments or assets in Danang. Simply put, the global success and reputation of these brands are the best assurance.
Despite remaining challenges, the special mechanism and the new effective Law are creating expectations for Danang’s resort real estate market in the coming time. Illustration
In terms of price levels, Danang is currently at a reasonable range, while its growth potential in tourism and industry offers high rental yields and price appreciation prospects. The city’s central land fund is also running out of supply, creating room for future price increases.
Recently, Danang has received positive signals as it becomes the destination of choice for influential figures like Bill Gates and investors from the US, Sweden, Japan, South Korea, and India. This lays the foundation for enhanced multilateral cooperation between Danang and foreign enterprises, mainly in areas such as tourism, real estate, smart city development, artificial intelligence, semiconductor technology, and infrastructure.
With these new supports, Danang’s real estate market remains optimistic yet cautious. This city was once the cradle of condotels – a groundbreaking product that brought the highest excitement and also the deepest “wounds” for many investors, even the seasoned ones. Therefore, every new step forward requires careful consideration and clear orientation.
