Da Nang City
Da Nang is the 4th largest city in Vietnam and the largest city in central Vietnam with a population of approximately 900,000 and has established itseft as a beach resort destination due to the beautiful beaches in the area and the presence of some of the best resorts in Vietnam. The city is emerging as a central economic power house, logistics hub and tourist destination with unparalleled growth reflected by the fastest growing GDP in Vietnam(13% in 2006)
The city provides the main transportation hub for the central region and tourist gateway to World Heritage sites and cultural attractions in the area such as Hoi An and My Son.The former imperial capital of Hue can be found 120 kms to the North.
Da Nang International Airport(DIA) is the third international airport in the country and has weekly flights from Danang to Singapore, Bangkok and Siem Reap in addition to a number of domestic flights. There is planned re-development and expansion of Da Nang International Airport and we anticipate a greater number of international flights to commence servicing the city in the next couple of years.
The region already boasts some of Vietnam`s finest infrastructure and development and growth will be fuelled as major infrastructure development projects near completion. These include Phase I of central Vietnam`s largest Fair and Exhibition Centre; the East/West Economic Corridor which will link the deep-water seaport of Mawlamyine in Myanmar with Da Nang; Construction of Hai Van Road Tunnel; Widening of both National Highways 1A and 14B; Construction Thuan Phuoc Bridge linking Da Nang centre with Son Tra Peninsula; Completion of the Son Tra - Dien Ngoc Coastal Road shorten travel time to Hoi An.
Tourism in the region is expected to increase exponentially with major resort development slated in the near future which is attracting the largest local developers and investors.Since Vietnam ascended to the WTO late last year foreign direct investment has steadily increased and since establishing our office in Da Nang we have experienced a deluge of enquiries from international investors, developers as well as hotel and resort operators interested in the coastal regions of Da Nang & Hoi An often looking for JV partners or financing opportunities. The region is perceived as an increasingly attractive investment destination due to the magnificent beaches, geographical beauty, fine weather, strategic location, quality infrastructure and proactive investment policies of the local people`s committee.
We are also seeing strong growth of Japanese and Chinese manufacturing companies in the 5 industrial zones of Da Nang with a constant stream of Korean and Taiwanese property developers seeking property investment opportunities.
Finally as existing developers move on from the planning and design phase to breaking ground and construction, we will see many new resorts and hotels begin to take shape and expect to see even greater activity over the coming years. We anticipate an influx of expatriates and Vietnamese workers from other cities working on the projects and looking for accommodation and investment opportunities in the region, fueling demand and consumption, creating new jobs and driving the local economy. Not to mention the increase in tourism after the airport expands and more international flights fly directly to Danang and the regions reputation and profile as a major tourist destination increases on the world stage.
Da Nang`s Office market.
One glance at the city`s skyline paints a picture of a city in the throes of major redevelopment and rapid economic growth.If you take a tour around the city center you will see a number of office buildings in various stages of construction with Vinh Trung Plaza and Indochina Riverside Tower set to provide the first international standart office space in the city when they open at the end of this year. These new mixed use developments will undoubtedly set the standard for this thriving metropolis transforming the business district and catering for large Vietnamese and international companies and organizations entering the Da Nang market as well as existing companies seeking to expand or upgrade their premises.
At the end of 2006 there was supply of approximately 20000m2 of office space for lease and as a result of strong economic activity new product had been rapidly absorbed allowing landlords to enjoy average occupancy rates of 96% and encouraging more new development.
Da Nang`s robust economy coupled with its unparalleled infrastructure has attracted many large national and international companies increasing the demand for office space. By the end of 2007 we expect supply of approximately 35,000 m2 depending upon the completion of existing office projects.
The majority of offices and business premises are located in Hai Chau District, particularly along Tran Phu and Nguyen Van Linh Street, where a number of Government offices and State-owned enterprises are situated.
The current market is being fuelled by companies currently operating in Da Nang seeking to expand or upgrade their premises. This is creating fierce competition as the local landlord`s of existing poorer quality grade C buildings offer cheaper rents and incentives to try and stem the exodus from their properties.Over the next few months we expect to see more national and international companies particularly banks and other financial services companies and trading companies obtain their investment licenses and commence operation in Da Nang absorbing much of the new supply. These high profile companies will likely target the new international standard developments of Vinh Trung Plaza & prime office tower at Indochina Riverside Tower in search of prestigious premises and high standard services and facilities.
Da Nang`s Retail market
The Da nang retail market is still very immature with predominantly shop front strip shopping and primitive small open front shops with no air conditioning.The majority of retailers are low end with some middle ranking operators and there is a prevalence of poor quality fake and copy products.There tends to be a high concentration of low end, poor quality fashion & accessory outlets with strong competition amongst them.
Some National & International brands are scattered around the city center in Le Duan & Phan Chu Trinh, Hoang Dieu and Nguyen Van linh Streets and current shopping centers/supermarkets include Metro on the edge of the city, Intimex, Da nang Supermarket and Nhat linh Plaza
Later this year we expect to a see an overnight renaissance in Da Nang`s retail market first with the opening of a Big C Shopping centre open at Vinh Trung Plaza in November closedly followed by the opening of the high end Indochina Riverside Mall at the end of December.We anticipate an influx of regional and international retailers opening shop in Da Nang offering a wider choice of quality products and brands than ever before as we have already seen in HCMC & Hanoi.There will also be a greater selection of restaurants and cafes & other food and beverage operatorscatering to both local and international tastes as well as entertainment options such as a Megastar Cinema at Vinh Trung Plaza.
Despite the local residents of Da Nang and surrounding areas traditionally coming from low income groups there are signs of an emerging middle class with higher incomes and aspirations to match. More tourists are visiting the city center than ever before driving retail sales and this trends is expected to continue as this metropolis flourishes and greater retail and entertainment choices spring to life.
Big C
The impending opening of Big C at Vinh Trung Plaza in November this year has generated a huge amount of interest and momentum in the market and currently 90% of the retail space has been taken up.The Shopping centre will comprise of mixed specialty retail on level 1 and a Big C hypermarket on level 2 & 3 with a 6 screen multiplex cinema operated by megastar on the podium level 4.
Riverside Mall
Similarly to Big C the retail podium of Indochina Riverside Tower a grade A mixed use development is creating a great deal of retailer interest as its December, 2007 opening approaches.The Riverside mall will be the first high end shopping mall in Da Nang and the exclusive shopping address in the city.The innovative floor layout will create a modern and vibrant atmosphere appealing to customers from aspiring middle to high building international and dosmetic tourists and the residential population in and around Da Nang
Da nang`s Residential market
The residential market in Da Nang is largely untapped and historically inactive and condominiums and serviced apartments are practically non existent and hence most expatriates find homes in shop house and villas or prefer the convenience of living in local hotels. The income of local residents has historically been low and only recently have we begun to see an emerging middle class and more demand from foreign and Vietnamese workers from other cities coming to work in Da Nang and the surrounding region
There is currently a huge amount of development planned and underway in the region and as developers move on from the planning and design phase to breaking earth and construction and new resorts and hotels begin to take shape we expect to see a greater influx of expatriate and Vietnamese workers from other cities working on the projects and looking for accommodation and investment opportunities in the region, fueling demand and consumption,creating new jobs and driving the local economy.
Opening in 2008 Vinh Trung Plaza and Indochina Riverside Tower will be the first two preminum quality developments to offer luxury serviced apartments and condominiums providing the staff of international companies greater choice and comfort in accommodation from the traditional houses and villas currently available.
Our market research and sales and marketing of condominiums has highlighted a strong demand in luxury investment properties from residents of Hong Kong and Japan as well as wealthy Vietnamese and Viet Kieu returning to Vietnam for re-settlement and investment.Demand is also emanating from the US,Europe,Singapore and Canada.
For further information :
Marc Townsend(Mr)
Managing Director
CB Richard Ellis Vietnam
Tel : 84.8.824.6125
Email : marc.townsend@cbre.com

Ha Quoc Minh(Mr)
Marketing Manager
CB Richard Ellis vietnam - Da Nang Office
Tel : 84.511.384.0850
Email : minh.ha@cbre.com