I’ve talked here before about the exciting investment landscape in Vietnam, and particularly in Ho Chi Minh City. It’s becoming increasingly clear that for a variety of reasons – a growing economy, a favourable demographic and positive government policies – Vietnam is ripe for investment at the moment. But the opportunities there spread far beyond just Ho Chi Minh City – so in this post I want to focus on another prime Vietnamese location: Danang.
A convenient location
What is it about Danang that makes it such an attractive option for foreign investors looking to break into the Vietnamese property market – in particular, I would say, for those of us based in Hong Kong? Well, the first and most obvious reason is its accessibility. Danang is only a short 90-minute flight from Hong Kong. Already well served by three airlines – Cathay Dragon, HK Express, Jetstar – which offer 25 flights per week between them, it’s reasonable to expect that there are more to come.
This accessibility is important – of course it means that you will be able to keep tabs on your investment property from your base in Hong Kong more easily – but it is also one of the reasons why Danang is so popular with tourists from HK and the rest of East Asia alike. It’s our nearest and most accessible beach destination, and as such holiday property there is in high demand from Hong Kongers.
Ideal Lifestyle Destination
Despite its status as the third largest city in Vietnam, Danang offers a far more relaxed lifestyle than Ho Chi Minh and Hanoi. It is the perfect weekend getaway for those who wish to escape the stress of city life. However, because it is a mid-sized city, it boasts first-rate infrastructure that is hard to find in other beach holiday destinations of Southeast Asia.
The coastline between Hoi An and Danang – with over 25km of gorgeous beaches – is stunning and a big draw for visitors. Golf is also booming there, with four world-class 18-hole courses along the coast and more being built. For many visitors, the central city of Danang also makes a useful base from which to explore other parts of Vietnam – the World Heritage Centre of Hoi An is nearby, as is the country’s historic former capital of Hué. The number of foreign and domestic tourist arrivals in Danang is climbing at an impressive rate every year. All in all, it adds up to a hugely attractive package for anyone looking to invest in rental property in the area.
High quality developments
So what are the options for foreign investors looking to purchase property there? Well, the first thing to say is that you’re likely to get much more for your money in Vietnam, even in a high-end market like Danang. I think that one of the most encouraging signs of the quality of the investment properties I’ve seen in Danang has been how well finished they are – there’s a real quality to the work that has been done on many of the properties and they’ve been furnished to a high standard with well-known global brand names.
As with any kind of investment, it’s a case of working within your own preferences, but the options range from resort-managed ‘condotels’ and villas, which offer a fixed annual return, to unmanaged individual apartments and villas. Most high-end property falls in the first category, a truly hassle-free choice for investors not based in Vietnam. A great example of the high quality options there are available is the Premier Village Danang Resort, which features 118 seaside villas, all within easy reach of the beach. Only a 10-minute drive from the airport, the development is complete with restaurants, swimming pools, a gym and a spa. It’s just one of the many resorts that developers are now committing to building up and down the coast near to Danang, and it’s encouraging to see that they are being completed, and finished, to such high standards.
Of course, while a beautiful location is important, obviously investors are also keen to see lucrative returns – and I think this is another area in which Danang performs well. Typically, the development projects are offering anything from between 5 to 10 per cent annual returns over ten years – just to illustrate, Fusion Suites on Danang Beach are currently offering a guaranteed return programme of between 6 and 8 per cent in 5 to ten years, while Wyndham Soleil Danang are guaranteeing returns of 9 per cent in five years. However, those looking to buy property with a guaranteed return in the area need to do their homework first, as the promise of high rental returns by developers often goes hand in hand with a big markup in the property price.
Of course, as with any potential property investment you’ll need to make your own judgements and take each development opportunity on its merits – but for me, Danang represents a promising destination for Hong Kong investors looking for good returns.