Da Nang real estate market breaks out with free trade zone

Da Nang real estate market breaks out with free trade zone

Da Nang real estate market, especially Lien Chieu area, is becoming the center of development thanks to a series of breakthrough growth drivers such as the new generation free trade zone (FTZ), Lien Chieu port and high-tech industrial cluster.

From the potential of the area with Vietnam's first FTZ

A Free Trade Zone (FTZ) is a geographically defined area designated within a country where goods can be imported, stored, processed, manufactured, adjusted and re-exported without being subject to customs duties or other customs regulations. The FTZ is established to implement mechanisms and policies aimed at attracting investment, finance, trade, tourism and high-quality services.

FTZ is a model that has been around for a long time and is becoming increasingly popular and focused on. There are 5,383 economic /free trade zones in 147 countries and territories in the world. Currently, many countries neighboring Vietnam have successfully developed the FTZ model and turned these areas into strong economic development drivers. Examples include Malaysia, Singapore, China, etc.

In particular, China's efforts to develop FTZs over the past 10 years with 22 FTZs have paved the way for an economic reform strategy spanning coastal, inland and border areas. In particular, the pilot establishment of the first FTZ in Shanghai is considered a historic milestone for the country's economy. Specifically, after more than 10 years of establishment, the Shanghai FTZ has recorded 84,000 new businesses, attracting 59 billion USD in foreign investment, making the region's GDP grow 200 times compared to 1990.

Singapore, with an area equivalent to an island district of Vietnam, currently has 9 FTZs that have been researched and developed since 1969. The effectiveness of the FTZs has made Singapore the second largest seaport in the Asia-Pacific region, ranked as the logistics center of Asia. Accordingly, it has attracted more than 5,000 multinational companies and corporations along with a large number of high-quality workers to work and live.

Jurong Port – Singapore’s Outstanding Economic Performance FTZ

From the success of the FTZ model in the world, the pilot establishment of the first FTZ in Vietnam has been proposed to be included in the National Assembly's Resolution on piloting a number of specific mechanisms and policies for the development of Da Nang city. Accordingly, it is expected that by 2030, the FTZ will contribute 1-2% of the total regional product (GRDP) of Da Nang city. By 2040, the contribution rate is expected to increase to 9.5% of GRDP and reach 17.9% of GRDP by 2050.

According to experts, with Da Nang's strategic location, including a deep-water seaport, an international airport, a maritime border area, a land border area, and the end of the East-West Economic Corridor, the city has all the conditions to form a free trade zone. In particular, the Lien Chieu area with Lien Chieu deep-water port is the leading favorable factor for building an FTZ. Currently, this area is home to high-tech industrial parks/clusters, oriented to become a quality technology community similar to the model of Silicon Valley in the US.

Based on the three-legged position of Da Nang free trade zone - Lien Chieu port - high-tech zone, Lien Chieu is forming the most dynamic area in Da Nang, with great potential to attract international corporations to build concentrated shopping centers associated with high-quality services, diverse commercial activities, and services associated with the center of Da Nang.

Experts say the effects of large-scale planning will have an important impact on Da Nang in general and Lien Chieu in particular, creating a "breakthrough space" for economic sectors, especially the real estate sector.

To the opportunities and challenges of the regional real estate market

“The new generation free trade zone of Da Nang is closely related to Lien Chieu port and the development of the real estate market in the Northwest region,” affirmed Architect Tran Ngoc Chinh, Chairman of the Vietnam Urban Planning and Development Association and former Deputy Minister of Construction.

As an important growth pole in the Northwest of the city, Lien Chieu district is approaching the opportunity to transform with clearer potential than ever. However, the urban appearance and real estate here lack well-planned projects with synchronous utilities enough to retain the team of international experts, businessmen, and intellectual workers to work and live long-term.

Actual survey shows that Lien Chieu district currently has the highest population density in Da Nang with nearly 220,000 people. In addition, the source of "gray matter" labor including experts and high-quality workers following the FDI wave pouring into FTZ is forecasted to be about 21,000 workers in 2030, 90,000 workers in 2040 and up to 127,000 workers in 2050.

In contrast to the crowded demand and the tendency to continue to increase is the scarce supply. Statistics in Lien Chieu district mainly include land plots, small townhouses and only 2 apartment projects. Of which, 1 mid-range apartment project, The Ori Garden, currently records a liquidity rate of over 98%. Faced with the existing demand from the natural increase in population and the problem of modern urban development, retaining high-quality labor on increasingly scarce land funds, experts share the view that the trend of developing apartments in this area is inevitable and necessary right now.

Demand has increased again, and the apartment segment of the Lien Chieu market is also expected to be higher (Photo: Tran Mien)

In the general market of Da Nang, the latest report of Batdongsan.com.vn shows that in the first 3 quarters of the year, apartments are leading the increase in selling prices and interest levels. The price level of Da Nang apartments has set a new milestone, increasing by 95% compared to the first quarter of 2023. This increase can be explained by the appearance of many high-end apartment projects in recent times, causing the average price to increase.

Notably, the number of searches for Da Nang apartments by Hanoi investors is increasingly large and increased by 90% in the second quarter of 2024 compared to the previous quarter. This partly proves the attractiveness of the Da Nang market to investors from other provinces. When demand increases again, the opportunity for the apartment segment is also expected to be higher, especially in areas with outstanding growth in infrastructure and demand such as Lien Chieu.

Source: https://baodautu.vn/batdongsan/thi-truong-bat-dong-san-da-nang-but-pha-cung-khu-thuong-mai-tu-do-d231322.html