Foreign companies like CB Richard Ellis Vietnam (CBRE Vietnam), Savills Vietnam, and Colliers have a 90 percent market share of the realty consulting industry in Vietnam.
They have recently been joined by one more foreign player, the UK-based Knight Frank, which opened its first commercial and residential property office in Hanoi.
CBRE Vietnam entered the market nine years ago while Savills and Colliers have been here for 14 and 15 years.
While CBRE’s strength lies in evaluating and managing office buildings, Savills’ is in investment consultancy and managing serviced apartments, and Colliers’ is in the luxury apartment segment.
Savills’ Ho Chi Minh City office leased out 40,000 square meters of office building last year, Colliers is managing the Kumho Asiana Plaza and the Bitexco Financial Tower which is under construction.
CB Richard Ellis Vietnam and Savills Vietnam, who do quarterly surveys of the property sector, are thought to provide the most accurate reports and forecasts, according to Vietnam News Agency.
For instance, CBRE warned of a looming downtrend in the office for lease segment last year and the prediction came true, with rates falling slightly.
But Nguyen Son Trung, director of the Ho Chi Minh city-based Dat Nam Do Co, said he treats these reports merely as a reference since they cannot keep pace with the rapid changes in the market.
Moreover, since the reports just focus on market segments that interest foreign investors — like properties in central business districts in Hanoi and Ho Chi Minh City — they cannot match the needs of Vietnamese investors, he said.
What real estate firms really look forward to are reports from state agencies and industry associations, but since they are not forthcoming, speculators dominate the market, Trung added.
Though the Ministry of Construction runs a market research center, it does not release any reports.
Vu Thi Hoa, deputy head of the ministry’s Housing and Real Estate Market Management Department, said while she has been urging the center to release reports to stabilize the market since moving to the department two years ago, its brief remains only gathering and analyzing data about property trading floors.
It is the ministry’s task to promptly disseminate information about the market to ensure there is no volatility caused by a shortage of information.
Room for domestic firms to grow
The domination of foreign firms, which have decades-long global and local experience and extensive databases and highly skilled personnel is complete at this moment when there are just a handful of domestic rivals, Sai Gon Tiep Thi (Saigon Marketing) newspaper quoted Nguyen Xuan Chau, general director of the newly-established Megagroup, as saying.
But foreign firms and investors, especially those just entering the market, require the help of local firms due to their understanding of the local market and hire them for consulting and management, he said.
His company has inked 14 deals to provide such services, including for some luxury projects like Sun Villa in Danang and Sun City in Hanoi, he added.
Bui Tien Thang, deputy general director of Sacomreal Co, said domestic firms must specialize in certain segments and not have a finger in all the pies to compete with their foreign rivals.
