Foreign real estate brokers expanding in Vietnamese market
In July, ERA Real Estate, a foreign broker, quietly opened five transaction points and one commercial office in the central business district of HCM City. The company now has 300 consultancy officers trained and certified in accordance with international standards.
The broker revealed an ambitious plan to become the leading real estate distributor in Vietnam in the next five years with a network of 50 transaction offices in large cities and staff of 5,000 well-trained workers.
The property market segments which bring the highest profits are mostly controlled by foreign enterprises.
To quickly adapt to the emerging market of Vietnam, the US broker decided to join hands with Eurocapital Group, an investment conglomerate which has had offices in Vietnam since 2008, to establish ERA Vietnam.
Thanks to cooperation with the partner, the US broker, new in Vietnam, has approached high-end and luxury real estate projects developed by Vietnamese conglomerates, including Sun Group, CEO Group, MIK, Sacomreal and Kien A, and foreign developers, including Keppel Land and Sunwah Group.
Foreign real estate brokers were once ‘the big fish in the little pond’ of Vietnam in 2006-2008, when the real estate market was ‘scorching hot’. They obtained the right to manage and distribute many large-scale projects because investors believed that foreign brokers would be more professional than Vietnamese. They included CBRE, Savills, Colliers International, DTZ, Cushman & Wakefield, Knight Frank, Coldwell Banker and JLL.
However, later, when the real estate market stagnated, the operation of foreign brokers narrowed considerably. Aldy Vina, Setia and Coldwell Banker all withdrew from the market. CBRE and Savills are among the few foreign real estate service providers which stayed in Vietnam.
Nguyen Khai Hoan from Khai Hoan Land said that the Vietnamese real estate market has been experiencing a difficult period with policies changing regularly and the market fluctuating all the time.
“They have strong brands and good technology. However, the Vietnamese market is different from other markets with different conditions of material facilities and staff,” he commented.
In such a context, Vietnamese brokers, which understand the market and follow a flexible way to approach clients, has gradually regained the distribution market. STDA alone in 2016 had 9,796 successful transactions.
However, analysts commented that the best pieces of the cake still belong to foreign service providers which have stronger capability and experience. The services which bring high profits such as office, apartment and hotel management and leasing are managed by foreign companies.