VietNamNet Bridge - Foreign real estate service providers often enter Vietnam with noisy PR campaigns, but then leave quietly.

Vietnam attracts foreign  real estate developers

Keller Williams was the first foreign real estate service provider known by Vietnamese 

The company was headquartered in the US, established in 1983, with 112,000 agents and 700 offices over the world.

However, the US-based Keller Williams itself was not present in Vietnam, but it penetrated the Vietnamese market through a Vietnamese firm – Truong Phuoc Real Estate Service Company – under a franchise contract allowing Truong Phuoc to use Keller Williams Commercial brand.

This was also the business model applied by many other big players such as Knight Frank, Coldwell Banker and Colliers.

A real expert noted that in most cases, Vietnamese firms just “borrowed” the foreign brand names to do business, while in fact, the business was managed 100 percent by Vietnamese.

A well-known US real estate brand name once came to Vietnam this way. A Hanoi-based firm hired two foreign experts, but in fact, the firm conducted all the business activities itself. 

Later, as the domestic real estate market became frozen, the company became financially incapable to continue employing foreign experts and pay for high-end offices. The US brand name, therefore, has disappeared in the Vietnamese market.

Foreign real estate brands were once warmly welcomed in Vietnam because they were all “big players” in their fields, while Vietnamese favored foreign brand names and disfavored Vietnamese firms which were believed to be inexperienced.

However, not all the big players can succeed in the Vietnamese market. Coldwell Banker, a real estate brand closely associated with Edward Chi, chair of Minh Viet Company, the investor of Tricon Tower project, is an example.

Edward Chi told the local press that Minh Viet had the right to use Coldwell Banker brand in Vietnam under a contract valid for 25 years.

Chi refused to reveal the value of the contract, but said Minh Viet would spend VND20 billion to develop the brand.

A real estate trading floor was set up a short time after the brand officially made its presence in Vietnam. It also released reports about the Vietnamese real estate market. However, later, with the disappearance of Chi, the brand from the US no longer exists.

A local newspaper quoted its sources as saying that some brands are facing big difficulties in Vietnam, including Knight Frank and Colliers, while Cushman & Wakefield has closed its Hanoi office.

Other foreign brands have been staying in Vietnam and cementing their firm positions in the market. 

CBRE Group has taken over CB Richard Ellis Vietnam, now focusing on marketing, consultancy and real estate management services. Meanwhile, Savills acts as a distributor for many projects.

Duy Anh