According to experts, the real estate service market (marketing, distribution, appraisal, investment consultancy and project management) has, for a long time, been in the hands of foreign enterprises which currently hold 90 percent of the market. Meaning, domestic service providers only hold the other modest 10 percent of the market share.

The foreign names like CBRE, Savills, Colliers, Knight Frank, Jones Lang LaSalle or Cushman & Wakefield have become too familiar to domestic real estate developers and anyone who is interested in Vietnam’s real estate market.

Especially, in the years until 2008, these names were indispensable for the success of big scale projects. Real estate developers, from the north to the south, who wanted to to successfully sell their products, had to ask for the help of the foreigners.

At that time, the foreign enterprises, which had been present in Vietnam for more than ten years, proved to have a good understanding of Vietnam’s market, and all the profitable projects in Vietnam were their targets. Even now, when the foreign enterprises have to compete with domestic enterprises, which have emerged recently, the enterprises still get “the bestpieces of the cakes” in many big projects.

Things have changed considerably since many domestic enterprises, which understand that the big profit has been falling into the pockets of foreign enterprises, have jumped on the bandwagon.

A lot of services, including real estate appraisal, or sale consultancy, which, in the past were undertaken only by foreigners, now have been provided by domestic enterprises.

Especially, many domestic real estate developers decided to “change horses while crossing the stream”. The developers, who have become choosier in selecting service providers, decided to break the contracts signed with foreign marketing representatives, or cut some works assigned to them, because foreign distributors cannot satisfy the requirements on sale speed, or because of theiroverly high fees.

The developer of Mulberry Lane project in Ha Dong district in Hanoi, for example, has ignored many big foreign names when choosing the marketing representative for the project. Sources said that the developer may choose a Vietnamese enterprise as its marketing representative.

Besides, the developers of some well known projects, including Canal Park in Long Bien district in Hanoi and Vincom have decided to terminate contracts with foreign marketing groups.

Analysts have noted that domestic real estate developers nowadays tend to hire domestic enterprises as the distributors for them, or they themselves undertake the sale.

A manager of Nam Cuong Group said that right after the group inaugurated a series of its projects, a lot of foreign enterprises asked for the cooperation with Nam Cuong, offering the services of doing marketing and giving consultancy. However, all of them were rejected.

The manager said that foreign distributors would charge Nam Cuong very high service fees. Meanwhile, the strategies applied by the foreign distributors are not as good as people think. Nam Cuong believes that if the high quality of its products and their reasonable priceswill be able to attract buyers, without the need to run noisy advertisement campaigns.

Besides Nam Cuong, the developers of some other big projects including the 40-storey building in My Dinh area developed by Viglacera, Star City by Dai Duong Group and the projects by Archi Land Vietnam, have also been distributed by the developers themselves.

Lam Bao Ky, General Director of Lang Son International Corporation, the developer of the $2 billion Hoang Dong Lang Son project, also said that he will only choose foreign enterprises if he has no other choice.

Ky said that in the current circumstances, when information, technologies and knowledge have become internationalized, domestic enterprises are fully capable of doing the job. This explains why the company has decided to choose a domestic company to market its project.

Source: Thoi bao Kinh te Vietnam