Foreign real estate service firms strong in Vietnam

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Foreign real estate service providers are doing well on the nascent Vietnamese market thanks to their vast experience, industry observers say.

Foreign-owned firms CBRE (CB Richard Ellis) Vietnam, Savills Vietnam and Colliers account for a large portion of the services in Vietnam.

Savills, a leading name in the UK residential property sector, has been operating in Vietnam for 15 years, the US-based Colliers International for 14 years and CBRE also based in the US for nine years. The three own many offices worldwide.

CBRE in Vietnam is strong at pricing and managing offices for rent, Colliers focuses on managing high-end departments and Savills concentrates on the management of serviced departments.

Colliers manages the Kumho Asiana Plaza in HCMC and has become the sole manager and promoter of Bitexco Financial, the highest building in the city.

Recently, Knight Frank, the UK-based leading real estate consultancy firm with 207 offices in 43 countries, announced its presence in Vietnam. The newcomer is considered a major opponent to local counterparts like Megagroup, Eden, Him Lam and VietRees.

Brett Ashton, executive of Savills Vietnam, said Knight Frank could give Savills a run for its money in the Vietnamese market.

Nguyen Xuan Chau, general director of Megagroup, said foreign firms have penetrated Vietnam's market so well not because local firms are weak but because foreign firms are more experienced.

Chau said the foreign firms have been operating for a very long time while Vietnam's real estate market is "fledgling" and very few firms have been established in the services sector. Megagroup, for instance, was set up just this year.

To be competitive in the field, he said firms need high competence, a long time to train staff, acquire data and build up trust in customers.

Local firms can still prevail as they know more about the culture and consumers' habits, Chau said. His company has won 14 contracts from large developers in the Middle East who have projects in Vietnam, he noted.

Bui Tien Thang, deputy general director of Sacomreal an arm of Saigon Thuong Tin Commercial Bank, shared Chau's opinion, saying local firms lose at home because they "have not operated long enough and thus have not made a big name for themselves."

Property developers have to pay 20-30 percent more to foreign service providers but they might receive the same product as local firms, Thang said.

Thang and others also said local service providers only weaken their case in trying to provide too many services instead of developing professionalism in core strength areas.

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