BACKGROUND
Hanoi is a key hub for the real estate industry in both Vietnam and Asia, attracting significant domestic and foreign investment due to its immense potential By the end of 2007, the Hanoi real estate market had rebounded from a prolonged period of stagnation, experiencing renewed enthusiasm and growth.
“It is the third fever” It is easy to see that price of all properties is rising strongly
To understand the current state and future outlook of the Hanoi real estate market, a thorough analysis of various influencing factors is essential Despite experiencing significant fluctuations in the past, Hanoi remains a key market, driven by booming demand and favorable policies that enhance its appeal for both domestic and foreign investors The market is expected to thrive in the coming years, presenting both substantial opportunities and challenges Ongoing public discussions often focus on critical issues such as supply shortages, rising prices, speculation, market transparency, and the impact of new regulations However, there is a notable lack of comprehensive and systematic research on the Hanoi real estate market, highlighting a gap in both practical and theoretical insights.
Property consultants play a crucial role in the real estate market, acting as conductors that drive the industry forward In Hanoi, the property consultancy sector has emerged as a lucrative business, fueled by rapidly increasing and diverse demand Key clients include property developers, domestic and international investors, and large corporations, all seeking expert guidance While foreign consultancy firms dominate the market with their strong reputations and comprehensive service offerings, Vietnamese companies are striving to enhance their competitiveness However, many local firms lack clear strategies to navigate the abundant opportunities and challenges in the market Currently, there is a notable absence of professional research focused on property consultancy in Vietnam, particularly in Hanoi.
OBJECTIVES OF THE STUDY
The objectives of this thesis focus on:
The Hanoi real estate market analysis aims to present and examine current key issues while forecasting future trends To achieve this overarching goal, the study focuses on specific objectives that delve into market dynamics and emerging patterns.
Analyse the effect of macro-environmental factors such as: Political, economic, social, legal and policy
The current analysis of the Hanoi real estate market highlights the key characteristics of demand and supply, alongside the various factors influencing them, as well as the pricing dynamics This assessment not only examines the present conditions but also offers forecasts for the upcoming years, particularly focusing on the period from 2007 to 2012.
The thesis on property consultancy in Hanoi aims to analyze key issues within the property consultancy market, comparing foreign and Vietnamese consultancy firms To achieve this overarching goal, the research emphasizes specific objectives that explore the dynamics and characteristics of both local and international players in the industry.
Analyze the development of property consultancy in Hanoi
Present and analyze key services which are offered in Hanoi
Analyze the demand, key clients and customer behaviour in determining choice of consultant
Analyze the market share, supplying competence and internal environment of property consultancy companies in Hanoi
This thesis presents an analysis of the real estate market and property consultancy in Hanoi, offering strategic solutions designed to enhance the business operations of Vietnamese property consultancy firms.
SIGNIFICANCE OF THE STUDY
This thesis presents an analysis of the current key issues in the Hanoi real estate market and forecasts trends for the upcoming years, highlighting its significance for stakeholders.
Lay the foundation for researches on Hanoi real estate market in a methodical, comprehensive and systematic view This thesis will be a good basis for further researches
Systematize separate researches on Hanoi real estate market
This article aims to clarify public discussions surrounding key economic issues, including rising prices, supply and demand trends, the impacts of economic growth, the financial market, foreign investment, and the implications of new policies.
Help to provide useful and selective information for making decisions related to the real estate business and investment as well as new policies
The presentation and analysis for key issues of property consultancy in Hanoi at this present time in this thesis will has the following significances:
Lay the first foundation for research on this subject
Help to understand the role of consultant in real estate market
Bring deep knowledge on property consultancy in Hanoi
Provide useful and selective information for clients, investors and property consultants
Help to make some strategic solutions for property consultancy companies, especially Vietnamese companies, which are playing in a big game full of opportunities but also full of challenges
SCOPE AND LIMITATIONS OF THE STUDY
This study analyzes the fundamental aspects of the Hanoi real estate market and property consultancy, aiming to provide strategic solutions for Vietnamese consultancy firms to enhance their business in a landscape filled with opportunities and challenges By focusing on key issues without delving into specific real estate sectors, the research offers a comprehensive perspective to inform strategic recommendations.
METHODOLOGY
Research Method
This research employed both qualitative and quantitative methods to analyze the real estate market and consultancy business A descriptive approach was utilized for observational data, while qualitative aspects focused on the perspectives of real estate consultants and clients regarding future trends Additionally, quantitative elements involved structured questionnaires that allowed for statistical data grouping and numerical analysis of the results.
Data Collection and Analysis Method
The research involved a comprehensive review of existing literature, primarily sourced from press articles and real estate industry magazines Additionally, relevant information from several master's theses in related fields was utilized Due to a scarcity of published research and data on the topic, conducting an empirical study was not feasible.
This research utilized primary data collected from informal discussions with staff at selected companies in the real estate market, complemented by secondary data from publicly available resources such as websites, brochures, marketing materials, and market reports Additionally, figures were sourced from the Hanoi Statistics Department and other internal documents To ensure reliability, the accuracy of the data from these supplementary sources was verified with the appropriate individuals or departments before being utilized.
The study primarily relied on data gathered from interviews and questionnaires, with a focus on enhancing response rates by avoiding mailed surveys Most questionnaires were administered face-to-face, while some were conducted via telephone or email Both property consultants and clients participated in the research, with one consultant representing ten clients The consultants were categorized into domestic and international property firms, legal, and accountancy services, while clients included property companies, developers, institutional investors, international investors, and large domestic corporations Data collection utilized a structured survey featuring numbered questions and multiple-choice responses, resulting in two distinct questionnaires tailored for property consultants and clients.
THESIS’S LIMITATION
This thesis focuses only on key and basic issues of Hanoi real estate market recently and in the near future
Professional property consultancy is still quite new in Vietnam, so representative features may be not popular It is still new and becoming developed dramatically in 5 past recent years
The questionnaire aims to interview key clients and consultants; however, the absence of some relevant interviewees may lead to less precise information collection and analysis.
Other restriction is that recommendation is for only key strategic solutions that help Vietnamese property consultancy companies to improve their business.
OUTLINE
The thesis is divided into three chapters:
LITERATURE REVIEW
REAL ESTATE MARKET
Real estate refers to land and anything permanently attached to it, like buildings In some contexts, it encompasses both the land and fixtures, while "real property" specifically denotes the ownership rights associated with the land.
The real estate market encompasses transactions involving buying, selling, leasing, and investing in properties, which ultimately determine real estate prices and volumes It is categorized into three primary segments: residential, commercial, and industrial, based on their intended use Key characteristics of the real estate market include decentralization, an imperfect market structure, limited supply, and a slow response of supply to changes in demand.
1.1.2 The Main Participants in Real Estate Market
Owner/User - These people are both owners and tenants They purchase houses or commercial property as an investment and also to live in or utilize as a business
Owner - These people are pure investors They do not consume the real estate that they purchase Typically they rent out or lease the property to someone else
Renter - These people are pure consumers
Developers - These people prepare raw land for building which results in product for the market
Facilitators - This includes banks, real estate brokers, lawyers, and others that facilitate the purchase, sale and lease of real estate
Government - Affect the real estate market by making, implement and control the policies related to real estate
The market is driven by the demand side, which includes owners, users, and renters, while developers represent the supply side Additionally, facilitators and government entities play a crucial role in bridging both sides of the market.
The demand for real estate indicates the quantity of property buyers are eager to purchase This quantity is influenced by the price, forming what is known as the real estate demand relationship Key factors that determine real estate demand include location, economic conditions, interest rates, and consumer preferences.
Cost and availability of credit
The supply of real estate indicates the market's capacity to offer properties, with the quantity supplied reflecting the amount sellers are willing to provide at a given price This relationship between price and the volume of real estate available is referred to as the supply relationship Key factors influencing real estate supply include various economic and market determinants.
Real estate development and business costs
The diagram illustrates the housing supply dynamics, with the existing stock on the left and new flow on the right Initially, the equilibrium price (Ro) is established at the intersection of existing housing supply (SH) and demand (D) This rent is converted into value (Vo) through discounted cash flows, calculated by dividing current rents by the discount rate as a perpetuity The resulting value is then compared to construction costs (CC) to identify profitable opportunities for developers The intersection of construction costs and housing service value determines the maximum new housing starts (HSo) Subsequently, the current period's housing starts are added to the existing stock for the next period, causing the supply curve (SH) to shift right by the amount of HSo.
Figure 1.1: The Adjustment Mechanism of Real Estate Market
1.1.6 Line of Real Estate Related Business
Corporate real-estate management and property operators
Service real estate/Social real estate
Open-end real estate funds
Closed-end real estate funds
Share-based vehicles eg REITs
Real-estate project management Facility-management services
Architecture and planning (not engineering and planning specialists)
THE PROPERTY CONSULTANCY
Main reasons consultants are hired are:
Clients seek the expertise of consulting firms to address challenges that exceed their internal capabilities, necessitating quick and effective solutions to their issues.
Figure 1.2: Traditional and Modern View of the Real Estate Market
The primary distinction between the traditional and modern views of the real estate market lies in the emergence of international influences and the role of property consultants In less developed markets, the real estate sector lacks international scope, whereas in more developed markets, the presence of global factors and professional consultants becomes prominent.
Property markets can be evaluated based on their maturity, which is determined by the diversity of user and investor opportunities, the flexibility in adjusting property interests, market openness, and the presence of information and research systems Additionally, professionalism and standardization of property rights and practices play a crucial role in market maturity Typically, this evolution trends toward the development of market structures and practices similar to those found in fully mature property markets of major financial centers worldwide Overall, a mature market generally exhibits these characteristics.
Openness to non-local players
More transparency in the functioning of the market
A wide use of sophisticated valuation procedures
As the real estate market matures, professionals from diverse fields such as law, accounting, and management consulting are increasingly entering the industry, providing services that were traditionally reserved for real estate specialists This trend highlights a growing shift, with more firms expanding their offerings to include real estate services, reflecting the evolving landscape of the market.
Consultants provide a range of services that can be categorized into five primary business areas: valuation, investment, leasing, sales, management, and corporate services To accommodate various sub-markets within these fields, some categories have been expanded; for example, property management is divided into three sub-groups: residential, office, and shopping centers.
HANOI REAL ESTATE MARKET
PROPERTY CONSULTANCY IN HANOI
HISTORY
Property consultancy plays a crucial role in the real estate market, evolving in tandem with its growth This sector not only facilitates transactions but also reflects the maturity of the real estate landscape, highlighting its significance in navigating market dynamics.
In the early days of Hanoi's real estate market, property consultancy primarily operated through realtor offices and independent brokers, focusing on leasing and sales brokerage services These agents provided essential legal consultancy related to the residential market, catering mainly to individual clients.
As the economy rapidly develops, the demand for property has surged, catering not only to individual residences but also to commercial and industrial needs This has led to a rise in property investment, development, and management activities Property consultants are now sought after for a wide range of services, including agency support, market research, valuation, property management, investment, and project development In response to these growing demands, professional property consulting firms have emerged and flourished in and around Hanoi.
The surge in foreign investment in Vietnam's real estate sector has highlighted the need for professional consultancy services that local companies are unable to meet Consequently, international property consulting firms are entering the Vietnamese market to fill this gap This influx of foreign consultants marks a significant turning point in the property consultancy landscape in Vietnam.
The property consultancy sector in Hanoi has emerged as a highly profitable business, driven by the growth of local companies and the involvement of international consulting firms This dynamic landscape ensures that all estate consultancy needs are effectively met, positioning property consultants as key players in coordinating the real estate market.
KEY SERVICES OFFERED IN HANOI
Consultants provide a range of services categorized into five main business areas: leasing, valuation, investment, management, and corporate services Each of these areas can be further divided into specific sub-markets, such as leasing, which encompasses residential, office, and shopping center segments.
In Hanoi, many international property consultants provide a comprehensive range of services to meet client needs, including the ability to bring in specialized teams for non-core requests However, due to intense competition, these companies often focus on offering only the services they excel in and that yield higher profits While most consultants are willing to provide various services if financially feasible, it is crucial to understand the actual services they consistently deliver.
3.2.1 Exclusive Agency, Exclusive Right to Sell or Lease
Property consultancy services in Hanoi are in high demand, generating significant and stable revenue To secure exclusive rights, consultants must possess a strong brand, in-depth market knowledge, and professional marketing skills, along with financial resources for deposits and an extensive network of target clients Recognizing the substantial supply shortage in the Hanoi real estate market, several foreign companies are pursuing exclusive rights to sell or lease prime Grade A and B projects, including notable developments like Vincom City Towers and Metropole Centre.
OPERA BUSINESS CENTRE, SKYLINE TOWER, Vinaplast - Domus Building, Pacific Place Hanoi, Capital Tower, DMC Tower, VIT Tower, Ciputra Mall Some
Vietnamese companies also get exclusive agency for some B or C grade projects
Figure 3.1: The Consultant with Best Reputation for Exclusive Agency
Property consultancy in Vietnam is a competitive field, with local consultants vying for market share while foreign firms view it as a supplementary service This sector provides valuable insights and opportunities for landlords and investors, who can engage multiple agents In Hanoi, the demand for residential, commercial, and industrial properties is high, despite a diverse yet limited supply, making consultancy services increasingly sought after Typically, consultants represent either landlords or investors in leasing transactions, and in sales, they may act for both parties Their loyalty lies solely with the clients they represent, from whom they receive compensation.
Figure 3.2: The Consultant with Best Reputation for Open Brokerage/Agency
Consultants provide essential services for tenants by acting as intermediaries in negotiations with landlords, ensuring that tenant needs are met, including space acquisition and favorable lease conditions Their expertise encompasses initial rent negotiations, re-negotiations, rent-free periods, and contributions for moving and IT infrastructure When tenants seek to surrender or assign their leases, consultants negotiate with landlords to secure the best terms Importantly, these consultants are dedicated solely to the tenant's interests and are compensated exclusively by them While tenant representation is a key focus, it exists within a broader spectrum of corporate property services that also includes project and development management and facilities management, primarily catering to companies that have fully outsourced their real estate functions.
In Hanoi, securing prime property is crucial for businesses like hotels, restaurants, retail, and finance, as these locations significantly impact their success Meanwhile, large investors actively seek valuable real estate opportunities for future investments However, ideal properties in the area have become increasingly scarce and costly, making it a competitive market for both businesses and investors.
In Hanoi, there is intense competition among various sectors, including retail, finance, hospitality, and real estate, in the search for ideal properties, often beginning at the "off plan" stage The process of acquiring suitable properties is complex, involving initial planning, market research, demand analysis, site selection, negotiation, and ongoing project management Due to the intricacies involved, many clients in Hanoi choose to outsource their real estate needs to property consultants Foreign consultants frequently receive substantial orders from international investors, while Vietnamese consultants leverage their local knowledge and relationships to facilitate connections This outsourcing trend fosters partnerships between foreign and Vietnamese consultants to enhance service delivery in the real estate market.
Figure 3.3: The Consultant with Best Reputation for Tenant Representation
Professional property managers play a crucial role in enhancing and preserving property values, consistently prioritizing the interests of property owners In Hanoi, the trend of employing professional property management services is gaining traction, driven by the rapid growth of new buildings and a burgeoning market Despite this promising landscape, the current number of projects utilizing professional property management companies remains limited due to specific target constraints.
In Hanoi, the predominant property management model sees investors taking on the responsibility of managing their own properties However, this approach often falls short in maintaining the quality and reputation of buildings compared to professional property management companies Insights from international practices reveal that effective property management is a systematic and meticulous process.
Not all investors can afford to hire a property management company due to financial constraints When they do, they often choose reputable foreign firms, as these companies' established international prestige enhances their own brand image Prominent projects that have engaged property management consultants include Vincom City Towers, Hanoi Tower, Metropole Centre, OPERA BUSINESS CENTRE, SKYLINE TOWER, Pacific Place Hanoi, Central Building, Capital Tower, DMC Tower, VIT Tower, and Hoa Binh Tower.
Recently, several Vietnamese property management companies have begun to enter the promising market, achieving notable successes However, these companies face significant challenges, including limited access to foreign investors and a lack of professionalism Despite these hurdles, their competitive edge lies in offering lower costs compared to foreign firms, making them an attractive option in the industry.
Figure 3.4: The Consultant with Best Reputation for Property Management
Hanoi's real estate market is currently dynamic and diverse, presenting both opportunities and risks that make it challenging to navigate Accurate information is essential for organizations and individuals involved in property investment and business activities to make informed decisions Recently, property consulting firms in Hanoi have seen a surge in demand for research services, particularly from major clients such as retail groups, foreign investors, and large real estate developers While international firms like CBRE and Savills regularly publish quarterly market overview reports for marketing purposes, Vietnamese companies also possess the capability to provide competitive research services.
Figure 3.5: The Consultant with Best Reputation for Research
The selection of consultants is crucial for the financial success of a project, leading clients to impose strict criteria during the hiring process In Hanoi, clients such as professional investors, government entities, banks, investment funds, and large corporations seek reliable valuation services However, aside from foreign professional firms, there are limited Vietnamese companies capable of securing significant valuation contracts.
Figure 3.6: The Consultant with Best Reputation for Valuation
This service significantly enhances project value through comprehensive research, financial preparation, project transfer, and asset management during both possession and development phases Typically, only property consulting firms with extensive networks of major investors and landlords can provide such services In Hanoi, previously, project transfers were conducted secretly between Vietnamese partners with strong connections and foreign partners possessing substantial financial resources, especially when project transfers were not officially permitted However, the current Real Estate Business Law now allows regulated project transfers between Vietnamese partners, and in the near future, foreign investors will also be permitted to directly acquire transferred projects.
Figure 3.7 the Consultant with Best Reputation for Investment Sales & Acquisition
Selecting business prospects in Hanoi necessitates extensive expertise in both technical and market aspects Due to the challenges and high costs associated with securing a site in the city, clients demand excellence in every aspect of the service Only a few foreign companies, such as Tai Tam Colliers and Savills, are capable of delivering this high-quality service, which is crucial for the success of significant projects, leading major clients to invest substantial sums for their expertise.
Figure 3.8: The Consultant with Best Reputation for Project Development
DEMAND AND KEY CONSIDERATIONS IN SELECTING CONSULTANT
The robust growth of the real estate market in Hanoi has led to a significant rise in demand for property consultancy services Clients primarily seek consultants for their expertise in navigating the complexities of the market, ensuring informed investment decisions, and maximizing property value.
Table 3.1: Reasons for Using a Consultant
To concentrate on core business 35%
The term "cost effective" is often associated with "maximize returns," focusing on reducing operational costs, such as outsourcing staff to save expenses In contrast, "maximize returns" pertains specifically to property-related activities, which can be intricate and costly, requiring significant time and resources Engaging a consultant can streamline these processes, allowing companies to concentrate on their core business, enhance decision-making security, and minimize potential issues.
The demand for estate consultancy services in Hanoi is rapidly increasing, with around 80% of significant real estate transactions involving these services This sector is experiencing an estimated growth rate of 30% annually However, property consultancy firms in Hanoi are currently overwhelmed, fulfilling only about 60% of incoming orders despite receiving a high volume of requests.
Consultants primarily work with a diverse clientele, including real estate developers, institutional investors, real estate firms, occupiers, the public sector, and private investors Currently, foreign clients, encompassing both organizations and individuals, represent the most lucrative segment for consultancy firms These clients tend to favor consultants due to their efficient negotiation processes and robust financial capabilities.
Table 3.2: The Type of Clients That the Consultants Deal With the Most
3.3.2 Key Factors In Determining Choice of Consultant 3.3.2.1 Relationship
Most clients interviewed reported having a strong, established relationship with their regular consultants, with 70% indicating this connection Additionally, 10% of clients actively sought out the most suitable consultant for their specific assignment, while 7% received recommendations Only 3% chose a consultant based on an unsolicited approach, and 10% employed other unspecified methods to select their consultants.
Table 3.3: The Way Clients Got Real Estate Consultant
The present real estate consultant got by %
Clients have consistently emphasized that their relationship with their consultant holds greater significance than the consulting firm itself Many expressed a willingness to switch companies if their consultant moved to another firm, highlighting the personal connection over brand loyalty However, various factors may complicate such transitions in practice.
Smooth transitions between consulting firms depend on factors like shareholder influence, the new consultant's understanding of the client, and the duration of the transition period It is crucial for consulting companies to prioritize the retention of their key staff to avoid the potential loss of clients.
Clients seek consultants who possess strong ethics, professional expertise, enthusiasm, and a commitment to collaboration for mutual understanding It is essential for consultants to grasp the clients' challenges and work effectively alongside them Once positive outcomes are achieved, clients often prefer to maintain the same consultant, fostering a dependency that leads to a lasting and close relationship.
In Hanoi, an impressive 83% of clients rate their current consultants as good to excellent, highlighting a strong level of satisfaction Meanwhile, 13% of clients consider their consultants to be average, while a mere 4% rate them below average This data underscores the overall positive perception of consulting services in the region.
“needs improvement” At a grade of poor maybe sure the consultant will be changed
Table 3.4: Evaluate the Performance of Current Consultant
Client complaints are an inherent aspect of the consultancy market, reflecting its professionalism Clients often express these complaints as minor criticisms, suggestions, or significant service issues, indicating their desire for improvement When clients voice concerns, they believe that addressing these issues could enhance efficiency, save resources, and strengthen the business relationship Consequently, every complaint, regardless of its size, can impact the client's perception of the consultancy firm, both personally and professionally However, minor issues that do not directly affect the project's outcome are less likely to lead clients to change consultants or refrain from future engagements.
Figure 3.12: Most Common Complaint from Clients
In Hanoi, 31% of clients express dissatisfaction due to "delays or unmet deadlines," largely attributed to the heavy workload faced by consultants These professionals receive numerous client requests but selectively prioritize only the most promising projects.
“Technical skills” and “delivery not good” also have many complaints, it show that the professionalism of consultants is not high or shortage of professional staffs
Market knowledge is a crucial factor that enables consultants to effectively persuade clients All respondents, regardless of their business sector, rated market knowledge as either "extremely important" or "important," highlighting its significance in the consulting process.
Understanding clients' specific needs is crucial for consultants to effectively fulfill their roles While most consultants grasp their clients' particular requirements, it is equally important to comprehend the client's current business situation A survey revealed that 80% of consultants are aware of their client's position within the industry, although other aspects, such as corporate strategy, are less understood, with nearly a quarter of consultants lacking this knowledge This gap exists because corporate strategy information is often not publicly available, making it essential for consultants to build close relationships with their clients to gain deeper insights.
Figure 3.14: How Well Consultants Understand Their Clients
In Hanoi, 98% of clients expressed a willingness to share more information if requested, though they are seldom asked This readiness to provide additional details hinges on their established relationship with the consultant Clients emphasize the importance of avoiding short-term gains and instead focusing on cultivating long-term, sustainable relationships Among various asset classes, real estate is particularly noted for its tendency towards long-term ownership and extended holding periods.
When selecting a real estate consultant in the Hanoi market, clients face a trade-off between the breadth of services offered and the quality of service delivery Consultancy firms should clearly define their core business to maximize profitability, with six primary service lines available While some consultants provide a comprehensive range of services, others operate as niche players, allowing clients the flexibility to choose the consultant that best fits their specific needs Many clients prefer a full-service provider for convenience, yet they also value the ability to explore multiple options without being restricted to a single consultant.
CONSULTING COMPANY
Many consultants are struggling to meet deadlines and maintain quality due to an overwhelming number of orders, leading to frequent client complaints A significant number of consultants acknowledge their shortcomings in client engagement and follow-up To improve their services, they recognize the need to filter orders more effectively and better define their target market Additionally, there is a noticeable distinction between foreign and Vietnamese clients, with consultants often favoring foreign clients in most situations.
The collaboration among Vietnamese consultants is currently lacking, in contrast to the more effective cooperation seen among foreign consultants Foreign firms implement clear strategies that enable them to expand their consultant networks successfully As a result, there is a growing trend of international consultants entering the Vietnamese real estate market, alongside the rapid development of local consultancy firms.
A recent survey of clients and consultants highlights top consultancy brands in Vietnam, with VinaCapital, CBRE, Chesterton (Savills), KPMG, Ernst & Young, Baker & McKenzie, Tai Tam Colliers, and the emerging Megaland leading in brand recognition In terms of overall reputation, SAS-CTAMAD, CBRE, Chesterton (Savills), Tai Tam Colliers, Ernst & Young, Baker & McKenzie, and Investconsult received high ratings.
Figure 3.17: Recognition of the Consulting Companies
Brand *Strong brand, high reputation international
Experience *Many years, in many countries worldwide
Services *Service is quite professional
*Offer a diversified list of services
*Most of them can offer integrated property services
Marketing *Marketing is quite professional, focused on target market
*Use some marketing tools: Billboard poster, postcards, website, brochure, press, seminar, market reports
HR *High quality, advanced training, foreign experts
Clients&Projects *Big clients and projects,
*Wide network of clients international and local
Size Growth *Est 30% per year Turnover Growth *Est 100% per year
Co-operation *Open, available for cooperation
*Establishing a wide network of consultants New Entry *Very potential for new entries
Brand *Strong brand, high reputation international and local
Experience *Many years, in many countries worldwide
*Experienced in local market by Vietnamese partner
Services *Service is quite professional
*Offer a diversified list of services
*Most of them can offer integrated property services
Finance *Strong finance, ready to take risk
Marketing *Marketing is quite professional, focused on target market
*Use some marketing tools: Billboard poster, postcards, website, brochure, press, seminar
HR *High quality, advanced training, foreign and
Clients&Projects *Big clients and projects
*Wide network of clients international and local
Size Growth *Est 20% per year Turnover Growth *Est 80% per year
Co-operation *Open, available for cooperation
*Establishing a wide network of consultants New Entry *Very potential for new entries
ReCentury Houselink Megaland Hanoiland T&T Tan Long TigerInvest IDJ
Experience *Many years, in many local market
Services *Service is not professional
*Offer only some basic services
*Most of them can’t offer integrated property services
Marketing *Marketing is not professional, target market is not clear
*Use some marketing tools: Website, brochure
HR *Lack of good staffs and managers
Clients&Projects *Small clients and projects
*Most clients are individuals Size Growth *Est 20% per year
Turnover Growth *Est 40% per year
Co-operation *Close, unavailable for cooperation with other
Vietnamese consultants New Entry *Potential for new entries
-Rapid development of real estate market in Hanoi
-Development of real estate related business -New policies to improve real estate market -Strong increase in foreign investment -Participants in real estate markets increasing
-The demand for property consultancy increasing
-Lack of professional property consultants -Overload of clients
-Strong development of information technology and application of internet in all fields of social life and business
-Foreign consultants expand their business -New entry of foreign consultants
-New policies to control property consultancy
-High requirement for quality of service and full services
-High risk of property consultancy in Hanoi (Low rate of successful works)
-Unclearness of real estate market
-Good knowledge and experience on local market
-Wide network of local partners and clients -Low fee
-Offer only some basic services, most of them can’t offer full services
-Lack of funds -Low quality human resource
-Marketing is not professional, target market is not clear
-Narrow network of foreign clients and big clients
The Hanoi real estate market is experiencing rapid growth across various sectors, including residential, office, retail, hotel, and industrial properties Despite facing a supply shortage and high prices, the market remains dynamic and eventful However, it is still considered underdeveloped, presenting both significant potential and challenges As a result, Hanoi is anticipated to emerge as a favored destination for investment, particularly attracting foreign investors.
Hanoi, a rapidly growing city with a young population, faces significant pressure on its residential market due to high population density and urbanization As incomes rise, there is a noticeable trend of residents moving from inner districts to new urban areas, leading to increased demand for high-end apartments However, this shift has created a serious housing shortage for low-income individuals, overseas Vietnamese, and foreigners looking to buy property Most apartments are sold off-plan, with secondary market prices significantly higher than initial offerings, exacerbating the supply issue and driving up prices, particularly in central areas While the housing shortage is unlikely to be resolved quickly, fierce competition is expected in the residential market over the next few years as major projects in new urban areas are completed, potentially leading to a decrease in prices if multiple projects are launched simultaneously.
The rapid growth of the stock market in recent years has become a significant driving force for the real estate market Many investors, having profited greatly from stocks, are now shifting their investments towards the more traditional real estate sector.
Hanoi serves as the economic, political, and social hub of Vietnam, witnessing a rapid increase in domestic and international visitors for business and tourism This surge in demand for hotels and serviced apartments has not been met by an adequate supply, with many projects facing delays As a result, the vacancy rates for accommodations remain low, driving rental prices to some of the highest levels in Asia This trend is expected to continue until 2009 and 2010, when numerous hotel and serviced apartment projects are anticipated to become operational.
As GDP and foreign investment surge, the demand for office, retail, and industrial properties in Hanoi is rapidly increasing This heightened demand, coupled with a significant supply shortage, is driving rental prices to escalate quickly, making Hanoi one of the most expensive cities for commercial and industrial real estate Analyses suggest that the rising rental prices for commercial properties may only stabilize after 2010.
By 2010, Hanoi is projected to face a significant land shortage due to rapid development To address this issue, local authorities plan to relocate old factories and facilities from the city center to suburban areas, thereby increasing land availability This strategy aims to free up space for essential public infrastructure, such as schools, parks, and business centers, while also transforming traditional markets into modern shopping centers.
Hanoi is experiencing significant changes in laws and policies that enhance opportunities for real estate businesses and foreign investment, positioning the market for growth Despite its potential, the real estate sector faces challenges such as bureaucratic inefficiencies and a lack of transparency, which hinder its development.
The Hanoi real estate market presents a compelling opportunity for foreign investment, particularly following its accession to the WTO A significant portion of this investment originates from Asia, with real estate projects ranking among the largest and most successful in the city Foreign capital addresses the funding shortages in these projects, accelerating their development Currently, collaborations between foreign investors and local developers are common, leveraging the domestic partners' market knowledge and connections to secure major projects Meanwhile, foreign partners contribute financial resources, advanced technology, and professional management expertise Overall, foreign investment enhances the real estate supply capacity within the Vietnamese economy.
The property consultant plays a crucial role in the real estate market, acting as a conductor that drives industry dynamics In Hanoi, the demand for property consultancy has rapidly diversified, creating significant pressure on consultants to meet evolving needs The sector has transformed from a closed domestic market to an attractive destination for foreign consultancy firms, which bring high professionalism and a strong reputation These foreign firms lead the market by offering a wide range of services, prompting Vietnamese consultancy companies to enhance their capabilities to maintain market share As a result, property-related services are now being delivered through various innovative approaches.
Vietnamese firms are increasingly engaging in mergers and acquisitions, including partnerships with foreign-owned companies and government departments While many consultancy firms are expanding their services to become full-service providers, others are narrowing their focus to become niche players Key services offered by consultants encompass agency and brokerage, research and valuation, tenant representation, property management, investment sales and acquisition, project development, legal services, financial services, and real estate investment.
Key clients of real estate consultancy services include property developers, domestic and international investors, and larger corporations The demand for estate consultancy has surged significantly, with projections indicating that around 80% of valuable real estate transactions in Hanoi involve these services The annual growth rate for this demand is estimated at approximately 30% However, property consultancy firms in Hanoi are currently overwhelmed, fulfilling only about 60% of incoming orders despite receiving a high volume of requests.
Clients in Hanoi choose to hire consultants primarily for their cost-effectiveness, the ability to focus on core business activities, and the security they provide for decision-making Key factors influencing their choice of consultant include the strength of the relationship, the consultant's performance, their brand reputation or track record, and the fee structure or level of service offered.
Some strategic solutions for Vietnamese consultancy companies in Hanoi as follows: