In early May 2017, founder and general director of Savista Nguyen Tien Dung suddenly received a call from a Japanese real estate corporation with a hope that it would bring to him a good news.
A meeting was held a few days later but produced no result. And there was no agreement signed between the two sides after the next four meetings. “I myself refuse the request to co-operate despite carefully considering,” said Nguyen Tien Dung.
Dung revealed that the Japanese corporation which also develops and manages projects is one of the leading real estate companies in Japan, which is the most important reason for the two side to organize a meeting. There was no more information about that Japanese corporation revealed due to the security reasons.
Ministry of Public Security apartments compound is managed by Savista.
Savista is a large real estate management company in Ho Chi Minh City. It manages offices, apartments and class A and B trading center projects. Despite its size, Savista is a rival for such foreign brands as Savill and CBRE in the class A segment.
The Japanese partner has set its representative office in Vietnam for more than one year. It also has a subsidiary managing property in Cambodia. It expected to expand its business in Vietnam market through this co-operation as buying the stake of a domestic company is the fastest way to join a market as well as reduce business costs.
If Savista co-operated with the Japanese partner, it would be supported to expand the area of restaurant, hotel and hospital management, which Savista is trying to implement. However, Dung said that the specific terms are not suitable to Savista.
“They want to dominate but I do not want to sell my brainchild now,” said Dung.
After nine years being the chief legal officer for a US real estate company in Ho Chi Minh City, Dung accidentally approached the trend of real estate project management. At that time, there were only two foreign companies operating in this field. Housing and real estate laws were also gradually improved, especially the legal decisions on condominium management. And Savista was established in that context. Currently, it manages more than 27 projects throughout the south of Vietnam.
Despite leading Ho Chi Minh City in the real estate management area, Savista does not have much advantage compared to foreign companies operating in the same field. Specifically, they have large capital, hundreds of years of management experience and can manage big projects. Also, the Vietnam market still favors foreign brands; therefore, Dung's consideration is not the number of shares sold but the way to compete with new foreign businesses. "I do not want to quit this journey," he said.
Savista still wants to co-operate with foreign investors to enhance its competitiveness; however, Japanese investor still insists on dominating when not wanting to start a new project. If it can buy Savista’s stake, they will pour a huge amount of capital into the company to increase brand awareness and fully cover the real estate management market.
Besides, the ununified way of evaluating each side is a reason why he decided not to co-operate with the Japanese investor. “It is very important to determine our value in a collaboration,” said Dung.
Savista currently manages 27 projects throughout the south of Vietnam.
Savista takes on the risk of other companies to develop its own management standards and lead the Ho Chi Minh City market, which was confirmed by the Japanese investor in its report on Vietnam market research implemented in over one year. The obstacle is that Savista has not got access to the market in the north of Vietnam.
In addition, domestic companies like Savista have the locality, an advantage that foreign businesses do not have. Vietnamese people understand each other clearly when settling the disagreement. In addition, thanks to the Vietnamese personnel, the management costs are lower and more competitive than foreign companies. Different views on the abovementioned values are also the reason why the deal does not come to any concrete results.
In the long run, at least next two years, Savista may need the finance and experience supports from foreign investors. Currently, Savista is establishing its internal system and improving its management method before listing the company. “It is normal for foreign companies to buy stakes of a company to dominate after being listed on the stock market; however, we are already in a different position at that time,” said Nguyen Tien Dung.
