Changing tides: Global talent needed for China’s property market transition
The outlook for China’s real estate sector is still laden with promise in specific segments as sustained growth in areas including outbound investment and logistics property development is anticipated. Alex Barake, manager, Michael Page Property and Construction gives insights into why China’s real estate landscape will see a need for more skill-focused talent to steer it safely through market challenges.
A rush of outbound investment
China’s property landscape is transforming notably. From a market of rapid growth through unprecedented investment levels and demographic gains, it is moving into an era of moderate and diversified growth, driven by decreased speculative capital deployment and increased domestic consumption.
During the first few years after the global financial crisis, the Chinese real estate landscape experienced a flood of foreign direct investment for land and second-hand asset acquisition. Over the last two years or so, there has been an extraordinary change in tides, with a massive flow of outbound investment hitting the shores of the US, UK and Australia, amongst other Western countries.
The major players with an appetite to diversify their portfolios abroad are Chinese developers; institutional investors; and high net worth individuals acquiring residential units, land and second-hand commercial assets.
This trend has created new talent demand on numerous fronts. Chinese institutional investors and developers have set up departments at their global headquarters that are fully dedicated to overseeing outbound initiatives. The majority of these organisations pre-2012 had relatively localised businesses, in terms of the corporate culture and preferred candidate background, given that all projects were domestically based.
Due to the focus of investment and development transactions offshore, the talent pool now desired by these local players is significantly more international than before. This group includes Chinese returnee professionals who studied or worked overseas, and foreigners who have real estate exposure in China and the overseas markets. This has notably changed the jobseeker mentality in China as candidates with an international flair that previously would not consider domestic employers, due to them being too “local”, are now prioritising these newly multinational corporations to the top of their lists.
Mirroring this influx of outbound capital, several of the top brokerage firms and boutique service providers in China have established departments dedicated to servicing institutional and private investors. The talent sought by these companies includes residential sales associates – to attract domestic private investors to purchase units abroad – and investment brokers focused on institutional buy-side representation.
Riding the warehousing wave
The considerable shortage of logistic property space, which will last for years to come, has caused domestic and foreign investors and developers to pounce on the opportunity to ride the warehouse tidal wave in China. This demand has been mainly driven by the e-commerce and the online-to-offline boom, increased domestic consumption rates, and improved infrastructure interlinking inland and coastal cities.
Given that this is a relatively new specialised segment, that has emerged in recent years, coupled with the sheer project volume year-on-year, the demand for relevant talent far exceeds the supply. As property and construction recruitment is traditionally very asset class-focused, and there is a shortage of professionals in China with warehouse project experience, employers in this space have had to broaden their targeted candidate pool to include people with non-warehouse asset type exposure.
The most commonly preferred background outside of logistic property space is in decentralised business parks, industrial zones and hypermarkets, ideally on the landlord side, as there are commonalities in these product types that would allow candidates to transition smoothly.
For the last two years, and moving forward indefinitely, there has been a soaring demand for functional experts based in China’s major first- and second-tier cities and peripheral logistic hubs. Sought-after specialists include those in investment analytics, deal sourcing, project management, leasing and facility maintenance.
This article appeared in the Classified Post print edition as Changing tides.