Turning overseas to recoup
Faced with a lacklustre real estate market in Hong Kong, some property agencies have decided to look overseas or to the mainland for projects that they can market to local investors. Century21 Alliances Realty is a case in point.
"We had more than 40 sales agents before the [government's cooling measures] were launched," says Brian Tsang, managing director at Century21 Alliances Realty. "Now we have only 30. That means 25 per cent of our agents have left in 2013. In the very near future, the market will not be coming back. Maybe a few more agents will leave the company over the next one or two months."
Taking a long look at the available options, management decided to widen its horizons by seeking projects beyond Hong Kong. Southeast Asia and mainland China were the agency's first choices.
"We do have some methods to try and make more revenue, such as marketing properties overseas and in China," Tsang says. "In response to the current situation, we have taken up a project in Malaysia and a project in Huizhou, which is close to Shenzhen. We started selling townhouses and detached houses in July, ranging from 3,000 to 7,000 sq ft. The townhouses are selling for 3 million renminbi [HK$3.8 million] and the detached houses are selling for 12 million renminbi [HK$15 million]."
If sales agents can't market properties at home, selling properties in other jurisdictions is an attractive proposition. "This is something else that sales people can resort to," Tsang says.
Huizhou is a city of 4.6 million people and Century 21's project there is attracting a lot of interest from Hong Kong investors. "The development has the backing of the mainland government," Tsang says. "There are more than 300 units and we are selling phase four. The first three phases are already occupied. The market response has been quite good and we are taking people up every week."
Century 21 has also been named sole agent for the StarCentral and Gardenview Residence developments in Malaysia. StarCentral, located in Cyberjaya, a town 50km south of Kuala Lumpur that aspires to be Malaysia's Silicon Valley, is a low-density development, with offices and serviced apartments.
Gardenview Residence, also in Cyberjaya, has 210 residential units, three shops, one kiosk, and a cafeteria. The average selling price is 450 ringgit (HK$1,075) per square foot of the total saleable built-up area. The development is targeted at high-income groups such as owner-occupiers and property investors.
"The response has been quite good," Tsang says. "We are following up with some property investors."