Bloomberg News

Christie’s Names Hong Kong Affiliate in Costliest Home Market

April 11, 2012

A construction crane operates as residential and commercial buildings rise above the business district of Central in Hong Kong, China. Photographer: Jerome Favre/Bloomberg

A construction crane operates as residential and commercial buildings rise above the business district of Central in Hong Kong, China. Photographer: Jerome Favre/Bloomberg

Christie’s International (CHRS) has set up a real-estate franchise in Hong Kong, its first in Asia, as it seeks to tap property buyers in the world’s most expensive place to own a home.

The London-based auction house has appointed Landscope Realty Ltd., a local broker focusing on luxury homes, as an affiliate, Mitch Lewis, managing director for the Asia-Pacific region at Christie’s real estate division, said in an interview. Christie’s, which has real-estate affiliates in 41 countries, will look to add franchises in Taipei, Tokyo, Singapore and Kuala Lumpur over the next 12 months, Lewis said.

The move will allow Christie’s to tap its network of some of the world’s richest property buyers to invest in the Chinese city, where home prices have risen more than 70 percent since early 2009 on record-low mortgage rates, a lack of new supply and an influx of buyers from other parts of the country. It will also lure blossoming wealthy and middle classes in Greater China and Asia who are finding investment properties and second homes in cities such as London and New York.

The Hong Kong franchise “is an absolute launchpad,” Lewis said. “We want to set up our flagship here and will start building around it. If you look at all of Asia-Pacific, we could be looking at potentially about 40 locations.”

In the broader Asia-Pacific region, Christie’s also has partnerships in Australia and New Zealand.

The number of people in Southeast Asia, China and Japan with at least $100 million in disposable assets reached 18,000, overtaking North America’s tally for the first time, according to a report by Citigroup Inc.’s private bank on March 28.

China, India

International developers such as Atlanta-based Portman Holdings Ltd. are betting housing demand fueled by an expanding middle class in China and India, the world’s two-fastest growing major economies, will underpin their property markets.

Having Christie’s name could also help Landscope, founded in Hong Kong by Chairman Koh Keng-shing in 1995, to compete with international brokers including Jones Lang LaSalle Inc. and CBRE Group Inc. (CBG:US) for a bigger piece of the cross-border property investment market.

Following the agreement, Landscope’s operation will be renamed Landscope Christie’s, Lewis said. Koh said he expects the company’s share of the city’s luxury home market, defined as homes with a value exceeding HK$10 million ($1.3 million), to double from 2 percent.

“This will make our foray into the international playing field much easier,” Koh said. “Whenever we’re representing Hong Kong investors in outbound investments in other parts of the world, we encounter quite a lot of difficulties.”

Expensive Homes

Both Lewis and Koh declined to say how the companies will split the revenue.

Savills Plc (SVS) said Hong Kong is the world’s costliest place to buy an apartment, with prices about 55 percent higher than London, where the property broker is based. Moscow is 7.4 percent more expensive than London while New York is 15 percent cheaper, Savills said.

Fear that housing may become unaffordable for the general public has prompted the Hong Kong government to impose curbs such as higher minimum mortgage down payments and additional transaction taxes. At least a third of Hong Kong’s luxury home buyers in 2011 were from mainland China, according to Centaline Property Agency Ltd., the city’s biggest closely held realtor.

“Hong Kong, more like London, is kind of a haven,” Koh said. “People in developing countries, when they make money, they don’t feel safe putting their assets in their own countries. So they would always invest elsewhere where there’s market transparency and good governance.”

To contact the reporters on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net;


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