School debentures selling for more than rights to major clubs

PUBLISHED : Sunday, 17 June, 2007, 12:00am
UPDATED : Sunday, 17 June, 2007, 12:00am

School debentures are selling for more than memberships to some of the region's most prestigious golf and country clubs, traders say.

Hong Kong has a thriving second-hand market in memberships, with about eight agencies acting as brokers for the sale of rights to join luxury sports and social clubs.

At least five of the agencies also sell second-hand debentures, which are one-off, upfront payments towards financing an education that are sold by international schools to raise cash for building projects. Parents and employers buy them to jump the queue for school places.

Schools will refund individual debentures when the child leaves the school, while corporate ones can be passed on to children of other employees - but some schools also allow them to be sold.

The five agencies offer corporate debentures for the Chinese International School and the Canadian International School. Two also advertise Discovery Bay International School debentures, which were replaced last year by a premium levy.

Asking prices quoted to the Sunday Morning Post by agencies for Chinese International School debentures range from HK$2 million to HK$3 million.

Canadian International School prices range from HK$480,000 to HK$540,000, but parents said they had been quoted even higher prices.

Hilary Don, sales manager of China Dragon Membership Services, said asking prices were based on the latest transactions and consultation with other agencies.

She said they had seen record increases in the past nine months.

'This is the biggest price increase we have seen,' she said. 'The prices we are seeing at the moment are crazy. The vendors know demand is very high and that is why they are increasing a lot.

'I have five families on hand who are waiting for a Chinese International School debenture. The Canadian International School suggests the price on the second-hand market can't be higher than HK$380,000. But, up to now, I haven't had any case turned down by either the Canadian International School or the Chinese International School.'

Ms Don said China Dragon sold two Canadian International School debentures for HK$480,000 each in May and one for Chinese International School at between HK$1.5 million and HK$1.6 million last December.

Athena Wong Man-sze, director of Everfine Membership Services, said it had sold six or seven debentures in the past year - about half for the Chinese International School and half for the Canadian International School.

'We were very surprised when the Chinese International School debenture reached HK$2 million,' she said. 'We have been selling school debentures for the past 10 years and these are the highest prices we have ever seen.

'These debentures have increased even faster than golf club memberships.'

She said it was more expensive to buy a debenture for the Chinese International School than membership to Aberdeen Marina Club, the American Club, or the Hong Kong Football Club.

Carmen Kwok Ping-ying, marketing manager of Superior Club Services, which sells three to four debentures each year, said: 'About 50 per cent of the debentures we sell are bought by local owners of Hong Kong companies for their own children.'

She said if her company had a seller but no buyer, it co-operated with other agencies to make a sale.