Antiques add variety to a strong property portfolio
From property to jade and antique fragrant rosewood chairs, investor and collector Wong Koon-kau has many strings to his investment bow.
As a chartered surveyor with nearly 30 years of professional experience, buying properties for investment presents little challenge to 53-year-old Wong, managing director of Zeppelin Property Development Consultants and chairman of the Hong Kong board of the Royal Institution of Chartered Surveyors.
Like many investors, albeit with a professional eye for detail, he started buying offices and homes in Shenzhen two years ago as he spent more time across the border.
'The appreciation of the yuan was an added attraction to investing in mainland property. My properties are leased out and their rental income covers the monthly instalments,' said Wong.
Zeppelin was established in 1993, with offices in Hong Kong, Shenzhen and Beijing, and specialises in providing integrated real estate professional services for high-net-worth clients. Putting his money where his 'mouth' was, Wong set about acting on advice he was giving his clients.
The central government's austerity measures have so far had little impact on the value of his portfolio, he said, since his properties were in prime areas which were more resilient to market downturns. By his calculation, they have appreciated in value by some 60 to 70 per cent since he bought them two years ago.
Meanwhile, his frequent visits to the mainland and growing contacts with a widening circle of clients and associates introduced Wong to the attractions of Chinese cultural history, and the knowledge helped him strike up closer relations with his customers and enabled him to close deals more quickly.
'It served as a short cut for building up business networks on the mainland, particularly with government officials.' Wong said.
Wong branched out into investing in other assets and bought a pair of Ming dynasty chairs, made of a precious wood named dalbergia odorifera, or fragrant rosewood, for 100,000 yuan (HK$119,485) several years ago. Later, he began investing in precious stones such as jade.
'Now the valuation of the chairs is as much as 600,000 yuan. And the owner of the antique furniture store where I bought them has offered me 400,000 yuan.' he said.
A sandalwood table and four chairs he paid 150,000 yuan for has now doubled in value, he says, but is quick to add that his foray into antique furniture represents 'small investments' compared with the sums spent by veteran collectors.
'I have a friend on the mainland who bought three Qing dynasty antique beds for about 7 million yuan each for his new home. Apart from their investment purpose, he and his family use them as their own beds,' he said.
The beds were also made of dalbergia odorifera originating from Hainan. The fragrant high-quality wood was used for centuries to make furniture exclusively for the emperor and senior government officials in the Ming and Qing dynasties.
Due to its scarcity and high demand, the price of the wood went up to 8 million yuan per tonne last year from 20,000 yuan per tonne in 2002.
'Increasing demand among wealthy mainlanders is pushing prices up and reducing the number of items available.' said Wong.
'Although it is costly, it is value for money. You can pay HK$50,000 for a set of Italian modern design furniture, but you may find copies the next day offered at cheaper prices!' said Wong, adding that he expected his antiques' value to grow further.