Advertisement
Advertisement
Jill Lin believed there would be a new wave of Chinese buying properties in London.

In the business of searching for new homes away from home

Spotting a gap in the overseas property market has led Jill Lin into the business of matching rich Chinese investors with London real estate

Rich Chinese have developed a hunger for overseas properties in recent years. The Annual Report on Chinese International Migration 2014 shows that a growing number of Chinese investors are rushing abroad to buy property and set up permanent residence in places like Europe and North America.

Jill Lin, a Guangzhou native who has lived in London for years, saw great potential for the industry and started a business in her home region, the Pearl River Delta, to help locals snap up pricey real estate in the British capital.

I went to London from Guangzhou to study for a masters degree in 2004. After graduating, I worked in various jobs. In 2008, I worked as an overseas buyer for one of the largest privately own real estate contractors in London who had been actively playing properties in the Greater London area. I have also worked as a contractor for small-scale developers throughout England.

About three years ago, I heard that London real estate agents were keen to recruit Chinese-speaking employees thanks to the growing number of rich Chinese buyers. More Chinese were flocking to buy high-end properties in London for investment purposes as well as for the sake of their children's education. At the same time, in 2013, the Chinese government began tightening the local property investment market. The tougher rules forced wealthy Chinese to look overseas.

Last year, when I heard that the richest Chinese businessman Li Ka-shing was selling his mainland properties to invest massively in England, I knew it would be seen as a signal to rich Chinese investors to follow suit, especially those in the Pearl River Delta. I believed there would be a new wave of Chinese buying properties in London. So I invested all my savings to set up Ji Xi Global Investment Consultancy in Guangzhou and became the mainland agency for Barratt, one of the largest residential property development companies in Britain.

Of course, the buyers are China's multimillionaires or richer. Most are wealthy entrepreneurs or managers in the financial industry aged between 35 and 50. Family members of officials are also clients, although usually in secret.

A key factor driving these people to invest in overseas property currently is the rising uncertainty in the mainland property market. It now appears more risky to invest in property on the mainland, while the stable yuan exchange rate makes investing overseas more competitive and is hence a more attractive option.

Yes, Western property buyers invest mainly for retirement, holiday homes or for rental income. Many Chinese invest in overseas properties for migration purposes or for the sake of their child's education, even though the child might be only three years old at the moment.

There is great potential and the growth is sustainable. According to a recent research by the Hurun Research Institute, at the end of 2013, 1.09 million Chinese owned properties worth of 10 million yuan (HK$12.6 million yuan) or above. This group will grow by about 3.8 per cent annually for the time being. It is also forecast that over the next three years, families with capital and estates of more than 100 million yuan will increase by 4 per cent a year to nearly 10,000. For example, Barratt entered the Chinese market in late 2012. It sold about 200 flats in 2013, 400 in 2014, and expects to sell 500 this year. Guangzhou has dozens of agencies that sell overseas property, just like us.

We focus on selling one- or two-bedroom flats across Britain for between £300,000 (HK$3.5 million) and £600,000. Two-bedroom flats in the £400,000 range in central London are most popular with Chinese buyers. In North China, London agents such as Barratt have enjoyed great success with little advertising because that market has regarded Britain as one of their favourite migration destinations for years. In South China, people traditionally choose Australia, Canada or the United States. Right now, the London market has the greatest potential as more Chinese parents are starting to choose Britain for their children's education. Most parents prefer private schools, whose annual fees can run up to £35,000.

In terms of investment, I don't think they differ at all. One of the biggest differences might be their market acknowledgement of British, especially London, property. Buyers in Beijing and Shanghai appear to decide more quickly than those in the Pearl River Delta. A Beijing buyer usually does not disclose his background and takes only an hour or two to reach a decision, ordering three or more flats at a time. A factory owner in Guangdong, for example, might share his life details with you but could sit on a decision for months before buying a flat.

Now most rich Chinese families in the top urban centres - Beijing, Guangzhou, Shenzhen and Shanghai - have already invested abroad. Meanwhile, second-tier cities - the capitals of developing provinces - offer very good potential, like Fuzhou in Fujian , Wuhan in Hubei , Chengdu in Sichuan and Guiyang in Guizhou . We have 10 salesmen in my company. Our goal this year is to sell 30 flats in the Pearl River Delta region and 20 in the second-tier cities.

Financial controls on converting yuan to foreign currencies, for one. More importantly, since many famous international banks are not allowed to open branches in China, they normally cannot accept mainlanders' mortgage applications since the lender cannot access proof of an applicant's income.

This article appeared in the South China Morning Post print edition as: Searching for new homes away from home
Post