Valuers in demand as China booms

Foreign companies seek professional services as they cash in on a market with huge potential

Increasing numbers of multinationals are making a foray into China to tap the tremendous market potential, fuelling demand for professional valuation services.

With its fast-growing economy and admission to the World Trade Organisation (WTO), the mainland has become a magnet for foreign investment.

Overseas companies are eager to make a quick entry to take a slice of the world's largest growth market, according to Chiu Kam-kuen, executive director of valuation and advisory department for North Asia at DTZ Debenham Tie Leung.

Their expansion often involved property purchase, joint venture with mainland partners as well as mergers and acquisitions. All these activities required the support of quality professional valuation advice and assessment, Mr Chiu said.

These international companies were keen to first gain a foothold in the mainland market through joint ventures and then gradually look for further business opportunities, he said.

'In choosing partners, they must know the company value of the potential joint venture allies. This is leading to an increasing demand for valuation services, including real estate and capital valuation services,' he said.

With the growing opportunities, competition among valuation consultancies is intensifying, and mainland firms are posing a strong challenge.

About 150 valuation companies have been granted national real estate valuation licences, and most of them are mainland firms.

Mr Chiu said DTZ was the only international company to secure the licence, after demonstrating strong capability in meeting the authority's stringent requirements.

'The company's valuation services are recognised in 660 cities across the country.'

DTZ has been expanding its presence in the mainland since setting up shop in Shenzhen in 1993.

Mr Chiu said many companies wishing to invest in China were not familiar with the mainland market, and they needed the help of international valuation consultancies.

'Valuation consultancies with a global perspective know the working practice of international firms. They will provide much-needed services through their comprehensive business network on the mainland.'

Mr Chiu said DTZ had an edge over its mainland counterparts because of its strong international client base.

DTZ's headquarters in Hong Kong keeps a close watch on the needs and requirements of multinationals. Intensive staff training is undertaken regularly to cope with market demand.

'With globalisation, there is a need to increase services level and to broaden international perspective,' Mr Chiu said.

DTZ's existing clients are mainly Hong Kong and overseas banks, Hong Kong property developers, listed companies, and multinationals seeking professional advice. The consultancy intends to gradually expand its valuation services to more mainland firms.

Companies are expanding their business all over the world, and it is important to build up a strong business network to facilitate growth, he said.

DTZ's greater China team has more than 150 experts providing comprehensive services to clients in the mainland, Hong Kong and Taiwan.

The company's four main offices in Beijing, Shanghai, Guangzhou and Shenzhen employ more than 40 real estate valuation consultants, covering services related to plant and machinery, hotels, ports, residential property and business valuation.

'Banks, logistics, car and oil companies are fast-growing businesses, so their demands for our services will be increasing too,' Mr Chiu said.

He said DTZ would continue to enhance its national valuation team with a stronger focus on the increasing joint ventures as well as mergers and acquisitions by overseas firms.

'We will also develop our local client base and reinforce our strength in the capital market.'

Morning Star Property Consultants, developer of the massive Morning Star Villa development in Zhongshan, has sought both Hong Kong and mainland valuation expertise.

Assistant general manager Ho Ting-yiu said Hong Kong valuation companies provided services of international standard. Mainland consultancies offered more competitive pricing in their services and they were familiar with the market.

On property sales, Morning Star has witnessed increasing buying interest, following the introduction of more favourable trade and economic policies in the mainland. Mr Ho said the Closer Economic Partnership Arrangement and China's WTO entry had had a positive influence on the property market, encouraging the movement of people, goods and transport.

'More people who used to buy their mainland property for vacation purposes will now choose to live there because of business or work. From last year, we have seen increasing numbers of Taiwanese settle in Zhongshan city because of business,' he said.

Morning Star Villa features 5,000 units ranging in size from 50 square metres to 370 sq m, including low-rise apartments and detached houses. The occupancy rate is 95 per cent, with most buyers from Hong Kong.

Morning Star built the first phase of the development in 1992 and brought the concept of hotel management into the mainland's residential property management. Riding on the success of Morning Star Villa, the developer has launched another project, Morning Star Plaza, in the same city.