US brokerage revises its approach to Hong Kong

HONG KONG: A failed attempt to enter Hong Kong's brokerage market has not deterred US property agency Intero Real Estate Services from seeking a foothold in the city to sell local properties.

In February this year, the Califorinia-based property agency opened for business in an office in the International Finance Centre.

But instead of selling Hong Kong homes, it will be using its new Hong Kong base to lure wealthy Chinese into buying homes in the United States and elsewhere.

"We don't have our eye on the local [Hong Kong] market," said Kenny Lo, general manager of Intero HK.

That was not the original intention, which was to seek a Hong Kong partner to operate under a franchise agreement and open agencies under the Intero brand, selling properties in Hong Kong. But the plan was called off after it failed to find a local partner.

With more than 60% of market share controlled by two local property agents — Centaline Property Agency and Midland Realty — muscling into Hong Kong's tightly held property brokerage market is not easy, noted Samson Law Lai-choi, who speaks from experience.

Centaline and Midland's businesses cover the entire residential spectrum, from mass housing to luxury, said Law.

Law last year secured a 25-year master franchise agreement to develop the Sotheby's brand in Hong Kong. He said Intero had approached him on the possibility of forming a partnership, but he finally picked Sotheby's instead.

"Everyone knows the name Sotheby's," Law said, but Intero was a company with a relatively short history.

Despite the failed attempt, Lo of Intero said the company still wanted to open a local brokerage in Hong Kong, but in the meantime would sell US and South Asian properties by aiming to tap buyers among affluent Chinese in Hong Kong.

"Hong Kong is an important market to promote the company's brand. We plan to organise five to six project launches a year," said Lo. "There are many properties in London and Australia being sold in Hong Kong, but not too many choices when it comes to other overseas properties. We have room to expand."

By the end of this month, the company will have teamed up with HSBC's US office to organise a seminar about US property market in Nanjing and Shanghai and this practice will continue.

Intero Real Estate Services was founded in 2002. With its fast expansion, the Intero family now includes over 1,800 agents in 40 offices in a number of countries such as the United States, the UK and Vietnam.

In January this year, the company signed a franchise agreement with partner to establish its brand in Shanghai. — SCMP