Sav­ills CEO Jeremy Helsby sees B&R cre­at­ing ter­rific East-West syn­ergy in realty

China Daily (Hong Kong) - - BUSINESS - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

On a rainy af­ter­noon in Shang­hai, Jeremy Helsby asks for English break­fast tea to re­fresh him­self. Equally re­fresh­ing is the po­ten­tial of China’s prop­erty in­dus­try, said the Lon­don-based realty vet­eran.

As CEO of Sav­ills plc, a lead­ing real estate ser­vices provider, Helsby trav­els more fre­quently than ever to China these days. The UK and China markets may be thou­sands of miles apart, in dif­fer­ent time zones and at var­i­ous stages of de­vel­op­ment, but they are con­nected closely by in­vest­ments and ser­vices.

So, the two markets will ben­e­fit from col­lab­o­ra­tion, in­creas­ing in­vest­ment and mu­tual learn­ing, he said.

For real estate play­ers to sur­vive in hard times and thrive amid fast growth, what’s needed is vi­sion­ary long-term in­vest­ment based on re­search of fun­da­men­tals. The play­ers con­cerned need to “add value” to prop­er­ties and land. That could help boost un­der­stand­ing and cre­ate good op­por­tu­ni­ties in markets across the world, he said.

Glob­ally as well as in China, Sav­ills com­petes with JLL, Cush­man & Wake­field, CBRE and Col­liers, all in­ter­na­tional realty ser­vices providers. In China, Sav­ills at­taches great im­por­tance to ser­vic­ing local clients and ex­pand­ing fast in cen­tral and western parts of China where pop­u­la­tion, avail­abil­ity of hu­man re­sources and in­fra­struc­ture are grow­ing at a fast clip.

Es­tab­lished in 1855, Sav­ills en­tered the China mar­ket in 1995. By June 2017, it had served tens of thou­sands of clients, and cov­ered 30 mil­lion square me­ters, in­clud­ing China’s tallest build­ing, the Shang­hai Tower.

Since Helsby also serves as di­rec­tor of Sav­ills Asia, he knows the China mar­ket in­side out; and he sees op­por­tu­ni­ties to “add value” to land and prop­er­ties. He senses one such op­por­tu­nity in the Belt and Road Ini­tia­tive.

Play­ers in UK fi­nan­cial ser­vices can con­trib­ute mas­sive in­vest­ment to in­fra­struc­ture projects that are com­ing up in coun­tries and re­gions par­tic­i­pat­ing in the Ini­tia­tive, he said.

Use of ren­minbi in Lon­don is more than in any other Euro­pean city. Given that Lon­don is a fi­nan­cial hub, the UK’s fi­nan­cial ser­vices providers will play a key role, he said.

“Many con­struc­tion firms with ex­per­tise in the most com­pli­cated projects are based in Lon­don, and are likely to get in­volved to sup­port the Belt and Road projects,” he said.

When in­fra­struc­ture projects like roads and rail­ways be­come op­er­a­tional, costs will fall for both im­porters and ex­porters, and trade will be­come more ac­tive. Con­se­quently, the value of prop­er­ties in coun­tries and re­gions par­tic­i­pat­ing in the Belt and Road Ini­tia­tive will ap­pre­ci­ate, he said.

Ac­cord­ing to Sav­ills data, com­mer­cial prop­erty markets have largely sta­bi­lized af­ter the Brexit ref­er­en­dum in June 2016. While oc­cu­pa­tional un­cer­tainty has risen, there is lit­tle sign that this is af­fect­ing in­vestor con­fi­dence, with £13 bil­lion ($14.56 bil­lion) in­vested in the UK com­mer­cial prop­erty in the first quar­ter of this year.

Some 56 per­cent of it was from foreign in­vestors, in­clud­ing those from China who spent more than £3.3 bil­lion so far this year. Chi­nese in­vestors have taken a shine to Lon­don of­fices, where the prop­erty mar­ket tends to be volatile; but other cities in the UK are less volatile as they are less ex­posed to the im­pact of Brexit.

So, it is pos­si­ble that Chi­nese in­vestors may find prop­erty in re­gional cities of the UK at­trac­tive in the fu­ture. Gen­er­ally, yields in Europe are still quite at­trac­tive for Chi­nese in­vestors, and re­turns on in­vest­ment, par­tic­u­larly in the UK, are strong, av­er­ag­ing 6.3 per­cent per year over the last 20 years, he said.

Cur­rency ex­change rate is another rea­son that en­cour­ages Chi­nese in­vestors to look at qual­ity prop­er­ties in the UK, as the pound dropped some 10 per­cent against the ren­minbi in the past two years.

Be­sides in­creas­ing in­vest­ment over­seas, Chi­nese in­vestors are seek­ing to add value to prop­er­ties in their home mar­ket, through new mod­els of de­vel­op­ment and man­age­ment, said Helsby.

Such trends catch his at­ten­tion im­me­di­ately be­cause he is sen­si­tive to them, hav­ing joined Sav­ills’ Lon­don West End of­fice in 1980 at the age of 25. He has seen the shrink­ing of sup­ply of new land for de­vel­op­ment; he is aware of ris­ing home prices; he knows more young res­i­dents are turn­ing from home­buy­ers to ten­ants.

In this con­text, China is not very dif­fer­ent, Helsby said. He be­lieves rein­vest­ment in cities is the right choice and key to con­tin­ued suc­cess. “Busi­nesses, work­ers and res­i­dents are be­com­ing more de­mand­ing of in­fra­struc­ture and the en­vi­ron­ment, and with ris­ing global competition, the best cities will be those that reg­u­larly rein­vent them­selves.”

For in­stance, Lon­don’s fo­cus is on in­fra­struc­ture im­prove­ment, the de­vel­op­ment of cross-rail, the Ox­ford-Cam­bridge Cor­ri­dor. These projects at­tract com­pa­nies from sim­i­lar sec­tors, re­sult­ing in a clus­ter of sup­ply chain and value chain, sig­nif­i­cantly chang­ing the hous­ing scene in Lon­don.

Working pro­fes­sion­als can take ad­van­tage of con­ve­nient in­ter­city rail­way and bus ser­vices to com­mute be­tween work­places in big cities and homes in sub­ur­ban or satel­lite cities. More res­i­dents are choos­ing to rent in­stead of buy­ing apart­ments. De­velop- ers and man­agers of prop­er­ties are re­spond­ing to such changes, he said.

“Strong trans­port links and de­vel­op­ment of the local econ­omy are crit­i­cal. A city with a long-term plan for de­vel­op­ment of a spe­cific in­dus­try will at­tract peo­ple and com­pa­nies, such as tech and bio­sciences in Cam­bridge and me­dia in Bris­tol,” he said.

Big cities such as Bei­jing and Shang­hai are in­tro­duc­ing stricter pop­u­la­tion con­trol, and China’s ur­ban­iza­tion drive is likely to fo­cus more on sec­on­dand third-tier cities where costs are lower and an in­creas­ing num­ber of eco­nomic op­por­tu­ni­ties are emerg­ing.

size of prop­erty that Sav­ills has helped sell in China from 1995 to June this year

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