- Building relationships is critical to success in the Chinese market.
- Having a physical presence in Shanghai enables progressive, face-to-face follow-up with business partners and clients.
- Persistence is key.
At the beginning of 2015, Macdonald Real Estate Group (MREG) officially opened its first stand-alone office in China. Located in Shanghai’s bustling Jing’an district, this office is branded the MREG Canadian Real Estate Investment Centre.
It is the result of 13 months of on-the-ground due diligence by my colleague, Dan Scarrow, who in February 2014 moved to China to head up our operations there.
In a broader sense, MREG’s Shanghai office is part of a long history of bilateral economic and cultural exchange between China and western Canada. Vancouver has had a sizable Chinese population since before 1900.
In the late 1960s, there was a significant influx of investment from Hong Kong businesspeople who looked to metro Vancouver as an accessible destination for offshore investment.
As discussed in a previous article, the ’80s and ’90s saw overlapping waves of Hong Kong and Taiwanese investment, and more recently, we have seen a surge in activity from mainland China.
Opening a new office in a foreign country will never be without its challenges, and MREG’s first 200 days of full operations in China have been both hectic and rewarding.
Two key observations stand out from our experience so far: First, as we had already learned from our long experience with Asian clients in Canada, building relationships is critical to success in the Chinese market.
Having a physical presence in Shanghai enables progressive, face-to-face follow-up with business partners and clients.
The second lesson we have learned: Persistence is key. We have done dozens and dozens of presentations, trade shows and other client events across China, and the successes we have had flowed from this day-in and day-out networking.
We have put together nearly 20 transactions in China on behalf of our clients. We have also built numerous bridges for Chinese investors to other related real estate consultancy services.
For example, Toronto’s Baker Real Estate has recently joined as an affiliate of the Canadian Real Estate Investment Centre.
Our Shanghai office started as a one-man show, but we have now expanded to six full-time staff. China is a huge country, so we needed to increase our horsepower to further the conversation with a broader base of clients.
As has been widely reported by the financial press, the Chinese economy is in a state of flux. The high degree of uncertainty surrounding the stock market has diminished the liquidity of both businesses and private investors.
It has also heightened the appeal of foreign real estate as an investment and wealth protection vehicle. The weak Canadian dollar makes our real estate more attractive to offshore parties, but this is offset — at least to some extent — by the recent sharp devaluation of the yuan.
Regardless of the ebb and flow of financial markets, our goal moving forward is to continue to deepen our engagement with Chinese consumers — including the growing middle class.
By doing so, we will facilitate a broader awareness of investment opportunities and strengthen our region’s long-standing bilateral ties.