Google adwords produced my first serious enquiry. An exporter of Chinese goods, called, having seen an adwords link alongside some content in the Shanghai Daily News (as far as he could remember).
He had been involved in purchasing and refurbising upmarket apartments in Shanghai. He didn't know much about Zhuhai, although he was aware of Macau and its status. He asked some sensible questions, including the hardest one of all, which was about my own motivation and objectives.
There are actually a number of services that Freshfield/Herts Lettings could provide to a would-be investor in China:
- membership of a syndicate which pools funds to purchase a diversified portfolio of Chinese properties. This could be set up in a number of ways, but the cheapest and simplest would probably via a PRC national who held the properties in trust for members of the syndicate. Ideally the trustee would be a member of the syndicate and well-known to them. This could only work with a small, close-knit group: even the most carefully-drafted trust deed would offer only limited protection against a trustee who was determined to misbehave.
- access to an agency service which would faciltiate UK investors invest real estate in Zhuhai (and possibly elsewhere in Guangdong) . This would be a natural extension of my existing business, a letting agency, although it would extend to sourcing new properties which I do not do at the moment. My interest would in the fees I could earn. My preference would be for explicit, transparent fees paid by the client (investor) but I can see that there would be a pressure to share commission with the PRC-based agent handling the sale, and possibly the financing of it.
- shares in a property investment fund, probably structured as a Hong Kong registered company, which would be to invest in mainland properties. In this case Freshfield would charge a management charge with possibly some carried interest, private-equity style. This is the only service where the investment is geared without the investor having to take on debt personally.
I would very much welcome your reaction to these ideas, and in particular, an indication of which, in your view, would add the most value.
