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5 tactics for working with wealthy Chinese real estate buyers
By Juwai, 19 February 2014
Xin Zhang is a typical Chinese billionaire.
Any real estate agent who wants to work with upper middle class or high net worth Chinese buyers should study her life story. Not every Chinese buyer will have US$3.6 billion like Zhang. But even those who are "merely rich," rather than being veritable billionaires, will share many of the beliefs and aspirations that also drive Zhang in the accumulation of her vast fortune.
The biggest foreign investor in New York
Not yet 50, and already in possession of a fortune of more than US$3.6 billion, Zhang is the biggest foreign investor in New York – and that’s saying something.
As a female Chinese billionaire, Zhang is far from alone. On the Forbes' recent list of self-made female billionaires, one quarter are from China or Hong Kong. Only six woman, however, rank higher than Zhang on that list. Her net worth is substantially greater than that of better known Donald Trump or Oprah Winfrey.
Zhang has spent more on Manhattan real estate in the last three years than any other international investor. In 2013, she led a US$1 billion purchase of 40% of Manhattan’s famous GM Building, a striking office tower overlooking Central Park.
But Zhang also favours residential real estate – she beat out Leonardo DiCaprio, a Saudi prince and Brad Pitt to obtain a pristine five-bedroom, classically inspired, 19th-century townhouse in Manhattan. There are pools both on the rooftop and in the basement, a spa on one of the four terraces, banisters handmade from bronze and leather, a gorgeous Italian marble façade, a wine cellar and ten-foot ceilings.
Billionaires who grew up hungry
Despite her affluent surroundings today, Zhang grew up poor, like most Chinese billionaires.
Born 1965 in Beijing, she suffered through Mao’s Cultural Revolution. From the age of 14, she lived with her mother in Hong Kong, where their home was really just a room big enough for their two bunk beds. To save for an education abroad, the teenage Zhang worked for five years in small garment and electronics factories.
By age 19, she had saved enough for airfare to London, where she began studying English at secretarial school – this was the first step on Zhang’s fast climb to billionaire-dom.
Some ultra high net worth Chinese who grew up poor, today compensate by spoiling their children, trying to ensure that their kids never want for anything. Zhang takes a different tack. She told CNN she is “very, very tight” with her children about money. She gives them no spending money, but even so she worries that their wealth will spoil them. “They never have extra money. But I think that still cannot compare to where we came [from]."
Zhang even insisted that one of her two sons get a job at McDonald's at the age of 14, the same age at which she herself starting working in a factory. He tried, but discovered he was too young and couldn't be hired.
A fortune in real estate
It is fitting that Zhang’s entrée into New York has been through real estate investments. She made her fortune as a residential real estate developer and today dedicates herself to commercial property development in China.
She gave up building residential buildings in China, due to excessive regulation. "Residential development has become very political,” she said.
"I think the policies are so distorted. Like someone who's sick, you've taken so much medicine that you've lost the sense of which one works and which one doesn't. That's a little bit like the real estate market in China.”
Her attitude is similar to that held by many wealthy Chinese. As their country develops and its economy matures, new opportunities present themselves and different business skills are needed.
Working with high net worth Chinese
The number of high net worth individuals like Zhang in China more than doubled between 2008 and 2012. These buyers often acquire multiple overseas properties. Some strictly serve as investments and others are for their own use or for family to use.
These buyers are motivated to buy property in other countries by lifestyle, their children's education, investment and immigration.
Here are five tactics for real estate agents who want to profit from working with these buyers:
- Customisation: Be ready to adjust the way you do things when you work with wealthy Chinese buyers. They have different expectations, types of experience and local knowledge than domestic buyers. Be polite, accept their culture and ways of communicating, and provide them with information in professionally translated Chinese.
- Education: It will pay off if you engage with high net worth Chinese by educating them about property investment in your country, region and local area. Property expos, private events, real estate tours, publications, online videos and social events are all excellent vehicles for building relationships. Don’t just promote your listings, but work to answer the questions that naturally arise when a person buys real estate in a new country. That could mean everything from investor visa programmes to buying and registering a car in your area.
- On-shoreing: Don’t just wait for Chinese buyers to arrive on your doorstep. Actively engage them before they even leave their own country. Try online advertising on Juwai.com, working with Juwai Event Services to attend Chinese property expos and attending events like Juwai.com’s China Agent Summit on 13 March to build relationships with Chinese agents who can provide buyer leads.
- Service Orientation: Build you relationship with Chinese buyers by looking out for opportunities to be useful. It could be as easy as sending them a local market report, or something more time consuming – such as taking them for a shopping trip in the best local stores while they are in town.
- Listing in China: If your property listings aren’t available in China, it will be hard for these potential buyers to see them. China subjects foreign websites to blocking and filtering, which means you can only count on websites like Juwai.com – which are hosted within China itself – to reliably and quickly load for your mainland Chinese buyers. Find out more about Juwai.com by registering here.
Understanding wealthy Chinese real estate investors: How many are there?