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Harcourts entering world’s largest market - China

Harcourts entering world’s largest market - China

17 March 2008: Harcourts is entering the People’s Republic of China, the world’s most populous country, following an agreement between Harcourts International Limited (HIL) and a group of Chinese businessmen, HIL Executive Director Paul Wright announced today.

The recently signed Master Licence Agreement will soon see a head office and four real estate offices operating in Shanghai and rapid expansion subsequently, Mr Wright says.

“This new venture is a huge and exciting step for Harcourts with the potential to expose our brand to over a billion people and to bring some positive spin-offs for the New Zealand market too,” he says.

“China is a large and dynamic market and to sign an agreement that is expected to see hundreds of Harcourts offices offering our full range of services in that vast market is a significant move towards our goal of being one of the world’s leading real estate franchise groups.”

Already the largest real estate group in New Zealand and the fastest growing real estate group in Australia, the new agreement, which is hot on the heels of another in Zambia, means Harcourts is now operating seven countries: New Zealand, Australia, Fiji, Indonesia, Singapore, Zambia and China.

As Mr Wright explains, the latest agreement has a number of benefits for New Zealand.

“It’s already resulted in the creation of some additional jobs in our New Zealand-based corporate team in order to support this growth, while further down the track we expect our presence in China will help to generate more enquiries about New Zealand properties, particularly from ex-pats looking to invest or return here.”

Mr Wright explains that the agreement was brokered by Sean Zhao, who during his New Zealand university education some years ago studied Harcourts as part of his Masters thesis on franchising.

Mr Zhao says that he was so impressed by the Harcourts brand, the Harcourts franchise model and all of the systems and training that are part of it that he set out to get the joint venture business partners he needed in order to enter into a master franchise agreement with Harcourts.

“During my research I was able to get a good insight into Harcourts’ successful franchise model and based on what I learned I was keen to work towards establishing Harcourts back home in China.”

Along with two Chinese investors - a leading property and luxury hotel developer in Shanghai and a New Zealand-based businessman - Mr Zhao has formed a joint venture company to partner with Harcourts.

Currently he is focused on setting up a head office/support centre in Shanghai and four offices – each intended to offer residential and commercial real estate services including property management. The introduction of ‘value-added services’ such a mortgage broking is planned for the future, he says.

Over the next six to 12 months both Mr Wright and Mr Zhao are predicting “rapid expansion” initially in Shanghai, which with a population of more than 25 million is the largest city in China and one of the largest cities in the world.

“As people would expect in such a populous country the volume of real estate transactions in China is huge, and as their economy continues to grow that volume is expected to climb - so the potential for Harcourts as it expands in Shanghai and then beyond is substantial,” Mr Wright says.

Mr Zhao says that while there are some large American real estate brands already operating in China, there is still considerable potential for the Harcourts franchise model.

“The market is currently dominated by independently owned and operated real estate companies, who increasingly are looking for good brands with good systems, technology, training and management – which Harcourts is well positioned to deliver. Further, both vendors and buyers are also looking for something more, and The Harcourts Way, which is the foundation of Harcourts’ service, provides what they want too.”

Mr Wright says one of the biggest challenges of expanding into China has been the amount of translation required. “However, that has also been one of the most exciting aspects, as it is a sign we’re achieving our goal of being a multi-national, multi-lingual global company.”

ENDS

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