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Sinyi plots move to China market in expansion bid

Faced with dismal conditions in the local real estate market, Sinyi Realty Estate Inc (信義房屋) is leading the local charge into the Chinese property market with plans to open 100 franchise offices across the Strait within three years, company executives said yesterday.

Sinyi spokesman Chou Chuang-yun (周莊雲) told the Taipei Times yesterday that his company hopes to expand its current number of franchise operations in Shanghai to 15 from two by the end of this year.

"We're not going now just because the local market here is poor. It's to establish a good base for future expansion into other regions," Chou said.

Chou said Sinyi's US$500,000 investment in China has been approved by the government and is undertaken jointly with US realtor Coldwell Banker, which in 1999 authorized Sinyi as its legal representative for the Greater China region.

"The development of the China market will be both rapid and huge in the coming years," he said.

Sinyi entered the Shanghai market in 1993 and directly operates seven branches which will be combined into the company's franchise system.

Chou said while Sinyi is involved in all aspects of the property market in Shanghai, at present it is primarily focusing on office leasing segments.

According to Andrew Liu (劉學龍), Taiwan manager for CB Richard Ellis, strong competition in the Shanghai market from both local and foreign firms has forced Sinyi to change the direction of its business strategy.

"In Taiwan Sinyi focuses largely on residential business ... but right now in China they are more focused and active in commercial leasing," Liu said.

Sinyi's plans to expand in Shanghai come at a good juncture in the market's cycle.

A Q1 report by CB Richard Ellis, stated that: "Along with the continued rapid growth displayed by the municipal economy during the first quarter, the Shanghai office market continued to follow the positive trend first established a year ago.

"The Shanghai office market has already entered into an early stage of a positive phase within the current market cycle ... overall vacancy levels of prime office properties continued to contract over the past quarter while take-up persisted in being recorded at a relatively high level," the report said.

Liu says that many Taiwanese realtors have already moved into the China market and that more will likely follow.

"There will be few business opportunities in the local market so therefore they have been forced to move their focus to China," Liu said.

Liu said that the move was also due in large part to Taiwan investors and developers investing in real estate in China and particularly Shanghai.

Taiwanese investors in China will generally go through a Taiwanese real estate agent and Taiwanese realtors are counting on having a significant portion of their clients be their compatriots, Liu said.
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