Macdonald Realty’s Shanghai office is meeting the needs of its clients and bearing fruitful results
As seen in BCBusiness July 2015 issue.
As the demands of the BC real estate market change, realtors and their respective real estate agencies must react accordingly to stay in the game. For one agency, this meant thinking outside of the box and stepping out of its time zone.
When Macdonald Realty opened its office in Shanghai, China, last year, it was branded as “The Canadian Real Estate Investment Centre.” But Dan Scarrow, who manages the Shanghai office, says that his Chinese clients had their own words to describe it. Impressed with the office’s scope, they say that it covers “an entire dragon of services.”
Those services include residential resale, commercial sales and leasing, new development project marketing and property management. While American, Australian, New Zealand and European real estate companies had established offices in China, Macdonald Realty was the first company in China with a sole focus on Canadian real estate. The company decided to open the office as a response to their clients’ desire for better access to the Chinese market.
Scarrow is uniquely qualified to run the office. He has been working with Macdonald Realty for nearly 10 years, and has worked as an executive assistant for the CEO, and as a residential and a commercial agent. He is a born-and-bred Vancouverite, but he is half Taiwanese. “The upshot is that Mainland Chinese see me as a white Canadian, but I’m also able to communicate with them in Mandarin,” he says. “I guess you could say that, in China, I am an authoritative foreign curiosity and hence memorable.”
His company, says Scarrow, has several competitive advantages. “Our intimate knowledge of the market is what makes us uniquely valuable to investors here,” he says. “We are small enough to be agile, but big enough to provide a full range of brokerage, management and advisory services.”
Scarrow works with Chinese clients who are in the process of immigrating to Canada, with new Canadians and with pure investors. Those interested only in investment tend to look at new condos and commercial properties. “What resonates with investors in China is the perception of Canada as a safe and secure investment climate, in contrast with China’s robust, but volatile, environment,” says Scarrow.
In order to stand out in today’s highly competitive real estate market, Macdonald Realty has undertaken several innovative marketing strategies. As technology has made property information widely available to the public, Scarrow notes that the role of the real estate agent has shifted: from gatekeeper of information to interpreter and negotiator. To meet the demands of those roles, Macdonald Realty has been working with an outside training organization to offer all agents the exclusive Certified Negotiation Expert (CNE) designation. Macdonald Realty has also launched its own magazine called Macdonald Realty Luxury Homes, to help market its luxury home listings in Canada and in China. Produced by the company’s own in-house creative marketing team, the magazine has proven to be a hit.
But from his own experience, Scarrow says that the most important way for an agent to get ahead is to be a competent professional first. “Doing a fantastic job with one client will generate more long-term business than even the most successful email campaign,” he says. “Start with the people who know and trust you, do an unbelievable job for them and continue learning about how to be a professional from the good agents and managers around you.” Dan Scarrow manages Macdonald Realty’s Shanghai office sults just come a lot easier.”
This article was originally posted on BCBusiness, June 12th, 2015.
When Vancouver-based Macdonald Realty dispatched Dan Scarrow, the agency’s vice-president of corporate strategy, to China last March to investigate the feasibility of launching a branch office in Shanghai, the assignment was initially only going to be for four months.
A year later, Scarrow, a second-generation Chinese Canadian who is fluent in Mandarin, is still there. The Vancouver Sun reached Scarrow in Shanghai by phone last week to discuss his progress, objectives and challenges in building a bridge for residential and commercial real estate investment between China and British Columbia as the new managing director of Macdonald Realty’s Canadian Real Estate Investment Centre in Shanghai.
Q When you first were dispatched to Shanghai at this time last year, it was for a four-month assignment to investigate opening up a Macdonald Realty branch in China. Why are you still there?
A We actually have ended up opening up an office here. We have a representative office over here in Shanghai now doing project marketing and commercial and residential prospecting for our Vancouver and British Columbia offices. We’ve branded it as the Canadian Real Estate Investment Centre, so it’s offering a one-stop shop for Chinese investors looking toward anything to do with Canadian real estate, specifically B.C.
Q Why did Macdonald Realty want a presence in China?
A It was sort of two-fold. The first one is that Chinese investors are becoming a bigger and bigger part of our market — both on the residential side and the commercial side. And after our investigation over here we found that there are no other Canadian [real estate] companies over here in China that actively do this, so we would be the first one.
Q What’s been the biggest adjustment living in China for you personally?
A Shanghai is a pretty easy city for an expat to get used to. I think that the rest of China would be a much more difficult adjustment, but Shanghai itself is a pretty cosmopolitan city with a pretty global outlook and a pretty robust expat community. So it’s not as difficult. The challenge, I guess, that everyone talks about is the pollution aspect. They talk about it here the same way Vancouverites talk about the rain.
Q What’s your mandate in terms of building links between commercial real estate in B.C. and the Chinese market?
A Our main mandate is to promote B.C. commercial properties over here in China. I think we all acknowledge that China has been growing. It has created the fastest-growing wealthy and middle class in human history, so tapping into that market I think is going to be increasingly important for Canada and Canadian companies over the next decades.
Q What’s the most common question you hear from Chinese clients interested in investing in British Columbia’s commercial real estate?
A The most common question actually isn’t about real estate. It’s with what is happening in immigration. The biggest question is what is Canada’s current immigration policy and what will it be moving forward, just because there have been so many changes to Canada’s immigration policy in the last few years, and I think everyone is a little bit confused as to what it will be moving forward.
Q Any unwelcome surprises or challenges doing real estate business in China?
A Not really. It’s been interesting in the last year because there were the big changes to the immigration program — the investor immigrant program in the middle of last year and continuing until today. And also with the collapse of oil prices and the subsequent drop in the Canadian dollar. That’s been another thing we’ve had to deal with, but more in a positive sense from our investors’ point of view because now Canada’s real estate market is seen as even cheaper than it was prior to that change.
Q In a blog post last year you wrote that wealthy clients in China are more interested in placing their children and a portion of their wealth outside of China than they are in immigrating themselves. Why do you think that’s the case, if it still is the case?
A It still is the case. If you’re a wealthy Chinese individual it’s likely because you have a large business still in China. China does not recognize dual citizenship and it’s just more difficult for you to actively operate your business without Chinese citizenship. So a lot of people, they’re not willing to give up their business so they’re not willing to give up their Chinese passport either.
Q Which areas of Vancouver’s commercial real estate market are your Chinese clients eager to get involved in?
A For a lot of our clients it’s hotels. But it’s an education process as well, letting them know which asset classes are involved or available in B.C. Hotel investment is more of an active business, so while we have a lot of hotel operator clients who are interested in buying hotels, if they don’t have that kind of experience we like to talk to them about some of the other opportunities that might be available. Some of the hotter ones would be street-front retail with redevelopment potential. That goes very quickly for us. We probably have 15 very serious-type buyers that would snap up products like that immediately, but we can’t find enough product for them. It’s a lot of investment-type product that has income right now but has development potential in five to 10 years.
Q What’s the next step for your operations in China?
A Right now we’re working with a couple of developers to promote their projects over here [in China] and so we’re doing project marketing and then also working with our residential agents to make sure the listings that we have are exposed to the widest possible audience. And finally — obviously — exposure of the commercial real estate realm. I think that’s really the big push right now. A lot of investors have already bought a home for themselves in Vancouver and they’re looking for ways to diversify their investment portfolio in Canada, and really the promotion of the commercial real estate, and the education of those buyers, is our next step.
This article was originally posted on The Vancouver Sun, February 24th, 2015. Written by Evan Duggan.
Sales of high-end properties are on the upswing in the Vancouver region, spurring one of British Columbia’s leading real estate firms to search for wealthy buyers by setting up shop in China.
Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Ltd., said he has heard enough anecdotal evidence of well-heeled home buyers with roots in China to make it worthwhile to invest in a Shanghai office.
In February, Mr. Scarrow will start the first of two three-month assignments in 2014 in Shanghai. After his fact-finding mission, he plans to hire Mandarin-speaking staff in China to keep the overseas branch office going.
While real estate experts have estimated the proportion of foreign buyers in the Vancouver region’s housing market at only 1 to 3 per cent, Mr. Scarrow said if the statistics were to include recent immigrants with origins in China, the influence of rich Chinese buyers would be greater, especially on single-family detached homes in pockets of Vancouver’s West Side.
Most high-end transactions occur on Vancouver’s West Side and the Municipality of West Vancouver. In the luxury market, there were 644 properties that sold for $3-million or higher in the Vancouver area last year, up 47 per cent from 439 homes that traded hands in 2012, according to data compiled by Macdonald Realty. Of homes that sold last year, there were 148 that fetched at least $5-million, compared with 107 sales in that category in 2012.
Mr. Scarrow said it is hard to determine how many of those elite sales went to recent immigrants from China, noting that the ripple effect due to an influx of new money can easily be exaggerated. Still, he believes the proportion was significantly higher than 3 per cent last year.
“There isn’t this wave of offshore investors with no ties to Canada who are coming in to buy, but the genesis of their wealth is from mainland China,” said Mr. Scarrow, a Canadian who speaks Mandarin fluently. “Most of these people land in Canada first as investor-class immigrants.”
He dismisses tales circulating of wealthy offshore buyers snapping up Vancouver properties sight unseen as false, emphasizing that he will instead seek to nurture a market in which China-Canada family ties are crucial.
The 30-year-old Mr. Scarrow said that as a product of a mixed-race marriage, he is acutely aware that the issue of foreign shoppers is a sensitive one in British Columbia. “The perception among some sellers is that mainland Chinese money is driving the luxury real estate market here,” he said.
But Mr. Scarrow cautions homeowners against hiring real estate agents based only on ethnicity, stressing that the best representatives know Vancouver’s neighbourhoods well, no matter what their race.
Mr. Scarrow’s mother, Lynn Hsu, moved in 1979 from Taiwan to Vancouver. Ms. Hsu is the president and majority owner of Macdonald Realty, which has more than 1,000 real estate agents and staff across British Columbia. Her ex-husband, Peter Scarrow, is a lawyer who has worked in Asia for the past dozen years, including advising wealthy Chinese on Canadian immigration and tax rules.
Dan Scarrow said there will be opportunities to tap into the Chinese market during his stay in Shanghai. Besides seeking contacts who are interested in single-family residential properties, he will be on the lookout for investors in Vancouver’s commercial real estate market and also new condo projects.
Benchmark index prices, which strip out the most expensive properties, have jumped 17.3 per cent to $2.1-million for single-family detached houses over the past three years on the city’s West Side, according to the Real Estate Board of Greater Vancouver. By contrast, West Side prices have risen only 4 per cent for townhouses and 3.5 per cent for condos over the same period.
This article was originally posted on The Globe and Mail, Jan 19, 2014. Written by Brent Jang.
After 70 years in business in British Columbia, and much consideration and analysis, Macdonald Real Estate Group has decided to explore opening an office in China. To that end, my colleague, Dan Scarrow, our vice president of corporate strategy, left for Shanghai early in February.
In order to understand our rationale, it is first important to appreciate how Chinese investors have shaped the real estate market in Vancouver, B.C., where our company is headquartered.
Over the past three decades, Macdonald Real Estate Group has assisted thousands of Asian families and investors in real estate transactions in the Vancouver area and across western Canada. In the 1980s and ’90s, there were overlapping waves of Hong Kong and Taiwanese investment, and more recently we have seen the mainland China wave.
Our experience has given us the chance to develop a sizable network of Asian clients, both commercial and residential.
While the official percentage of foreign buyers in the Vancouver area is around 3 percent, Chinese clients make up a much higher proportion of certain segments of the market. The exact percentage is hard to pin down, but our research would indicate that Chinese families account for at least 50 percent of Vancouver home sales over $3 million, and our commercial division has put together dozens of major transactions with Chinese investors on a range of commercial real estate asset classes.
Asian clients are not arbitrarily choosing Vancouver as a destination for real estate investment. Our Chinese clients generally have close family and business ties to the areas in which they invest.
For example, aside from business considerations, the primary factor in shaping immigration-related real estate decisions for Chinese families will be proximity and availability of educational opportunities for the next generation.
Aside from business considerations, the primary factor in shaping immigration-related real estate decisions for Chinese families is educational opportunities for the next generation.””
That said, these clients often maintain a foothold in their country of origin, where they often have ongoing commercial interests.
If we open an office in Shanghai, we will be better able to serve our clients who are based in China, or who those spend significant time there. They will have somewhere to go to review documents, and get insight on real estate issues.
In addition, having a presence in China will give us another channel for promoting real estate opportunities.
I will be providing periodic updates to Inman as we go through our due diligence in Shanghai. Hopefully you can find something in our experience that is useful to you in your business, or at the very least you can enjoy watching the process unfold.
Jonathan Cooper is vice president of operations at Macdonald Real Estate Group (MREG). Based in Vancouver, British Columbia, MREG has 20 offices and 1,000 staff and Realtors, and offers a full range of real estate services across the province, including residential and commercial brokerage, property and strata management, and project marketing.
This article was originally posted on Inman News, Feb 21, 2014.
View the original post at Inman News
For more information contact Macdonald Realty at 1-877-278-3888