Centaline Group, one of Hong Kong’s leading property agencies, is turning its attention to family office services to find new growth opportunities in response to a downturn in the real estate market. Centaline Wealth Management, a division of the Centaline Group, aims to manage US$1 billion in assets for affluent clients within the next year, according to Kelly But, the founding partner of the family office division. The company plans to leverage its extensive real estate network to attract clients with assets ranging from US$3 million to US$5 million.
The family office and private wealth department, established last year, will offer services such as asset allocation and alternative investments. This strategic move comes as Centaline faces a decline in its primary business in both Hong Kong and mainland China due to the regional property slump. The company’s workforce has been reduced by approximately 67% to 20,000 employees compared to three to four years ago, and the number of outlets has halved to about 1,200.
Shih Wing-ching, co-founder of Centaline, noted that several mainland developers, including China Evergrande Group, owe around two billion yuan (S$370 million) in commission fees to Centaline, which is double the amount from August of the previous year. Consequently, the company has been unable to pay commissions to some staff, as these fees are typically disbursed after receiving payments from developers.
“We might not see immediate results from the new businesses, but we will work hard,” said Shih, estimating that the company’s Hong Kong operations have contracted by about 30%, with a 50% reduction in mainland China.
Centaline operates branches across mainland China, Hong Kong, and Macau, and is expanding into Singapore and Taiwan. However, it will face stiff competition in wealth management as banks and other service providers strengthen their presence in Asia.
According to a Deloitte survey, Hong Kong hosted over 2,700 single-family offices last year, following government efforts to enhance the city’s status as an Asian wealth hub. The city is also attracting wealthy Chinese by welcoming them, while rival Singapore is becoming more cautious with foreign funds.
