Heads to roll as curbs bite HK property agents; largest property agency Centaline sent letters to a staggering 1,400 of its agents – more than one-third of the total – warning they could be fired

Heads to roll as curbs bite property agents
Karen Chiu
Thursday, July 11, 2013
Property agents may face another round of layoffs as major agencies launch fresh efforts to slash costs.

Centaline Property Agency yesterday sent letters to a staggering 1,400 of its agents – more than one-third of the total – warning they could be fired as they have made deals worth less than HK$60,000 in the past six months. Agents at Centaline told The Standard that the firm sends letters to underperforming staff every June and December.

“We have sent letters to 1,241 sales agents and 216 managers,” said Louis Chan Wing-kit, Centaline’s chief executive of the residential division, which has more than 4,000 agents.

But Centaline founder Shih Wing-ching, who is no longer in charge of daily operations, said the group would not put itself at risk by laying off more than one-third of its agents under the current bearish market.

Shih expects Centaline to continue to see losses for a third straight month in July. Several million dollars have been lost during May-June.

In a related development, Ricacorp Properties, which has also been in the red for the past few months, may lay off around 150 staff soon.

“Losses were seen in March, May and June after the latest cooling curbs imposed in February,” said Willy Liu Wai-keung, chief executive of Ricacorp.

“Losses reached more than HK$10 million in May.”

So the agency has to cut resources and manpower. For instance, it may not renew rental contracts on outlets costing more than HK$300,000 per month. “There will be a natural outflow of workers at every branch,” Liu added.

A Ricacorp district director revealed that he has received orders from Liu to lay off about 10 agents per district. The firm separates the SAR into 15 districts.

The government doubled the stamp duty for second-home buyers and non-residential property buyers from February 23.

The measure has helped to drag down home transactions to 4,616 deals last month, from the 9,633 in February.

In the commercial property market, Ricacorp said 10 districts, excluding Central, saw a fall in transactions by up to 35 percent.

Separately, Kerry Properties (0683) relaunched five units at its Bayview project in To Kwa Wan after buyers forfeited their downpayment when they failed to carry on with the transaction.

Kerry raised prices of the units by up to 2.49 percent to HK$7.67 million-HK$19.9 million.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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