Friday Letter Hong Kong sevens

Seven quips from our annual PERE Summit: Asia, which took place this week against a backdrop of China growth doubts and the Eurozone crisis.

You may be aware that next month, the USA, Canada, England and France compete against China, Japan, Australia and New Zealand in rugby’s Hong Kong Sevens international tournament. While less physcial, of course, there were country versus country matters to resolve this week too as PERE hosted its own event in Hong Kong, the PERE Summit: Asia, where 350-plus delegates descended on The Conrad Hotel.

Whether it was the recent question marks about China’s economic prospects or the fallout from the ongoing Eurozone crisis, participants on stage had few topics to laugh about. Nonetheless, that didn’t stop the two-day event from providing a hearty level of competition and humour as participants shared their wisdom.

It’s easy to forget that trade conferences can (and arguably should) be just as much entertaining as they are informative and this week's summit was a well received reminder of that. So, in our version of Hong Kong Sevens, here are seven choice quotes extracted from our comprehensively packed on-stage happenings.

1. Economist-cum-sleuth

“If I wasn’t an economist, I’d loved to have become a detective. I certainly feel like a detective when it comes to looking at China, since uncovering the simplest piece of information can turn out to be an entire investigation,” said Diana Choyleva, director of Lombard Street Research, revealing how following China’s economy has unearthed her true calling.

2. What’s wrong with 5 percent?

“Tell the finance minister in Greece or in Spain that his GDP growth will only be 5 percent and see how happy he is,” said John Saunders, Asia chief executive officer at MGPA, showing he wasn’t bothered by Choyleva’s prediction that China’s real GDP growth over the coming decade would, on average, be about half of its recent 10 percent highs.

3. Tax party over

“It’s the dirty little secret of China: this whole business of selling off-shore and rolling up tax liabilities. I can think of one building in Shanghai that is now on owner number seven and the rolled-up tax liability for that must be absolutely horrific. I think that party is going to come to an end.” MGPA’s Saunders lifts the lid on the off-shore tax planning game of certain real estate investors in China.

4. Suitcase investors

“When there aren’t many suitcase investors, that’s the time to come in and deploy capital,” said Vikas Chimakurthy, director at Kotak Investment Advisors, explaining that the best time to invest capital in India is when those who only have short-term strategies for the country have left.

5. Toxic, us?

“By the way, radiation and contamination in Hong Kong is actually slightly higher than Tokyo, and you guys aren’t even close to a nuclear power station – yours is naturally higher.” Koichiro Obu, head of research for Japan and Korea at RREEF Real Estate, defends his country’s honour to a largely Hong Kong-based audience.

6. Push, push

“I’d like to compare it to giving birth. When you’ve gone through all the pain of putting together a PPM, the side letters are the last wave of contractions. It just doesn’t matter anymore.” Rachel Renucci-Tan, chief executive of TAN-EU Capital, challenges a predominantly male audience to empathise.

7. Pitch imperfect

“You may find you’re pitching to someone just to find out at the end of the day that they can’t even do real estate because they’re subject to policy restrictions.” William Shaw, director at Composition Capital Partners, warns those GPs intent on flying to Korea that being granted a meeting doesn’t automatically mean the organisation is actually an active investor in the real estate asset class.

For more on the event, see April’s issue of PERE magazine.