HONG KONG – One of Hong Kong’s biggest property agencies is expanding its family office services, as it looks for new avenues of growth amid a downturn in real estate.

Centaline Wealth Management, the subsidiary of Centaline Group, is seeking to manage US$1 billion (S$1.3 billion) in assets on behalf of rich clients within 12 months, Ms Kelly But, the founding partner of the family office division, said during an interview in Hong Kong on July 31.

The company is trying to use its real estate network to tap clients who have US$3 million to US$5 million in assets, Ms But said.

The company’s family office and private wealth department, which was set up in 2023, will provide services including asset allocation and alternative investment.

The decision comes as Centaline is seeing a shrinkage in its core business across Hong Kong and China due to the region’s property slump. The company’s staff has dropped by 67 per cent to 20,000 people, down from three to four years ago. Its outlet numbers have also halved to about 1,200.

Several developers from China, including China Evergrande Group, owe about 2 billion yuan (S$370 million) in commission fees to Centaline, said Mr Shih Wing Ching, who co-founded Centaline in 1978. That’s double the amount in August 2023.

The company was unable to pay commissions to some of its staff since these fees were typically handed out after the firm received money from developers.

“We might not see immediate results from the new businesses, but we will work hard,” said Mr Shih, who estimates that the company’s business in Hong Kong has shrunk about 30 per cent, and halved in China.

Centaline has branches across China, Hong Kong and Macau. It has also been expanding its footprint in Singapore and Taiwan.

Centaline will be facing strong competition in wealth management, as banks and other service providers beef up operations in Asia.

Hong Kong had more than 2,700 single-family offices based in it in 2023, following its government’s push to bolster the city’s status as an Asian wealth hub, according to a Deloitte survey. The city is also winning back wealthy Chinese people by rolling out the red carpet for the rich while rival Singapore scrutinises foreign money.

Sources: The Straits Times