Home sweet home

Ark International helps expats find more than just housing in Shanghai - the company's thorough after-sales service helps them find peace of mind as well

----By Jody Braverman

Kate Whitton's been an expat her entire life. Growing up abroad, she learned a lot about the frustrations of being foreign in a foreign land and has built her company based on that experience. Thus, providing good customer service is the foundation of the real estate leasing company the Briton set up with her fianc¨Ĥe, Dima Lorenz, and two other silent partners in Shanghai a year-and-a-half ago. Catering to expats with higher budgets, Ark International, which has offices in Shanghai and Moscow, has a store of unique properties to suit every taste - from downtown colonial to suburban compound living. Orientation programs and extensive after-sales service help newcomers and old hands alike navigate the headaches and complexities of renting a property in Shanghai.

Why did you decide to open a real estate company?

My partners and I have been in real estate or customer service prior to setting up Ark, and we thought that it was about time to set up on our own and stop working for other people. There are a lot of companies dealing with real estate in Shanghai; some of them are absolutely excellent, there's no doubt about it, but there are plenty who promise perhaps more than they can deliver. We realised that there was definitely a market for detail-orientated customer service.

What were the difficulties involved in setting up a business in Shanghai?

We used a local specialist that helped us work through the process of setting up the business here in Shanghai. At the beginning we considered working together with a local partner under a JV format, but there is always the problem of mutual trust, so we made the decision to go on our own and set up as a WFOE. In terms of regulations and difficulties, I think the biggest problem was timeline. The necessary permits are not quick to come by and one really has to invest five or six months before getting started. We were lucky we commenced with the procedures before we were offered our first client and brought our first employees on board. Timeline was frustrating because it kept on extending; first we were told it would take us two months, then a few months, and then we had to wait a little more. I think if you set up as a JV, these processes are less time consuming.

How did you develop your business model to fit Shanghai?

We set up with a very strong local team of agents that all had experience - and we subsequently have only hired people with experience. In the future we will probably bring some more trainees on board, but right now we know that experience is key. We always make sure that there is transparency in our business, and that there are no sneaky deals. By keeping everything very open and making sure all details are in the contracts, I think people really begin to trust us and realise that we are benefiting both parties, landlords and tenants. It's a very strong customer-orientated business model. We do spend a lot of time on after-sales service, which may take time away from developing new business, but will definitely benefit us in the long run. We are expanding our after-sales team at the moment - and actually hiring new people to have a larger, dedicated after-sales team. We realise that this is something very important in this market, even more so than in other places. This definitely is a business model strongpoint compared to other companies.

Why don't you deal with sales?

It's important to know where your skills are. At the beginning in particular, our strength was with residential leasing and because of our experience in this sector we said 'let's focus on something we know we can deliver.' We were thinking about moving on to the buying and selling relatively soon, but with the most recent regulations coming in we decided to just expand geographically rather than go into buying and selling.

Do the recent regulations concerning expats buying property mean more business for you? Will people stop buying property? I think it will definitely discourage a certain number of expats from buying, but I also believe that foreigners that really want to buy will do so - despite the new regulations. I think if people have been here a long time, and know the market, they will not be discouraged by any new regulations and will stick to their decisions to invest in China. They may be slowing down with their choices - they might wait for another six months - but I imagine they will still buy. However the ones who have been tentative about buying will swap and just rent instead - which of course is good for our business.

What advice do you give your clients on where to live?

When people are new to Shanghai we generally recommend them to be in new, modern apartments. If they are interested we will of course show them our colonial properties - we like our clients to have a good variety - but we're also very honest with them. Colonial properties, even if they are beautifully renovated, can have a few more problems than new properties. They're not big problems, but if you're new to China, it can be more of a stressful environment than anticipated. Very often when people have been here for a year and we are housing them for the second time, they tell us that they feel they are "ready" for a colonial place, because they realise how much character they have.

Where do you see the market going?

You can see over the past five years how prices have gone up and up and up, but also how the quality of the properties has improved greatly. We see more and more properties with radiators, floor heating, central A/C, double-glazed windows and high quality appliances and fittings. You can also still find some places with simple renovations - and for very good money. At the end of the day you never know how the market will develop in China, but I do see that the government is trying to keep a hold on growth and make sure the market is not going to burst. I believe they have got a stronghold on the situation.

Have you noticed a drop off in the number of expats being stationed here?

I would say no. I think however that there is a trend that more people are coming on local packages. Shanghai used to be a hardship post - even if it never was, it was seen as a hardship post - whereas now everyone wants to get here, everyone is talking about how hot Shanghai is. Because of that I think it's changing in certain ways; the people who are here are here because they want to be here, and thus many of them are accepting more local packages.

How has this affected your business?

I guess in some ways that's not a hugely positive thing because, of course, local packages can mean lower housing budgets. But that isn't true for everybody - there are still a huge amount of companies here that are bringing over employees with appropriate budgets, especially when they are more experienced and moving with their family. At the end of the day it does not matter if this is a hardship post or not - if the company requests a whole family to move, they will need to provide a decent housing allowance. There are also a lot of new companies setting-up and those employees will need a comfortable and secure place while they're here. So for the time being we are doing well with new clients and I do not think there is any lack of new business in the short run. In 10 years from now it may be different - once Shanghai becomes not vaguely a hardship post of any sort, and rivals Hong Kong or Singapore in terms of housing standards.