Over the 2017-18 winter break, 10 second-year real estate and corporate finance MBA students traveled to Hong Kong on a five-day study tour. Despite the 14-hour time difference, the students arrived eager to explore the autonomous territory, meet UW alums, and learn what developers, investment managers, and brokers had to say about the Asia Pacific market.
On the first day of the trip, the students traveled to Lantau Island to visit Tian Tan Buddha and the Po Lin Monastery. A Buddhist pilgrimage site, the 112-foot bronze "Big Buddha" is located on the highest point of the island, next to the active Po Lin Monastery. The City Gallery of Hong Kong followed, and was a great introduction into how Hong Kong has changed and plans to continue to grow over the next 30 years. Following that the group visited Hysan Place, a 40-story retail and office mixed-use tower that provides panoramic harbor and mountain views. It is also the first Hong Kong building that has achieved pre-certification of the highest Platinum level under LEED of the U.S. Green Building Council. In the evening the students did cultural tours around the city, including the Mongkok Night Market, the Happy Valley Race Track, Victoria Peak and Langham Place.
The first day of meetings began with a tour to ANREV (Asian Association for Investors in Non-listed Real Estate Vehicles). Alan Dalgleish, CEO, provided the students with data and talked them through how ANREV collects and reports on fund activity through the Pacific. Following ANREV was a visit of Swire Properties where senior manager Ada Lee presented on real estate development in Hong Kong. There the group learned that Hong Kong has a very unique real estate market with the most expensive land prices in the world, at over $8,000 USD per sq. ft. Additionally, re-development of old residential buildings is extremely difficult as each individual residential unit is separately owned - requiring developers to acquire at least 70% of the units before bringing a court led preceding to buy out the remaining hold outs. The process can take over 15 years. The group was welcomed for lunch at Berwin Leighton Paisner, LLP while listening to the firm's presentation on real estate law in Hong Kong. Students were able to take a deep dive into the changing landscape of Asian real estate law presented by Andrew MacGeoch, Head of Asia Real Estate, Hospitality and Leisure at the firm. The group visited the Citi group for their last visit of the day. The host first gave the group a tour of the office building, then talked about debt structuring in Asia, and current state of the economy in Hong Kong.
The group kicked off the second day of meetings with Invesco LTD, the direct real estate investment arm of the global finance firm. There, the group was presented an overview of Asian market trends by fund manager Phinex Wong, as well as a closer look at recent transactions undertaken in some major cities - including Hong Kong, Singapore, Seoul and Tokyo. Following the visit, the group had lunch with five outstanding alumni. The afternoon visit began with Gaw Capital, a private equity firm specializes in adding strategic value to underutilized real estate through redesigning and repositioning. Students learned about the company’s organization and fund structure, past deals, and deal process. An analyst of the company gave a presentation and “opened our minds with the chainman’s unique, yet extremely aggressive, investment strategy and his passions that is transferred to the staff through his vision,” said Holly Do, second-year Corporate Finance MBA student. The group’s last visit of the day was with the Canadian Pension Plan Investment Board where students met with Guy Fulton, the Managing Director for Real Estate Investments. Guy walked the students through CPPIB’s portfolio and gave them a deeper look at some of their real estate investments. The students found their multi-level industrial buildings and investment structures to be quite different and fascinating.
On Wednesday morning of the trip, the MBA Group had the opportunity to visit and meet with Ingrid Cheh of Jones Lang LaSalle at their Hong Kong office headquarters. Ingrid, a member of the Hong Kong JLL Research department, along with two of her associates, led a presentation and discussion on various recent real estate trends within the Hong Kong real estate market. These topics included the rise of e-commerce and how it may affect the booming retail and mall market in Hong Kong; the rise of co-working and co-living in Hong Kong in commercial and residential space; and the residential market landscape. The topic of highest interest included the concepts of co-living and co-working in Hong Kong due to how expensive the city is - it was very interesting to see examples of how small of a space some Hong Kong citizens live in due to extremely high housing prices. “The presentation was extremely informative, and we sincerely appreciated the opportunity to meet with Ingrid and her team during our visit to Hong Kong”, said Grady Capobianco, second-year Real Estate MBA Student. The day concluded with a Jockey Club Happy Valley Recourse.
On the last day of the trip, the students visited Macau, the “Las Vegas of China”. There the group visited many lavish casinos including a guided tour of Galaxy Entertainment Group. Galaxy Macau casino, with over 3,500 hotel rooms and a 97.5% average daily occupancy, is a famous family-friendly destination vacation location. The Galaxy Macau boasted world class shopping, dining, gambling, and entertainment that rivals Las Vegas. According to second-year MBA Vince Moita, “When looking at the numbers, it is clear that the Galaxy Macau itself commands a larger share of the world’s gambling market than any individual Casino in Las Vegas, positioning itself as a world leader in gambling destinations.”
Cultural visits followed, and the day ended with a group dinner. Feasting on a varied menu served as a great official end to the trip, before boarding the TurboJet back to Hong Kong Island, and flying back to the U.S. the next day.
Real estate MBAs would like to thank trip leader Arif Qureshi, alumni, and the Graaskamp Center for Real Estate for this amazing opportunity and immersive learning experience.