austcham news Issue 176

The Australian Chamber of Commerce Hong Kong and Macau 香港及澳門澳洲商會

PROPERTY AND REAL ESTATE EDITION ISSUE 176, 2015

Chinese Outward Real Estate Investment Globally and into Australia: After the Initial Wave, What’s Next?

P.12

Australia Focus Australian Government: The New Ministry

P.16

Industry Insights Thought leadership: Turn and face the change – P.19 Hot or Not? Today’s Job Market and Who is in Demand – P.20

Hong Kong Focus Property is Prime www.austcham.com.hk

Contents

austcham news issue 176 03 Chamber Chatter 06 Cover Story Chinese Outward Real Estate Investment Globally and into Australia: After the Initial Wave, What’s Next?

12 Australia Focus - Australian Government: The New Ministry

- Explainer: What’s Really Keeping Young and First Home Buyers Out of the Housing Market

Published By: The Australian Chamber of Commerce in Hong Kong and Macau Room 301-302, 3/F, Lucky Building 39 Wellington Street, Central, Hong Kong Tel: +852 2522 5054 Email: austcham@austcham.com.hk Editorial Committee: Drew Waters Karen Wu Claire Reaburn

16 Hong Kong Focus Property is Prime

Advertising: Karen Wu Email: karen.wu@austcham.com.hk

19 Industry Insights - Thought leadership: Turn and face the change - Hot or Not? Today’s Job Market and Who is in Demand

CONNEC T • ENGAGE • REPRESENT

The Australian Chamber of Commerce in Hong Kong and Macau has more than 1,500 members from some 500 companies doing business here.

It’s the largest Australian business grouping outside the country and the second largest of 28 International Chambers of Commerce in Hong Kong. The AustCham mission is: To promote & represent Australian business & values while enabling members to connect, engage & grow bilateral relationships.

22 AustCham ANZ Mentor Program

- A Chat with mentors and protégés - The Art of Social Media

24 Committees in Action

24 Events Update

16 Oct - Efficient Repatriation and Tax Planning Seminar; Macau Mingler 20 Nov - ACCESS China Forum

27 Corporate Feature

28 Small Business Corner

Disclaimer:

29 Corporate Profile THE PULSE

30 On The Scene Follow us on: Facebook Twitter LinkedIn

austcham news Online version

The views expressed in this publication are not necessarily those of the Australian Chamber of Commerce in Hong Kong and Macau, its members or officers. The Australian Chamber of Commerce in Hong Kong and Macau takes no responsibility for the contents of any article or advertisement, makes no representation as to its accuracy or completeness, and expressly disclaims and liability for any loss however arising from or in reliance upon the whole or any part of this publication.

Copyright © 2015 The Australian Chamber of Commerce in Hong Kong and Macau

2 • austcham news | issue 176

Chamber Chatter

Chairman's Column Property is the focus of this month’s AustCham News.

Property in Hong Kong is expensive. Property in Australia is expensive too, though the fall in the Australian dollar is making it more affordable for expats to buy in Australia and there remains a big price gap between the two markets. A lot of ink is dedicated to the issues of price, value, size, and quality of accommodation in both Hong Kong and in Australia. So I won’t address those issues directly. Instead, I shall note a few points about the importance of cities and how Australia stacks up.

Overall, Australia‘s cities do not compare favourably in terms of city level competitiveness under the analysis performed by either the Chinese Academy of Social Sciences Global Urban Competitiveness Index or the Globalization and World Cities Study Group and Network.

Australia’s cities lag behind the world leaders and the leaders in the Asia-Pacific region. The Australian city that scores best in city competitiveness or world city measures, Sydney, turns out not to play as important a role in the international economy or for international companies as some of the aggregate results would suggest. It essentially is a centre for managing Australia and New Zealand and while is able to generate sufficient knowledge locally to carry out that task, it is not for the most part able to generate knowledge sufficient to influence Asia-Pacific or global operations significantly.

The position of Australia’s cities is due in part to the fact that Australia has a moderately sized economy, moderately sized population, and is distant from other countries. Cities tend to manage flows of goods, services, finance, and people. Large countries with widely dispersed small populations, particularly those far from large markets, tend to perform these functions at much lower scale than cities in larger countries with denser populations, or that are next to larger countries with whom they trade and interact on other dimensions.

Australia does not have the scale of scope sufficient to house a city like New York, London, or Shanghai. While it is not possible to change the scale of Australia or its economy substantially in the medium term, it is possible to overcome some of the internal barriers that have prevented Australia’s cities from reaching their full potential.

While Australian cities are modern cities that handle the service requirements of an advanced and growing economy, that is different from being able to get ahead of the curve internationally when it comes to the knowledge economy or in internationalising Australian companies. These efforts require more advanced skill sets and more extensive international networks. The ability of Australia’s leading cities to play those important roles at this time is in question. This does not mean that Australia’s key cities cannot become more competitive.

It is the case, however, that Australia is likely to rely more on innovation and on innovative ways for becoming more competitive at a city level than on scale. It is also the case that, given moderate size and distance from large markets, Australia will have to be better than other countries at planning, managing, and connecting its cities, within the country and to the rest of the world, if its cities are to contribute as much as we might hope to national competitiveness.

Many AustCham members operate in the property sector, and are involved in creating better cities. Some of those members have contributed to this issue of AustCham News. They are well positioned to offer wise counsel both in Australia and in Hong Kong on how to improve the standard of living through the smart development of cities and property.

I hope that you will connect with the Chamber this month in some way, and that you will continue to share your views on how best the Chamber can serve you.

Richard Petty chairman@austcham.com.hk

issue 176 | austcham news

•3

Chamber Chatter

W

hether you are an enthusiastic property investor or, like a lot of expats, an accidental landlord, I do hope some of the insights presented in this edition will be of interest to you. With a fluctuating Aussie Dollar floating everyone’s mortgages at the moment, and the US Federal Reserve flirting with an interest rate lift, there currently appears to be plenty of opportunities to make the most of your property portfolio. For those of us with long standing investments in the Sydney market, things look very good indeed, but I am sensitive to those who are trying to enter the market and the difficulties that presents.

Additionally, with a new Prime Minister in place and a new Cabinet selected, there appears to be some more room for movement in markets across the country.

The property market in centres outside of Sydney, however, appears to be noticeably more accessible, and opportunities exist across the property spectrum.

The price of commercial and domestic property in Hong Kong, on the other hand, has long been a topic of discussion both within the local investors and the large expat population. The rising rental requirements may influence the competitiveness of Hong Kong to attract talented individuals or organisations within

Across My Desk the Innovation space, which the Government is keen to promote widely. This may influence the success of this programme, and potentially influence any future initiatives to attract new talent to Hong Kong, or attract back those Hong Kong nationals currently living or studying overseas.

I have received some very enthusiastic responses from our committee profiles in the last AustCham News.

I encourage your involvement in these highly active groups within the Chamber, and am very happy to speak to any of you about your possible engagement. My participation in all of the Committees' activities awards me with a great deal of insight into the industry and sector specific issues, and the opportunities of forming sound advocacy and involvement within business sectors across Hong Kong and Australia.

With property in mind, I can’t help but think of the huge numbers of dispossessed people flooding across Europe in search of a home in a safe and progressive environment. I do hope we, as people with a great degree of stability, can resolve the housing issues this presents and that those without can find the security they seek.

Drew Waters Chief Executive

Support Dress Casual Day 2015!

T

he Community Chest first introduced the idea to dress casual on a working day to raise funds for charity to Hong Kong in 1993.

Last year, Dress Casual Day has successfully raised over HK$19.5 million for The Community Chest with the generous support of over 360,000 participants from about 1,100 organisations, schools and government departments. All donations have been passed on in full, without any deduction, to enhance the social welfare services supported by The Community Chest of Hong Kong.

By donating HK$60 or more, participants can put on the Dress Casual Day stickers and dress down to work on Thursday, 8 October 2015. For those who have to wear uniform, you can also put on a Dress Casual Day sticker to show your support to the needy.

Community Corner

For more details, please visit Chest’s website http://www.commchest. org/filemanager/uploadfiles/ event2/dcd2015/en/ or contact to Chest office at 2599 6124 or by email to dress@commchest.org.

AustCham is a non-profit organisation and provides this space free of charge to other, selected non-profits or charities.

4 • austcham news | issue 176

Happy Wedding!

Former AustCham CE Kirsty Boazman recently married Paul Gunnell, a British pilot, aboard HK's Aqua Luna junk.

All best wishes to the beautiful couple!

A Letter from Canberra

A

bout one million Australians live abroad and of that million, more than 90,000 are based in Hong Kong.

Australians are drawn to Hong Kong for financial and business opportunities, its location within Asia, its lifestyle and its strong expatriate community.

And increasingly, many Australians are involved in start-ups.

The latest Digital Evolution Index, which rates a country's readiness for digital growth, lists Hong Kong in the “standout category”.

Meanwhile, Australia is listed as a “stall-out" country.

Australia's start-up ecosystem, which should be designed to match serious investors with smart innovators, is not working as well as it could.

And as a result, talented Australians are moving abroad to Hong Kong, Singapore or the Silicon Valley, to launch their businesses.

But the Federal Opposition has a plan to boost Australia's start-up ecosystem – a plan that puts infrastructure, education, small business, science and technology, innovation and start-ups at the centre of our vision.

Our plan identifies the skills that will be needed by Australia’s future leaders – skills in science, technology, engineering and mathematics.

Our plan will invest in: • Digital technologies and computer science • Coding in every primary and secondary school in Australia

• Writing off the university debt of 100,000 STEM students • Encouraging more women to study, teach and work in STEM fields • Reducing the small business company tax rate from 30 to 25 per cent • Working with the banks and finance industry to establish a partial guarantee scheme, StartUp Finance, to help more Australians convert their great ideas into good businesses, and • Establishing a new $500 million Smart Investment Fund to partner with venture capitalists and licensed fund managers to co-invest in early stage and high potential companies.

We want to build beyond the mining boom to capitalise on the imaginative, caring, productive and adaptive Australian people.

And we want to encourage home our talented expatriates.

Gai Brodtmann MP, Federal Member for Canberra and Co-Convenor of Parliamentary Hong Kong Friendship Group

The HUB Hong Kong The Bill Crews Foundation Limited (operating as The HUB Hong Kong) has been an AustCham member since 2014 and is a registered Hong Kong Charity with over 1,500 members. The charity is an initiative of Rev. Bill Crews in Australia and has been established with the substantial support of the Rotary Club of Kowloon North.

Its mission is to help children living at a disadvantage, both economically and socially. One of their feature projects, CHOOSE HOPE DREAM BIG, is where the HUB kids to pick their dream job and the Hub will take them to visit an appropriate work place where they can see behind the scenes. So far they have visited Queen Elizabeth Hospital Accident & Emergency Department and the kitchens of The Holiday Inn Golden Mile, with a monthly schedule of visits lined up.

Citibank Hong Kong also picked the HUB to partner with them on their Citi Global Community Day, the generous donations received

from the Bank and their guests are funding the above Project through 2015 for the charity.

The HUB’s goal is to help the over 200,000 children who are living below the poverty line in Hong Kong. To be one of the helping hand, you can join their main annual fundraising event, The HUB Hong Kong Gala Ball 2015, which will be held on Friday 23rd October at the Grand Hyatt Hotel. For more details please visit www.thehubhk.org

Community Corner

issue 176 | austcham news

•5

Cover Story

Chinese Outward Real Estate Investment Globally and into Australia:

After the Initial Wave, What’s Next?

- By Knight Frank

T

here has been a tremendous surge in Chinese outward investment in overseas real estate in recent years. What started as sovereign funds making exploratory investments has proliferated into investment sprees by Chinese developers, banks, ultra high net worth individuals (UHNWIs) and institutional investors such as insurance companies.

6 • austcham news | issue 176

This surge has been fuelled by a combination of push and pull factors, with a number of key domestic economic and policy variables contributing. One of the most powerful drivers has been the continued consolidation of China’s residential real estate market.

Fierce domestic competition, combined with government curbs on home purchases and rising borrowing costs over the past two years, has led to developers actively looking elsewhere for new opportunities.

Government incentives, such as the relaxation of real estate investment regulations for insurance companies have also resulted in billions of dollars in extra funding for overseas investment.

One of the push factors for outward investment comes from the slowing economic growth and consolidation of China’s residential market. As a result of rampant construction, vacant residential floor space increased by over 80 percent since 2010. It is estimated that existing inventory nationwide will take at least two years to absorb.

This oversupply has sparked cut-throat competition amongst developers, which has helped fuel buyers’ expectations of further price cuts. China property prices began falling during the second half of 2014 and have continued to fall into 2015. In February 2015, 66 of the 70 major Chinese cities recorded house price falls month-on-month, compared to February 2014, when only four cities saw a decline (see Figure 1). This downward trend has improved slightly from the worst point in October 2014, when 69 of the 70 cities recorded house price declines, which was the highest percentage since 2010.

Despite recent cuts to lending rates and the Reserve Requirement Ratio (RRR), in addition to the PBoC/Ministry of Housing and Urban-Rural Development (MOHURD) relaxing mortgage down payments, we expect property prices to remain under further pressure in 2015. Prices are unlikely to rebound while developers continue to clear inventory and pull back on new projects. While this remains the

case, we believe this will impact on developers’ future investment strategies, making offshore expansion a viable option over at least the short to medium term.

Another major push comes from some significant easing of overseas investment policies. For example, in late 2013 the outward investment approval threshold was raised from USD 100 million to USD 1 billion and in October 2014, the Ministry of Commerce removed prior approval for most foreign investment. The total assets of China’s insurance industry doubled over the past five years to RMB 9.6 trillion (USD 1.6 trillion) as at October 2014. By 2020, authorities estimate that the Chinese insurance industry will accumulate a further RMB 20 trillion worth of premiums, tripling the current pool size.

Meanwhile, the attractiveness of mature gateway markets in the UK, US and Australia is “pulling” capital out of China, providing quality products and higher yield returns with diversification benefits and assisting institutions and developers build their brand internationally.

There are a number of pull factors at play fuelling investment in overseas markets: • As these investors and developers already have extensive domestic exposure, offshore investments help them diversify risk into markets that offer better returns and lower funding costs. Funding costs in Shanghai and Beijing are very high, notwithstanding recent cuts, often at above 8 percent. In contrast, funding costs can be as low as 4 percent in Australia and an easing cycle is underway.

• Deep, liquid and transparent markets with scale – clarity of rules and regulations.

• The quality of life, weather, clean air and world class education institutions all act as a magnet to Chinese developers and migrants alike.

Figure 1: 66 out of 70 cities saw house prices decline in February Monthly residential price change in 70 major Chinese cities

Sources: National Bureau of Statistics, Knight Frank issue 176 | austcham news

•7

Cover Story • Overseas acquisitions help Chinese institutions build their brands internationally.

• Owner occupiers (eg. big banks) use investments to help manage their future occupation costs. Banks such as CCB, Bank of China, Agricultural Bank of China and Commercial Bank of China have all been active in the commercial market globally over the past year.

liquidity, total Chinese real estate investment volume in these two cities outstripped both London and New York in 2014.

China’s outward investment into real estate Targeting gateway cities in mature markets, such as Australia

Australia has recorded exponential growth in investment over the past few years, culminating in just over USD 4 billion invested into the country by Chinese investors, across both commercial and development sites. This has exceeded the total Chinese inbound real estate investment which occurred over the prior 5 years combined (2009-2013).

As a result, the total value of Chinese outward commercial real estate investment skyrocketed from USD 0.6 billion in 2009 to USD 16.9 billion in 2014. Over USD 7.8 billion has transacted in the first four months of 2015. If this activity was to continue, 2015 is likely to be another record year for Chinese outward investment, both globally and into Australia, with the potential for more than USD 20 billion transacting.

China and Australia signed a Declaration of Intent for a Free Trade Agreement (FTA) on 17 November 2014, which raised the threshold for private, non-state-owned investment from China in non-sensitive sectors (such as property) to go to the Foreign Investment Review Board from AUD 248 million to AUD 1.08 billion. The FTA is expected to accelerate the flow of Chinese investment funds into the Australian property market.

So far the majority of the Chinese outward investment has been focused in gateway cities of Australia, the US and the UK. In 2014 Australia has seen the strongest growth in inbound real estate investment from China, with particular focus on Sydney and Melbourne.

Somewhat dichotomously the Federal Government has proposed changes to the foreign investment framework of private residences in Australia, announced as part of an “options paper” released on 27 February 2015.

Chinese high net worth investors and developers are looking to new destinations offering discounts on prime property such as Miami in the US; and in Australia, Brisbane, the Gold Coast, Adelaide and regional suburbs of NSW and Victoria will start to gain more traction.

Figure 2: Chinese real estate investment into the gateway cities

Sources: Knight Frank, RCA NB date excludes residential dwellings and multi-family Chinese real estate investment activity into Australia The gateway cities of Australia, namely Sydney and Melbourne, have been the most active markets for Chinese investors. With their relative geographic proximity, relatively higher yields, market stability and

8 • austcham news | issue 176

This may impact Chinese commercial investment flows. However, even if implemented in their entirety, it is unlikely to deter the large scale development and investment into commercial and residential markets.

For many wealthy Chinese, the risk of buying property in unfamiliar overseas markets such as Australia can be offset by buying projects offered by Chinese developers. This provides a sense of both familiarity and pride. However, our recent conversations with several pioneering

Chinese developers revealed that they are increasingly realising the need not just to cater for Chinese buyers, but to tailor project design elements and marketing strategies to the broader local markets.

against the Renminbi. On the flip side, this devaluation now favours any Chinese investors who buy into this and any other residential schemes.

They are no longer distinguishing buyers by nationality or relying primarily on demand from Chinese buyers. Robust local sales conditions have become one of their most commonly stated criteria for project screening. They aim to expand and leverage their brand identity overseas and to take advantage of this demand. Chinese developers, however, have the added advantage of being able to attract a significant pool of Chinese buyers, who often purchase off-plan, which helps to de-risk their development projects.

The stronger buying power of the Chinese and the weaker AUD will undoubtedly continue to support capital inflow. With the potential for further interest rate cuts in Australia over the remainder of 2015, coupled with a seemingly more entrenched US recovery leading to interest rates rising there in 2015, the AUD will remain under downward pressure.

A few major Chinese developers have already begun aggressively expanding into Australia. For example, Greenland has invested heavily into Australian development projects, tapping predominately into cities such as Sydney and Melbourne. Dalian Wanda Group, one of China’s largest mixed-use developers, is developing major hotel and residential projects in Sydney and the Gold Coast.

Currency play Since the end of 2007 and the onset of the GFC, the Renminbi (RMB) has appreciated considerably against a basket of major currencies, including 37 percent against the British Pound, 38 percent against the Euro, 15 percent against the US dollar and 26 percent against the Australian dollar. This has largely strengthened the purchasing power of Chinese investors, as overseas investment has become relatively cheaper. Many Chinese investors see this as a good opportunity to acquire foreign assets.

In the face of a cooling Chinese economy, RMB appreciation is expected to slow down in the coming years. Currency fluctuation is a doubleedged sword for Chinese investors. Since Greenland’s acquisition of their Melbourne site, the Australian dollar has depreciated roughly 18 percent

After the initial wave: what’s next?

The emergence of new fourth-wave of investors The first wave of Chinese capital outflow saw sovereign wealth funds, banks and private funds investing in core, trophy assets with examples including CIC and Bright Ruby Group acquiring core office assets in the Sydney CBD. Large developers followed, looking to diversify with an overseas presence. Currently, the third wave of equity investors and insurance firms are seeking core, value-add and yield-driven opportunities.

A new group of entities is quickly emerging as a fourth wave of capital outflow. This group constitutes not only big-name companies, but also UHNWIs, small- to mid-cap SOEs, and smaller, private developers. UHNWIs are exploring Australian investment opportunities mainly for secured income, capital appreciation, risk diversification, personal interest and to link with the strong education sector. Their investment strategies are far ranging, and they are open to different asset classes, with interests ranging from smaller shopping centres, such as the Campsie Centre, to offices such as 299 Elizabeth Street in the Sydney CBD, residential units and lifestyle properties.

Figure 3: AUD / RMB Exchange Rate – last 10 years

Sources: RBA, Knight Frank issue 176 | austcham news

•9

Cover Story

The introduction of the Significant Investor Visa (SIV) scheme in late 2012 intended to target the migration of high net-worth individuals to Australia and required an investment of at least AUD 5 million into complying investments in Australia for a minimum of four years before becoming eligible for a permanent visa. This has predominately been taken up by Chinese investors. This process was refined during 2014/15, with a Premium Investor Visa (PIV), offering a more expeditious, 12 month pathway to permanent residency for those meeting an AUD 15 million threshold and had formally introduced on 1 July 2015. This is another driver of increased capital flow into Australia more broadly from UHNWIs over the course of 2015/16.

Amongst the big-cap players, only four of the top ten Chinese insurance companies have made offshore investments so far, although the remaining six are considering overseas expansion.

Sunshine Insurance Group’s purchase of the Sheraton on the Park Hotel in Sydney for a record AUD 463 million in November 2014 was followed up by acquiring the Baccarat Hotel in Manhattan, New York for circa USD 230 million.

Chinese developers, however, have been more aggressive, with eight of the top ten players having already made offshore investments, seven of which have been active in Australia, and other developers are contemplating such a move. Greenland Group, one of Shanghai’s largest state-owned enterprises, has purchased numerous development sites in Sydney’s CBD and other metropolitan markets in Sydney and Melbourne. Other developers currently actively developing

10 • austcham news | issue 176

product include Country Garden, Chiwayland, Bridgehill, Aqualand, Golden Age, JQZ, R&F Properties, Golden Horse and Dalian Wanda (Wanda One). We expect to see more debuts from these companies and other private developers in the coming years.

Increasingly, we will also see small- to mid-cap SOEs and private developers actively seeking different options in small- to medium-scale development opportunities in core and non-core markets in Australia.

Given their relative lack of international exposure, their efforts to evaluate their overseas strategy and growth targets will follow a steep learning curve. One of their challenges in gaining market entry is that they typically take a longer period to learn about the market and carry out due diligence, given their corporate structure and scale. Partnering with trusted property and tax/financial advisors, providing local expertise and long-term professional support is critical in the process.

Where to invest next?

After heavy investment in prime office buildings and subsequent yield compression in gateway cities, Chinese investors have begun to look increasingly at opportunities in other key cities and other property sectors and importantly in suburban locations in metropolitan Sydney, Brisbane and Melbourne, not just within the CBD and fringe markets.

Whereas investors traditionally targeted the core office and residential development sector, they are now also targeting a more diversified group of real estate assets, from hotels and leisure to industrial to student accommodation. Brisbane and the Gold Coast have begun to capture more residential development interest from Chinese investors

and developers. There has been increasing activity in non-core areas of Brisbane, such as Newstead and Fortitude Valley, and this is expected to broaden to more metropolitan sites and to the Gold Coast, where Wanda has co-invested in an AUD 1 billion beachfront site. These markets are underpriced relative to Sydney and Melbourne, and we expect Chinese developers to continue to seek entry to these markets.

Adelaide and more satellite or regional suburbs of NSW and Victoria will start to gain traction/interest from Chinese and we should see some stronger price growth occur also.

In the commercial sector, retail and hotels will start to garner more interest following relatively subdued activity over the past few years relative to office and residential development sites.

Risks: Chinese market conditions and Australian policy intervention There is an expectation that Chinese investors and developers will continue to expand into real estate markets overseas and Australia’s major gateway cities have been the greatest beneficiary of this over the past year. As the Chinese market continues to underperform, we expect to see active overseas expansion by these firms. Given the distinctive policy-driven nature of the Chinese market, however, we should equally be aware of the risk of policy reversals over time.

Despite China relaxing government restrictions and easing monetary policy, Chinese house prices have continued to slide, and an early rebound in the sector is unlikely. An accelerated worsening of the Chinese market may be a double-edged sword. While we may see more players in a relatively strong financial position sustain their overseas investments and in fact continue to seek safe-haven markets

like Australia, we may also see some cash-strapped developers and investors finding it difficult to continue their expansion efforts, creating problems such as distressed properties in the host countries.

In Australia, housing prices have risen by about 8 percent nationally in Australia over the past year and closer to 14 percent in Sydney, driven by rising investor demand. The Reserve Bank of Australia recently stressed the importance of maintaining rigorous standards on loans to property investors and flagged macro-prudential intervention. This is being watched closely, as will a formal policy on the foreign investment framework, where the ‘options paper’ was put out for community feedback, however the proposed changes need to be legislated. The Government will introduce legislation into Parliament from August 2015 with the intention that the reforms will commence on 1 December 2015.

The Australian Government is proposing the introduction of fees to be levied on all foreign investment applications. For residential properties valued at AUD 1 million or less, foreign investors are likely to pay a fee of AUD 5,000. Higher fees will apply to more expensive residential properties, as well as business, agriculture and commercial property applications. The exact fee structure for properties above AUD 1 million has not been formalised, nor has information relating to any discount for multiple applications.

Source: Knight Frank. The analysis was first published in KPMG Australia and The University of Sydney China Studies Centre’s Demystifying Chinese Investment in Australia report.

For full report please go to: www.demystifyingchina.com.au

AustCham on Social!

CONNECT · ENGAGE · REPRESENT

Follow us for latest chamber news, events coverage and more on our social media platform!

Facebook

LinkedIn

Twitter

Flickr

Instagram

Google Plus

The Australian Chamber of Commerce in Hong Kong and Macau Room 301-302, 3/F Lucky Building, 39 Wellington Street, Central, Hong Kong T E

+852 2522 5054 austcham@austcham.com.hk

F +852 2877 0860 W www.austcham.com.hk

© 2015 THE AUSTRALIAN CHAMBER OF COMMERCE IN HONG KONG AND MACAU

issue 176 | austcham news

• 11

Cover Story Australia Focus

Australian Government: The New Ministry Malcolm Turnbull was sworn in as the 29th Prime Minister of Australia on 15 September 2015.

Mr Turnbull was elected to Federal Parliament as the Member for Wentworth in 2004. Since entering public life, Mr Turnbull has held a number of parliamentary positions including Shadow Treasurer, Parliamentary Secretary to the Prime Minister with responsibility for national water policy and Minister for Environment and Water Resources.

He was Leader of the Opposition from 16 September 2008 to 1 December 2009 and was later Shadow Minister for Communications and Broadband. Most recently, Mr Turnbull was Minister for Communications from 18 September 2013 to 14 September 2015.

Here are the members of the new Government Ministry*.

Minister for Foreign Affairs: Julie Bishop

Prime Minister: Malcolm Turnbull

Deputy Prime Minister; Minister for Infrastructure and Regional Development: Warren Truss

Treasurer: Scott Morrison

12 • austcham news | issue 176

Attorney-General: George Brandis QC

Minister for Finance: Mathias Cormann

Minister for Education and Training: Simon Birmingham

Minister for Trade and Investment: Andrew Robb

Minister for Women; Minister for Employment; Minister Assisting the Prime Minister for the Public Service: Michaelia Cash

Minister for Tourism and International Education: Richard Colbeck

Minister for Immigration and Border Protection: Peter Dutton

Minister for Communications; Minister for the Arts; Minister Assisting the Prime Minister for Digital Government: Mitch Fifield

Minister for Resources, Energy and Northern Australia (Minister for Territories, Local Government and Major Projects): Joshua Frydenberg

Minister for the Environment: Greg Hunt

Minister for Agriculture and Water Resources: Barnaby Joyce

Minister for Health and Sport: Sussan Ley

Minister for Small Business; Assistant Treasurer: Kelly O’Dwyer

Minister for Defence: Marise Payne

Minister for Social Services: Christian Porter

*For full list please check http://www.dpmc.gov.au/pmc/parliamentary-information Minister for Industry, Innovation and Science: Christopher Pyne

Minister for Indigenous Affairs: Nigel Scullion issue 176 | austcham news

• 13

Cover Story Australia Focus

Explainer: What’s Really Keeping Young and First Home Buyers Out of the Housing Market - Judith Yates, Honorary Associate Professor at University of Sydney

T

he current parliamentary inquiry into home ownership1 is in the midst of public hearings, questioning, among other things, the decline in home ownership among younger Australians.

From the 1990s, younger households were additionally constrained by the burden of education debt and deterred from home ownership by the implementation of compulsory superannuation which slowed down earnings growth.

This, however, is not a recent issue. For a long time young people have found it difficult to purchase their first home. Home ownership rates for households aged 25-34 began to decline close to 40 years ago; declines for those aged 35-44 followed a decade later.

As inflation and nominal interest rates fell throughout the 1990s, financial liberalisation contributed to an increase in the availability and reduction in the cost of housing finance. This, along with associated changes in lending criteria, disproportionately benefited high income households, most of whom were already established home owners.

Declines have been most dramatic among low to moderate income households; only younger households in the top quintile of the household income distribution have been (relatively) protected.

A 40-year problem These declines date back to social, demographic and economic changes that began up to 40 years ago. Social change in the 1970s saw the number of both single adult and dual income households increase. This resulted in increasing disparities in household incomes. The increasing numbers of high income households increased housing demand and triggered pressures on the housing market that began to squeeze out lower income households.

These pressures have been maintained by ongoing household income inequality, which has been increasing in Australia since the mid-1980s2, compounded by growing earnings inequality and the impacts of uneven economic growth.

The squeeze on lower income households was intensified during the 1980s by high inflation and high nominal interest rates that limited borrowing capacity and created significant deposit gaps for those already facing income constraints.

The willingness of established households to invest in both owner-occupied housing and investor housing was fuelled by changes in our tax system that made housing an extremely attractive investment. Tax benefits for owner-occupiers increased in 1985 when owner-occupied housing was exempted from the newly introduced capital gains tax. For housing investors (whether negatively or positively geared), benefits arose from the asymmetric treatment of income and expense. These tax benefits increased in 1999 for debt financed investors prepared to speculate on rising real house prices.

Demand pressures from established households in the past two decades (readily seen in housing finance data3) have reinforced ongoing pressures on urban land markets from population growth.

Declines in agriculture and manufacturing and the rise of the services sector have led to an increasingly urbanised population with jobs being concentrated in the centres of our capital cities.

Increased demand has contributed to an increase in, and a steepening of, land price gradients in these cities. This is partly a result of the innate shortage of centrally located land in areas where job concentration is greatest, partly in response to state government strategic policies encouraging infill development, and

1. http://www.aph.gov.au/HomeOwnership 2. https://theconversation.com/senate-report-shows-why-australia-needs-to-talk-about-inequality-36121 3. http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0

14 • austcham news | issue 176

partly in response to the inadequate investment in, and cost of, transport infrastructure.

In other words, increasing land values in urban locations are an inevitable outcome of the combined impact of: • the pressure of income and population growth; • structural change which results in increasing urbanisation and concentration of (knowledge-based) employment in its central locations; • a failure to invest in rapid-transit transport infrastructure that facilitates cost-effective access to employment and essential services.

Quick fix solutions to the housing affordability problems that have led to declining home ownership rates often look to land release and urban planning policies. These might ease supply shortages driven by a growing population, but they are less likely to work when price growth is coming from increasing demand for bigger and better located dwellings. This demand is driven both by economic growth and by increasing inequality.

• our system of property rights that ensures those who do own land are able to act as rent-seekers by expropriating for their own the increase in land values not of their own making.

These institutional arrangements reinforce existing housing and wealth inequalities.

If the decline in home ownership among younger households is not reversed, then ultimately Australia’s aggregate home ownership rate will fall. Whether this matters is an entirely different question.

But it does suggest it’s time policy makers recognise the underlying structural drivers of current housing outcomes and consider which households will benefit from new policies that support property ownership.

Source: The article was first published in The Conversation.

Full coverage can be found: http://goo.gl/PJRvbH

Higher housing prices arising from demand and supply pressures have had a number of effects. They have increased the wealth of established home owners and provided a platform for further increases in demand for housing, reflected in upgrading of existing homes, and in demand for second homes and investment dwellings. In so doing, they have excluded a growing proportion of younger households, and particularly low to moderate income households, from home-ownership.

Some of this group can’t afford to buy, others would rather rent in a higher cost location closer to job opportunities than live on the outskirts of our metropolitan regions where housing may be more affordable.

The underlying issues Short term cyclical factors are not enough to explain declining rates of home ownership amongst younger households. Underlying structural factors and changing institutional arrangements have been critical.

These include: • our system of housing finance that makes it relatively easier for better-off households to accumulate housing assets through debt finance; • our income taxation system that provides these households with an incentive to treat property as a means of accumulating wealth ahead of its more essential role as providing shelter; and issue 176 | austcham news

• 15

CoverKong Hong StoryFocus

Property is Prime Overseas apartments are hot property for Hong Kong investors eyeing bricks and mortar assets in prime locations.

H

ongkongers have money to invest, and property is on their watch list. Such is the appetite for investment in prime location homes abroad that developers sometimes struggle to keep up with demand.

Mr Taylor said. “Chinese buyers were coming to Hong Kong in large numbers to purchase property, and we wondered where they would go next. We started the site to help them find the property of their dreams overseas.”

Gavin Sung, Head of International Residential Sales, Savills, says Hong Kong’s rich supply of wealthy and ambitious investors, who have strong links with key markets such as Australia, Canada, the United Kingdom and the United States, “would definitely have an impact.”

The transparency of the digital era helps give overseas investors greater confidence in what they are buying, he added.

Forbes has called the company “China's biggest real estate source for those looking to buy overseas.” Juwai.com was also named 2014's most influential international property site in China by the China Electronic Commerce Association.

Demand has also ramped up among emerging-buyer groups.

China Gateway Effect Hong Kong’s status as the Chinese mainland’s global gateway is also boosting demand among cashed-up mainland investors. Juwai.com, a multilingual international property website for mainland buyers, was launched in 2011, and according to co-CEO Andrew Taylor, it now has 2.5 million listings from 89 countries, and gets 2.6 million online visits each month.

“It was only when we started to hear Mandarin being spoken around Hong Kong that we realised there was a need for a portal like Juwai.com,”

16 • austcham news | issue 176

“Hong Kong is the base for most of our team that deals with real estate agents and other advertising customers around the world,” said Mr Taylor, who added that the global-focused Hong Kong office complements the company’s Shanghai team, which works directly with mainland clients there. “Hong Kong is the ideal place to have a business that links China and the world,” he said. “In fact, our team is growing so quickly that we just took an extra floor in our office building."

Hamish Pound, Investment Manager for IP Global Ltd, has been “taken aback” by the level of demand from the company’s recent investment seminar featuring The Assembly, a Manchester development in the UK. The 28-storey city centre high-rise will tap demand from university students, academics and professionals, said Mr Pound.

Hong Kong is unique as it has a local and expat population that appreciate design, and are savvy investors willing to purchase properties throughout the region.

Marco Biggiogero Chairman of Aqua Boracay

“Asia is the centre of global growth and Hong Kong its capital city.”

Marco Biggiogero, Chairman of Aqua Boracay, said Hong Kong was the logical place to host the property’s international launch. “Asia is the centre of global growth and Hong Kong its capital city,” he said. “Hong Kong is unique as it has a local and expat population that appreciate design, and are savvy investors willing to purchase properties throughout the region.”

Within weeks of last year’s launch in Hong Kong, the first phase was 30 per cent sold, “which exceeded our expectations,” Mr Biggiogero added. “Following our success, as we launch our final phase next month, we are heading back to Hong Kong.”

Akihiko Mizuno, JLL’s Head of Capital Markets Japan, says that Tokyo is so hot right now for Hong Kong and Singapore-based investors that he struggles to find property to meet the demand. He hopes to have a development to offer later this year – and if so, will be heading to Hong Kong to market it.

The Hong Kong launch was “absolutely down to demand,” he said.

“We had high hopes – and we’ve had a huge response, both from locals and investors on the ground in Hong Kong. Manchester – Europe’s largest combined university campus and with direct flights from Hong Kong via Cathay Pacific Airways – really is on everyone’s radar,” Mr Pound said.

Fifty per cent of the 156 units offered in The Assembly were reserved on the first day of the June launch, which was conducted concurrently in various markets except for the UK. Mr Pound said there was “particularly strong interest from Hong Kong investors.”

In light of this demand, IP Global is due to launch another project in Manchester next month – Cyberquay, which is a new development near Media City.

Expectations Exceeded In 2014, Hong Kong was chosen for the global launch of Aqua Boracay

by YOO, the first branded residential development on the Philippines’ Boracay Island. Based on its successful debut results, the developer is returning to Hong Kong next month for a further release.

Source: HKTDC Hong Kong Means Business For more information on this topic or others, please visit: http://goo.gl/c3Zw9p

issue 176 | austcham news

• 17

Profile

www.adlerho.com

Adler Ho Property Consultants is a Sydney based firm specialising in buyers agency services, assisting mainly overseas based clients such as expats with their Australian-based property needs.

With over 15 years’ proven experience in property investment along with extensive experience working with developers on mixed residential/commercial apartment blocks, Adler is able to assist expats with purchasing or selling their Australian real estate whether for relocation or investment.

Adler Ho Founder & Managing Director +61 411 088 008 | info@adlerho.com As a Sydney based firm, how do you service clients in Hong Kong?

I travel frequently between Sydney, Hong Kong and mainland China. My clients range from private clients based in HK and China – such as expats – and extend to corporate clients looking for large-scale development sites. As an example, in the last 2/3 months, I have been on 5-6 trips to HK to meet with clients. Many expats clients are taking advantage of the recent drop in the Australian dollar to buy now.

How does a buyers agency work and why is there a need for this service?

A buyers agency is not a new concept, but is definitely less common than regular real estate agencies acting for the seller. We will work with any and all selling agents to find the most suitable property for our clients, regardless of who is selling a property – a claim that can’t be made by traditional selling agents as they have a legal obligation to act on behalf of the seller. As we are being paid by the buyer, there is no conflict of interest.

We save our clients significant time in researching and locating properties – think of the multiple open houses that most buyers often attend before buying a property – along with using our expertise in real estate investment to negotiate the best deal possible for our clients. Our services are of particular benefit to overseas based clients as they are unable to spend the time and effort required to properly research potential property purchases.

What type of properties can you assist with?

We are Sydney based specialists and can assist clients with any type of property from $500k one bedroom units for investment through to trophy homes on the Eastern Suburbs. We have established relationships with a number of agents and will also approach owners direct where required to secure the best properties and the best deals for our clients.

18 • austcham news | issue 176

On the flip side, we have also worked with developers and commercial investors seeking development sites from AUD $20m through to $100m+. With our local developer and financial industry contacts, we have access to a range of offmarket development opportunities.

How do you differ from other buyers agencies?

With my personal extensive experience in investment properties (25-30 properties purchased personally Australia-wide) in addition to my development experience from acquisition stage through to project marketing, our firm has the experience and expertise to negotiate and understand not only our clients, but also from the vendor and developer side.

With my regular visits to HK, we meet clients in their home or office here in HK to save them time and maintain a personalised one-on-one service. We maintain a strong in-person presence throughout the negotiation process back in Sydney giving us an advantage over firms based solely in HK or in Australia.

It is important that our clients feel valued and their concerns addressed – as a boutique agency, our clients have direct access to me personally and one point of contact. We can also deal directly with the client’s accountants and banking contacts to streamline the purchasing process.

I want to buy a property in Sydney - how do I get started?

It’s important to set a budget and talk to a bank/broker to find out what you can afford. Other factors then need to be considered such as location, size, type of property, proximity to transport rental return and outgoings. We work with clients to ascertain their requirements before beginning the search and walk them through the entire purchase process.

The first step is to make contact with us – we have an initial enquiry form on our website – www.adlerho.com info@adlerho.com with your requirements.

or you can send us an email

Industry Insights

Thought leadership: Turn and face the change Change Management is a relatively new discipline both in Hong Kong and the wider world. Like anything new though, it’s often treated as a luxury – a nice to have.

But with so much invested into projects in Hong Kong, is it the one discipline we cannot afford to be without?

– By Sophia Khimji, Associate Director at Practicus

T

he Hong Kong Government says it will be investing HKD 70 billion into public projects each year for the foreseeable future.

That’s a lot, and while there’s no straightforward estimate of the number of privately funded projects that I could find, what is clear from the data is that the scale of ambition and cost in the Hong Kong private sector is tremendous. What takes me back is that very few of these projects will have their benefits professionally managed.

I’ve worked in Hong Kong for four years and in all that time I’ve only come across one client that had a professional change manager on the project’s payroll – and that includes a lot of companies headquartered overseas as well as locally.

So why in a world where only 37% of companies can point to a tangible financial impact for their change projects are we not taking change management more seriously? And what actual impact would it have on the billions being spent on projects?

What is change management and why should I care?

There are two definitions of change management. The one that most people are familiar with is unexciting and purely functional: change management is about transitioning individuals, teams and organisations to a desired future state. It’s easy to see why this gets confused with project management. Allow me to create some clear water by giving you a more insightful definition: change management is about managing a project’s benefits. Change management in other words is all about delivering results.

It’s possible for a project manager to achieve all of their deliverables to budget, quality and time but for the overall change to be a failure – the old medical analogy runs, “The operation was a success but the patient died”. This is what we see time and again in projects. It’s not enough for a project team to deliver a new system, define new processes and create new organisational structures – people actually have to use them. In order to succeed, the affected employees need

to take over, “own” the change, embrace it, run with it and make it work in reality – this is the “transitioning” element and it’s what a good change manager will ensure happens, measurably.

Change management in Hong Kong Even if there is not budget for a dedicated change manager, there should at least be a separate workstream for it with clear accountability for its measurement and success.

Hong Kong has a proud tradition of meeting hard problems head on. After all, we took a mountain and turned it into an island for an airport. However, we also tend to focus on the “hard problems” in a completely different sense, i.e. those problems that are well defined and commonly understood. Where we have proven less strong as a region is with the “soft” unbounded problems, the problems that are highly dependent on how they are perceived or which might appear ambiguous to senior management. Sadly, there is often a culture here that believes it’s better to do nothing than be seen to make a mistake and this can create paralysis around change. This is not helped by our otherwise commendable politeness, we like to say “yes” when we really mean “no” which could imply support for changes, even if we won’t really give it.

It is for the same reasons that change management is ignored that it also becomes so vital. When management avoid the soft challenges and your affected stakeholders are paying the project lip service, your project is facing risks that only professional change management can solve. It’s a safeguard for your investment and the earlier you apply it, the more certain your targeted results will become.

About Practicus Practicus helps organisations to better deliver change. Practicus’ services target the support they need with business and technology change - they take a straightforward approach to translating strategies and visions into implementable steps. issue 176 | austcham news

• 19

Industry Insights

Hot or Not? Today’s Job Market and Who is in Demand

W

ith a steady Hong Kong economy, which grew modestly in the first quarter of 2015, variable confidence in global markets, and positive sentiment surrounding the Hong Kong stock market, employers are positive around hiring for the rest of the year and jobseekers are open and willing to consider new opportunities. So which markets are hot and which are not? How do you capitalise of this data if you are interested in hiring or being hired?

Ambition’s latest market survey and salary trends report shows that whilst employers have focused heavily on retention of key personnel and their top performers, experienced and high calibre professionals are in high demand, and in many sectors within Hong Kong there remains a shortage of qualified talent.

Chris Aukland, Managing Director, Hong Kong reflects: “We expect talent retention and attraction to become even more challenging and important for the rest of 2015 and we advise our clients to be on the front foot in creating innovative strategies to attract and retain their best talent.”

So who is in demand? Digital and Big Data Specialists are top of a CEO's shopping list!

The continued emergence of “all things digital” has created opportunities for organisations who are willing to invest and adapt to get ahead of their competition, with contractors as well as permanent recruitment remaining ‘hot’ across all sectors “At present, Digital and Emerging Technology specialists are amongst the most sought after in today’s employment market and can demand some of the highest pay increases in the market of between 15-35% when changing roles”. commented Jiun Chan, Director, Technology at Ambition.

Job Title

Experience

Annual Salary Range (HK$)

15+ 15+ 6 - 10+

1.8M - 2.5M 1M - 1.5M 750K - 1M

10 - 15 5 - 10 3-5

750K - 1.1M 500K - 800K 350K - 550K

15+ 10 - 15 6 - 15

1.5M - 2.4M 900K - 1.5M 650K - 1M

Business Change IT Director (ED – MD) Program Manager (VP-D) Project Manager Application Development Application Development Manager Lead Analyst Programmer Analyst Programmer Infrastructure / Network Infrastructure Director (ED-MD) Infrastructure Manager (SVP-ED) Infrastructure Architect (VP-SVP)

Source: Ambition Market Trends Report – 2nd Half 2015 Extract: Technology Salaries review.

Also in high demand are Compliance and Risk Professionals, with the first six months of 2015 seeing no let-up in the focus on compliance and risk management in major financial institutions.

“Compliance Testing is another hot area; most banks are building up new teams at AVP to VP level. At Associate / AVP level, we have also seen continued demand for Advisory / Regulatory Compliance and AML candidates,” advised Tracy Tam, Associate Director, Banking & Financial Services, she adds, “Compliance professionals can also demand pay increases in the market of between 15-35% when changing roles. In all other sectors we expect similar salary rises to 2014 of between 10-20%.”

Job Title

Annual Salary Range (HK$)

Compliance

AERTKET MK NDS MATRRE DSLARY TRE&NSLA RY AEPAORT & SR T R KONG REP2HO20O15NHGOKNOGNG 015 H 2H 2

Managing Director Director Vice President Assistant Vice President Associate Analyst

2.1M+ 1.8M - 2.1M 1.1M - 1.7M 720K - 1M 360K - 660K 300K - 420K

Source: Ambition Market Trends Report – 2nd Half 2015 Extract: Investment Banking Salaries review In the limelight on the ‘hot’ list in the sales and marketing space are Chinese Professionals. Justin Leung, Director, Commerce at Ambition identified “A key trend in the first half of the year has been the demand for China specialists. Hong Kong remains a gateway for China and is a major recruitment market for companies looking to invest and grow in China. The need for candidates across all industry sectors who are

20 • austcham news | issue 176

trilingual, have on the ground China experience and are prepared to relocate in the future is high and increasing.”

Job Title

Experience

Annual Salary Range (HK$)

15+ 15+ 10 - 15+ 6 - 8+ 3-5 15+ 10 - 15 8+ 6+ 4-6 3-5 5-8 8 - 10

1.8M+ 1.6M - 1.8M 1M - 1.5M 540K - 800K+ 400K - 600K 1M - 1.5M 800K - 1M 480K - 720K 350K - 420K 300K - 400K 300K - 400K 520K - 650K 325K - 400K

IT / Telecommunications Managing Director Head of Sales Sales / Business Development Director Sales Manager Account Manager Head of Marketing Marketing Director Marketing Manager Assistant Marketing Manager Channel Manager Product Manager Social Media Manager Sales Operation Manager

Source: Ambition Market Trends Report – 2nd Half 2015 Extract: Commerce and Industry Sales and Marketing Salaries review.

For Employers who are interested in hiring staff for a particular busy period or project, the outlook for obtaining contractors remains positive. Many employers and candidates believe this is a good way to ensure that they can support existing staff who are under strain, thus retaining them and their goodwill, whilst achieving a trial period with a possible new permanent staff member, even if there is no budget for additional headcount.

Overall Ambition is expecting a year on year salary increase to range from 3-5% and above for top performers.

About Ambition Ambition Group is a global boutique recruitment agency, head officed in Sydney and with a long pedigree of placements in Banking & Financial Services, Finance & Accounting, Technology, Sales & Marketing and Supply Chain & Procurement.

If you would like to see the full results from the Ambition Market Trends Survey 2015 (2nd Half) please go to http://www.ambition. com.hk/news-and-research/market-trends-salary-reports

CONTINUE YOUR RISE TO THE TOP Advance your director career Our courses give you the tools needed to handle the challenges facing multinational organisations at the top today. Immerse yourself in real world experiences, join lively discussions with small groups, and gain invaluable understandings from industry insiders.

Rise higher with our courses t: +61 8 9320 1700 w: companydirectors.com.au/international

issue 176 | austcham news

• 21

AustCham ANZ Mentor Program

A Chat with mentors and protégés Benjamin Wong

of Class 2015 - Protége of Class 2014 and Mentor es Chair - Former AustCham Young Executiv mittee member Com Tax - AustCham Finance, Legal and program during the 25th anniversary for AustCham Hong Kong, along with the fact that at that time to our knowledge, there was no other chamber in Hong Kong that has a mentoring program.

Finally, on a personal note, it was when I was living and working in Abu Dhabi that, with the leadership of Kirsty Boazman and the new leadership of the Young Executives Committee, I was pleasantly surprised to see the news of the launch of the “AustCham Mentor” program with a Mentor Program Manager in the form of Mary Barbara who has done a phenomenal job in establishing the first year’s program, and making even better with each year!

How long have you lived in Hong Kong?

Almost 6 years in total, with a break in the middle where I relocated to Abu Dhabi for a career opportunity.

Where do you work?

Wells Fargo Bank, N.A. the largest bank in the world by market capitalization. I report to the Chief Operating Officer for Asia Pacific at the bank - and I help manage strategic initiatives, governance and proactive oversight and management of potential risks for the bank.

What inspired the AustCham Young Executives to start the Mentor Program?

Taking a trip down memory lane, it was an idea born out of an AustCham Young Executives committee meeting brainstorming – from that, I along with a fellow Young Executive Committee member, Patrick Daley, took on driving this from idea including the initial business case and with support and partners within the AustCham network, ultimately to the point of approval by the AustCham Board.

In that process, we had managed to garner support from the Peoples Forum committee (special thanks to Leigh Stewart and chairs of APF committee including Gautum who is also a mentor!), the CEO of AustCham at the time Debbie Biber, the Board including Melanie Nutbeam and Alan Johnson.

How did so much support come about you may ask - because we the Young Executives saw the mentor program as great way to link the young executive group with the wealth of leadership and experience across the sectors and industries represented in the chamber – bringing together this great cohort in a “formal setting” under the mentor banner , we saw as a win-win: for young executives to learn from more experienced peers in AustCham, and mentors who would be exposed to the new ways of thinking and working that the Young Executives brought to the table.

Once we were able to communicate this to those in the Chamber, we were able to build out the idea and with the people and support have this approved by the board.

Additional selling points including the planned launch year of the

22 • austcham news | issue 176

Why did you join the Mentor Program?

I’m at a stage of my life and career where I had worked internationally, ranging from my hometown Sydney, to London and the Middle East being back in Hong Kong, I wanted to focus and prepare myself for the next decade in my career and life. I personally and professionally, saw the mentoring program as an added channel to help me achieve my goals.

Furthermore, challenging myself to be better every day is my mantra of mine I stick to, whether it relates to work, social activities, community, family or health and fitness. Through the mentor program I saw a way to have a “coach” to provide me with advice and “outside perspective” I may not have seen myself.

Please share something you’ve learned thus far in the program.

Firstly, Mary Barbara did a phenomenal job in both the program and events, and especially in pairing me with my mentor Neel from Beyond Leadership Development who has been absolutely amazing as a mentor.

Since joining the program, I’ve had an access to a new way of thinking which Neel has helped provide me through our one on ones.

I’ve always been working on developing myself since a young age, which includes business and self-development books and martial arts. However, Neel has been phenomenal in giving me access to a new way of thinking and looking at myself which has been impactful in all areas of my life, not just in my career.

The best way to summarize my journey objective and journey so far in the mentor program, is to refer to a quote from Buddha: “It is better to conquer yourself than to win a thousand battles. Then the victory is yours. It cannot be taken from you, not by angels or by demons, heaven or hell.”

With the help of Neel, I feel I am getting to know myself a lot better and step by step “peeling the layers of the onion “ (as Neel likes to say).

For more information and details of AustCham Mentor Program, please contact AustCham Mentor Program Manager Mary Barbara Hanna at mentor@austcham.com.hk.

The Art of Social Media

T

he Summer Mentor Event “The Art of Social Media and Your Brand” invited Tim Smith, Executive Sales Leader with LinkedIn Hong Kong, to guide the audience through the use of Social Media and the impact it has on you as a “brand”.

Program sponsor:

Riverview in Hong Kong Looking for a school for your son?

Saint Ignatius’ College, Riverview is a Catholic, day and full-time boarding school in the Jesuit tradition located in Sydney, Australia educating boys in Years 5-12 to be the leaders of tomorrow.

The Rector Fr Ross Jones SJ, the Principal Dr Paul Hine and the Director of Boarding Mr Guy Masters will be available to answer any questions about boarding and enrolment at Riverview at an information session:

SU N DAY 1 1 O C TO B E R 20 1 5 , 2 PM - 4 PM For more information and to book to attend, please go to www.riverview.nsw.edu.au/news-events issue 176 | austcham news

• 23

Committees in Action

AustCham Young Executives: How Can Tomorrow’s Leaders Get Involved in CSR?

A

ustCham Young Executives (AYE) hosted another successful CEO Forum on the topic “How Can Tomorrow’s Leaders Get Involved in CSR?”. An insightful panel discussion with Caroline Sprod of HandsOn Hong Kong, Kay McArdle of PathFinders and Dorothy Chan of MTR, sharing with attendees on how young professionals can become more engaged and utilised in the sector.

Special thanks to our CEO Forum Series Partner Herbert Smith Freehills and moderator on the day, Brooke Avory of BSR.

EVENTS UPDATE OCTOBER AT A GLANCE Thur, 15 Oct, 12:30pm – 2:00pm Lunch with The Hon Andrew Robb AO MP Bowen Room, 7/F, Conrad Hong Kong Thur, 15 Oct, 6:00pm – 8:30pm AustCham ANZ 2015 Mentor Programme Should You Pursue Your MBA? Compass Office, 20/F, Infinitus Plaza, 199 Des Voeux Road Central, Sheung Wan Fri, 16 Oct, 4:30pm – 8:00pm Efficient Repatriation and Tax Planning Seminar; Macau Mingler Sofitel Macau At Ponte 16, Rua do Visconde Paco de Arcos, Macau Thur, 22 Oct, 6:00pm – 9:00pm Mix at Six Roofgarden, 56/F, Island Shangri-la, Pacific Place, Supreme Court Road, Central, Hong Kong Thur, 5 Nov, 12:30pm – 2:00pm The Ten Steps to Building a More Profitable Property Portfolio AustCham Business Centre Fri, 20 Nov, 8:30am – 2:30pm ACCESS China Forum JW Marriot, Pacific Place, 88 Queensway

Business Technology Committee: The Future of Business

T

he co-host session with BritCham was held in early September.

Thanks to the keynote speakers Rohit Talwar, Kevin Taylor, Ardre Blumberg, Geoff McClelland and Po Chi Wu, the engaging panel discussion on “The Impact of the Next Generation of Technology” had attracted over 80 attendees on the day.

AustCham Platinum Patrons

24 • austcham news | issue 176

Corporate Feature

Adler Ho Property Consultants

A

Sydney based firm specialising in buyers agency services, assisting mainly overseas based clients such as expats with their Australian-based property needs. With over 15 years’ proven experience in property investment along with extensive experience working with developers, agents & other property professionals – we are able to assist expats with purchasing or selling their Australian real estate.

Our services save our clients time and money and are of particular benefit to overseas based clients as they are unable to spend the necessary time and effort required to properly research potential property purchases. We travel regularly between HK and Sydney so we are able to meet with you in person in either city at your convenience.

With the recent fluctuations in currency exchange, this is the perfect time to be considering purchasing a new property back in Australia in preparation for relocation back to Sydney or simply as an investment. As an overseas buyer, we understand your specific needs and concerns and have local banking contacts here in HK that we can refer you to.

Contact us today on info@adlerho.com or call us on +61 411 088 008 to arrange a one-on-one consultation to discuss your requirements.

ADLER HO P R O P E R T Y C O N S U LTA N T S

Kerry Properties Limited

K

erry Properties Limited ("Kerry Properties") was listed on The Stock Exchange of Hong Kong Limited (Stock code 683) in 1996. Subsidiaries of Kerry Properties (which together with Kerry Properties are referred to as the “Group”) have been involved in property investment and development activities in Hong Kong since 1978. Kerry Properties has also been selected as a constituent stock in the Hang Seng Composite Index, Hang Seng Composite Large-Cap Index and the Hang Seng Composite Industry Index (Properties & Construction).

Guided by the principle of aspiring to excellence, Kerry Properties is a world-class property company with significant investments in key People’s Republic of China (“PRC”) cities and Hong Kong. The Group’s major focus is on developing high

AustCham Membership eC

ard

quality residential and mixed-use developments encompassing hotels, shopping malls, offices towers and apartments in prime locations.

With its considerable experience in premium property development and management, Kerry’s buildings are in harmony with their environment and blend inspiring architecture with local characteristics - that is the essence of Kerry Properties.

Beyond the delivery of quality properties in prime locations, the Group continues to serve its clients by offering professional management and a range of value-added services and diverse privileges.

In September and October, W Hotel is offering AustCham members discount to enjoy their hot BBQ Dinner by its Rooftop Pool and happy hour special at Woobar.

1. Wet Is On Fire Poolside BBQ Dinner HK$358+10% (original at HK$398+10%) *Available from Monday to Friday 2. Woobar Winederlust Wednesday HK$330 net (original HK$330+10%), free-flow wine and cheese 3. Woobar Happy Hour Buy 1 drink and have another for free, plus a signature shot or 2 pieces of mini burger per person *Available from Monday to Friday To book, please call 3717 2222 or email w.hk@whotels.com * Terms and conditions apply. * Offers are available until 31 October 2015.

Thank you!

issue 176 | austcham news

• 25

Small Business Corner Small business travel HOME

ABOUT US

MEMBERSHIP

SERVICES

Travel Tips for Your Small Business - Content provided by Flight Centre Business Travel

CALENDAR October S M T W T F S 1 2 3 4 5 6

7

8

9 10

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Internet vs Travel Agent Many small to medium businesses view the Internet as a quick method to book their travel. There is no denying that the Internet is a great tool to find information; and with easy accessibility to information, travellers have access to finding flight prices and variety of options easily.

GALLERY London

But is the Internet really the best tool to organize your business travel? Does it really save you time and moneys?

What’s the benefit of booking with a travel consultant when you can book online? A common question so frequently asked.

There are many benefits to using a travel agent to help you organise your business travel. The Internet is filled with content. However, your travel consultant is a human being who understands your needs and will be able to help make recommendations to save you time and money, including personal advice that you just won’t find online. Using a travel consultant also means you benefit from more flexible payment terms by means of a monthly credit account.

Personal Service The Internet offers a quick and simple way to book your travel, but having a professional travel consultant has many valuable qualities – after all they are experts in their field and understand the industry in great depth. A travel consultant has the knowledge and long-established connections within the industry; call it their ‘little black book’. As an individual traveller booking online, you won’t have these contacts and therefore can spend hours trying to find an answer to your question. The Internet will not understand your needs. A travel consultant is a human being, and can make right recommendations that suit your needs.

26 • austcham news | issue 176

Macau

Shanghai

Small business travel HOME

ABOUT US

MEMBERSHIP

SERVICES

Flight Expertise Most often than not, search engines will present you with the cheapest, non-flexible, non-refundable ticket which can be tempting and appears to save money for your business. But is this really the best type of ticket for you? Despite our best planning, business trips do often change. With airlines selling a multitude of different fare classes for the same flight, all with their own set of complex rules and regulations for changes and cancellations, it is often difficult to know which type of ticket is best for you. A travel consultant will take time to understand the requirements for your trip and be able to recommend the best fare class to ensure you are travelling in the most efficient way possible, but also have the flexibility you need should your plans change. This will save you hours of lost productivity annually with not needing to be on hold to the airlines directly. Just one email or call to your travel consultant and they will be able to assist you with this which will mean that you can concentrate on your business.

Peace of Mind 24/7 When plans change last minute (which they often will with business travel) the last thing you want to worry about is having to hold on the line to a call centre to change the flight and then having to call the hotel to change your reservation. Most travel agents will offer 24 hour emergency assistance allowing you peace of mind that someone is just a phone call away should your plans change. Another great point is having your travel agent manage all your travel plans means that in the event you need to make changes to your trip this can be done with a simple email or phone call.

Save time and money Your travel consultant will not only save you and your team hours of lost productivity searching the internet but will also help you manage every aspect of your trip from hotels, visas and insurance to management of your frequent flyer points and reward programs.

The Chambers' Small

Business Network (SBN) provides interested members with meetings, speaking events, networking events and cross chamber activities; the opportunity to generate referrals and business within the network; and a platform to provide assistance and professional guidance.

SPONSOR

The AustCham Small Business Network is proudly sponsored

by Primasia.

To find out more about how a Flight Centre Business Travel expert can help your business save time and money, please visit www.flightcentre.com.hk or contact Stephanie Dixon on stephanie.dixon@flightcentre. com.hk.

T

o enquire about advertising, submit an article, comment or respond to austcham news, please contact Karen Wu at karen.wu@austcham.com.hk or call +852 2522 5054. issue 176 | austcham news

• 27

Small Business Corner

Stand Up and Build Your Brand

A

ustCham Small Business Network (SBN) recently hosted an interactive session on the topic ‘Stand Up and Build Your Brand’ with Steven Beeckman, Managing Director and Co-Founder of Asia Business Development Group.

Steven guided attendees on how to evaluate their brand's strengths as well as provided insights on what branding should SMEs do to succeed with a small budget. Special thanks to venue partner SERVCORP.

Member Classifieds Australia Registered Tax Agent in Hong Kong

Holistic Business Consulting Pty Ltd. Chartered Accountant We specialise in tax planning for Australian Expatriates, tax returns preparations, private rulings for deductions. www.myoztax.com Call Tommy Ip on +852 69018136 or email: tommy@myoztax.com

28 • austcham news | issue 176

Corporate Profile

THE PULSE 21/F, 23 Luard Road, Wan Chai, Hong Kong experiencetheplulse.com

The Pulse is a collection of artists, technicians, programmers, thinkers and innovators, striving to bring a new perspective to visual entertainment (creative solutions).

We are inventors, risk takers, explorers, creators and deliverers.

Ours is an exciting world where we create content at the intersection of design, culture and technology to produce powerful immersive experiences.

As the world moves from the service economy to the experience economy, we use breakthrough technologies such as 3D projection mapping, augmented reality and virtual reality to provide our clients with the opportunity to engage and delight their audiences in ways never before imagined.

What are the main skills of your job?

Brands of the future don’t just sell products or services. Enabled by technology they create inspiring content and experiences that engage people in their brand world – a world where each interaction adds as much, if not more value than the product itself.

My task is to identify and understand the emerging creative technologies and to come up with creative solutions that will utilise them in a way that will be meaningful and impactful for our clients and their audiences.

What’s the most unusual thing you have had to do as part of your job?

This year I produced a video segment for the World Men’s Handball Championships that involved wrangling some 30 Qatar Army paratroopers (one in a giant mascot suit), four helicopters, a film crew and prevailing weather conditions.

How would you describe your workplace and colleagues?

We’re a mix of highly creative, skilled designers and technicians who constantly try to out-do each other in knowing what’s new, exciting and far-fetched in the world of design and technology.

Brett Heil Managing Director

What does your company do really well?

I think our strength lies in our ability to develop beautifully designed creative solutions that are feasible within the timeframe, incorporating innovative, world-first techniques, processes and technologies. We know how to engage an audience and we achieve this by closely collaborating with clients on creative technology options.

What’s something most people don’t know about your company?

Something that people don’t know about The Pulse is that we’ve collectively produced some of the world’s largest content deliveries including several Olympic ceremonies.

What’s your company’s connection to Australia?

The Pulse started from the second bedroom of our apartment. It is now a major studio facility in Sydney, with a growing network of international offices be now. We work on projects all around the world, but are very happy to be now living in Asia’s “Global City”.

What’s your favorite place to go on the week-end?

Sheung Wan for coffee followed by a great Hong Kong hike.

What’s your favorite place to eat lunch?

In Hong Kong I eat at Chez Patrick or Le Bistro Wine Beast… they’re the next best thing to sitting on a verandah in a small French restaurant in Provence and enjoying a glass of Rosé.

issue 176 | austcham news

• 29

On The Scene

Our

company provides, audit and taxation services.

Additionally, our affiliated company provides accounting and company secretary services for Hong Kong companies.

W www.kkchoco.com.hk T (852) 3996 7398 E kkcho@kkchoco.com.hk

Shaun Cunningham, Angus Stuart and Martina Hui.

Kate Dunstan of Clifford Chance and Angie Todd of Withers.

Nick Wilshire of ZHRecruit and Digby Ross.

Summer Mix at Six was held at iCON Central, to celebrate the 3rd anniversary of the AustCham ANZ Mentor Program. Thank you to our Program sponsor:

AustCham Chief Executive Drew Waters with David Fergusson of FIS Global and Alan Leung of Manulife.

Jordan Campbell of ARUP, Megan Walker of HBO+EMTB Urban Design with Maarten Hartog of KPMG.

Malcolm Brocklebank with Kathy Stannard of Ord Minnett.

Brett Heil of The Pulse and Victoria Smith of UBS.

Christine Chester of Telmar, Gayble Tsang of axiom, Lee-Ann Ford of Traceability Ltd and Ellie Hann of Telmar.

Katrie Lowe of AECOM and Peter Keller of The Hub Hong Kong.

Austcham Mentor Program Manager MaryBarbara Hanna and Gautam Dev of Eastspring Investment.

30 • austcham news | issue 176

The Hon Anthony Albanese MP, Australian Shadow Minister for Infrastructure and Transport, Shadow Minister for Tourism, and Shadow Minister for Cities briefed AustCham members at a breakfast session in August.

On The Scene

Chloe Vuong and Preema Kabir (right) of Commonwealth Bank of Australia with Marianne Johnson of AllianceBernstein HK Ltd (middle).

Jillian Xin with David Lock of Brandix.

Kim Kenchington of Mediaworks Asia and Bina Gupta of BG Business Communications Ltd.

AustCham Women in Business Network (WIBN) Summer Drinks was held at The Fringe Club in late August, with special feature on Australian fashion and textile pop-up. Members meet with talented fashion designers visiting from Australia.

Special thanks to Event Partners: Council of Textile & Fashion Industries of Australia, Austrade, lucky draw prize sponsor Aesop, and the network sponsor: Celestine Wilson of UGG Australia and Teresa Tam of Primasia.

Simone Wheeler of CLSA, Vickie Fan of CPA Australia and Alison Harbert of Nomura.

Cassandra Venn and Sally Ingram.

Hilary Muir of UGG Australia and Aaron Lim of Flight Centre Business Travel.

Elise Phillipson of run’em ragged Ltd, Maaike Steinebach of Commonwealth Bank of Australia and Nicole Denholder.

Shayna Quinn with Lesley Hobbs of AdventBalance.

WIBN Steering Committee Chair Fiona Nott welcomes all.

Kiri Delly, CEO of The Council of Textile & Fashion Industries of Australia talks about their Capability Mission trip to Hong Kong.

Lucky draw winner Stephanie Dixon received the Aesop prize from AustCham Chief Executive Drew Waters.

More coverage can be found on our online photo album: www.flickr.com/photos/austchamhongkong

issue 176 | austcham news

• 31