Hines’ Claire Thielke on value-add opportunities in Hong Kong

US real estate firm Hines is seeking out opportunities to wield its value-add capabilities in Hong Kong, as it maps out its Asia Pacific expansion plans from the financial capital.

The US$120.6bn privately owned business opened its first Hong Kong office earlier this year, appointing former Hines Investment Management COO Claire Thielke to lead the new team as managing director.

Claire Thielke (image: Hines)

“As a global firm, one of our differentiators is that we can really look across the spectrum of our own coverage and look at where there are trends or changes underway or taking hold in one market and not in others,” Thielke told APAC Real Estate.

“We are particularly enthusiastic about the value-add space and asset repositioning where we can draw on Hines’ development expertise. We’re actively looking across the product spectrum for the right opportunities where we can apply what we call the ‘Hines Alpha.’”

While Hines is arguably best known as an office developer, the firm has notched up experience across most real estate asset classes, in addition to investment, asset and property management activities.

In fact, the firm has sponsored almost 60 investment funds, on top of numerous one-off vehicles, totalling US$51.2bn of equity since it was founded in 1957.

“Another opportunity that excites us about Hong Kong and the platform here is the opportunity to partner with property holders on joint venture redevelopments or provide third-party services, such as development management,” the MD said.

“Part of the reason these partnerships can be so compelling is that they tend to work well when you have long-time generational landlords, of which there are many in Hong Kong.”

The firm sees opportunities to work with local landlords and deploy the latest technology and trends to extract more value from their assets.

“As a JV partner or a third-party provider, we work with partners to implement that on portfolios that they already have or even individual buildings, so that’s something that we would look to do here,” she said.

Asia Pacific expansion

The new outpost will also serve as Hines’ Asia Pacific headquarters, where co-CEO Ray Lawler will oversee the firm’s activities across the region.

“The launch of the APAC headquarters really coincides with the launch of Asia Pacific as its own independent region at Hines and that’s a very big deal because it’s been 25 years since Hines has launched an independent region,” Thielke said.

Hyundai Motor Tower (image: Hines)

“It is a big shift to have Asia Pacific as its own region with its own flexibility and ability to spread its wings across numerous markets, while also continuing to build on the incredible work that our teams led by David Warneford in Australia and James Morrison in China.”

Hines has had a presence in the region since 1996, when it planted its first outpost in Beijing to oversee its China operations.

The firm made its inaugural Asia Pacific acquisition in the Chinese capital with the purchase of the 24-storey Hyundai Motor Tower in 2001.

It then completed its maiden development, the 32-storey Embassy House apartment tower in Beijing, in 2002.

The company then established its Australian business in 2012, and set up offices in Seoul and Tokyo in 2013 and 2017, respectively.

Thielke and Drew Huffman, who was also appointed director when the new office was announced, will not only oversee the Hong Kong operations but will also be scouting out new business opportunities across the region.

Market challenges

While Hong Kong continues as an important gateway city to Asia, the special administrative region has its risks.

Advisor Colliers noted that various sectors of Hong Kong’s property market have slowed since the second half of 2018, not to mention the broader issues of a slowing global economy and the US-China trade war.

Embassy House (image: Hines)

For Thielke, it’s about finding defensive strategies, as well as taking a rigorous and thoughtful approach when deploying capital.

The Hong Kong team will also be looking for opportunities arising from the Greater Bay Area infrastructure boom that is connecting Hong Kong, Macau and nine cities within China’s Guangdong province.

Colliers believes the Greater Bay Area plan and the likely very slow pace of interest rate increases this year should “offset any slower economic growth from the trade war”.

“We are committed to the region and believe in the underlying fundamentals of it,” Thielke said. “We’re taking a long-term view.”

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