“Our Middle Eastern clients never, ever tell us they are coming – no warning, no appointment.” Shirley Humphrey nods to the entrance of the Harrods Estates Knightsbridge HQ: “They just walk through that door and are extremely surprised if you are not here. Or if you are busy with something else. They start arriving from now, leave for Ramadan and are back in August. September is when the Russians are over and from late November the Christmas shopping season kicks off. It’s about to get extremely full on.”
Luckily, as the director of one of the most high-end, niche residential agents in prime central London, Humphrey is well versed in handling international buyers. Especially as they make up no less than 87% of the group’s client list – a figure buoyed by the Harrods brand, seen by many foreign high net worth individuals as the ultimate sign of London luxury.
For more than 100 years Harrods Estates has exclusively dealt with the very top of the residential market. Today there is nothing in the group’s £800m property portfolio across Knightsbridge and Mayfair priced under £2m. And even that wouldn’t get you more than a one-bedroom flat. But that is now set to change.
Last Tuesday the agent opened its third office in Chelsea. Positioned just outside the Golden Postcode triangle, the Fulham Road office will add more variety – and a greater price range – to the group’s portfolio, making it more accessible to overseas and UK buyers on a (marginally) tighter budget.
Here Humphrey discusses plans to double the size of the agent in three years, the ever-decreasing pool of prime central residential property and explains how developers can sell Harrods Estates-managed units off the back of the famous green-and-gold brand.
Made in Chelsea
Since Humphrey joined Harrods Estates 13 years ago the group’s international client base has grown from 40% to nearly 90%. And now that the London market is increasingly considered a safe haven in a volatile global market, the enquiries are rolling in. “There is definitely an urgency from clients in some countries who want to buy up property as fast as possible while they still can,” she says. “There are some parts of the world where there is a fear that laws will change overnight making it harder for them to access and move funds around so there is a lot of activity at the moment.”
The new office will add more stock to the group’s existing portfolio. And it is expected to help the group’s current multi-million pound turnover and profit figures grow by 100% over the next three years.
But whether the client list will go for the new offering remains to be seen. “We think the new properties – a mix of studios above retail outlets and larger spaces – will be of particular interest to UK buyers and clients who have owned assets in London for years and who know the city well,” says Humphrey. “They will know that property in this area is a good investment – Chelsea is very lettable. For other clients – I don’t know. The majority want to be in Knightsbridge within walking distance of Harrods. Otherwise they start saying, ‘Where are you taking me?’ Harrods is what they know and what they want.”
Travel to trade
While the retailer’s property arm is pushing ahead with its expansion plan – one that will continue throughout prime central London after the new branch opening – Humphrey and her team know that for some clients only a Golden Postcode will do. And working with investors at this level is a finely tuned business – one that racks up a fair few air miles.
The Harrods Estates team travels, on average, around five times a year to key destinations – often accompanied by an interior designer, a solicitor and even an expert to talk through education options in the London area.
“Our client base is about a third Middle Eastern, a third Asian and then a mix of wealthy Europeans and UK purchasers,” says Humphrey. “Our travel patterns reflect this. As for new investors, we are seeing a lot of interest from Nigeria so we are considering a trip to Lagos. And we have seen an increase in the number of Brazilians coming over – but they seem more interested in lettings than sales. Maybe they are still testing out the market.”
With an almost entirely international client base, there is no room for error when it comes to relationship-building overseas. The property arm is given access to the same cultural awareness training offered to Harrods store staff – who are expected to be able to deal appropriately with customers from all over the world – and Humphrey has built up a team of key foreign language speakers.
As for being a woman doing business in markets sometimes considered to be more male-dominated than most, Humphrey says there is just one part of the world she would shy away from. “The only place I haven’t been and where we send an all-male team is Saudi Arabia,” she says. “There is a misconception that the Middle East in particular might be tough to navigate as a woman. I have found the opposite. It’s a very charming, sensitive market. Our clients are extremely wealthy and high profile. They want to meet the most senior person available – whether that person is male or female is irrelevant.”
The Harrods effect
It helps that the entire agency operation is underpinned by the Harrods brand. From the green and gold awnings to the annual teddy bear, clients love the association with the store and access to its services, including interior designers and furniture offers. “I am not aware of any other agency that offers a global retail arm,” says Humphrey. “I know some have interior design services now but they wouldn’t have access to anything like the Harrods store products and furnishings.”
And the association extends to the group’s fast-growing asset management service, which currently makes up around a third of its business. “We are managing around £4m worth of stock for the likes of Berkeley, St George and Barratt,” says Humphrey.
“A lot of developers will sell units off the back of being asset managed by Harrods Estates. It is such a powerful brand.”
An ever-decreasing pool?
The problem with wealthy buyers snapping up London property is that they rarely have any need to sell. Why would they when they have their money in a safe haven, UK law is transparent and they get the deeds to their property?
And as most want to buy in the same place, Humphrey says there could be a risk of market saturation. “The pool is ever decreasing – especially in Knightsbridge. There just isn’t the land to build on and competition for space is huge,” she says. “We have some clients who are more savvy and who look at Mayfair where there is more space. And this helps the market ebb and flow a bit.
“Plus 25% of our sales are off-market as clients move from floor to floor, building to building, so we are in a position to know what is happening first and to let other potential buyers know.”
And with a business expected to double by 2016, it doesn’t look like Harrods Estates is likely to see a slowdown in unannounced client visits any time soon.
