Warren Buffett eyes Dubai amid push to take property arm global
Sage of Omaha's Berkshire Hathaway HomseServices unit to move into new regions from Middle East, to South East Asia and Europe
One of Warren Buffett’s real estate brokerages waited 18 years to sign its first overseas franchise deal.
Now the firm is extending its reach to regions from Italy to Japan and the Middle East.
Berkshire Hathaway HomeServices this month teamed up with London-based Kay & Co, its second franchisee in Europe, after Rubina Real Estate in Berlin. The company hopes to add Milan, Vienna and Dubai to its network before the year’s out.
“We’ve got a number of markets already teed up,” Gino Blefari, who oversees a business that operates franchise networks, said in Berlin. “Eventually we’ll be in all the major metropolitan markets.” The company is also in talks with prospective partners in Paris and Madrid, and is looking at Mexico City, Hong Kong and Tokyo as well.
Mr Buffett’s Berkshire Hathaway first acquired a stake in HomeServices of America - comprised of real estate brokerages and mortgage companies - as part of the purchase of an energy business in 2000. The billionaire investor originally paid little attention to HomeServices, but that operation has since become one of the largest residential-brokerage owners in the US.
Mr Blefari is chief executive officer of HSF Affiliates, which includes Berkshire Hathaway HomeServices and is owned by HomeServices of America. Mr Blefari’s business operates networks of real estate brokerage franchises.
“With so many buyers of high-end properties coming from outside the US, it became essential for us to be able to say we were global,” he said.
The tie-up with a luxury-property brokerage focused on London neighbourhoods including Mayfair and Hyde Park comes as Brexit hammers the UK housing market. Undeterred, the UK firm - now known as Berkshire Hathaway HomeServices Kay & Co - plans to expand through acquisitions and joint ventures, and will add as many as 10 standalone offices in the next decade.
“Events like the referendum in the UK are not a decision-maker for us because of the long-term nature of how we look at things,” said Mitch Lewis, managing director for Europe and the Middle East at Berkshire Hathaway HomeServices. “They’re important, no doubt, but they don’t drive what we do.”
The ability to link buyers and sellers in different countries is already paying off, according to Michael Jalbert, senior vice president for global sales at HSF Affiliates. Since announcing its intention to work with Kay & Co, the UK company has received a steady stream of leads from the Berkshire Hathaway network. “And we haven’t even changed the signs yet,” he said.
Berkshire Hathaway HomeServices made its first step toward forming a global network by joining forces with Berlin’s Rubina earlier this year. The firm is looking for opportunities in other major German cities, Mr Lewis said, adding that Frankfurt would make a “very natural second step”.
Back in the US, HomeServices of America is vying with Realogy’s NRT unit for top spot in the market after last year’s purchase of rival broker Long & Foster. Mr Blefari said the company has been back on the acquisition trail and expects to close two “big” acquisitions by the end of the year.
“These are fun times for us,” he said. “We’re the prettiest girl at the dance right now.”
Updated: November 13, 2018 09:59 AM