South China Morning Post - December, 2002
Web sites spur property-based business sales
Entrepreneurs find inspiration online
RICHARD WARREN in London
The Internet is making it increasingly easy to buy property-based businesses - including pubs, restaurants, hotels, even a Caribbean cucumber farm. Estate agents report a surge of inquiries, including many from Hong Kong, about such properties since they started promoting them online.
Christie & Co's Web site, www.christie.com, offering European property-based businesses, has signed up 56,000 registered users since it was constructed five years ago.
BusinessesForSale.com features about 12,000 international properties and receives 5,000 visitors every day. Other estate agents, including Hamptons International and FPDSavills, may also offer business properties on their sites.
Marcus Markou, founder of www.BusinessesForSale.com, said 10 per cent of inquiries were from expatriates and those looking to join family overseas.
"BusinessesForSale.com receives a significant number of enquiries from expats in Hong Kong, looking to purchase enterprises in Britain the United States and Canada," Mr Markou said.
Prospective entrepreneurs can choose from a bewildering variety of businesses promoted over the Web. These range from a jazz club in New York to a wildflower farm in Australia, a boarding kennels and cattery in Spain and a motel in New Zealand. One of the most expensive properties is a five-star hotel in Madrid marketed by Christie's, priced at 84 million euros (about HK$653.4 million). Christie's offers 718 hotels in Britain, Spain, France and Germany for sale on its Web site.
Moderately priced establishments include a two million euro hotel on the Cote d'Azur. Christie's also offers shops, pubs, restaurants, health clubs, care homes and sub-post offices, mainly in Britain, among the 3,000 properties listed on its Web site.
Prices range from £250,000 (about HK$3.05 million) to £100 million.
A thatched, four-bedroom, east Devon pub with two bars and one restaurant set in about one hectare of land, including beer garden and paddocks is for sale at £1 million on Christie's site. A Hertfordshire golf club and a West Midlands preparatory school are among the more unusual establishments offered.
At BusinessesForSale.com, a hydroponic farm growing cucumbers and tomatoes on the Turks and Caicos Islands, price US$750,000, is offered, so is an upmarket Victorian Bed and Breakfast "mansion" in Colorado, price US$1.3 million, and a furniture retailer with large house in Lincolnshire, price £275,000.
Retail franchises are also available. Plenty of going concerns and land in Thailand are promoted on BusinessesForSale.com.
These include beachfront land for development, offered at 1.5 million baht (about HK$270,000) per rai (1,600 square metres). Architects may be interested in buying a Sri Lankan civil engineering and architectural practice in Colombo, which comes with a top-floor three-bedroom flat and roof terrace, price unstated. Purchasers are typically looking to start a new life and are attracted to the independence of running their own businesses.
Jeremy Hill, international director at Christie & Co, said: "People buy a business if they have been made redundant, or if they are expats returning to Britain, or feel they can make some more money running their own business."
The lack of professional or legal restrictions attracted many entrepreneurs to buying a going concern such as a pub or hotel, Mr Hill said.
Care homes were the exception, because this specialised type of business attracted medical professionals, he said.
"You don't need a licence or a degree to run a hotel, though you tend to find that people who go into it have experience in the hospitality trade, come from accountancy or other types of business background," he said.
However, there were pitfalls he warned.
"Like the stock market, investments can go down as well as up. I have seen people go into it who find out fairly soon that it is not for them. People who have known each other all their lives and have wanted to work with each other, within three months they can be scratching each other's eyes out," he said.
Potential buyers needed to consider a number of issues before buying, he advised. "You need to look at your own skill set. With you and your wife or whoever you are going into business with, you will have to see whether you have the requisite skills.
"For a hotel, are you good at front of house and know how to look at accounts? You need to understand the legal aspects of employment law, be good at recruitment, and something that is often overlooked, sales and marketing, so there are many different facets," he said.
Convincing the bank manager to lend you money could be another obstacle. A bank would only lend money if they believed in both the product and the people running the business, he said.
BusinessesForSale.com and Christie's provide detailed information on the properties and the businesses and contact details of the vendors. Advice is also given on the valuation and legal aspects of the procedure.
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