On the other end of a crackly Zoom link are two of the property industry’s agency stars. One is Gary Hersham, founder of prime specialist agency Beauchamp Estates that he founded in 1979 and the other Jeremy Gee, who joined in April 2019 from house builder Fairview and before that, Glentree International. Both are doyens of the prime sales and lettings sectors and have an enviable client book that includes a fair chunk of the ‘high net worth individuals’ (HNWIs) who buy, sell and rent prime and super-prime properties both in London and across the world.
We are just fortunate to deal with some of the best properties in the world and some of the wealthiest buyers.
Beauchamp, which is arguably the best-known independent estate agency in the world for the super-rich, has a head office in London on Curzon Street in Mayfair as well as two other branches in London. This includes a new one just opened in St John’s Wood, but also operations in Los Angeles, Cannes, St Tropez, Tel Aviv and New York.
Both men are keen to point out that, although they deal with properties that often exceed £20 million, their modus operandi remains the same as any other agent. Albeit, on steroids. “We are just fortunate to deal with some of the best properties in the world and some of the wealthiest buyers across the globe. But I don’t see our job as any different,” says Gee.
“Obviously you can only sell these kinds of properties if you’re able to deal with these people and understand both HNWI sellers and buyers. It’s a skill that you learn over the years.”
But while most UK agents spend time keeping tabs on their target vendors and buyers locally, Gee and Hersham have a global contacts to keep warm. “If you look at all the big deals in London recently north of £20 million chances are they were an international buyer from Hong Kong, China, Russia, the US, India or the Middle East,” says Gee. “That international market has always existed, but more so as the world has changed over the past decade or so.
“When we sell a property we are scanning internationally for our buyers and they either come into London or we find them via our contacts and offices overseas.”
Beauchamp, like its corporate competitors including Savills, Sotheby’s Realty and Knight Frank, have benefitted enormously from the exponential growth in the world’s super rich community. “We’re not the Premier League breaking away from ‘normal’ estate agency and we’re not alone in doing this,” says Gee. “There are some very talented operators out that we have a high regard for in various countries that also deal specifically at the top end.”
Until the 1970s the international HNWIs were largely a European and US community. But it has since been joined by people from the Middle East, Russia, Hong Kong, China and Singapore. These super-wealthy buyers often want to buy homes in multiple locations – typically Los Angeles or New York, London and Paris – and only want the best. Or as Hersham puts it, the ‘apex’ of each property market.
But the dominant buyers now are Chinese and in particular those from Hong Kong. Over the past 14 months Beauchamp has sold a flat for £50 million and a 45-room Knightsbridge mansion for £210 million both in London to these buyers. Hersham says there is a colossal flight of wealth from Hong Kong now as its Chinese-controlled authorities crack down on free speech. “Even if just a small percentage of that wealth comes to London that’s going to really drive the super-prime market even further,” says Hersham.
His agency landed a coup last month when it bagged the instruction of all instructions – to find a buyer for a Los Angeles mansion that once belonged to US newspaper magnate William Hearst. The Beverley House will only appeal to a small number of buyers; it’s for sale at £90 million. “We were approached,” says Gee. “We didn’t go out seeking to get the business. Someone in Los Angeles understood that they needed an international agent to source a buyer outside the US and phoned us.”
But unlike most agents who deal with ‘normal’ homes below the ‘apex’ Hersham talks about, Beauchamp operates in a very discrete world in which Non-Disclosure Agreements or NDAs are common to protect vendor, buyer and even tenant privacy. Approximately 70 per cent of the properties it deals with are ‘off market’ and never make it onto the portals.
“That doesn’t stop us having to go through due diligence, but a lot of our clients either don’t want their property to go publicly to market or we have buyers who are looking specifically for properties that are off the market,” says Gee. This may seem strange to some agents. Because the greater the number of buyers for a property, the greater the likely price? But the pair argue that, conversely, there just aren’t that many buyers for these kinds of properties. “It’s not like standard sale by a high street agent where you have say, 20 viewings; this is a property that will only appeal to a limited number of buyers so you want to use an agent who knows who they are and has access to them, however few there may be,” Hersham adds.
Beauchamp’s Head Office is in Mayfair, with two London branches and operations in Los Angeles, Cannes, St Tropez, Tel Aviv and New York.
But Beauchamp Estates and agents like it do face a threat their very traditional sales and lettings model. Although Purplebricks is extremely unlikely to get a super-prime listing, there are a new breed of self-employed agents who now operate on social media, better known as ‘Insta-agents’, who operate internationally. The most famous is London’s Daniel Daggers, but there are plenty of others including Ryan Serhant in New York and Fredrik Eklund in Los Angeles.
Gee and Hersham say this new kind of agent has a place in the industry but that they will not make serious inroads into the prime market. Both make the point strenuously that agents in their sector are all about adding value with a plethora of services whether it be finding a butler, cook or security team, something social media agents will struggle to match.
“In 1997 somebody came to my office and showed me the internet and said you will soon no longer have estate agents on the high street, and I said that there’s no way people who are dealing with their most expensive asset will do it online only; they will want to deal with a human being in an office,” says Gee. “I think that was the right call.”
Gee is also suspicious of the claims made by Insta-agents on their social media feeds and says the hundreds of thousands and sometime millions of people who look at their photos and videos are not target customers of Beauchamp. “Most people we deal with would never consider using an Insta-agent,” says Gee. “Beauchamp has been around for 40 years and I’ve been in the business for 16 years and Gary for even longer. It’s about trust – I have people who I sold to when I was 20 years old who are still my clients now. “They want to deal with someone they can trust, who has a grounding in a professional business, a good business and personal reputation and I don’t think that will change.”
Beauchamp has also shrugged off the pandemic, at least until recently. Like many other agents it ensured all the properties on its books were added to its virtual viewings platform. This helped it trade through the first lockdown and beyond, including the sale of a £16 million house. “The subsequent Covid lockdown has been different – people have been more scared by the new variant virus and there’s been no international travel into London. No-one wants to come until they are vaccinated or are allowed to,” says Gee.
Knowing your customer
But prime agents are not all about marble hallways and buyers jetting in for viewings. HMRC has been cracking down hard on London’s prime central London agencies, many of whom it believes are being too lax when it comes to following anti-money laundering procedures and, in some cases, wilfully ignoring them. Gee says the crackdown hasn’t put international clients off buying in London, but rather scared off those that are not keen to reveal the source of their wealth. “We take it very seriously – including regular training for our staff and a barrister who oversees our procedures,” he says.
I’ve been in the business for 16 years and Gary for even longer. It’s about trust – I have people who I sold to when I was 20 years old who are still my clients now.
“Because of the types of deals we do, Beauchamp is in the spotlight and we’re ultra-cautious – but it does add a layer of complexity to any matter you’re dealing with now, including customer due diligence, when you’re marketing a property and dealing with a buyer, but we’ve accepted it as a part of life.” Hersham adds, “When it all started we, like other agents, wondered why we had to do AML but now we ensure our paperwork is spotless – and had a letter from HMRC last week to confirm that.”
Bags of money
But it was not always like that. Both Hersham and Gee worked during the ‘good old days’ when AML was unheard of and foreign millionaires and billionaires had a free reign in the capital. “When I was about 20 and selling a house in Hampstead Garden Suburb for £300k, a Russian agreed to buy the house,” says Gee. “He met me and the owner at the property and walked in with a suitcase stuffed with the cash – I told him ‘this is not how it’s done; you need to take this to your solicitor’. That the equivalent of £1.5 million today.”
Hersham has a similar pre-AML story including when he let a house in Belgravia to a senior member of a Middle East royal family. “Several things were notable – a carrier bag with £36,000 in it which was 11 weeks rent and the deposit. I then took this money back to the office on a bus because I didn’t have a car at the time.” Such financial shenanigans would be both inadvisable not to mention illegal under current AML regulations.
But in many ways the rarefied world of prime property hasn’t changed since the company started up 42 years ago, except the mix of nationalities who are their clientele, the huge sums involved and the mild intrusions of the digital world.