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Buffett to expand real estate empire to Milan, Dubai
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 end of this year.
"We've got a number of markets already teed up," Gino Blefari, who oversees a business that operates franchise networks, said in an interview 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.
Mr Buffett's Berkshire Hathaway first acquired a stake in HomeServices of America - comprising 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.
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 British 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.
Back in the US, HomeServices of America is vying with Realogy Holdings Corp's NRT LLC unit for top spot in the market after last year's purchase of rival broker Long & Foster Cos. 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." BLOOMBERG