Real estate: the 'local' global economy

If a seamless, integrated global real estate market does not yet exist, it is not due to a lack of interest on the part of corporations, businesses and other users of space—or indifference on the part of real estate investors and owners.

A means to new markets. Companies see globalization as a means to find new markets, move closer to customers, and reduce manufacturing and other costs. Investors, too, are looking beyond their own borders, in part because some home markets are too small or too competitive and do not offer many investment opportunities.

Investors are trying to realize higher returns by taking advantage of inefficiencies or unique opportunities in local markets, while owners are seeking to expand their existing portfolios of assets and build on the success of their domestic businesses.

Global guidelines. The rules of the game are not the same in global markets as they are at home. Here are some of the important global guidelines to remember if you want to thrive in the real estate arena:

* Currently, globalization of real estate is a myth: The planet is a collection of different real estate markets, not a seamless, integrated, unified market. As the economy goes global, real estate remains local.
* Understanding local markets is crucial to making the most of global opportunities. Know your target markets as well as your home market. Often this means working with local partners and service providers.
* Look before you leap. DonÂ't go into a market without carefully evaluating all the risks—and donÂ't wait until youÂ're in trouble to call for help. Remember: WhatÂ's true in one market is not necessarily true in another. DonÂ't take your assumptions, beliefs and expectations and apply them to other markets.
* Despite their differences, real estate markets are slowly but surely moving toward globalization by removing barriers to entry, adopting global real estate standards, and developing the required legal and professional infrastructure.

(source: Ernst & Young)

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