American companies with real estate interests abroad have increased 22 percent since 1989, according to one survey, and corporate real estate executives warn those planning expansion in some areas to take care.
Some 1,300 people turned up this month for the International Association of Corporate Real Estate Executives` 18th annual symposium, up from 900 in 1990. Officials representing the gamut from Fortune 500 companies to one-person consultancies discussed rentals, purchases and financing real estate deals in a variety of international and domestic markets.
A Nacore survey of 380 of its members found that 48 percent, up from 26 percent in 1989, already have international holdings, with the largest proportion-38 percent-in Europe, followed by 35 percent in either Mexico or Canada and 30 percent in Asia. Foreign expansion plans are not as numerous, but those that have such strategies are focusing on Mexico (16 percent), Europe (13 percent), Canada and the Pacific Rim (9 percent each).
West Coast companies, said Mark W. Hoewing, Nacore executive director,
”are clamoring for information on Asian markets, especially Japan.” One area that has lost its luster due to political uncertainty is Hong Kong, which is losing ground to Singapore as a financial center, executives said.
Gerald R. Younce, vice president of New York`s Richard Ellis Inc., said
”major clients” will find bargains in prime office space in Hong Kong because of both overbuilding and political jitters caused by China`s scheduled takeover of the British crown colony in 1997. Two million feet of office space a year continue to be added, and ”a tenant can get a very good deal if he knows what he`s doing,” he said.
Josef Keselman, Digital Equipment Corp. real estate acquisition manager, said Singapore is fast becoming a favorite substitute for Hong Kong, while Bangkok has ”very high occupancy rates” and thus high rents. U.S. companies can`t own an office building in Seoul, but the South Korean government is quite willing to sell land for a manufacturing plant.
In Eastern Europe, executives agreed, enterprise is widespread, as is the desire for American companies to set up shop. But, as Terry L. Rees, international real estate manager for United Technologies Corp., said, finding the right site for a manufacturing plant can be arduous, as some Hungarian municipalities proved during a recent UTC search.
UTC chose an area near Budapest for a new wire-harness plant because it is close to a labor supply as well as within commuting distance for local executives living in the capital.
Don`t, Rees added, don`t expect many local government incentives because they just don`t have the money.
