Globalization has made our world smaller, and every day more and more real estate developers choose to broaden their business by adding international scope. To do this successfully, we need to build solid international business strategies based on different factors, which are distinct for each new location.
During our preliminary analysis we need to understand the real estate cycle – what its drivers are, the difference between physical and financial cycles, and the factors that drive other investors to enter or exit a particular market. From there, we will explore how to take advantage of both expansions and recessions, how to prepare for the next cycle, and how to anticipate and outmaneuver competitors. We will also address how to assess the risks we would face in particular countries and markets, how we measure those risks, and strategies to mitigate those risks.
Different markets worldwide have different profiles, which we’ll explore in detail: the US market is mature with a growing population and transparent economy, whereas the European market is mature but with a shrinking population and more rigid structure. The Asia-Pacific market is marked by strong contrasts, for instance between China and Japan, and emerging markets such as Latin America are less mature with big potential for development in the near future, albeit with significant risks. Externalities affect these markets differently, and each has unique perils, including market transparency and corruption, governmental intervention, inflation, currency exchange risks, political and economic risks, interest rate fluctuations, demographic changes, and so on.
In the second part of the program, we will address best practices for negotiating international details, including different negotiation tactics and strategies, common mistakes, understanding your counterparty’s position and BATNA, and the unique challenges that cross-border negotiations pose. The participants will engage in several negotiation exercises where they will be able to practice all this new tools.
Finally, we’ll construct a financial model that you can use to determine the right “pricing” for your investments, especially in situations where the investment involves ground up developments. Participants will leave the 3-day program with a copy of this financial model in Excel for future reference and use.
