It is often said that
real estate is a local business. However, there is an increasing rate
of capital and investments moving across international boundaries
where the yields are attractive or there are competitive advantages
for multi-national corporations to relocate their operations and
Meanwhile the world economy is changing. The economic dynamics are shifting and there is also a shift in the economic prosperity of countries. Many of the local companies in our region recognize the need to venture beyond the local shores in order for them to grow. It becomes a need for local companies to globalize. In Singapore, globalization of local companies is encouraged by the government and for many companies, globalization may be the strategy of survival and growth. Major property services companies in Singapore also need to have a global perspective.
Real Estate Services
Besides the shift in the world’s economic dynamics, the old economy is now replaced by the new economy with rapid the technological advances. These have impacted the business environments and the services provided. Real estate services are not spared. In old economy, the real estate services are mainly:
In the new economy real estate services company provides a total asset solution to an investor or property owner. Thus its services may include:
In Singapore, PREMAS International Ltd, is one that provides the full spectrum of the real estate services
PREMAS International is a Singapore bred real services company. It is one of the largest real estate services companies in Singapore.
GLOBALIZATION OF REAL ESTATE SERVICES
and Pull Factors
The pull factor can be from the home clients who have global businesses and need corporate real estate services. As the cross border issues for doing business have gradually been reduced in this rapidly advanced technologically age. The increased connectivity amongst offices in various states of country and various countries gives impetus to the globalization of real estate services. In this new economy, connectivity is through email, video conference and internet.
In its initial years in China, PREMAS International Ltd was providing property management and marketing services to the CapitaLand group of properties in Shanghai.
The competitive advantages of one country may attract global of businesses. For labour intensive companies, many have established themselves in China, and India from their home countries. Philips and Seagate are examples of the multinational corporations who have globalised operations.
Companies providing the real estate services may also be pulled by the vast opportunities offered in countries where there is a lack of sophisticated real estate services. The opening of China to the world is a window of opportunities as China moves from a communist society to a socialist society with inclinations towards a laissez faire economy.
MINIMUM INGREDIENTS FOR THE EXPORT OF REAL ESTATE SERVICES
In all these forms of globalization and to export the real estate services, two basic ingredients have to exist. They are:
the Knowledge Workers
In my observations, the availability and mobility of the knowledge workers across boundaries are important. Their availability and mobility are affected by
From the Singapore experience of globalization of real estate services to China, a number of companies have entered into China by the establishment of the company there. Thus the knowledge worker is needed from the home country to China. The knowledge worker must be receptive to be uprooted from the comfortable situation to one that may have many uncertainties...
Systems and Procedures of Processes
For the facilities and property management services, systems and procedures of processes are usually the core competencies and core competitive advantage for the company to go global. The implementation of ISO standards, the Total Quality Plan, the Six Sigma or the Malcolm Balridge Award helps the company tremendously in its pursuit for globalization.
The Malcolm Balridge Award is an award given to a company who has reached a certain prescribed standards in seven areas namely: leadership, strategic planning, management of information system, human resources, management processes, the measurements of key processes, and customer satisfaction. The equivalent Malcolm Balridge Award in Singapore is the Singapore Quality Award which helps a company document its procedures and processes.
CHALLENGES IN THE GLOBALIZATION AND EXPORT OF REAL ESTATE SERVICES
Knowledge and Legislations
In countries where the legislations are evolving as their economies grow, secondary information can be outdated very fast. Evolving legislation can also spell uncertainty to the companies who have invested in a country.
In PREMAS experience, to provide valuation services in Shanghais or local financial institutions, the valuer has to sit for a national examination and the valuation company must have at least 5 licensed valuers. Many foreign real estate consultancy companies may not qualify and thus only serve foreign clients who are investing there.
The food taken in a foreign country may be different too. To have the same food as from the home country can be expensive. The fast food meal costs as much in Shanghai as in Singapore. It is important for the expatriate workers to adapt to the culture in the new country.
In certain countries, the medium of communication may not be English. Documents may need to be translated with the right technical terms. In addition, the ability to master the local official language makes networking easier and generally this can be translated into more businesses.
Continual Training and Upgrading the Skills of Workers
When a company provides facilities and property management services in countries like China and India where labour cost is much cheaper than in Singapore, it is economically more viable and advantages for the company to have more local staff with a certain number of knowledge workers from the home country for knowledge and skills transfer. However, continual upgrading of the skills of the local workers is necessary to ensure the standards and quality of services are not compromised. Staff may have to be trained in the home country of the company. It may be a challenge to a medium size company who has expanded overseas.
In PREMAS, a training college has been set up to upgrade these skills in the countries which PREMAS has business operations. For those companies who do not have the resources to have their own training facilities, PREMAS training facilities are available to them too.
As Woodward Hansin
from USA has mentioned in his paper, the new economy will be driven by
a profound development. Information is an important matter and global
sharing is made possible through internet and common platforms of
databases. Space and distance have been diminished. Geographical
distance is not an excuse. The world is our customer, business partner
and competitor. Time is collapsing. Instantaneous connection and
response are the demands from your customers. Individuals and
companies are electronically linked. It is no longer a one stop
service but a non stop service that is 24 x 7 service. And this points
towards virtual globalization.