winning ways in a small world patricia lines bsc mrics sior james southey bsc mrics sior 2006 sior...
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Winning Ways in a Small World
Patricia Lines Bsc MRICS SIORJames Southey Bsc MRICS SIOR
2006 SIOR Spring Convention – La Quinta, CA USA
Winning Ways in a small World
Doing International Business in the Real Estate Sector
Patricia Lines Bsc MRICS SIOR
James Southey Bsc MRICS SIOR
April 2006
Who are we?
Patricia Lines
Qualified Surveyor
SIOR since 2000
In Real Estate since 1986
Worked in Real Estate on a worldwide basis
Lived and worked in Germany
SIOR International Advisory Vice Chair
Keen golfer!
James Southey
Qualified surveyor
SIOR since 2000
In Real Estate since 1990
Licensed in NJ and worked in USA from 1999 through 2004
Based in London with responsibility for USA
Winning Ways in a small World
Let’s take SIOR business in the right direction and take off for success
Winning Ways in a small World
Where is this city? Image courtesy of Terry Farrell and Partners
Winning Ways in a small World
EUROPE
FRANCE
SPAIN
ITALY
GERMANY
NO
RW
AYS
WE
DE
N
FIN
LAN
D
NETHERLANDS
BELGIUM
POLAND
POR
TUG
AL
GREECE
ESTONIA
LATVIJA
LITUANIA
BULGARIA
CZECH REPUBLIC
BULGARIA
SWITZERLAND
AUSTRIA
LUXEMBOURG
UNITED KINGDOM
DENMARK
SLOVAKIA
HUNGARY
ROMANIA
SERBIA
MACEDONIA
MONTENEGRO
ALBANIA
BOSNIA
CROATIA
SLOVENIA
IRELAND
Winning Ways in a small World
Why is doing business different?
• Cultural differences
• English language v American language
• Different time zones
• Different languages
• Ways of conducting meetings
Winning Ways in a small World
Lease Structures in Germany
• Typically 5 plus 5 year leases
• Reviews linked to consumer price index
• No statutory right to renew• Structural repairs - landlord
Winning Ways in a small World
Italian Lease Structures
• 6 plus 6 year terms
• Annual indexation of rents
• Landlord responsible for structural repairs
• No full recovery of service charges
Winning Ways in a small World
American and British Lease Comparisons – A few differences
Clause UK USA
Length of lease 10 to 15 years 5 to 10 years
Rent NET GROSS
Rental payment Quarterly in advance Monthly in advance
Security of Tenure Legislative Contractual
Service Charges Reimbursement of costs
Fixed by annual escalation
Winning Ways in a small World
Fee Structures
Country Lease Fees
Belgium 15% of first years rent
Czech Republic 10 – 12% of one years rent
Denmark 15% of one years rent
France 20 – 30% of one years rent
Germany 20 – 25 % of gross annual rent
Winning Ways in a small World
Fee Structures
Country Lease Fees
Italy 1 – 2 months rent
Ireland 10 – 12% of first years rent
Netherlands 10% of first years rent
Poland 8.5 -10% of one years rent
Spain 10% of annual rent
Switzerland 15% of one years rent
UK 10% of one years rent
Winning Ways in a small World
Office Rents Comparisons
0
20
40
60
80
100
120
140
160
180
200
US$ pa
London West End
Tokyo
Paris
MidtownManhattan
Frankfurt
Washington
Barcelona
San Francisco
Chicago
Dallas
Winning Ways in a small World
Industrial Rents Comparison
0
5
10
15
20
25
30
US $ pa
London Heathrow
New York
Tokyo
Barcelona
Frankfurt
San Francisco
Dallas
Brussels
Winning Ways in a small World
International Case Study: Bristol Myers Squibb - Europe
Winning Ways in a small World
Location Rhein-Main
Winning Ways in a small World
St. Nazaire, France
• Manufacturing and R&D 63,034 ft² on 23.5 acres
• Valuation and P&M
Winning Ways in a small World
UK and Germany
• 12 ongoing instructions out of approx 120 properties in Germany
• Opposite, HQ in Offenbach, Frankfurt – Honeywell 8,000 m² office relocation strategy completed
Winning Ways in a small World
Examples of International Investment Business and pitfalls
Buying Investments in the USA with a German Fund
Winning Ways in a small World
• Meetings Culture
• Language
• Sq m/Sq ft
• Rent per annum/per month
• Definition of yields
Examples of International Investment Winning Ways in a small World
• Currency Issues
• Time Differences
• Legals
• Expectations
• Legislation/Tax
What steps should you take to do business outside North America?
1. Contact the local SIOR broker in the country or city
2. If no one listed call Patricia Lines or James Southey who will advise if their offices can help
3. The SIOR broker will explain the market differences and what needs to be done by You and Your client
4. The SIOR will know the local markets and idiosyncrasies as you would in the USA
Winning Ways in a small World
From small acorns grow large oaks
Winning Ways in a small World