House and Coca-Cola are two products that have nothing in common. It is not crazy to compare the two. Food companies like Coca-Cola can achieve globalization. But in the past 200 years, there has not been a global real estate company. It seems hard to appear.
Although many real estate enterprises invest overseas, the real estate industry is extremely competitive and localized in any country because of its special attributes, whether it is domestic real estate enterprises or real estate enterprises with British background. Every country and region has different legal systems, tax policies, consumption habits and even hidden rules.
Today, China's developers are almost all over Europe, North America and Australia, but Hong Kong Land, a real estate company spanning a century, is only located in a few countries in Southeast Asia, including Indonesia, Cambodia, Vietnam, Thailand and Singapore.
Observing the action of Singapore Kaide Group, the largest foreign real estate enterprise in China, we will find that when China developers try to add, they are actually doing subtraction. For example, take the initiative to recover investment in Australia. In order to be more focused and balanced, shorten the management radius. Even though the China market is growing faster, they are careful to keep a balance and control the investment ratio.
In contrast, China's real estate enterprises have begun to invest urgently before spending too much time learning about overseas markets. The biggest difference with domestic real estate enterprises is that the asset-liability ratio of CapitaLand and Hong Kong Land is very low, not exceeding 25%. Domestic real estate enterprises are generally around 70%. Housing enterprises that have experienced a complete economic cycle are more awed by the market.
In fact, some risks have just emerged. Such as policy risk. Some overseas cities will have policies and regulations that are not conducive to foreign investment in local real estate. For example, in order to curb the excessive rise of housing prices, Hong Kong introduced the policy that foreign buyers should pay 15% stamp duty in June 20/3. London is also planning to levy property value-added tax on non-local residents from 20 15. The implementation of these policies will hit the market activity and reduce the liquidity of market funds.
In developed markets in Europe and America, although the legal system is sound, the double-edged sword is that security is guaranteed and the law is extremely complicated. Joel H., partner of Puheng Law Firm, USA. Rostain's advice to China developers is that the design of transaction structure, financial arrangement and tax planning must be carefully considered.
Exchange rate risk should not be underestimated. The state of RMB appreciation cannot last forever. Fluctuations may devour profits.
In the initial stage, for the rapid development of the project, all links such as design, development and sales can be solved through cooperation with external institutions, but from the perspective of cost saving and long-term development, we must cultivate our own team.
At the same time, we must also deal with the impact of emergencies. After Malaysia Airlines MH370 incident, Chinese people's enthusiasm for buying houses in the Malaysian market dropped greatly. Although Country Garden's projects in Malaysia are not only sold to China people, many locals, Singaporeans and Indonesians buy them. The occurrence of uncontrollable events makes the investment risk suddenly rise.
China's economic development is slowing down, and the real estate market is also slowing down, but escaping is not the way. In fact, innovation is almost the only way for any enterprise to develop for a long time. For example, internationalization in the use and management of funds and blind expansion of overseas investment may push enterprises to the abyss.