Mariwyn Evans writes about commercial real estate for REALTOR® Magazine. You can reach her at firstname.lastname@example.org.
Take Your Skills Abroad
Representing foreign buyers in the United States isn't the only way to work with other cultures. Follow the example of Shanghai-based Chris Cuff, SIOR®, regional director of Asia for Colliers International, and strike out for the unknown.
December 1, 2009
You had a successful career in Toronto as a top-producing broker with Royal LePage (now Cushman & Wakefield LePage). What made you want to work in China?
Cuff: In 1997 and again in 2000, I had the opportunity to travel in Asia on vacation and saw firsthand how quickly the real estate markets were developing there. The amount of construction, especially new office space, was and still is staggering, as many regions move from agricultural economies to industrial then to services. For example, in Shanghai, where I'm based, developers have been building between 3 million and 5 million square feet of new downtown A-grade office space every year without any precommitted leasing and, until very recently, had no problem filling it.
I'd never worked overseas and didn't speak Chinese, but the challenge interested me. So Cushman & Wakefield felt my experience would appeal to U.S. companies working in China and offered me a position in Shanghai in 2003. I took it. I moved to Colliers in 2008. I still don't speak Chinese beyond a few standard phrases, but that hasn't prevented me from being successful. Currently, I run the China commercial brokerage business for Colliers and act as liaison between North America and Asia to facilitate international referrals.
Tell me about what types of services your company provides in Asia?
Cuff: Many of the larger real estate services firms, including Colliers, have been operating in the Asia- Pacific region for a long time now. Colliers has good coverage with 71 offices in 13 Asia-Pacific countries. The company provides a full range of services including retail, industrial, and office brokerage; development consulting; appraisal; corporate services; property management; and market research. Our clients are generally multinational firms. A large number are based in the United States, but we're doing an increasing amount of business with local and regional firms.
How are your clients' needs different from those of similar companies in the States?
Cuff: In addition to the services we would normally provide in any other market, we're also required to advise on cultural and local market differences. We might be asked to advise on anything from local staffing practices to the perception of certain locations within the city to local construction standards. Also, many of our clients grow significantly faster in Asia than in other countries, so we need to consider shorter lease terms and better expansion options.
Do you also work with Asian companies and individuals to acquire U.S. property?
Cuff: We've built relationships with some large Asian companies, and, on occasion, are able to refer their business to our colleagues in the States. At this stage, however, there are still far more referrals from the United States to China than the other way around. This will change over time as more global real estate companies are based in Asia.
What are the biggest business challenges in working in a foreign market?
Cuff: The two biggest challenges are probably language and the cultural sensitivities surrounding negotiations. Translating between English and many Asian languages is a time-consuming and inexact process, but it can't be avoided. Many jurisdictions will not accept contracts written in anything other than the official language (just as you might have trouble registering a lease written in Chinese in the United States). Furthermore, the bulk of our staff across Asia has learned English as a second (or third or fourth) language. But despite their best efforts, things do sometimes get lost in translation. We compensate for this by trying to use template documents (i.e. documents, proposals, and even emails) as much as possible.
Cultural factors can affect negotiations, including the greater deference for age and status plus the increased role of personal relationships. For example, many younger brokers believe it is inappropriate to negotiate with an older person or with someone who is perceived to be of a higher status. The trading of favors, which is used to build and maintain relationships, can also lead to less-than-optimal results when measured on the basis of a single transaction. Although many people argue that relationship-based negotiations yield the same average result over time, our Western clients generally want to evaluate each transaction on its own merits. The focus on personal relationships is one reason we see so many companies negotiating their own leases even though, in almost every case, an experienced broker could achieve a better result.
We compensate for these challenges by being more flexible. We use different negotiation strategies to suit different situations. Some of the most important advice we can give clients is when to do things the "Asian way" and when to insist on their usual process.
What are the biggest personal challenges to working overseas?
Cuff: Certainly moving away from friends and family and giving up the business I'd built in North America was difficult, but there's no question that I've gained more than I've lost. I visit friends and family frequently and stay touch with many former clients. I've learned so much by being out here — both professionally by taking on new challenges and personally by exposing myself to new cultures. Just seeing China develop over the past six years has been an amazing experience.
What advice would you give a fellow commercial real estate professional who wanted to work in a foreign market?
Cuff: Be prepared to make a three-to-five-year commitment. It's possible to be very successful out here, but there is a learning curve. Anytime a broker changes markets, although a few clients may follow and the company may provide some corporate referrals, you will have to develop new relationships in order to succeed. Learning the market and the culture also takes time. Language skills are generally not required, but they certainly help.
Research cities and countries based on size of the market, population, and GDP growth. You want a country with opportunities. Then arrange preliminary interviews with the larger firms in the market. Remember that the more mature markets (such as Hong Kong) have established bases of experienced real estate professionals, so it will take more time to build your business. Choosing a less mature market (such as Shanghai or Beijing) may provide better opportunities in the long run.