High-tech firms continue their expansions overseas

Newport Beach, Calif. - Koll National Real Estate Index in conjunction with E&Y Kenneth Leventhal Real Estate Group and the International Association of Corporate Real Estate Executives (NACORE) has created the 1996 Annual Global Strategies Survey, which reports that U.S.-based firms, especially technology firms, will continue high levels of expansion throughout the world.

"Much of the expansion is taking place, and will continue, into Asia and emerging nations - particularly those recently opened to U.S. investment by the fall of the Iron Curtain," says Paul Meyer, managing director of Koll Asia Pacific. "These expansion plans come on top of those with a large existing presence in western Europe, Canada, Japan and Australia - nations that are established trading partners with the U.S."

Mexico was rated the No. 2 choice for expansion, internationally. With the country seemingly rebounding from recent economic turmoil, almost one-fifth (19%) of respondents plan to expand in at least one site in Mexico, making it the second most attractive nation for U.S.-based firm expansion.

Many of the respondents perceive obtaining real estate services in other markets as difficult. This difficulty, however, creates opportunities for service providers, foreign nations and U.S.-based firms that have an understanding of and access in foreign locales.

Surprisingly, Meyer says, the most important factor in determining locations is not cost; it is the accessibility to consumer populations. Of all the study respondents, three-quarters report accessibility to target consumer populations to be a greatly important criterion.

* The survey provides a snapshot projection of corporate expansion for the next several years:

* High-tech firms are leading the expansion into foreign nations. Nearly one-fifth (18%) of the international expansion is planned by high-tech firms.

* Very strong expansion is planned for Asia. Slightly more than one-half (53%) of respondents plan to expand or open a new facility in Asia within the next three years, with the majority (31%) choosing China. Nine of the top 14 foreign cities listed as offering the best prospects are in Asia, with Singapore leading the pack.

* Significant growth is planned for much of the world. A total of 37% plan to expand in at least one location in Europe, 33% in Latin America, 7% in Canada, and 7% in Australia/New Zealand.

* Mexico ties, United Kingdom remains very strong. The U.K. is ranked second (along with Mexico) as a foreign place for U.S.-based firms to expand. More respondents (66%) have existing facilities in the U.K. than in any other nation.

* Modest expansion is planned in Canada, Australia/New Zealand, Japan and much of Western Europe, despite a high level of existing involvement there.

* Continued aggressive expansion in the former Eastern Bloc and Russia is planned. Today, 36% of the respondents have operations in the former Eastern Bloc; 46% plan to have operations within three years. In Russia, 30% have existing operations, and 40% plan to have operations there within three years.

* Half the U.S-based firms rely primarily upon leasing in existing structures to meet their overseas space needs. The other half rely upon a combination of build-to-suits, purchasing existing structures and joint-venture projects with developers.

* There is a very strong reliance on U.S. corporate real estate groups for meeting needs overseas. For example, 51% rely upon their corporate real estate group for lease/acquisition negotiations and 43% do so for construction/development management.

The survey targeted members of NACORE and other organizations, especially corporate real estate executives from large companies and multinational firms.

For more information on the Global Strategies Survey, or to receive a copy, contact Paul Meyer of Koll Asia Pacific at (714) 833-9360.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.