Interview Stena Realty in BOSS Magazine

September 9th, 2015

Interview Stena Realty in BOSS Magazine.

7 things to take into account for international succes

Joost Nieuwenburg

Doing business is an international concept. But what happens when your area of expertise expands across borders. What if you have to deal with people who do not talk the way you talk, work the way you work or do not share the same level of knowledge? And this on a daily basis. In a world that is becoming smaller and smaller because of current technology, the differences between ways of working become more obvious. All kinds of challenges have to be faced in the global business world. To overcome these challenges, you better get a kick-start!

And here we meet Ronald Visscher. Since March 2011 Ronald has been managing director of Stena Realty, but he has international business experience that goes further back. After he completed the renowned Master of Real Estate (MRE) program at the VU in Amsterdam he was strategic consultant with SEB investment, senior director with Tishman Speyer and previously employed at Cushman & Wakefield.

At the moment, Ronald is leading the property branch of Stena Group, which consists of seven business units in total. The well-known ferry lines are a sister organization. Stena Realty is responsible for all international real estate investments in Europe and the United States with both direct and indirect interests. The mother organization of Stena is Swedish, and therefore Ronald Visscher, has approximately 57 real estate objects to manage inseven countries. A talk with the managing director of this global operation is a glance in a pool of experience not only applicable to the international real estate market, but on the international business market as well.

“Besides commodities like a pen, every business is local business.”

7 things
Before even mentioning international business aspects there is one thing Ronald wishes to communicate: real estate, national or international, is a playing field that you have to understand, and have a certain feeling for. In real estate it is important to ‘get buildings’ from the perspective you are working from; understand them, grasp the essence, the feeling and the perception of them. In rental, owner occupied, developer or investor it all goes the same: if you do not understand what the client wants, you will never give them what they want. In the first years of his career, Ronald worked on the advisory side of the market. This taught him a lot about varying clients, unique buildings and different wishes a client could have.

Understanding a client is becoming increasingly international. Most clients are not only oriented locally, broadening your horizon is therefore essential in understanding your clients. Around 80% of today’s real estate market is defined by international investors. This means that the price level is also internationally driven: you should consider investing your euro’s in Amsterdam or perhaps in London or Berlin! However, be aware of the different influences on the market, to create a better feeling for all the aspects that come into play.

1. Local knowledge

First to mention, last one to forget. When doing international business, local knowledge is essential. Besides perhaps commodities like a pen, all business is local business. The main intent might be the same elsewhere, but it are the nuances that make the difference between one location and the next. Everyone is able to gain a certain level of knowledge about economics, political situations or master theoretical aspects of a culture, First to mention, last one to forget. When doing international business, local knowledge is essential. Besides perhaps commodities like a pen, all business is local business. The main intent might be the same elsewhere, but it are the nuances that make the difference between one location and the next. Everyone is able to gain a certain level of knowledge about economics, political situations or master theoretical aspects of a culture, culture, the business and the product. But as long as this person does not know the local culture, has a local network of trustworthy people and knows how to do business the localway, this will most likely fail. That is why you most likely need a Polish person. You need to be aware of the nuances the location brings.

“If we need to change our character too much, the location or market is probably not suitable for us.”

2. Corporate culture versus local culture

Culture is not physical, it is not written down or literal retrievable. You have to anticipate to culture in just the right way. And the line between corporate culture and local culture is filmy and difficult to manage. Lets say your corporate culture ‘dictates’ that it is perfectly normal for an employee to bring his or her own dishes to the sink after the lunch. Whilst on some places this might be frowned upon, this might be considered a task of the front desk clerk or the house keeping. Your business culture does not have to adapt to the customs of that place, because in this case the example is something internal. But the boundaries are fragile and can cause friction in the line of business.

In the case of Stena Realty and Ronald Visscher, if the business culture does not match the local culture at all, a stand will be taken. Ronald explains: “business culture can be flexible, of course, but if the necessary things that need to be flexible in the business culture become too prominent and change the character too much, the location or market is probably not suited for us. It will bring too much risk and will not fit the strategy or values or our company”. That is how important a corporate culture can be.

3. The people

Your colleagues are important. And of course these are also the persons working in the office right next to yours, but when working abroad this becomes even more evident. You have to be able to trust the people you work with. They have to be professional and suit the company.

At Stena Realty they believe in the long-term relation. The relation with their colleagues, their suppliers, their clients and anyone else who they come across in the working field. This is based on the idea of the founding father of Stena. They consider real estate a stable investment. Continuity is important and if you want to maintain this, you must have good and solid relations with your network. That is also why Stena Realty likes to do a lot by themselves. Not only is this cost beneficial, it also gives you the opportunity to maintain contact with all your partners because there are fewer links in the chain. Ronald already pointed out that every market and location has its nuances, this also goes for the way they treat the corporate culture in respect to the people that work with Stena Realty. In general it can be said, that if a person fits the main corporate culture of Stena within certain boundaries, he or she will be able to forge a cohesive group of people. And this group will be able to carry out the values and standards that are important for the company.

4. Basic economic conditions and target group

It is no coincidence that Stena Realty is doing business in SofiaAntipolis in the South of France. It is probably a bit exaggerated, but this region can be seen as the silicon valley of France. It is a research and development area, with lots of offices and their own technical University. These conditions provide economic continuity for the area. And this is important for Stena.

The lesson here is that not all your investments have to be on the South axis in Amsterdam or in SofiaAntipolis in France, but you have to realize that an office tower from the South axis does not work in a village.

The target group you are aiming for is connected to a certain location and certain conditions that go with this location. A match on this point is vital.

“Incorporating knowledge into your own corporation can only be beneficial if it will provide a business economical advantage.”

5. Economies of scale

When you are doing international business you like to have local knowledge. Ronald explained this to us before. But it is important to see this in the light economies of scale and the corporate ideas about doing business. Within Stena Realty as much as possible is done by their own people; accounting, property management, asset management, financing. Basically all aspects of operating real estate. This fits their corporate thought about building a long-term relationship with everyone involved in the process. But incorporating knowledge on all these different topics into your own corporation can only be beneficial if it will provide an economic advantage. And for it to do so, you have to analyse the scale on which you are working. Sometimes the overhead costs are just too big compared to the local product you offer.

6. Regulations

Deriving from the need for local expertise, the local regulations are something you cannot bypass. This might be casually mentioned, but there are local rules everywhere that you have to comply to. As soon as it gets specific, you either have to dive into the subject and make yourself an expert or you have to attract this knowledge from outside. And in new and unknown areas the latter is the way to start. It is not efficient and will cost too much time and money to master the regulations of each location. Regulations are something you cannot go around and will always go above your own rules like your corporate philosophy.

7. There is no such thing as a ‘standard checklist’

This might be obvious and applicable for many things, but certainly for the international real estate market. Real estate decisions are always a combination of a checklist and a gut feeling. There will be a checklist that you can work with. But this does not capture every specific part of an international location, because the differences are simply too big. With each new location you have to take a certain risk, which will sometimes be bigger than other times. Location x might be politically stable or location Y could be economically more attractive, but you have to look at the opportunity on the specified moment and potential situation in the future. This is the key. And to reduce the risk in such a decision you should develop a sense of understanding real estate, like Ronald mentioned in the beginning.

“The Dutch can be adaptive to other cultures; they know what is needed to do business.”

All lessons aside
Lots can be said about international business, in real estate or other markets. Adapting to local culture, local regulations and finding the right people are important lessons. But before we might over think things, Ronald names an aspect the Dutchies might take home as an advantage. Like it was said, every business is a local business. But the Dutch have, speaking of culture and historical background, something important in their genes. The Dutch have always been a trading nation, and this power of commerce seems somehow to be in our blood. The Dutch can be fairly adaptive to other cultures; they know what is needed to do business. We can take on such an attitude where we do business, go home and think: “the people we dealt with have a different business culture, but we have been able to do business”. It does not have to be our way, as long as we can do business. Take this background as an inspiration and the lessons from Ronald as knowledge. The international real estate market is an interesting challenge, but you just got handed over a nice set of tools to cope with this challenge!

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