Property challenges put Chinese firms’ go-global plans at risk, JLL says
Some firms have scrapped investment plans to ‘restart from scratch’ after difficulty securing property, researcher says
The real estate services firm said 82 per cent of corporate respondents in a survey reported either paying more than expected to buy or rent properties, or wasting time in failed searches or prolonged furnishing, representing a stern challenge to their international plans.
The missteps for these companies, from electric vehicle (EV) makers to consumer-product companies, could eventually hurt their public images, increase difficulties in recruiting talent and raise their logistics costs, according to Daniel Yao, head of research for JLL China.
“In some cases, they had to adjust the original strategies to find a new solution, which resulted in a heavier financial burden,” he said in an interview. “We found some of them had even scrapped the original investment plans because of the property issues and had to restart from scratch.”
The research showed that Chinese manufacturing businesses with ambitions of foraying into international markets would face challenges despite their technological and production advantages over overseas rivals.
“Fixed-assets like office space, production facilities and logistics parks in various markets could become a stumbling block to mainland Chinese companies’ go-global drive too,” he said. “In some countries, logistics parks are in severe shortage, while rents for office space can be super expensive in some other developed markets. Chinese companies need to have proper real estate strategies to align with their overall globalisation efforts.”