GE grows into the world’s biggest landlord
GE Real Estate in numbers
Cross-border capital flows into real estate as an asset class are growing but real estate remains the ultimate local business. You can sell or repatriate your international bond portfolio in seconds, resolve your FX exposures even faster and manage down your international equity exposure in a day or two. Even in as capital intensive a business as aircraft leasing, if the lessor refuses to pay you can seize the planes and fly them home. But real estate stays rooted to the spot, its value subject to demand driven by the local economy and supply driven by local planning, building, tax and legal conventions.
So how can anyone operate as a global investor in real estate? In what possible ways can you treat residential developments in China, industrial parks in Mexico, offices in Perth and concert halls in Manchester as the same. Yes, they all happen to be buildings but it’s hard to see what else they have in common.
"Certainly you have to have local expertise," concedes Michael Pralle, chief executive of GE Real Estate. "But what remains common globally is the way you underwrite and value.