Cross-border real estate is often won or lost after the deal closes.
A transaction may be approved in Seoul, London or Singapore, but performance is shaped on the ground – by tenants, regulations, sustainability requirements, construction costs and shifts in local submarkets.
As institutional investors, including Korean institutions, increasingly look overseas for income, diversification and long-term returns, Savills Investment Management believes the gap between global capital and local execution has never mattered more.
“Most international investors arrive with a clear strategy,” Kevin Aitchison, managing director and head of Equity Real Estate Europe at Savills Investment Management, said in a report. “What they frequently underestimate is the complexity of execution.”
Overseas property investments are sensitive to details that are difficult to manage from afar: tenant concerns that may not surface immediately, local planning constraints and fast-changing sustainability standards.
For investors entering unfamiliar markets, selecting a local asset manager is often one of the most consequential decisions made after acquisition.
Asset management, Savills Investment Management argues, is now a strategic function rather than simply an operational one – capable of influencing leasing outcomes, tenant retention, ESG credentials and the price a seller can command at exit.
PROOF ON THE GROUND
In Stuttgart, Savills Investment Management’s local team led a three-year refurbishment of a central business district office asset occupied by an anchor tenant, a leading auditing and consulting firm in Germany.
The scope included lobby and courtyard upgrades, photovoltaic panels, LED lighting, water-saving fittings and green lease clauses. The building achieved LEED Gold certification and, despite disruption from the war in Ukraine, was delivered about 10% under budget.
Since the acquisition, the asset value has increased significantly, achieving strong double-digit growth.
In Poland, the firm repositioned a shopping center operating under structural pressure in the retail market. The team reworked the tenant mix, drove footfall growth and embedded sustainability within the asset’s identity.
The center achieved BREEAM Outstanding certification, while landlord revenue rose 25% and tenant turnover increased 35%.
Both examples illustrate how returns are shaped by a series of local decisions, not a single acquisition call.
CHOOSING THE RIGHT LOCAL PARTNER
Appointing the wrong local manager can do more than disrupt day-to-day operations – it can undermine the investment thesis entirely.
That risk has grown as higher interest rates, more selective tenants and tougher environmental standards make overseas property ownership less forgiving.
“Real estate is a local business,” Aitchison said. “The right manager does not simply preserve value; they create it.”
For investors deploying capital into distant markets, the choice of local partner may ultimately determine whether an overseas property investment performs.
Jennifer Nicholson-Breen edited this article.