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Ask the Expert is an interactive section where you can ask any question about AsiaPac International, the commercial real estate industry, or the services provided by our company. Our qualified management team will answer your questions and the best ones will be published in our newsletter, which is distributed to over 12 thousand people, including our clients, partners, and brokers. If you would like to receive our Newsletters or Did You Knows, simply go to Knowledge Bank and click on Register.  Send your questions to Email Info

 

 
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The following are some of the responses published in our newsletter.     

Q. How do you manage the requests of multiple partners for international information?

A. Coordinating the demands of our multiple partners can be tricky but is a necessity. We facilitate international information for over 11 different US based firms and most of them would like to run the entire project themselves. Instead of having over 10,000 individuals calling each of our offices and running them through all the demands and challenges of business development, I take the lead and help assess each deal and work with the partner to explain to their clients the process. This way each of our international locations only becomes engaged when we contact them and focuses on completing the project. Once a client wishes to engage, I pass the project over to our client services department. This eliminates any distractions to our international team and sets up the precedent for our one point of contact here in the US. 

Q. What are the main differences between American landlords and Asian landlords?

A. The Main difference between Asian landlords and Americans is the style of lease terms and the purposes for which they were created. The style of lease terms in turn sets up different practice.

In the US of A, we like to see things written down and like the language to be transparent. It is understood what the responsibilities of each party are and that they are clearly and cleanly articulated is the common practice. We have a fairly decent system of laws that holds those responsibilities in place and allows for each group to feel comfortable with each others roles. This has come about from the Colonial legacy that the US has, but we have made it our own, like so many of the things we inherited from the British.

In Asia-pacific and the subcontinent it comes down to Cultural Mentality and British History.
In the countries that have been influenced by Britain, individualistic common law practice rules. Some examples include:

  1. Singapore
  2. Australia
  3. Hong Kong Special Administrative Region (HKSAR)
  4. India

These countries fall into a group that we will label “Colonial Legacy”.
In other Asian countries a group or family and close friends mentality is prevalent in the leasing practice.
Some examples include:

  1. China
  2. Japan
  3. Korea
  4. Thailand

These countries fall into a group that we will label “Feudal Legacy”

What characterizes each style?

The Colonial Legacy:

  1. Reliant on individualism; “what’s mine is mine and what’s yours is yours”
  2. Very defined Commonly accepted laws and definitions which are expressly written
  3. Expressly written laws are thought to ensure individuals safety
  4. As written law is prevalent, you can also bet that obtuse lawyers language is there.
  5. Lawyers are thus needed to interpret the obligations of each person.
  6. Everything is decided in writing, down to the last possible question.
  7. Lease terms decided by common law of what is fair practice
  8. Business is done first, if you like the person, then you might go out for a meal or drink.
  9. The purpose of this style of lease is to define the differences in individual property and rights, and establishing hard and fast rules to determine the penalty of breaching the others individuality

The Feudal Legacy:

  1. It all flows from the former ruling dynasty. The land is owned by former powerful families
  2. Families are thus major land lords and landowners, and looking to do what’s right for their own.
  3. The lessee in their eyes is becoming part of the “family”.
  4. As part of the “Family” trust is required and fair treatment is expected rather than required by law because of your “symbiotic” relationship.
  5. Trust is hard to build and easy to destroy. When you have a LL’s trust you can bet they will do what’s right for you, just as if it were their family, but treat them disrespectfully and find that you are outside the circle of favor.
  6. Reputation is everything, and proper conduct is paramount, one slip up in etiquette can cost you 20% in annual rent.
  7. Lease terms decided by the major Land owners.
  8. Business is done second, after you have had a meal and determined that this person is a desirable addition to the inner circle
  9. The Purpose of this style of lease is to allow you to take a stake in the building and the owner’s outcome. It is more of an incorporating lease than a division of what is each person’s and what they have to do to legally keep themselves safe.

Is there any hope for American companies?

As American Companies are becoming more and more influential in both of these types of markets they are changing the way leasing is handled. It is becoming more of a business initiative rather than an extension of “family” or a complex practice that only solicitors can understand. In Feudal Asia the family trust mentality is being minimized, while the less complicated parts of common law come into practice, the line between group and individual becomes more distinct. The reverse is happening in the former colonies, the common person can now review and understand leases as opposed to being left in the dark by complicated and obtuse language written by the most dense of lawyers.

There is much hope for American companies as international leasing will become much more like the American style in the next 5 to 10 years, and will mold to be a hybrid of the two aforementioned systems. The thing that will remain constant in Asia though, respect, reputation and proper conduct, if you cannot commit to handling all of these in a favorable manner you will always have a hard time anywhere is the Asia-Pacific region or the subcontinent.
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