Global Gateways: Portman’s Baisiwala on Growing Beyond U.S. Borders

By Paul Rosta

Commercial real estate becomes more global every year. Even in an unsettled world economic climate, a broad spectrum of development, investment, consulting and advisory firms are on constant lookout for fresh opportunities. As one of the oldest China hands in the U.S. real estate industry, Portman Holdings L.L.C. has perspective on the strategies required to successfully launch an office in a rewarding but complex market.

One of the first real estate companies to enter China when the country relaxed restrictions in 1979, the diversified Atlanta-based company chose Hong Kong as its first location in Asia. From there, it led the development of landmarks like Shanghai Centre, a 2 million-square-foot mixed-use project completed in 1990.

Three years later, the firm closed its longtime office in Hong Kong and moved its operations to Shanghai in order to be closer to its projects. Today, Portman fields a team of about 30 in Shanghai. The lessons learned from operating in China have helped guide the approach to establishing additional outposts in Asia. Portman opened an office in Mumbai in 1996, and in 2006, the firm established a location in Seoul in order to oversee Songdu Landmark, a master-planned 1,500-acre development.

Late last year, Portman staged a homecoming of sorts and hung out its shingle in Hong Kong for the first time in nearly two decades. The company decided to return to Hong Kong for multiple reasons. A major consideration was that Hong Kong serves as the headquarters for many of its capital partners. Even though it is only a two-hour flight from Shanghai, the company’s leadership wanted its team to have easier and more frequent interaction with those partners.

There is no substitute for more personal contact, observed CEO Ambrish Baisiwala.

The Hong Kong team is using that opportunity for contact to work on securing financing for an undisclosed large, mixed-use development and a smaller, single-use project, Baisiwala explained. Hong Kong also offers easy access to southern China, Singapore and promising East Asian markets like Vietnam.

To oversee Portman’s operations in the Hong Kong and Shanghai offices, it recruited Stanley Chin, who had previously been based in Hong Kong as director of portfolio management for Henderson Global Investors. Chin will oversee operations in both China and Taiwan, and will divide his time between Shanghai and Hong Kong. An initial team of about a dozen will extend the reach of the company’s main China office in Shanghai, which numbers about 30.

Expansion Principles

After decades of experience in challenging foreign cultures, Portman has accumulated a series of principles that apply to any global expansion opportunity. Determining whether the company’s business model is the right fit for a specific country or location stands at the top of the list. That requires exhaustive analysis of business opportunities, capital flows, the regulatory climate, the local players and the little things that tend to trip people up.

For any company opening a new office halfway around the world, a perennial concern is making sure that the new team conducts business in a way that is consistent with the company’s standards. What we often end up doing is bringing someone over from the leadership team (in the United States) for a one- or two-year time frame to learn the local practices and stay true to our way of doing business, Baisiwala explained.

On the operational side, the company carefully considers the precise coordinates of its new office and prefers a centrally located space that is close to mass transportation and to client offices.

Finally, when it comes to expanding a global footprint, Baisiwala emphasizes that commitment is measured in decades rather than years. Businesses considering this should really keep in mind that it’s a long haul, he said. Generally, the benefits take time to come back.

For more secrets to effective expansion, see “Planting the Flag” in the July 2012 issue of CPE.