Local Execution Key to Overseas Property Investments
Global property investors are increasingly turning to overseas markets for income, diversification, and long-term returns. However, the real test of their investments comes after acquisition, when executing a business plan on the ground.
According to Savills Investment Management, overseas property returns are shaped by local factors such as tenants, regulations, sustainability requirements, construction costs, and shifts in local submarkets. These factors can be difficult to manage from afar, making the choice of local asset manager a crucial decision.
Savills Investment Management argues that asset management is now a strategic function rather than merely 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
Savills Investment Management has demonstrated the importance of local execution in two recent projects. In Stuttgart, the firm's local team led a three-year refurbishment of a central business district office building occupied by an anchor tenant. The project scope included lobby and courtyard upgrades, addition of photovoltaic panels, LED lighting, water-saving fittings, and green lease clauses. The building has achieved LEED Gold certification and was delivered at about 10% under budget.
Since the acquisition, the asset's value has increased considerably, 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 visitor 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%.
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.
According to Kevin Aitchison, managing director and head of Equity Real Estate Europe at Savills Investment Management, "Real estate is a local business. 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.
