Over the last month I have heard no less than six mentions of Colombia. Irvine Sellar is considering a project out there and, bearing in mind he will be making his overseas debut wherever he decides to expand, the fact that Colombia is on the list is potentially a real kudos clincher. Architect Rogers Stirk Harbour + Partners is also looking to expand into the market. And last month UK consultant McBains Cooper opened an office in Bogota.
This time last year I was wondering why UK firms have not been quicker off the mark into this market. OK – so the growth rate slowed down a bit in 2012 to 3.6% compared with the 5.9% annual increase in 2011. But it is expected to rise again this year to around 4.1%, thanks to expansion in coal mining, oil and gas extraction.
The driving force behind the growth comes from the government’s plans to increase infrastructure investment to £5.3bn by 2015. And a report last month by Market Research predicted average annual construction and infrastructure growth in the country of 5.3% between 2013 and 2017.
But still, until pretty recently, UK construction and property firms appeared to shy away from the Colombian market. Now, since the government passed a new public-private partnership law based ?on UK best practice last year, and with key UK architects and developers suggesting moves in this direction, opportunities for property companies and agents who have been focusing on moves elsewhere until now might do well to take a look.
Apart from anything else, there are billions of pounds worth of infrastructure projects in the pipeline for which UK project management experience is being actively sought.
Of course, the nervousness about entering this market could well have something to do with the country’s reputation. But while worries over drug gangs and ?guerrilla violence should certainly not be brushed under the carpet, this is not the Colombia of the ’80s and ’90s. Threats remain, but they are nowhere near as prevalent as many might fear. It seems that, to some extent at least, concerns are exacerbated by a lack of any real understanding of the market.
The need for global expansion into fast emerging markets to ?stay ahead of the pack means that plenty of UK property companies already operate in potentially dangerous places – Africa, India, China and Russia ?to name just a few all present real challenges of their own.
The good news is that working in volatile markets is something the UK property industry is much better at and more familiar with than it was five years ago. Risk management is key and CBRE’s complex and emerging markets ?desk – set up to respond ?to this sort of market change – is evidence of ?just how fast UK property ?is becoming a global business.
Managing risk in emerging markets to make an earlier move is the name of the game.
Waiting for the challenges to be worked out before making the first tentative steps will see UK firms arriving very late to the party.
emily.wright@estatesgazette.com
