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ASIA: THIS WAY FOR GROWTH
The establishment of a subsidiary in Japan and the construction of the new Asia/Pacific business division marks the dawn of a new era in the history of Eurohypo and one in which it is conquering the fastest growing region of the world.
To Hendrik Gienow, the significance of the Asia/Pacific region to Eurohypo cannot be rated highly enough. The Head of Corporate and Investment Banking Asia-Pacific (CIBI Asia-Pacific) says, “This is an entirely new chapter in the history of our bank.”
With the construction of the new business division, the bank is advancing its expansion in the Asia/Pacific region. “To us, this means taking a decisive step into completely different cultures and this will give us a unique opportunity of benefiting from the potential offered by the fastest growing region in the world.”
Tokyo first target market in Asia
2006, Eurohypo made a start with the opening of its own office in Tokyo. The liaison office has now become a subsidiary. From the Eschborn HQ, the newly expanded Business Development Asia-Pacific promotes the development of further markets in the region.
Japan represents the start of the development of the Asia-Pacific region. Japan is particularly suitable as the first target market in Asia. The Japanese economy is the second largest in the world, after the USA. The country has a highly developed real estate market and as far as its professionalism, transparency and liquidity are concerned, it can certainly compete with any other investment centre in the world.
Hendrik Gienow explained: “We are entering the market at a particularly auspicious time.” After a long period of recession, the Japanese economy has been enjoying strong growth in recent years and domestic demand is on an upward trend. Consequently, companies are investing and individual consumption is rising.
“Our target clients are primarily the major international players with whom Eurohypo is already working in other markets” he added. A specialist team will work closely with the other business departments to seek out clients in the existing client base who are potentially of interest for the Asia business. Initially, new business will focus on financing for office and retail real estate.
Eurohypo addresses in Hong Kong and Singapore
Eurohypo (Japan) Corporation in Tokyo will not remain the only Eurohypo address in Asia for long. In 2007 offices will be opened in Hong Kong for China and for the South-east Asia in Singapore.
The outlook for returns is definitely in the double digit range for office and retail real estate (see diagram), a fact which is very attractive to investors and consequently, to potential clients for providers of real estate finance.
Eurohypo and Commerzbank make joint use of resources
As a member of the Commerzbank Group, Eurohypo makes use of the resources of the parent company whereever these are available.This applies to Tokyo, where both banks are sharing the same office floor and is also true of Singapore, where the office will assume an important interface function, not least because Commerzbank manages part of its Asia business from there. Gienow explained: “Where possible, we shall be staying with the existing infrastructure our parent company may already have and making joint use of the valuable resources available.”
As well as Japan, China and South East Asia, Gienow and his crew are currently also very busy with India. For some time, the country has established itself as a location for highly specialised services, such as those provided in the IT sector. Experts ascribe even greater growth potential for some areas of India than China.
The economic upturn in India is becoming more widespread. After a marked rise in salaries in towns such as Delhi, Mumbai and Bangalore, the focus for outsourcing has now turned to other major towns and cities like Hyderabad, Pune and Calcutta, which are consequently enjoying dynamic growth in demand for commercial real estate. In a current survey of the Indian real estate market, Deutsche Bank’s research specialists estimate that real estate will grow by one fifth, or USD 60 billion, in the next three years.
The rise of a broad middle class and the population growth are also adding to the general purchasing power and a population of conspicuous consumers requires modern retailing with suitable real estate. Gienow is convinced: “India offers the best conditions for long term positive development. The country has the potential to become one of Asia’s key markets.”
“All we have to do is to grasp the opportunities with both hands”
CIBI Asia-Pacific not only has big plans and fascinating perspectives, but it already has some successes under its belt. Taking Japan as an example, a series of finance projects are currently in the Eurohypo pipeline and by the end of the year, new business achieved is likely to be worth around EUR 500 million. For Gienow this is just the beginning: “Eurohypo has set its sights on growth and this is where this can best be achieved. All we have to do is to grasp the opportunities with both hands.”
