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Posted: 01 Jan 2013 | 6:00 am
Last night I had catfish for dinner. I know what you are thinking and no I have not gone all Cajun white trash, at least not yet. It wasn't the deep fried cholesterol nuclear bomb type that would send me to the emergency room for a triple bypass, this was the oh so spicy Thai version with green mango. "Phet Phet" my little spicy salad chimed in. It's always a worry whenever the food starts talking back.
Catfish, in case you didn't know, are bottom feeders. It's not pretty so let's not even go there, but talking of submersible water vultures brings up the subject of real estate.
In my other persona as an international hospitality and property consultant, my office regularly receives all manner of requests, cries for help and cryptic business propositions. Over the past 10 years, one recurring storyline continues to be those seeking out cheap deals. That, and those Nigerian lottery emails.
Good times, bad times, the global financial crisis or even the boom time pre-subprime, it is one constant that has remained part of the daily grind. Be they bottom feeders, or more politely what private equity players call "opportunity funds", it's always the same deal. Undervalued assets, cheap land, and distress.
Sure, some are called back and few are even chosen, but when you start to count the true deals in recent memory, a stutter starts to occur and words become long drawn out slurs. In short - there aren't many.
Over the same aforementioned 10 years (pardon my corporate sounding slang), Asia has grown up considerably. We now live in the Big East and can effectively bin those colonial hash tags like "developing countries" or "the orient."
We may miss being exotic, but the rice bowl is overflowing and I find great comfort in having a latte at Starbuck's within easy reach wherever I travel. But Asia, as anyone who travels to Singapore, Hong Kong, or even escapes to Phuket or Bali will tell you, is no longer cheap. In fact it's downright expensive.
This includes land, buying hotels and the sheer cost of doing business. While there is topside, we have floated up closer to the surface. Our catfish friends are mere memories as we try to get up closer to the warming rays of the sun. Real estate deals need lots of cash; liquidity and access to substantial debt are a must. As for margins, these are under attack by hyperinflation, skyrocketing wages, and competitive labour market.
If you want to run with the bulls you damn well need to get down to Prada and choose the right outfit. No sales or bargain basement deals there. Recently, we've done a number of jobs in Myanmar and Sri Lanka and again, you get the same nonsensical wallflowers thinking that just because the country has been shut off with years of military rule or wracked by civil war, they are virtually giving land away.
Land in Asia is no bargain and it's only set to rise higher given the failure of the West and the proximity to half the world's population. If you want cheap, perhaps look at the rust belt in America, a condo in Spain or a nice little island in Greece. Upside? You might have to wait for a very long time.
My plate is ominously empty and starting to talk gibberish. Catfish apparently don't make good house pets, so maybe it's best to take on a dog. As the world goes upside down its hard to figure out just where the top and the bottom really are?
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