Cross boarder dealmaking: How to avoid getting lost in translation
18. September 2020
- Analysts expect a surge in cross-border transactions following the receding of the COVID-19 pandemic
- The US in particular is projected to witness an upturn in cross border money invested into real estate in the coming months
- Multifamily, life sciences, industrial and healthcare properties remain the most viable investments as does underdeveloped land
- On account of the increasingly international nature of deal making, Drooms’ TRANSACTION data room provides a built-in translation feature available in 6 languages, adding speed to the due diligence process and increasing the level of security of sensitive international transactions
Risk mitigation & cross-border dealmaking
From diverging regulatory systems to tax, accounting and political considerations, real estate investors have their work cut out for them. Although certain professionals may look at reinvesting in their local markets, analysts expect a surge in foreign buyers attracted by investment opportunities in core assets following the receding of the COVID-19 pandemic. The US in particular, which has seen a significant lull in activity, is projected to witness an upturn in cross border money invested into real estate in the coming months.
Whether a strong marketplace for foreign capital or not, cross-border investors continue to air on the side of caution, many undecided whether to buy or sell. Uncertainty has not deterred everyone, however. One need only look at comments made by Karsten Kallevig, who, charged with overseeing Norway’s sovereign wealth fund’s $30 billion real estate portfolio, has been open about pursuing opportunities in the US. Multifamily, life sciences, industrial and healthcare properties remain viable investments as does underdeveloped land while retail, lodging and, to an extent office space, has become less attractive.
Managing language barriers key to success
Adequately managing parties involved in a deal and performing thorough due diligence are both crucial to a successful process. Investors considering international real estate do have more tools at their disposal to enhance transparency and avoid unwanted risk and delays. Language barriers can make carrying out due diligence challenging, costly and are particularly detrimental to deal making.
On account of the increasingly international nature of transactions, Drooms’ TRANSACTION data room doesn’t just increase efficiencies and streamline workflows with market leading features like Q&A and instant access technology, it also has a built-in translation feature available in 6 languages.
✔ No longer needing the services of translation agencies at an additional cost
✔ No longer having to login and out of disparate systems increasing document review times
✔ No longer putting security and confidentiality at risk by being able to keep data ‘on premises’
Drooms TRANSACTION facilitates a direct machine-based translation of documents uploaded to the data room. In order to find the most important information contained in the data flow, a comprehensive search function is indispensable. By entering the desired search term, an OCR (Optical Character Recognition) search of all index descriptions and document content is carried out in the data room for this keyword, any synonyms and similar search terms. Any hits are then flagged to users.