, Japan

PwC tax exec cites real estate firms’ support for corporate clients as critical

Hospitality industry, infrastructure projects need to evolve.

PwC’s Stuart Porter is an international tax adviser with 30 years of experience covering banking, capital markets, investment management, private equity, insurance, real estate, infrastructure and transfer pricing matters for funds, portfolio companies, and financial services clients. 

In his role, Porter advises major US, European, and Asian funds on investment structures, transactions and fund raising. He also advises global investors on their Japanese portfolio investments and commercial joint ventures. Porter advises on market entry strategies for financial services companies starting or expanding in Japan, supports in-bound M&A transactions across a wide variety of sectors, leads tax due diligence teams and advises on investment acquisition and financing strategies. He has led projects advising international consortiums on the privatisation of Japanese airport concessions.

Porter has held several Asia Pacific leadership positions from his base in Tokyo, including for many years acting as the tax leader for the private equity industry, and more recently for the insurance sector. Since 2021, he has acted as the Asia Pacific tax leader for real estate, infrastructure and real assets at PwC.

Before moving to Tokyo in 2003, he worked in the firm’s London, Hong Kong, and Sydney offices. Porter has served as an expert witness before the High Court of Hong Kong. He writes and speaks regularly on Japanese tax law developments, and has undertaken tax reform initiatives projects for Japanese government bodies, including the Ministry of Finance, the Financial Services Agency of Japan, and the Tokyo Metropolitan Government.

He is a lawyer qualified in both England and Australia. 

Sitting with the Real Estate Awards team for a brief interview, Porter gave us a few insights on how cultural differences impacts business and COVID-19’s effect on the commercial and residential market.

Working with US, European, Asian and Japanese funds, what differences do you observe in how each culture conducts real estate business?

Since the advent of global real estate funds with global investors, there has been a homogenisation of how funds treat investors in terms of structuring investments and managing tax risks. However, with same country investments and investors, differences are more pronounced. For example, Japanese investors in real estate tend to follow more market norms with respect to structuring than we see for US investors in US real estate investments. US real estate investments tend to be much more complex--with multiple levels of income allocations at different profit points.

 

One of the major cultural differences is transparency. Dissemination of sale prices and lease rates varies greatly amongst countries. Lack of transparency in some countries can make making informed pricing decisions difficult. A number of countries have a history of restricting foreign ownership of real estate (or of certain types of real estate) and in distributing cash offshore. Whilst such restrictions have loosened over the years as countries seek foreign investment, they remain in limited form in a number of counties.

How do diversity and inclusion practices inform the way you serve real estate clients?

The standards the market and stakeholders apply to our clients apply just as much if not more to what they expect and demand from their service providers. 

As an industry leader, how do you see the real estate industry transforming in the near term? What role does technology play in this transformation?

I think COVID-19 and work-from-home set-up has had a dramatic effect on the commercial and residential market, big cities and the regions. The ability for many office workers to work substantially from almost any location has only been made possible by the latest tech developments and the ability of anyone to utilise them at a low cost. We have in a year or so leaped a development period ahead of implementation and changed mindsets about where, how and what it means to work. 

In selecting the winners of the Real Estate Asia awards, which innovations or projects do you think will deliver the most impact to customers and, consequently, to the industry?

Whilst design will always catch the eye and last, the ability of real estate firms and investors to work with corporates and support their pressing needs to me has been critical over the last few years. How the hospitality industry is evolving and all and any infrastructure projects are also what I would be of keen interest.

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