URBAN 2020 in Peru: 7 years of the jump to South America
URBAN 2020 is a Canarian company with an international presence that is made up from a professional group of engineers, architects and technical architects. This professional team have wide experience in Spain and South America in the construction and real estate sectors. It has managed to adapt itself to changing times, looking for new business. It has a future project based on diversification within the real estate construction sector.
Among the services of Urban, there is the construction of a new building site (residential, industrial, commercial, touristic and sport), civil engineering, building renovation and integral reforms, in this case in residential, touristic and healthcare sector. At the same time and as a part of the business, due to the experienced acquired, URBAN 2020 also develops real estate projects. Initially, it has been developed real estate projects in Peru because of the crisis of this sector in Spain.
"...as soon as we were established, we were lucky to find a local Peruvian partner who showed us the local markets, the needs and provided us knowledge of the real estate business in Lima."
In every real estate projects, URBAN give access to investors that participate in the profitability of the project. The management of the capital is sensible. We always look for consolidated location with diminishing return but which have rapid turnovers of the buildings, reporting monthly information for all the investors concerning the sales and the construction work.
The adventure of going abroad
In our particular process of going abroad, we were forced to look for business alternatives because of the serious crisis in Spain on 2010. Undertaking the challenge of internationalization was a way to diversify the business and to repeat what we have done so well in the Canary Islands before in a similar market. Therefore, we perfectly know that Latin America –due to the similarities with the Islands, its potential and the short-term of adaptation- was the right place to counteract the difficult situation in those years.
Originally, we analysed several markets such as Chile, Colombia and Panama, but we finally decided on Peru after a visit to the Commerce Chamber of Las Palmas, where we have good feelings on the meeting schedule. Finally, we were able to transform those first conversation with local companies into real projects.
Moreover, we also took into account that Peru have macroeconomic stability and great prospects of growth in the real estate sector. Nowadays, we have a thorough knowledge of the real estate and construction sector in Peru and we have surpassed the training cost of the first years.
Going outside the Canary Islands was more a need for survival than a strategy to complement our work in the islands. However, we can say outright that the experience in Peru has helped us to imitate the business model and replicate it in the Canary Islands, now that the economic situation have improved. In other words, the internationalization was a breath of fresh air in turbulent times. And now, we are taking back the new visions of work that we have acquired in Peru.
The beginning with the help of a local Company
The main problem when starting in Peru was undoubtedly the lack of knowledge of the ways and customs when it comes to start a business, as well as the difficulty to get direct bank financing in order to develop them.
In our case, as soon as we were established, we were lucky to find a Peruvian local partner who showed us the local markets, the needs and provided the know-how of the real estate business in Lima. With this first local partner, land was bought and we built and promoted our first construction work in Lima. The building was called RESIDENCIAL GRAN CANARIA (9 dwellings, garages and storage rooms). Subsequently, we have carried out another 4 real estate operations. We are currently promoting the construction of a building of three towers of 174 dwellings.
Certainly, at the time of carrying out the construction works, you also find many problems of different nature, which are related to a different work philosophy, a different construction methods, etc. Nevertheless, the best way we have found to solve these problems has been to get involved at all levels and always taking the control –which is why our plans do not grow desperately. We want to grow by guaranteeing the product quality and having an exhaustive control throughout the chain.
Nowadays, the greatest success for us is to say that we are a Peruvian company for all effects, because, for instance, we do not depend on a local partner and we have access to direct financing in case we decide to expand. This did not happen at the beginning, so it is a remarkable achievement.
Our work in Peru
We have carried out 4 real estate projects with a total of 88 dwellings that have been sold, 174 dwellings under construction and 117 dwellings under development which will begin to be built the next year, 2019. Expectations are good, and we are even lucky to decide the pace of growth that we want to keep. At the moment, we have decided not to grow in an aggressive way, but we prefer to do it in a way in which we have a control and a personalized customer service.
I know that internationalization can vary according to the type of industry or company. According to our experience, going abroad has allowed us to implement other variants of the business model in order to be more competitive in the Canary Islands. It has made us stronger as a company and we have gained a very valuable experience. The exchange of information on how to proceed internally, between our offices in the Canary Islands and Peru, is currently the greatest heritage of our internationalization process and also an additional enrichment for the Company that we did not previously have. This is very important, even more in a limited market as the Canarian one.
Miguel Apeles Díaz O`Shanahan
General manager of URBAN 2020 PERÚ
Tel: +51 993 697 727
Translated by: Haridian Suárez González, January, 23rd 2019