A flexible future: The real estate sector is starting to catch up with the modern world
I am still in the process of digesting our 2019 Visions, Insights & Perspectives (VIP) Europe conference, which took place on 20 and 21 February in Amsterdam.
I was very pleased to have co-hosted the event with my colleagues Geoffrey Dohrmann and Jonathan Schein, to have learnt so much in such a short space of time, met some new faces, and caught up with some familiar ones. I was also immensely proud that the gathering was held in the Dutch capital, as it happens to be my home town.
The conference was a great success and this was all due to our excellent moderators, speakers and attendees. One of the great things about VIP is the way that we try to encourage discussion and participation among the delegates, and I feel that this was one of the many plus points that came out of the event this year. As I understand it, previous conferences have had similar levels of interaction — it’s fantastic to see and is a great indicator of how much our delegates value the sessions that we put on for them.
There was also a lot of networking that took place at our evening dinner as well as at our post-conference canal boat tour and visit to the Heineken brewery. This was very encouraging to see, as one of our aims is to make it easier for investors and managers to connect and share ideas. Incidentally, we were able to extend the networking into the following week. Almost 70 investors and managers based in London joined us at an impromptu cocktail party in the city (many thanks to Jonathan and Roberto Verandas from Cos Capital Europe for organising it), where we were able to dissect VIP a little bit more over drinks and nibbles.
Of course, VIP would not have been possible without our sponsors who underwrite the event. Their support is greatly valued and appreciated, as is that of our advisory board, whose input into the event is invaluable.
Five key themes emerged from the event: sustainability, technology, innovation, diversity and flexibility.
The first of these, sustainability, is a relatively new concept for the real estate sector to consider, given that investors have mostly been concerned with factoring asset depreciation into their allocation decisions up until recently. But with urbanisation and the subsequent need to protect our environment, there is no doubt that sustainability will be close to the top, if not at the top, of investors’ lists of priorities from now on.
Technology and innovation are developing at such a fast pace that it sometimes feels like it is hard to keep up. One of our speakers, Antony Slumbers, an expert on AI and its impact on real estate, said that a gulf could soon emerge between those companies who learn how to harness technology to make better investments, and those who only pay lip service to it. If you don’t have people looking at how technology can enhance your business, then maybe now is the time to remedy that situation.
The fourth theme, diversity, was directly tackled by one of our panel sessions. The conclusion our panellists reached was that better diversity actually aids innovation and growth, as old ideas are challenged and new ones are given the time of day. There is a lot more that can be done to improve diversity within the real estate world, but we are getting there, step-by-step.
The fifth and final point, flexibility, ties into the first four and perhaps is the most important. Without flexibility it is impossible to push new boundaries and challenge conventional thinking. We saw at VIP how flexibility is in fact now entering all aspects of real estate investment. One example of this was a discussion on the cycle. Some managers, such as Andrew Thornton, chief executive officer at Principal Real Estate Europe, said that it was dangerous to assume that we are in the midst of a normal cycle. He pointed out that things have changed since the GFC in such a way that it can be easy to misread the signals that can be found in various real estate markets. In an environment that is far more conducive to sustainable low inflation and lower interest rates, why would it not be possible to extend the cycle for a lot longer than would be expected in “normal” times?
Speaking of “normal” times, another great session that we had took place at our pre-event roundtable discussion on 19 February between investors and managers. This saw some participants question whether Germany’s economic success story is about to end. With the various threats hanging over the motor industry, lower export numbers (particularly into China) and global trade tensions, Europe’s economic powerhouse could be in a precarious position.
Germany’s case underlines the importance of the five themes that stood out during VIP. They are also notions that we at IREI have taken on board as we look to constantly improve the events, publications and data that we produce. That’s why my door is always open to new ideas and suggestions as to how we can better serve you and help make your job that little bit easier — and more enjoyable. So if you have any ideas as to how we can make VIP 2020 even better, then please do get in touch.
I hope to see as many of you as possible over the coming months and, of course, at next year’s conference.
Arno Van Grondelle is the managing director of business development of Institutional Real Estate Europe.