Real Estate Board Lunch

Hugo Healing hosted senior executives from across the industry at a Real Estate Board lunch. Gemma Burgess, Global Co-Head of Real Estate at RRA, gave a global overview to guests - discussing trends in the US, Middle East and APAC following her recent meetings and mandates in these regions.

Discussion topics included:

1. Investor Confidence. Some investors appear to have re-baselined valuations after a long period of artificially low rates, others who bought at the wrong phase of the cycle are in denial or holding out. There is a flight to quality where buildings are changing hands - the cost of upgrading B/C grade stock to meet occupier expectations is now prohibitive (materials, labour costs etc). Speculative development is also largely on hold.
2. DEI and Sustainability. The group discussed how to message what remains important to their businesses and people, across markets which have different views, and in ways that are both authentic and do not have a negative business impact. Investor focus is now how the topic of sustainability impacts valuations, rather than whether it meets other softer (ESG) investment criteria.
3. AI and Real Estate. Asset management/monitoring building usage etc could be obvious applications - but the human impact is still not clear in an industry that relies on critical learning opportunities in more junior roles (surveying, investment, valuations, development, asset management etc).
4. Government debt. Interest rates are one thing, but many felt gilts never get the press, and continue to have an outsized impact on Real Estate market confidence.
5. Low Churn and the ‘missing generation’. Following the great resignation post COVID - the great stagnation amongst organisations was discussed - churn in some businesses is at historic lows (4-5% down from 12-15% at peak), as executives and their teams hunker down, creating succession, career development and talent pipelining challenges for HRDs. The missing generation in real estate caught by the GFC means leaders in that age bracket are in short supply, as many left the industry at that point.