Stephen Ryan attended Expo Real, the annual trade fair for Europe’s real estate sector, in Munich this week and shares what issues he came across from speaking with delegates (see https://www.exporeal.net/).
It is a huge event with over 40,000 delegates milling around seven exhibition halls so there is a danger of information overload. However, there were some recurring themes that particularly struck me: Affordable housing is a pressing issue everywhere.
Affordable housing is complex because it requires a deep understanding of many different fields including demographics, institutional investment, land use, construction methods, economics, taxation and the macro-prudential policies of banking regulators. At Expo there was an interesting discussion about prefabrication and its role in affordable housing.
But there is no single solution and the area is complex – that is the bad news. But the good news is that this issue has been extensively analysed by national governments, universities, trade associations, supranational organisations and others. Other people have therefore done much of the heavy lifting here and they are happy to share, you just need to do the research.
Retail: Is physical retail facing an “apocalypse”, as we sometimes hear? No, according to the experts at Expo, that is an exaggeration. However, online shopping has profoundly changed the sector and continues to do so. The degree of change varies widely – for example, clothing and electronics have been affected more than furniture. Online penetration varies widely from country to country too – for example, Austria and Switzerland have lower online penetration than the UK or the Netherlands.
Some difficult decisions need to be taken, especially by investors with legacy retail portfolios accumulated over many years. In some cases, a change of retail strategy may do the trick; in other cases, the physical assets themselves may have to be repurposed. As with affordable housing, guidance may be available from others, though with retail the source is more likely to location planners, retail data analysts, store performance practitioners and ex-retailers rather than universities or governments.
Data: it seems that very many of us store precious data across a mishmash of spreadsheets, Word documents, PDFs, personal mailboxes and byzantine file directories. Within organisations, the situation may be exacerbated by behavioural imperfections such as working in silos and data hoarding. The result can be that data does not move freely in an organisation but rather gets uncovered almost by accident, sometimes after decisions have been made.
Real estate investment businesses and their advisors need to effectively manage and maximise the value from their proprietary data and third-party data assets. But, judging from what I heard at Expo, data management seems to be left almost to chance. Business level data strategies are often absent and too little effort is made to identify core data assets. The integration of data from multiple sources is acknowledged as important but not undertaken.
My feet are killing me: a topic that was frequently discussed at Expo was sore feet, as three days of walking and standing took its toll on delegates. Affordable housing, retail portfolios and data management came up again and again, and these three will require a deep understanding of complex areas and an ability to make difficult decisions.
Decisions like these are best done with experienced advisers at your side. Didobi, specialist advisers to the real estate industry, can help.