INREV Young Professionals Seminar 2021
The three-hour seminar around the theme, ‘Open for Business: preparing for a post-COVID world’, took place on 1 July 2021, with many interesting areas covered and moderated by Catriona Allen from LaSalle Global Partner Solutions. New ideas were brought to the table and refreshingly, themes were not anymore so much around COVID-19 as we move to adapting to the ‘new normal’
The seminar started with Greg Kane’s presentation on “How will an economic bounce back affect real estate”. The key takeaways were related with possible risk of overshooting with pricing, and the need to be aware of inflation and interest rates, but in the end, it is the low supply that is the key in the real estate markets. Demand for operational assets and green strategies are also rising in popularity.
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Brenna O’Roarty gave the audience some of the key highlights related to the latest INREV research paper of “Real estate as a Commodity, Product and Service: The User-Centric Opportunity 2021”. The key message was how user centric strategies are benefitting different areas of the real estate path; you will have stronger relationships, enhanced income and extended asset life. Another important factor was how income returns are driven but also protected by managing the cost margin. Brenna pointed out how investors and managers should be careful when investing in real estate as a bond, as equity or as real estate and keep in mind the income, value and risk associated with each option.
Countries like the Nordics have low temperatures, high availability for land, good connectivity, lower power pricing and 100 % green energy which is ideal for data centers
Kiran Patel, Peter Pohlschroeder and Tom Errath were presenting their thoughts around urban logistics, data centers and life science. Kiran explained how fast the e-commerce sales volume has been rising in Europe. An Interesting factor was also how urban logistics rents have been positively developing compared to the standard industrial rents since 2010 (urban premium +45 %). Peter gave us a view on data centers and highlighted where ideal target regions for these could be. Countries like the Nordics have low temperatures, high availability for land, good connectivity, lower power pricing and 100 % green energy which is ideal for data centers.
Demand for operational assets and green strategies are also rising in popularity
Tom presented on the life science sector and according to him, the US is few years ahead of Europe when it comes to the life science investor market. This sector has a strong set of attractive fundamentals for example, tenant retention is high due to amount of capital invested into the space. Tom cited the most risk related concerns as possible regulation changes for life science, pricing, level of taxation increases for urban logistics and possible changes for space requirements for data centers.
We also had a 30 minute virtual networking session after panel discussion through an online tool, ‘Glimpse’. In total 235 speed meetings were made during that time – very efficient networking!
In total 235 speed meetings were made during that time – very efficient networking!
Next in the program was “Investing for life: how to make a difference through impact investing”. John Levy defined impact investing and focused on the social aspect as Nehla Krir was focusing more on the environmental impact. John presented the three-dimensional efficient frontier which had a third element of impact alongside risk and return. Nehla pointed out how real estate investors should promote impact especially within the existing stock; 75 % of the 2050 real estate stock is already built.
Last but not least was Andrew Baum from the University of Oxford with his presentation around “PropTech: Future of Real Estate Investment”. He explained about the deep change that is occuring around the commercial real estate markets and that the key drivers behind this are fourth industrial revolution (impacts of the technology), healthy buildings, and climate change. Andrew also presented the idea of the sustainable triangle where Economic, Environmental and Social sustainability aspects are more separately addressed than is currently the case within in the “ESG” Framework.
What an interesting Young Professionals Seminar. A lot of new information and also some new connections through virtual networking. Attendees were also able to poll for the next years seminar venue hopes – Porto got the most votes, let’s see if it will be possible to organize this event there in 2022!
You can view the recording of the Young Professionals Seminar here
This article was written by Eveliina Rusi, Analyst, Varma