overview
Real estate has traditionally been a safe investment, but it has recently become a more challenging industry, with changing working and shopping patterns reducing demand for office and retail space.
At the same time, inflation and the interest rate increases implemented to curb it have increased the costs associated with doing business and securing capital.
Navigating this period of prolonged uncertainty requires both resilience and strategic foresight. To understand how real estate managers are addressing these challenges, we surveyed 350 companies around the world. From real estate investors to asset managers to pension funds, this diverse group shared their views on the current situation.
We delved into perceptions of immediate risks, identified potential growth indicators, and explored strategies for addressing climate change and expanding regulatory and reporting obligations.
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Many see the ongoing real estate tech revolution and the emergence of innovations like smart buildings as an opportunity not only to overcome challenges but also to gain a competitive advantage.”
Ben McCarthy, Head of Asia and Disasters
Head of Asia Real Estate, Hospitality & Leisure
Despite widespread market headwinds, our survey results reveal a surprising amount of optimism among businesses, with many seeing the ongoing real estate tech revolution and the emergence of innovations such as smart buildings as an opportunity not only to overcome challenges but also to gain a competitive advantage.
68% recognize artificial intelligence as a key tool for digital transformation
However, this optimism is tempered by recognition of a complex situation, with issues including growing cyber risks, economic volatility and political uncertainty.
Real estate companies adapting to ESG standards and climate regulations have expressed concerns about their current capabilities and data readiness as legal deadlines approach. Despite the challenges, the industry remains thriving, and companies are actively pursuing innovative solutions to succeed in an evolving environment.
About the survey
Our survey was conducted between September and October 2023 by our research partner Coleman Parkes using phone-to-web methodology.
We received 350 responses from senior executives responsible for risk strategy across their organizations, based in more than 20 countries across Europe, North America, South America, Asia Pacific and the Middle East.
Date: September-October 2023
Audience: 350 senior executives from around the world, including C-suite executives, risk managers and asset managers.
Business operations: Real estate investment, asset management, fund management, pension funds, real estate investment management.
Location: 20 countries across Europe, Asia Pacific, North America, South America and the Middle East.
Size: 49% between $500 million and $1 billion, 29% between $1 billion and $15 billion, and 22% over $15 billion.
Key findings: Optimistic outlook and growth expectations: The majority of businesses surveyed (55%) expect their total assets to increase within the next two years. Despite a significant downturn in the real estate market, 68% are confident that rental rates will improve. This optimism suggests that businesses are envisioning growth and recovery, and that the industry outlook is strong despite the challenging circumstances.
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