CEOs from across the real estate sector met last week at the Real Estate Forum organised by IESE, Savills Aguirre Newman and Tinsa to reflect on their fortunes and share their predictions for the future.
Jorge Péres de Leza, CEO of Metrovacesa, David Martínez, CEO of Aedas Homes and Jaime Riera, Head of Real Estate in Europe at Credit Suisse, were amongst the industry leaders in attendance.
They were united in ruling out the likelihood of consolidation in the sector, which had been expected this year. They noted the tough climate in which the large listed real estate companies are trading, with share prices that are between 30% and 40% below their NAVs. And they highlighted that private equity firms can no longer play with the high levels of leverage (as they did in the past), which allowed them to undertake operations with high returns.
They do expect to see some M&A movement in the future though, given that many companies in the sector are controlled by funds, and so sooner or later, there will have to be exits.
By sector, the industry chiefs point to the continuing success of the high street, flagship stores and shopping centres despite previous reservations.
In the office sector, they noted that the new phenomenon is “flex space”. According to the President of Colonial, Juan José Bruguera, “The real money is not in coworking (like we thought last year) but in flexible office space” – which means offering companies the option of leasing offices only when they need them. He forecasts that flexible space rental contracts will come first, and then green rental contracts.
Finally, the President of Asprima, Juan Antonio Gómez-Pintado, made the case for public-private partnerships as the best solution to the on-going housing crisis.