Is real estate still an own and lease business?
As always proves to be the case, real estate is changing as our society is changing, but it is the rapid speed of change which seems different this time. Across all asset classes we are witnessing how the needs of our tenants and clients, and their customers, are creating demand for new spaces with new features and in new locations. One of the strongest trends the industry has to adapt to is the evolution of the landlord away from being a passive owner, to becoming the provider of a holistic experience for the tenant that goes way beyond the bricks and mortar.
The fixed-lease contract model is becoming a thing of the past across many asset classes with the tenant and landlord realizing it’s healthier to share the returns being generated by the use of the underlying real estate asset, so they both feel the pain when the going gets tough but both profit in a more balanced way during the good times.
What made you invest in a recent specialist fund?
Fifth Wall’s dedicated European technology fund is a very important part of our strategy because it allows us to expand our reach and our proximity to the latest innovations. There is a lot of innovation that can be done in-house, but we are big believers in cooperating with other partners. Pooling our insight and experience with Fifth Wall and its other investors will give us a unique perspective, significantly more insightful than we could ever achieve on our own.
How important is it to keep up with technological advancements?
All industries will be impacted by technology in the years ahead and many will be deeply disrupted – to think otherwise or not to adjust for this would be complacency of the highest order. Companies that do not monitor how technology is being used across the real estate and investment industry will start losing ground and will eventually fall permanently behind.
Given the correlation between our buildings and our daily lives for real estate investors, there is a real threat of obsolescence. We see technology as a competitive advantage and the more we embrace it, the better we will perform – in our current activity and in creating new business models.
What makes European proptech exciting?
We are living through an explosion of innovation in Europe. The roll out of 5G makes this moment extremely attractive and will take the possibilities and uses of technology to a new dimension. The EU and every country within it are dedicating significant resources to foster innovation, entrepreneurship and collaboration between universities, other research centers and the real estate industry.
For the first time, I believe Europe has realized that it must be able to compete on innovation and have its own industry champions, to keep up with the USA or China, who have both been nurturing investment in innovation and new technologies for decades.
Will you be making more proptech investments?
We are advancing our technological capability on several fronts, constantly considering new investments as well as becoming part of innovation platforms, because innovation is not something that can happen just by looking in one single direction, even though some paths may at times appear to overlap. We will also consider outright acquisitions where they make strategic and financial sense.