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PERE Amsterdam: managers focused on RE 'revolution'

Big hitters from the investment management world discussed how they were adapting to current changes in the market and the global economy, on the first panel of the PERE Global Investor Forum, this year held at the Hilton Amsterdam.

A panel of experts concluded that a “revolution” was taking place in the private real estate world as technological advances and demographic changes shape the way the industry thinks about property, from investors to fund managers to occupiers.

The session was moderated by Max von Below, executive director, global investors group at USAA Real estate, and focused on how real estate is adapting to a changing market.

Sitting on the panel were Christophe de Taurines, managing director European investor relations at Colony Capital; Elliot Glausiusz, head of investment at Luxembourg-based investment manager ImmoFinRe; Tom Lee, head of real estate EMEA at BlackRock Real Estate; Paul Parker, managing director at secondaries market specialists Landmark Partners; and Sophie van Oosterom, chief investment officer and head of special programs EMEA at CBRE Global Investors.

de Taurines said he felt the industry was “adapting to a new world”, as the millennial generation grew older and more influential. “People’s working, living and shopping habits are changing,” he said. “Look at Airbnb. What actually is a tenant anymore? Are they a one day tenant or more long term? We are in a whole new world. There has been a huge shift in the last couple of years,” de Taurines added. “We are incorporating changes to our portfolio so we stay attuned to the tech sector. You cannot ignore them.”

While Parker told a packed audience that the changes were forcing all those involved in the real estate industry, from developers to investors to occupiers, to change the way they thought about some sectors. “There is a revolution happening in the way people use space,” Parker said. “On the way to the Hilton today, I saw two WeWork offices. These are revolutionizing the office sector. We have seen student accommodation doubling up as hotels on weekends or holidays when students are away. Uber is another example, young people want to hire or rent short term.”

Lee, whose firm has already developed WeWork offices in London, told the conference he believed “primary reliables” such as the office and retail sectors were undergoing massive changes. “These sectors are going to be turned on their heads in the coming years. Concepts such as flexible working and WeWork are going to transform the office sector. In logistics, driverless trucks will be a gamechanger which in turn will affect retail. Soon we will be asking, do we even need high street shops?” Lee added.

van Oosterom said evidence of the industry’s adaptation to real estate’s changing face could be clearly seen in the Netherlands, a country which firms such as Airbnb, Amazon and WeWork had targeted fairly early. “This modernization happened very quickly in the Netherlands in many sectors, but, especially in retail over the last ten years. Now, the dominant retail centers are large shopping centers,” said van Oosterom. “In logistics, the last mile is now all the rage. We have seen firms like DHL taking up positions in the real estate space by buying land close to big cities.”

de Taurines also added that the way people invest is changing with the rise of crowdfunding through the internet, a concept relatively new to the real estate world. “It may have a certain reputation now because of how difficult it is to raise money this way, but in ten year’s time this type of fundraising will be commonplace.”

The PERE Global Investors Forum 2016 is being held at the Amsterdam Hilton and runs from October 27 to October 28.