The long period of stability and very cheap financing that we used to enjoy before now seems like a distant memory. Volatility is still high while we are starting to see the light at the end of the tunnel. As market players, we can only focus on what we control or can influence, stated Mr. Hanin.
His comment was imprinted on the board of the EPRA conference, and the background of the event’s speakers was a sky with moving clouds—sometimes dense, others transparent—but with sunlight breaking through as a sign that the difficulties are now over, as a sign that a new cycle begins for the European real estate market.
At the Annual Conference held this year in Berlin, discussions
revolved around the economic prospects against a background of geopolitical
challenges and the energy mix for the transition to a zero-footprint
environment in 2050—as well as the intermediate goal of the end of the decade.
Economist Ian Shepherdson, founder of Pantheon
Macroeconomics, presented the economic analysis, which was followed by a
geopolitical discussion with historian and Harvard professor Sir Niall Ferguson
and author Lord Andrew Roberts.
The professor, a former member of the Board of Directors of
the German PPC Graham Weale and an expert on energy transition issues touched
on the need to review the Green Deal on a more realistic basis, analyzing the
existing sources of energy production. At the same time, the economic effects
on the real estate market and the additional costs that companies pay were
developed by Sven Bienert, MRICS REV, from the CRREM initiative with James
Wilkinson, Head of BlackRock Global Real Asset Securities.
EPRA CEO Dominique Moerenhout noted that the local
regulatory environment has been highly beneficial for various real estate
sub-sectors. He specifically emphasized the initiatives taken at the European
legislative level to strengthen several proposals, such as the CSRD and the
taxonomy. These efforts aim to make the listed sector more appealing to
institutional funds, including insurance funds. When it comes to
sustainability, he mentioned that while the intentions are good, it's important
to ensure that this legislation effectively achieves its goals in the long term
without just adding to compliance costs.
During the conference, there were also discussions about the
dominant and emerging trends and technological developments that, along with
AI, have led to the growth of a market for Data Centers, a market that requires
a significant amount of energy and expertise and is able to drive
competitiveness in Mediterranean countries. These countries are where the clean
energy production networks from Africa connect, and Spanish real estate
companies are at the forefront of developing Data Centers to meet the demands
of Northern Europe.The development cost of €10,000 per square meter justifies
the rents that hyper scalers (such as Amazon, Google, and Microsoft),
governments, media companies, and many other businesses using colocation
centers for increased data storage needs are required to pay.
As for the remaining real estate sectors, residential
rentals, biotechnology facilities, and tourism appear to be the most attractive
to investors.
