Stefan Mächler, group CIO of Swiss Life, predicts that data will be an important strategic asset as digitalisation sweeps through the real estate sector.
Which trends and developments do you hope for most for your business in 2018?
Persistently negative real rates mean there are few alternatives to real estate investments. This will lead to further investments in this asset class. Playing the whole value chain in real estate as we do is an advantage in the various European market cycles, we are convinced that we can keep vacancy rates at low levels. One of the biggest game changers will be digitalisation, especially in real estate; data will therefore be an important strategic asset.
What do you fear the most in the coming year?
A sharp increase in regulation, although basically well-meant consumer protection, will lead to significantly higher costs with marginal improvements, if at all. This, in turn, will mean less attractive financial products for the clients and a further boost in consolidation. We are convinced that we are well prepared for this.
Will you be expanding or scaling down your business?
We will continue to expand our business activities in 2018. From our strong position in our four core home markets we are rapidly expanding into the rest of Europe. While bearing in mind that cycles differ in the various European markets, we believe the risk-free premium for core real estate is still appealing.
What is set to have the biggest impact on your business?
A sudden significant shift in interest rates would be unfavourable. As long as inflation-adjusted real rates are low or even negative, real estate investments are attractive. However, in the long run real estate is a good inflation protection.
We believe Brexit is being over emphasised. Technology is certainly the biggest game changer – although it might take longer than anticipated. As for geopolitics, there are quite a few elephants in the room.
The ageing population is having a great impact on the healthcare sector: mainly care homes, assisted living etc. Increasing urbanisation and changing household structures affect the attractiveness of micro-apartments, such as student housing. We are already engaged in these sectors.
