Real estate is a long-term game, but a sense of impatience is building up in the market as investors await interest rate cuts and the outcome of two key elections.
Sometimes it can be hard to know where to look to gauge the future. From geopolitical storms to abysmal weather, sticky inflation to politicians on trial, it feels like factors affecting the macroeconomic outlook have shifted from the sublime to the ridiculous.
Meanwhile, a sense of impatience continues to build in the real estate capital markets as investors wait for central banks to finally get on with rate cuts. In the UK, economists remain in thrall to the current government announcing an election date. Across the pond, the November ballot for a new US president is still more than six months away.
Real estate people should be great at waiting: development plans can take a whole generation, and everyone has wintered out a cycle or three. But the sense that dealmaking is still somewhat out of the industry’s hands, and beholden to minutes from the Fed, is frustrating. At Mipim, we heard fresh notes of confidence that rate cuts will come, perhaps as early as June, with the ECB and the Bank of England likely to be hot on the heels of the US institution. But until they come, what can the real estate industry do? Well, it turns out, quite a lot.
While macroeconomic headwinds stole the headlines in Cannes, there was plenty of evidence that real estate people are seriously busy. Jane Roberts reports on a widespread conviction that values are at or near the bottom and real estate is tantalisingly poised on the verge of a new phase in the cycle. Meanwhile, ‘there is a lot more distress to come,’ says Serenity Morley of Mount Street.
Elsewhere, in an interview with KKR’s Guillaume Cassou, head of Europe, reporter Virna Asara finds out about the global investment firm’s timely expansion plans across core+ and credit strategies.
There is plenty of long-term thinking in play, as well. The developers in our Logistics Survey, authored by Marianne Korteweg, consider the solid fundamentals of an asset class which has shaken off its ‘boring’ reputation in recent years. Some of the brightest players are leading the way with initiatives that meet the demand for renewable energy and AI-driven space.
Finally, the smartest real estate teams are getting ahead of the competition thanks to a welcome injection of fresh blood. Our Rising Stars feature, by Robin Marriott, profiles some of the most prodigious young minds out there, who have decided to stop waiting and forge the future themselves.
