The real thing - The Forecast 2020 - Magazine | Monocle

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For those in real estate, construction, architecture or anything tangentially related to the property industry, October means one thing: Expo Real. Europe’s largest real-estate trade show brings people from all over the world to Munich’s Messe München for three days of debate, prospecting and deal-sealing. This year 2,190 exhibitors from 45 countries set up stands across seven halls; they included Invest Stockholm, real-estate and investment firm cbre, Hyatt hotels and Gina Barcelona Architects.

Between discussing deals, participants chomped Bavarian sausages and supped beer in the autumn sun before rushing off for talks about everything from urban planning to the future of mobility. Some 46,000 people attended – 4 per cent more than last year – hailing from 76 countries.

More than anything, Expo Real measures the pulse of the industry. This year the outlook was “positive with a note of caution” and there were a few unexpectedly positive signs for the London market. Didn’t make it? Fear not. Here is our overview of the best bits and the investment opportunities to watch.


The investment hotspots

What makes a city attractive to investors? Real-estate services firm Jll looked at various criteria to rank the world’s leading investment destinations. “Many real-estate investors are targeting cities that are rich in innovation and technology,” says Jeremy Kelly, Jll’s lead director of global research. Highly connected cities with extensive pools of skill, top universities and a rich culture attract the best talent, he tells us.

Brexit has wrought uncertainty in the UK but, long-term, trust in London remains strong. For those looking for more stable investment strategies (with lower yields), Germany, the Netherlands and the Nordics are seen as safe bets. Higher returns (and greater risks) can be found in Ireland, Spain, Poland, Italy and Portugal.

When it comes to predicting future hotspots, Kelly bets on “cities that offer high levels of amenities and universities”. The marker of a successful city is one that is adaptable and agile,” he adds.

Top investment destinations:
1. London
2. New York
3. Paris
4. Los Angeles
5. Shanghai
6. Seoul
7. Tokyo
8. Hong Kong
9. Washington
10. Chicago


The deals

Mipim in Cannes might be where property people partyon yachts and network but Expo Real is where deals are actually cut. Here are three that caught our eye.

  1. Long stay: The UK’s InterContinental Hotels Group signed three multiple development agreements to accelerate its growth across Europe. The goal is to add 50 hotels in Europe over the next decade.
  2. Big deal: Commerz Real of the German Commerzbank made its biggest deal yet by buying dozens of sites from Munich-based insurance firm Generali Lebensversicherung for €2.5bn. The Millennium Portfolio includes 49 office, residential and retail properties in prime German locations.
  3. Nice work: Germany’s Real IS AG bought an office in Adelaide and is starting to build up a diversified real-estate portfolio there worth up to au$400m (€245m).


The Q&A

Anna Gissler, CEO Invest Stockholm

Anna Gissler works on attracting global investment and talent to Stockholm.

Why are you here?   
Expo Real is a good place to meet investors from different countries – mainly Germany. We’ve attended the fair for 15 to 20 years.

More than €111bn in investments are planned for Stockholm by 2040. What developments are you excited about?
Stockholm is one of the fastest-growing cities in Europe. The Meatpacking District, our newest development project, will be an expansion of the city – a place for creativity, culture and start-ups.

What is your aim for 2020 and beyond?
Investing in technology has paid off: we’re home to more billion-dollar companies per capita than any region other than Silicon Valley. Our focus on big data centres has attracted firms such as Microsoft and Google. Ultimately our goal is to make the local business environment even better, with a focus on improving quality and work-life balance.

Stockholm developments to watch:

1. The Meatpacking District
Planned opening date: 2030
Construction of 4,000 homes and 10,000 workplaces has just begun. There will also be food, retail and cultural spaces.

2. Stockholm Royal Seaport
Planned opening date: 2030
As one of Europe’s biggest urban developments, this old industrial area will provide at least 12,000 new homes and 35,000 workplaces.

3. Arstafaltet
Planned opening date: 2030
This 60-hectare greenfield site is being developed into a new city district.


The 2020 trends

Germany, France and the UK continue to dominate the real-estate-investment scene in Europe. Housing has established itself as “the new ‘sweetheart’ of investment in Europe”, according to Chris Brett, Cbre’s head of EMEA capital markets. It’s a trend that he expects to see continue “as demographic patterns and declining levels of home ownership drive demand”.

Thomas Westerhof, who runs Cbre’s European residential activities, says that housing is a relatively safe bet. It is also evolving rapidly to serve young and old, and provide space to work. “Student housing is gaining ground and senior living is going to have a big growth trajectory,” he says. “There’s a demand for affordable housing and residential buildings are diversifying in response to that demand. In five years we might start seeing mixed-use spaces with lots of amenities, especially cities with a more mobile and flexible population that is driven by convenience.”


The future of Expo Real

This year’s fair was bigger than ever thanks to the addition of Nova3, a new exhibition hall for businesses focused on how digital products can transform the industry. “We’ve grown the fair and had a boost of new exhibitors, including those from Malta, asset-management companies from the US and international start-ups,” says Expo Real director Claudia Boymanns.

Now the focus is on further expanding Nova3, staying abreast of changes in the industry and developing regional plays, such as a group stand for the Baltics or Nordic countries. Issues discussed here include rapid urbanisation, the revival of inner cities, logistics, affordable living and reducing Co2 emissions. “Cities are the biggest drivers of change and the interest in exhibiting here is growing,” says Boymanns. “I’d like to talk about creating car-free cities and see whether we can find solutions to such issues.”

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