Real Estate Awards 2017

Geopolitical forces are colliding to create an unusual backdrop for companies in the real estate sector, but those who have played their cards wisely are seeing their work pay off. We recognise the most agile players in the World Finance Real Estate Awards

Warren Buffett once quipped: “Risk comes from not knowing what you’re doing.” The erratic geopolitics of 2017 have established it as an unorthodox and unpredictable year for the real estate sector – one that will not end well for those who are naive and impulsive. Certainly, the unstable backdrop makes it more important than ever to pursue both shrewd and agile strategies. And yet, the broad rules of the game remain the same as ever: to succeed, it takes a calculated approach and a deep understanding of the full range of relevant economic, social, political and technological developments. Effectively, you need to know what you’re doing, and the best will be several steps ahead of the rest.

The winners of this year’s World Finance Real Estate Awards have been carefully selected to represent the leading players in the industry. We have chosen the most impressive companies from across the globe, looking for innovation and talent across all sectors. The winners have achieved outstanding results on the back of rigorous research and astute insights.

Moving on up
Above all, 2017 will be remembered for its rapidly shifting political landscape, as well as the prevalence of historically low interest rates. Against this backdrop, property is being utilised as a relative safe haven when compared with riskier asset classes. This said, the sector at large is also being supported by an increasingly convincing global recovery; at the time of print, the most up-to-date IMF forecast predicts that global output will grow 3.5 percent in 2017, and 3.6 percent in 2018.

From a very broad perspective, improving job markets, increases in wages and flourishing business are all good news for the real estate sector. Notable examples of progress on this front include US unemployment hitting a 16-year low, while Germany is witnessing its highest employment levels since reunification. Japan, meanwhile, has recently seen its job-to-applicant ratio reach an all-time high. Maury Obstfeld, the IMF’s Chief Economist, recently described global economic performance as a “broad-based” recovery, setting an optimistic tone for the sector worldwide.

Above all, 2017 will be remembered for its rapidly shifting political landscape, as well as the prevalence of historically low interest rates

Crucially, those working in real estate will be poised to react to any upcoming changes in interest rates, which in many countries have remained low for almost a decade. Indeed, it appears that central bankers worldwide are drawing up their game plans for a tightening of monetary policy. Such dynamics will have significant implications, and will prompt some important decisions in the real estate sector.

And yet, despite a somewhat turbulent market and the uncertain path ahead for interest rates, confidence in the sector remains relatively high. For instance, Inman’s industry outlook report for 2017 noted that the industry’s top executives were positive about the year. Respondents to Inman’s broader survey also expressed optimism for the future, with 27 percent stating that they were “extremely optimistic”, and 45 percent describing their outlook as “somewhat positive”.

Of course, memories of the 2008 real estate bubble and its subsequent fallout will continue to weigh heavily on the minds of investors. This said, some important lessons have been learnt. Most countries have held on to post-crisis legislation, and stricter bank regulations have gone some way to enforcing discipline on lending. Interestingly, PwC’s most recent trends report for the US speculated that what we are witnessing could be a “kinder, gentler real estate cycle”. It further noted: “In a real sense, the reverberations [from the crash] continue. Real estate transaction volume across the [US has] rebounded, but development remains below historical norms for most property types… Overall, there is a sense that real estate has learned painful but valuable lessons. This time, real estate will not likely be the trigger for a business cycle recession.” In addition, it is important to note that US macroeconomic data implies that there is little sign of overheating.

New disruption
Disruption in the real estate sector is usually restricted by the relatively unchanging rules of brick, steel and concrete. Yet, increasingly, technological advancements appear to be making their mark, and could be driving fundamental change in the sector. Indeed, technology is impacting everything from leasing efficiency to the ways in which spaces are used. For instance, respondents in PwC’s Emerging Trends Europe report noted that they have seen a shift towards shorter leases and flexible segmented leases.

At the same time, there has been a jump in the number of shared office providers who deliver office space as a service, such as WeWork and TOG. According to data from The Instant Group, the flexible office space market is worth $20bn, and it has seen a compound growth rate of 21 percent over the past five years. Summarising this trend, PwC’s report noted: “This is very much a human behavioural shift, the changing way people interact with real estate: it is the emergence of the sharing economy and with it, a focus on access over ownership.”

But this is just one of many ways that technological advances might prove disruptive. Another trend that has attracted a lot of attention recently is the idea of leveraging virtual reality technology to achieve greater efficiency within the real estate sector. More specifically, the technology could be used as a tool for agents to show potential leasers a space: people could be taken on 3D virtual tours of a property, while apps could be programmed to give customers a comprehensive insight into a living space. Such technological leaps will have a broad range of interesting implications for those working in the sector, many of which are difficult to predict.

Ultimately, those in the real estate sector will need to be agile in order to stay ahead of the curve. Not only must they have to carefully navigate sharp changes in the economic climate, but they must also grapple with fundamental shifts in the ways people interact with space. This involves a high level of skill, especially given that competition and disruption could come from all angles. The World Finance Real Estate Awards recognise those who stand out from the competition and are able to drive progress in the sector.

World Finance Real Estate Awards 2017

Europe
Most Sustainable Developer
Turkmall

Best Residential Developer
Aristo Developers

Middle East
Most Sustainable Developer
Diamond Developers

Best Residential Developer
Damac Properties

North America
Most Sustainable Developer
Cadillac Fairview

Best Residential Developer
Holland Partner Group

Latin America
Most Sustainable Developer
G&D Developers

Best Residential Developer
IRSA

Asia
Most Sustainable Developer
Paramount Land

Best Residential Developer
Paramount Land