Will Private Equity Firms Bet Big on the Post-Brexit Real Estate Market
It was announced earlier this week that Apollo Global Management (“Apollo”) quadrupled its European real estate lending to $3.7bn in 2019 up from circa $1bn the previous year with plans further to expand its lending in 2020. Apollo is not alone in their increased activity in the real estate sector (and more specifically the real estate debt business) with LaSalle Investment Management expecting to invest a further £1bn in UK property this year, on top of their current £12.3bn real estate assets.
This move is part of the wider trend of private equity (“PE”) investment in UK real estate. Research from Knight Frank in their London Report 2020 seems to confirm this, where they state that capital targeting London commercial real estate is likely to increase by 21% to £48.4bn in 2020. But, what has driven this increased investment?
Since the General Election in December established greater political clarity over Brexit there has been an “unlocking of transactions”, according to the Head of European Commercial Real Estate Debt at Apollo, Ben Eppley in City A.M. Whereby investors and developers alike are now more willing to put capital into future real estate projects. The renewed clarity has been reflected in positive results for the UK construction industry, with The Times reporting that the purchasing managers’ index rose to 48.4 in January, which was above analysts’ forecasts.
Wider macroeconomic trends also continue to play a role in the level of PE investment, with cheap debt coupled with low fixed income returns incentivising investment in real estate. Notwithstanding the Bank of England’s recent decision to keep interest rates at 0.75%. This in conjunction with similarly low rates in the US and EU and the large quantitative easing programmes carried out by the Federal Reserve and the European Central Bank has meant that there is a glut of cheap debt on the markets.
The current monetary environment has had a tranquilising effect on the fixed income market, where real returns are, at best, low and at worst negative. Together, these factors mean that PE firms have already and will continue to look for higher returns, through the real estate market.
The CBRE has predicted that total returns, in the real estate sector, will average 3.1% p.a. from 2020-2024, which is a considerably more attractive return on investment than many alternatives. PE firms, global and UK, will want take advantage of these returns, with Cushman and Wakefield anticipating that non-central business district offices, retail warehouses and shopping centres are likely to see the largest influx of PE capital. 2020 could prove to be an exciting year for real estate and this will only be enhanced by the increasing interest that PE firms are paying to the sector.
We are hiring!
Social Media & Digital Manager – (depending on experience) – London, UK
Digital is already a major and growing component of our aligned campaigns. Hence, we are looking to strengthen our digital team and recruit an experienced and capable Digital Manager to take up the lead on key digital accounts. Together with a team of PR executives to gather content and a vast array of assets to deliver digital campaigns, we are looking for a candidate with 2+ (ideally 3+) years’ experience.
The successful applicant will play an important role in our team from leading on digital and social media accounts, client facing, creative execution of campaigns, through to a full understanding of digital best practice, SEO and all social media platforms. This is an excellent opportunity to join a growing agency with a top-level client list. We want you to be part of our success.
The key responsibilities of a Digital Manager include, but are not limited to:
- Contributing creative ideas that add digital and content marketing elements to campaigns
- Offering strategic advice to develop digital marketing tactics
- Developing SMART objectives for the digital elements of each project; and managing the digital elements of campaigns including SEM/PPC through content marketing and social media
- Monitoring outreach and engagement, day-to-day optimisation, results analysis and testing new strategies; and measuring campaign impact (engagement, web traffic and conversions)
- Using Google Analytics and other tools to analyse and interpret the data behind the results
- Applying SEO techniques to help optimise content
- Researching current and new innovations in content marketing and PPC/SEM
- Maintaining an up-to date knowledge of web monitoring platforms like Google Analytics, Google Tag Manager and Google Search Console
- Maintain current knowledge of paid and organic tools for search engines and social media platforms like Google, YouTube, Facebook, Instagram, Telegram, Twitter and LinkedIn
- Understanding the fundamentals of on-page and off-page SEO including keyword creation
- Monitoring and managing contact database to maximise outreach
Some of the key skills and qualities of a Digital Manager:
- Likely to have 2-5 years’ experience within a known agency/digital role; an understanding and appreciation of the wider real estate industry (commercial, not consumer residential) is ideal but not necessary
- Able to support, manage or take lead on all digital and social campaigns from briefing through to full implementation and contribute to new business pitches from the digital perspective
- A full capability across all design elements – all social media platforms, online advertising, eNewsletters, digital metric interrogation, and preferably HTML or Dreamweaver understanding
- A natural interest and curiosity for the digital arena, with an understanding of how digital fits within an integrated marketing campaign; an interest in fashion or retail is beneficial
- Excellent communication and interpersonal skills; being an emotionally intelligent team player with outstanding client relationship management skills from the digital arena
- High level of organisation and time management, confident enough and comfortable to deal with the full pitch and response to proposal stage and the ability to juggle multiple tasks
If you are keen on joining this exciting, forward thinking company and taking the next step in your career, then please click the apply now button to find out more.More
MIPIM 2020: What is the real estate community saying about ‘future cities’?
The dawn of a new decade will always bring a certain symbolic significance to a gathering of minds in real estate, or any industry for that matter. In the case of MIPIM 2020, which is now fewer than 40 working days away, it’s a milestone moment to explore the macro trends that will shape the way humans interact with the built environment for years to come.
Understanding exactly what drives key conversations is paramount ahead of any major event – and this year we wanted to really get under the skin of one of the biggest topics of the year: ‘future cities’. At the forefront of future-city development is Egypt – which Innesco will be supporting at MIPIM for a second consecutive year. Responding to huge population growth, Egypt is developing ambitious masterplans for 15 new cities across the country. With a project of that scale comes a number of fascinating opportunities for the public and private sector.
Through a mass forensic analysis of the sector – the stories, discussion topics, hashtags and influencers that have emerged among the real estate investment community around the subject of future cities over the last three months – we uncovered key related themes that we can expect to guide some fascinating discussions, around Egypt and other future city projects showcased on the French Riviera in March.
Of all of the social media mentions of ‘future cities’ since October last year…
- 20% also mentioned ‘mobility solutions’
We can expect model cities of the future to be those most willing to contest a century of car-centricity, and refocus priorities towards quality of life. Within the last week we have seen more major progress being made in the ‘mobility revolution’ with Toyota announcing its plans for ‘Toyota Woven City’ and Hyundai and Uber teaming up to launch a prototype for a self-driving flying car, which could be available in some of the world’s most iconic cities from 2023. Of course, not all cities are in a position to implement flying car systems any time soon. However, no matter how close a city is to advanced mobility models, the public sector must begin laying the ground work for integrated mobility – mapping out what it might look like and how their cities might evolve in tandem to improve life for the people that live there. One city in particular has mobility solutions high up on its agenda – Oslo – another region which Innesco has represented at MIPIM for two years. Vowing to become the world’s first car-free city and by the end of 2019, it had taken several significant steps towards this goal. Now that cars have been removed from the streets, Oslo has the potential to become a testing ground for new solutions – and a model country for others wanting to take a similar route.
- 20% also mentioned ‘community engagement’
Our analysis revealed that a people-centric or ‘community’ approach to urban planning is central to any discussion around future cities. This calls into question methods for embracing new technologies, social media, collaborative design, community policy mapping and other innovations to overcome issues associated with increasingly crowded and complex urban conurbations. We’re keeping a close eye on MIPIM’s planned ‘Engaging citizens and communities for social purposes’ session at 16.30 on Wednesday 11th March, which should spark some interesting debate over the sector’s biggest issues regarding community engagement.
- 44% also mentioned ‘smart cities’
It should come as no surprise that ‘smart cities’ emerged as one of the most mentioned terms alongside ‘future cities’, with digitisation, big data, the internet of things, automation and AI providing the infrastructure for the sustainable, inclusive and fully integrated cities of the future. We anticipate that central to the discussion around smart cities at MIPI will be the convergence of machine and human learning in their development.
- 100% also mentioned ‘human’
City planning, strategies and innovative solutions are all very well, of course, but at the heart of it all is the humans who will be affected by it. The social aspect of real estate is ever so important, not least as both the population and rates of urbanisation are growing exponentially, placing heavy demands on the entire industry. In line with the official theme for this year’s 31st annual MIPIM – “The Future is Human” – we were thrilled to see that the social dimension of development is being recognised in the discourse, and that a human-centred, bottom-up approach, where people will be able to make choices according to their own preferences, is being taken.
This insight puts us in good stead to tackle MIPIM head on, with an informed and contextualised approach. We are excited to join the various discussions down in Cannes, and look forward to meeting you at MIPIM 2020.
Is the UK turning into a nation a shed-keepers?
For a supposed ‘nation of shop-keepers’, the UK real estate market seems alarmingly pre-occupied with sheds of late.
Despite the recent headwinds in the retail market, news this week that @Prologis has acquired a retail park in north London for conversion to an urban logistics facility certainly raised some eyebrows. But the world’s leading supplier of logistics space has a well-earned reputation as one of the market’s most sophisticated investors and shrewdest innovators and, where it leads, others are likely to follow.
“This deal is the starkest sign yet of the contrasting fortunes of the two sectors”, according to analysis from React News
Given the march of e-commerce and Brits’ seemingly insatiable demand for home delivery, a surge in demand for last-mile logistics space is hardly surprising. The same growth in e-commerce, allied with a decline in car ownership in urban locations has also has a similarly unsurprising impact on the fortunes of the out-of-town retail sector. Prologis has been quick to work this trend in its favour by striking a deal precisely at the axis at which retail values are at the trough of a downward trajectory and logistics are heading way back up the curve. On this basis, the re-purposing of ‘analogue’ retail assets into more ‘digital’ logistics assets makes perfect sense and is certainly a trend to watch out for.
However, discrepancies in values will always make these deals challenging and it is unlikely to become a blanket solution across and it is unlikely that the majority of the UK’s retail parks will be converted into logistics parks.
It is more likely that we are moving to a more sophisticated investment model that is beginning to break free from the traditional silos and apply creative thinking and relevant solutions where individual assets are concerned. @IngkaCentres recent acquisition of the King’s Mall in Hammersmith is another example of innovative thinking, which will deliver a major transformation to a mixed-use destination anchored by London’s first @Ikea city store.
With the pace of change in consumer demand at its most rapid ever, the real estate community is often accused of failing to keep pace. These two examples alone show that there are plenty of players, who are adaptable enough to respond to these changes and to be a catalyst for further positive change. As we head into 2020, the market has arguably never been a more interesting place in which to work.More