New Reality Demands Focus on Income Return

Market strategies with leading female real estate players at Europe GRI 2023

September 26, 2023Real Estate
Written by Helen Richards

Last week in Paris saw the realisation of GRI’s biggest event to date, as Europe GRI 2023 gathered more than 700 top decision-makers in real estate for the ultimate networking and knowledge sharing event.

Opening the event this year was the GRI Women Leading Real Estate Committee’s Club Meeting, an opportunity for leading female real estate executives to network and forge connections with other women, on the path to equal gender representation within the industry.

Fast becoming one of the favourite meetings among female members, one attendee described the meeting as an opportunity to discuss the industry and market trends in a “comfortable environment”. 

Discussions began with an assessment of the current market climate before turning to strategies and perspectives on the future of real estate - moderated by Ana Estrada (Goldman Sachs) and Kristina Foster (Schroders Capital), and co-chaired by Club Patrons, Joanne McNamara (Oxford) and Mary Ricks (Kennedy Wilson).

Topics then turned to the matter at hand: women’s representation in real estate and how the industry’s companies and players, as well as GRI Club, can continue to support and promote women in the sector, building a future that is inclusive and rich in thought.
(Image: GRI Club)

Current RE Strategies

The rocky road of the past 12 months echoed throughout Europe GRI 2023 this year, and the prevailing sentiment is caution. Patience and learning can be frustrating, but they are essential. Some went as far to say that doing nothing can often be the best decision. 

As discussions suggested, investors must value the talent on the team, keep good relationships, and bide their time. Most importantly, this period of low transaction volume must be used to conduct thorough due diligence, research, and analysis, before making financial commitments.

The struggling new reality of real estate has taken some getting used to, but it is essential to do just that - get used to it. Elevated interest rates are here to stay, and investors must operate within this new reality to avoid making decisions based on how the industry was before.

Considering this new reality, preferred strategies sit on the side of income return rather than cash return. Real estate of today needs to be viewed as an operating business with vertical integration, and as a result, income return.

With such instability and soaring interest rates, cash return is simply not appealing right now. Capital must be raised by implementing vertical integration - working with partners, leasing buildings, and streamlining operations.

(Image: GRI Club)

Future Focus

ESG was a recurring topic in many of the panels during Europe GRI 2023, and the Women’s Committee club meeting was no exception. It is undeniably shaping the future, and the industry must act now to keep up with the demands.

ESG drives the value of an asset - be it energy saving or attracting tenants - and therefore, it is becoming part of the financial goal. While green capital has the disadvantage of being hard to measure, the more neglected element of ESG, social impact, is more quantifiable, making it an important aspect to consider.
Control of capital was another future focus brought to the table during the meeting. Especially for long-term oriented investors, being able to adjust the exit and move money when needed is essential. This returns to the idea of carrying out thorough due diligence before commitment, and nourishing good relationships with local strategic partners.
(Image: GRI Club

Empowering Women in Leading Roles

As reported by one attendee, women are increasingly seen in junior roles within the industry, however there is an obvious drop off when they reach a certain level. The goal is to see more women in senior leading roles in the real estate industry.

It is clear that more needs to be done, and positive discrimination can be an extremely effective tool. It is vital to accelerate and invest in junior females early on in their careers, rather than waiting for that small minority of women to reach the top before paying them attention.

Equal representation of women in the sphere isn’t solely for diversity of thought, but also for junior female professionals to have exposure to female role models at the top. The response must be active and not passive: find women who are ready to speak to an audience, bring them into the sphere, increase representation, provide role models, and, ultimately, break the vicious circle.

The newly launched GRI Women 50/50 Initiative aspires to take a stand for diversity, and shape the future of real estate as a more inclusive and equal space. The initiative is offering a 50% reduction of fees for new female club members. Read more here, and share to support the initiative!

Empowering Women in Real Estate