Real estate: 20 years of change

Ghada Sousou, CEO of Sousou Partners, reflects on her twenty years in real assets, how the industry has evolved, and lessons learned from the Covid crisis.

I have been in a reflective mood lately. Not sure whether it is our pending release from lockdown, celebrating 20 years in the industry or thinking about the resilience and penchant for change that lies at the heart of real estate – but my thoughts have focused on three ideas: 

First, the sector will be at the centre of the ‘perfect storm’ that will describe our post-Covid business recovery. Real estate is challenged by almost all the fundamental changes that Covid has accelerated:

  • Offices coping with the working-from-home revolution, hollowed-out central business districts and millennial values changing how space is used
  • Retail grappling with the digitisation of the high street and the shift to experiential shopping
  • Logistics blending physical capacity with intelligent distribution driven by AI and ‘Big Data’ 

But this is only part of the wider arc of change. The real estate sector is like a conduit for change and is almost unrecognisable from 2001. We see: 

  • Far more asset classes in play now – 20 years ago investment covered the traditional asset classes of office, residential and commercial. Today the wider definition includes verticals as far reaching as healthcare and life sciences
  • A huge explosion in geographical focus – activity in capital flows and investment opportunities – now includes Middle East, Asia and emerging markets 
  • A significantly more diverse range of players – all targeting similar capital pools and expanding into what used to be each other’s core expertise (eg. opportunistic funds going down the risk curve; operating platforms adopting fund structures; many widening coverage to include the entire capital stack, providing the ‘one-stop-shop’ approach 
  • More sophisticated acquisitions and fund raising – the ‘deal junkies’ and ‘smile and dial’ guys are gone now, it’s less about individual charisma and more about value quantified 
  • More focus on creating value – creating value is now recognised as the chief challenge in real estate and asset management not M&A expertise is the core skill
  • Greater realisation that culture is key – the ‘cultural fit’ of senior hires and the organisation is the most important consideration when talent is hired. 20 years ago it was an afterthought to performance 
  • A primary focus on Innovation, ESG and Diversity & Inclusion

And finally, we’re getting better at coping with change. Our collective response to Covid has been vastly different and better compared to the global financial crisis (GFC).  This time round there has been far less downturn in activity. 20 years ago, there was near paralysis. This time we have barely paused and have experienced a record two quarters of activity in second half of 2020. Firms have been far more agile and in all my discussions with global executives there is unanimity that the GFC felt more disruptive and existential. In coping with Covid, the industry has grown up and matured. 

*Ghada Sousou is CEO and co-founder of executive recruitment agency Sousou Partners

© 2021 funds europe



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