The property market is ‘late cycle’, and the path ahead will not be the same as the path behind.
MIPIM will celebrate its 30th edition next March. The doors of the first edition opened in 1990, four months after the fall of the Berlin Wall and the launch of the first commercial internet service provider. How the world has changed since then!
Inspired by over 350 world-class speakers and keynote addresses, MIPIM 2019 will ‘engage in the future’, envisioning the next 30 years through the lens of ‘durable’ growth – a growth that enables stability.
We talk to MIPIM Director Ronan Vaspart about the MIPIM 2019 Conference theme – Engaging the Future.
Tell us why the conference theme ‘Engaging the Future’ was chosen?
Ronan Vaspart: We are in the late part of a market cycle. Whatever unfolds next and whenever, this is the time for us in the property industry to realign ourselves for the future – to engage the future – to sow the seeds for our industry to grow and flourish over the course of the next cycle. As US management theory writer Peter Drucker said, reflecting the words of Abraham Lincoln before him: “The best way to predict the future is to create it.”
How do you see the present?
RV: We are operating in a landscape more complex and more global than ever. We have enjoyed a long run of growth – since 2008. The world population is ballooning by over 80 million people each year; our cities are getting bigger and bigger and increasingly ‘networked’, both digitally and through transport connections. In advance of any market correction, industry players are looking to manage risk and seek out new investment classes. New market opportunities are also arising. However, it is essential to create a future of ‘durable’ growth – growth that enables economic, social and viable stability.
What do you mean by ‘viable’ stability?
Viable in the way we use our resources; in a sustainable way, without compromising the ability of future generations to meet their needs. This is crucial in order to achieve durable growth. Otherwise we are destroying the future for our present. A viable use of resources also makes financial sense. To take one example, Derwent London, ranked among the world’s top 100 sustainable companies and also Property Week’s Property Company of the Year in 2018, has reduced its like-for-like landlord carbon emissions by 50% and its energy consumption by 30% since 2003 … with a beneficial knock-on effect on its bottom line.
What role does the property industry have in terms of the environment?
RV: Climate change and resource depletion have emerged as two huge new risks for the industry and for humanity. The property industry is a major polluter and user of resources. At the same time, some of the world’s most iconic property users are leading the demand for clean energy: 140 influential companies, with the likes of Apple, Google and eBay, and British Land and The Crown Estate, have united under RE100 to achieve 100% renewable power… one of these is Apple, which achieved this goal across its global facilities earlier this year.
And social stability?
RV: To quote Joe Kaeser, President & CEO of Siemens, at this year’s World Economic Forum, it is in no one’s interest for the “glue that holds societies and communities together [to]disintegrate”. We live in a global, connected world, where, to achieve durable growth, it is essential that we are active in building and being part of the societies and communities where we operate.
Why is the role of the property industry more than just about financial return?
RV: Economic and financial growth is one cornerstone of the creation of durable growth. For a business, and an industry, to flourish, it is essential for the focus to also be on the other two cornerstones: social and viable stability. It is essential that we create an industry for the future, for future generations, rather than just focussing on the now.
What about the role of technology?
RV: Technology – from AI to 3D printing, driverless cars and blockchain – will become an increasingly important tool for achieving durable growth. A PwC survey of CEOs from around the world quite alarmingly revealed that only 10% of real estate CEOs view the speed of technological change as a threat to their organisations compared with 38% of all CEOs. The pace of technological change is phenomenal. Just think, the first iPhone came on the market 11 years ago. Now, people in the US check their smartphones on average 80 times a day, so once every 10 minutes or so.
How is the property adapting to these new challenges?
RV: Industry players are adapting their business models to be more operational, while new players are entering the market, in particular from the digital world, as property becomes less about ownership and more about access – to services and to outcomes. These changes are also linked to the rise of the ‘prosumer’ phenomena, a term coined by US writer and futurist Alvin Toffler in 1980 to describe consumers becoming part of the development process, altering the design and usability of a product.
And the future of the private-public partnership?
RV: The private-public partnership is stronger than ever, as cities expand and compete with each other on a global platform. This is reflected in key projects under way around the world, from the Grand Paris Express project to double the French capital’s metro network to the Shibuya Station Area Redevelopment Plan in advance of the Tokyo Olympics in 2020. Whether public-private partnerships or other novel ways of collaborating outside the traditional industry boundaries, partnerships are the way ahead.
How do you see the future of the property industry? What are your ideas about creating durable growth? Please let us know!