MIPIM 2022 (21 MB)

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The year 2022 begins with the obvious challenges that have already occupied us in the past
year. COVID-19 has changed our working, shopping and living habits, or rather, already
apparent trends have been massively accelerated as a result. This change affects almost all
asset classes, although the impact varies depending on the type of use. The residential asset
class has proven to be very reliable and stable even before the pandemic, so demand for core
real estate will continue to increase.
In the medium and long term, a shift in investor interests and a change in the risk profile of
selected asset classes can be expected.
Michael Widschwendter,
Arealis
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Evaluating means comparing. Real estate appraisers merely reflect the market
situation or the willingness to pay the current market price, but they do not
influence it. More concretely, this means mapping what is happening in the
market and not anticipating that green buildings „must be worth more“ and this
„fact“ should be priced in as evidence even without further market data, or that
energy inefficient buildings „must“ have a discount. The „Green Premium“ or a
„Grey Discount“ is not a value in its own right, but an integral part of the market
value of a property.
Initial impacts associated with COVID-19 are evident in projected revenues
through rent reductions, co-defaults, and deferrals granted, which in turn impact
cash flow.
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With the current changes, especially the issue
around ESG as well as the ongoing pandemic, a new
assessment of risk is emerging that will lead to an
investment-specific reshaping of the risk premium.
While the source of monetary policy will not stop
overnight, increased volatility in capital flows can
be expected given the continued historically and
cyclically low interest rate environment. Increased
inflation is currently putting pressure on central
banks to tighten their monetary policy, which will
lead to a „slight“ increase in the general interest
rate level. Interest rates are currently still very low
by historical standards and no massive changes are
expected.
1 The issue of COVID-19 will continue to occupy us beyond 2022.
Mutations of the virus, necessary measures as well as political
decisions related to the pandemic create additional uncertainty in
society and the markets. The challenges here lie primarily in the fight
against the pandemic to which we can all contribute through a high
vaccination rate.
2. „ESG is here to stay!“ The issues around sustainability as well as
decarbonization have begun and will keep us intensively busy for a
very long time. The regulatory innovations affect all sub-sectors of the
real estate industry and its entire life and investment cycle. Essential
success factors here are a corresponding mindset in the company,
exchange in the industry, and training and continuing education
measures for the entire workforce.
3. Last but not least, digitization is a central topic that will influence
the industry in the coming year. In the future, new technologies, the
breaking down of data silos - especially in connection with ESG, new
job profiles and a digital mindset will be needed to meet the challenges
in the real estate industry in the years to come.
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As an asset and property management, Arealis will actively
incorporate the topic of sustainability into its corporate culture
and policy in the future. In addition to fulfilling the regulatory
requirements (e.g., EU Taxonomy and Disclosure Regulation)
on the part of the legislator, the focus here will also be on the
consistent derivation to the business model of the clients and
the working methods of the organization within Arealis. In
doing so, we will pursue a consistent approach that economic
success and responsible action are not mutually exclusive but
rather mutually dependent - „Manage to Green“. Even if the
topic of ESG is still very „E-heavy“ at the moment and climate
targets are the focus, for us the „S“ and „G“ are also part of our
overall strategy.
Digitization and automation of processes is a crucial success
factor for us. In doing so, we use and expand the technology to
promote employee collaboration and work flexibility.
MIPIM | 2022
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