This brings to light an interesting disconnect — even with such volatility, there is still strong interest in investment. When compared to conditions after the 2008 global financial crisis, or even the dotcom boom, it was a very different scenario. Some surmised that this is due to a general complacency in the market – one could argue that perhaps people don’t actually believe global events will occur (think Brexit, the election of Donald Trump) until they do.
One of the problems discussed concerned the fact that senior housing as an asset class is very operationally intensive, with many high profile bankruptcies occuring in the space over recent years. Southern Cross is one such cataclysmic example that comes to mind. There are pressures at the local and neighborhood level and concerns over how to fund senior living, and how to increase density in urban locations that are already heavily populated.
Success in this area will almost certainly require the collaboration between the public and private sectors, with long term planning paramount. As was pointed out, achieving such long term thinking is difficult in current times, with many politicians thinking only as far out as electoral cycles.
Nonetheless, there was conference-wide consensus that changing demographics and the aging population presents a huge opportunity for those in property who can get it right.
“We are looking to take ugly brownfield sites and build inclusive, sustainable neighbourhoods,” he told the conference. “These are areas that have complex problems, are becoming more complex, and so you need a different approach,” said Bearelle.
At the end of the day, despite the geopolitical situation in which we find ourselves in, one of the main takeaways from the conference was that real estate opportunities remain plentiful, particularly for those who take a long-term view. It will certainly be interesting to attend the conference next year to see what progress has been made.