Miren Tellería, Strategy Responsible at PwC Real Estate, shares her point of view regarding the challenges that the real estate industry will have to overcome from now on, the role of digital transformation in this process and the different types of assets in the sector. In addition, she discusses her expectations for the future of large companies, some European cities and Spain.
Which are the major challenges the real estate industry is facing?
Miren Telleria: I would divide the challenges into three blocks. First, we have the technological factor that has been growing a lot and was accelerated much more by the pandemic. Second, we have the acceleration of the assets that were, at the time, put in the set of alternatives. Third, there is the issue of speed. Talking about transformation, I think it is important to notice the incorporation of digitization in the value chain and its evolution in the different points where there may really be a substantial change, as in intelligent building.
We also need to talk about the types of assets. There are assets that we put in the set of alternatives that are beginning to emerge and accelerate in the market of Spain, which is always a bit behind those of other countries. We have to see their behaviour, their scalability, the volumes necessary to generate returns, the yield that we continually talk about in relation to the other real estate assets. They have much more comfortable yield or profitability numbers for certain investors.
The technological factor has been growing a lot and was accelerated much more by the pandemic
What is the contribution of digital transformation to this new real estate era?
Miren Telleria: We can divide the impact of digital transformation into two blocks. The first one, which is the impact of digitization in the production of the asset, that is, everything included from the definition of the product until the consolidation of the asset. The second one is the management part.
Being able to incorporate digitization allows us to be much more reliable regarding production deadlines, especially when it comes to the most industrial building industry. In other words, it allows us to have much more reliability regarding the execution of deadlines and, therefore, more comfort for both investors and end users. Besides, having a more analytical, more numerical, more detailed follow-up of the production allows us to assess costs, which is one of the issues that usually generates the most insecurity or uncertainty in our sector.
Being able to incorporate digitization allows us to be much more reliable regarding production deadlines
Finally, digital transformation in management encompasses the customer experience. It is important to know our clients, something we have not done so closely. Maybe we did not have the tools to do so digitally.
What do you expect regarding large real estate companies and start-ups?
Miren Telleria: Well, regarding our start-ups and prop-tech inside the real estate industry, large companies or more established corporate companies do want or need help from these prop-techs during specific points of the value chain.
Throughout our entire process, from the definition to the management, we will increasingly require technological support at very specific points, both for the short term, such as pop-ups management, and also for the long term, such as the improvement of the efficiency of contracts and being much more agile in many moments of the processes where the real estate is a bit slower at the moment.
Which are the European markets that generate more interest regarding retail investment?
Miren Telleria: Together with ULI, we launched a report called Emerging Trends in Europe with this analysis. I can tell you that Spain is always one of the countries at the top of the list. It always generates a lot of investment interest. The pandemic and the COVID-19 situation are causing investors to maintain a slightly lower risk profile, such as Berlin, London or Paris, which are going to stay on top of high transactions. But as I have said, Spain is an attractive country, it generates investment interest and if we do our homework well, we will continue to see foreign investment in our country.
The best path is forward, and our industry undoubtedly has what it takes to create a fruitful and rewarding journey. Watch the whole interview to learn more about this interesting approach to the future of our industry!
