Numbers were up massively on last year’s post-pandemic EXPO Real and people were still smiling, happy to be able to catch up in the autumn sunshine over a Bavarian beer and a Pretzel. While no one denied that storm clouds were gathering, the atmosphere felt strangely divorced from the reality that such a rapid rise in interest rates will ultimately have on an industry so closely linked to conditions in the debt markets.
For someone who started in real estate, albeit on the PR side of things, in late 2007, some of the conversations between clients and journalists were reminiscent of those in 2008. Yes, the scenario is different this time, but everyone is busy trying to work out what’s coming and how their role and business will cope or prosper.
Perhaps the aura of calmness can be attributed to a communal resilience that we’ve all built up dealing with the significant upheaval in our personal and working lives over recent years. Something akin to a real estate investor’s thousand yard stare and the gallows humour that emanates from people who’ve become accustomed to dealing with significant upheaval and trauma. Okay, so maybe that’s going too far, but it’s definitely been a challenging few years.
For the optimists in real estate, of which there are many, there are going to be huge opportunities on the horizon. For those sweating on approaching bank refinancing, interest and exchange rate hedging, or lack thereof, things could get uncomfortable.
One thing we heard more than once over the past few days, is that people were here to test sentiment. In essence, they were looking for guidance. Whether that was from the German lenders or the large property companies, dominant in their sectors, it doesn’t really matter. We need the experienced hands to step up and provide leadership or risk talking ourselves into another crisis. We only have to look to Ukraine for a prime example of what is possible when a motivated group of people come together under inspirational leadership in the face of seemingly insurmountable odds.