Last Thursday we joined Europe's PropTech leaders in a panel discussion about the Covid-19 impact on Real Estate in Europe, with a focus on the French market. This month’s “PropTech Connect” webinar, kindly organised by Round Hill Ventures and hosted by Evgenia Sopochkina, explored the effect of the Covid-19 outbreak on different real estate classes, addressing issues such as:
- Covid-19 impact on real estate, specifically on the residential, office and logistics sectors
- Technological trends accelerated by the pandemic (e.g. sustainability, digitalisation)
- Post-Covid short-term and long-term challenges faced by real estate players
- Emerging PropTech opportunities and innovative solutions
The panel consisted of Victor Carreau, CEO and Co-Founder of Comet Meetings, Cormac Crossan, Head of Global Business Development for the Real Estate vertical at Schneider Electric, Etienne Chatenay, Investment Manager at Round Hill Capital, François Marill, CEO & Co-Founder of Unlatch, and Robin Rivaton, Investment Director at Idinvest Partners and Board Member at Comet Meetings.
The panel kicked off their discussion on the topic of big cities, questioning whether the global pandemic brought about the death of larger cities as we know them. Robin stated that although the introduction of remote working encouraged individuals to leave big cities and settle in more attractive, smaller cities, often in the countryside, this idea needs to be put into context. Metropolitan areas are engines for growth and important economical hubs due to the power of their demographics. Robin considers that the current crisis does not necessarily equate to the death of big cities. Firstly, urban areas provide economic and business opportunities which attract a large proportion of young people who build networks within these cities. By permanently moving out of these metropolitan hubs, the networks built over the years fall apart, and cannot be matched in smaller cities. Secondly, young adults moving into cities have children, and parents often elaborate educational strategies for their children, undoubtedly difficult to match in remote locations. In a poll, the viewers then had to click on their preferred answer to the question: “Would you permanently move outside of the big city?”. 30% of the audience chose “Yes”, 21% chose “Maybe”, and 49% chose “No”. Therefore, Covid-19 might not bring about the end of big cities as we know them. Cormac labelled the current crisis as a “speed bump in the human civilisation”, which would highly unlikely, according to him, end the attraction to big cities which humans have spent millennia developing.
This brought us to the topic of working from home versus working in the office. Despite certain advantages, offices still provide a vital role of culture, community, and connection between employees. The poll indicated that 7% of the audience preferred working from home, 4% from the office, and 89% preferring a mix of both. Victor shared an interesting insight regarding this topic, stating that we are currently living two crises: the Covid-19 pandemic, but also the upcoming economic crisis. On the one hand, the Covid-19 crisis has made us question the need for employees to commute daily to a physical office, suggesting that we have started to question the existing status quo. On the other hand, the economic crisis has forced companies to consider the essence and necessity of the office space, especially because its lease cost often represents a major cost in the PNL of a company. Companies such as WeWork and Comet Meetings have benefitted from the recent popularity in subscription-based and pay as you go models for the office space.
The next topic touched upon sustainability, and how the pandemic has contributed to the growth of sustainable buildings and other green trends in Real Estate. Cormac affirmed that there has indeed been a huge momentum behind sustainability and carbon neutrality since the beginning of the year, which also somewhat precedes Covid. Prominent figures in the global Real Estate investment community such as Larry Fink, CEO of BlackRock, purport that sustainability should be a ‘top issue’ for investors.
The pandemic also resulted in the acceleration of a different phenomenon: the digitalisation of Real Estate. According to François, the emergence of remote working in the Real Estate industry, which is traditionally known to be slower at keeping up with and adopting digital tools, has made property developers’ and other big players’ jobs difficult during lockdown. These individuals have been forced to urgently adopt new digital tools in order to continue working effectively. These new tools are being used by both the merchants and the clients. Liberkeys, for example, offers virtual visits of properties on their website. It is important to note, however, that digitalisation might improve the efficiency and speed of certain procedures, but it cannot replace and remove all operations. Using the example of the virtual viewing offered by Liberkeys, clients will rarely, if ever, sign any agreement only based on the latter, and will still want a real-life viewing of the property.
Thank you to Round Hill Ventures and Evgenia for hosting this insightful webinar. It was a pleasure to find out about the different panel speakers, their companies, and their perspectives and forecast on the impact of Covid-19 in the era of Covid-19.