End of cycle or end of a world? Whatever the case, these are times of great plate tectonics. In a relatively unprecedented environment, real estate is struggling to keep up with so many contradictory injunctions that it is sometimes difficult to stay on course. Financial conditions - with interest rates rising sharply and volatility running high - have changed. Economic conditions have changed, with the return of inflation that no one under the age of 25 can imagine. Geopolitical conditions - with the war between Ukraine and Russia fuelling tensions over energy - have changed. The real estate industry is going through these broken cycles head-on.
The great divide is everywhere. On the segment front, the investment market has ground to a halt, while the rental market is beating all-time highs in inner Paris, and lamenting the fact that it has passed the Périphérique. On the asset class front, product trajectories are in a panic. People are crying foul over shopping centers and warning of the overheating of logistics products. People are arguing over the take-up of hotels and managed residences to compensate for the chronic lack of housing in investors' portfolios, even though the shortage in this market is well established and organized. As for office space, what can we learn from a Paris asset that is soaring to new heights, while other, less well-placed assets are plummeting? At a time when France could be moving slowly but surely towards new ways of working and new working hours. Lastly, on the players' front, the transition is underway, still hesitating between a legacy industry and the world of PropTechs, whose profitable survivors are finally in the doldrums.
Real estate has entered a new cycle, or rather a new world, that of easy money and high valuations, ushering in a period of uncertainty, but also of opportunity, where a new scale of values should be established. It's perhaps the return of a certain hierarchy of assets, prices and strategies. In any case, no local or global real estate player can do without an ESG strategy. After the Malthusianism of the 1980s and the value-creating destruction of the 2010s, the coming decades in real estate will be shaped by the new "driver" of climate change, to use the comparison put forward by Béatrice Guedj, Head of Research at Swiss Life Asset Managers.