|On the Road with REP|
| By Kate Hanlon, Senior Editor |
Euro Finance Week (European Real Estate Forum),
Frankfurt, 19 November 2008
|If anyone had gone to the fourth annual Real Estate Forum looking for answers to the recent financial crisis there was plenty of talk about the causes and consequences, but the crystal ball was still too cloudy for many of the experts to predict an end to the doom and gloom. Inevitably the subject of the financial crisis dominated discussions during the rest of the day – from the opening remarks, throughout the morning and into the closing session.|
|Several hundred people were in attendance to hear the welcome address from Dr. Eckart John von Freyend, President of ZIA and the following opening remarks from Bill Kistler, President of ULI EMEA. Kistler talked about the impacts of the financial crisis on the real estate industry and the gathering gloom – citing the lack of new developments and deals being done. He anticipates more pain for 2009 and a slow recovery in 2011, but also pointed to opportunities in the current climate.|
The first panel 'Real estate markets in the
spotlight' in progress, with Barbara Knoflach,
CEO, SEB Asset Management on the screen.
Lessons to be learned
The first panel discussion focused on ‘Lessons to be Learned’ – starting with presentations from Ian Cassidy, Savills and Prof. Dr. Simon Martin, University of Reading, on the problems in the real estate markets in Spain and the UK respectively. Moderator Dr. Karsten von Köller, Chairman of Lone Star Germany, was then also joined by Dr. Lutz Raettig, Morgan Stanley; Barbara Knoflach, SEB Asset Management; Dr Frank Pörschke, Eurohypo; and Christian Ulbrich, Jones Lang LaSalle to discuss the theme in more detail. The panel talked about the globalization of the markets and how all countries will suffer from the fall out of the credit crunch to varying extents. The discussion then moved to the topic of liquidity and when it will come back – most of the talk was of a ‘wait and see’ approach. But the panel was divided between pessimists and optimists on the outlook for the real estate markets. Knoflach and Martin were quite positive about the future of the German economy and German real estate – stating that its traditional stability should see it through the crisis.
The second panel focused on 'Interaction between players in the markets and their targets'. The discussion was moderated by Christof Hardebusch (center).
After a welcome tea break, Panel 2 kicked off with a presentation from Prof. Dr. Max Otte about the interaction between players in the markets and their targets. Otto talked about the need to be ‘pro-cyclical’ and the difficulty of knowing how the current market situation will play out. The panelists, including Chris Morrish, GIC Real Estate; Dr. Karl Petrikovics, formerly of Immofinanz AG, Hubert Spechtenhauser, Commerz Real AG, Stefan Brendgen, Tishman Speyer Properties – moderated by Christof Hardebusch of Immobilien Manager – again discussed the global implications of the financial crisis – that no markets are immune. Here again, they stated that there is unlikely to be much activity until the start of 2010, but that opportunities exist for those with capital, and investors are waiting for trust to return to the market.
After lunch I attended a forum on Green Buildings – the future of real estate or just a bubble – one of three sessions running simultaneously (and the only one translated into English!). This session was moderated by journalist Miriam Beul with panelists Prof. Michael Cesarz, Metro Group Asset Management; Werner Dorss, lawyer; Rainer Eichholz, Hochtief Projektentwicklung; Ingo Beenen, Jones Lang LaSalle; and Dr. Franz Fuerst from University of Reading.
Beenen started the session by examining the misunderstandings around the definition of green and sustainable buildings – and highlighting the key differences between the two. All panelists agreed that green or sustainable buildings are the real estate of the future, and went on to debate the importance and difficulties of the varied ‘green’ certifications and ratings available. Cesarz took the opportunity to showcase Metro’s award-winning Meydan shopping center in Istanbul and its sustainable approach to development.
Panel 3: The effects of the subprime crisis on the
German real estate markets. FLTR: Dr. Hans
Reckers, Thomas Ortmanns, Jens Friedemann,
Prof. Dr. Michael Hüther and Dr. Louis Hagen.
The final panel session of the day brought me back to the topic of the financial crisis. Moderator Jens Friedemann of the Frankfurter Allgemeine was joined by Dr. Louis Hagen, Association of German Pfandbriefbanks; Prof. Dr. Michael Hüther, Institut der deutschen Wirtschaft Köln; Thomas Ortmanns, Aareal Bank; and Dr. Hans Reckers; Deutsche Bundesbank to discuss the effects of the subprime crisis on the German real estate market. The panel explored the varied causes of the crisis – including a debate about the role of ratings agencies, securitization, and the responsibility of highlighting risk – and its consequences: likely to feature a return to simple, transparent products whose risk is easier to evaluate. The panel also discussed the need for a change in attitudes and for trust and cooperation between products, players and markets to bring us out of the crisis.
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