PwC Australia's Director-Real Estate Advisory, Robert Cavallucci, will be moderating a panel discussion on Emerging Trends in Real Estate, an annual series of trends and forecast publications that reflect the views of leading real estate executives in three global regions—Americas, Europe, and Asia Pacific.
Undertaken jointly with PwC and the Urban Land Institute, Emerging Trends in Real Estate® provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues.
The event will be held at PwC’s Brisbane Office on December 3, 2015. Speakers include David Henry, Chief Executive Officer, CBD Development, Springfield Land Corporation; Ian Mackie, International Director, Strategic Partnerships, Asia Pacific, LaSalle and Malcolm Aikman, Director Economics & Research, Urbis. To register to attend the event, click here.
1) You recently joined PwC after several years in State politics as the Member for Brisbane Central. How has the transition been and are you glad to be out of the public spotlight?
PwC has been pretty extraordinary in how seamless it has helped make the transition for me. The reality is I never really defined myself as a politician, which I am sure has helped this process. I know many former colleagues on both sides struggle after public life because it can be difficult to let go of a public persona and the intensity of office. More importantly, I have three kids under seven and the demands of public life were really tough on my family, so having more time with them now is something I appreciate.
2) Prior to your time in State Parliament, you were involved in the property sector through a private construction and development group, Infinitec. Tell us about your history in the sector.
Our family building and development company started in 1981 when I was six, so much of my childhood was spent on construction and development sites. Almost every weekend, school and uni holiday I would be working with my dad and brothers on site or in the office, so I learned about the importance and impact of every trade, as well as construction and development from a practical, grass roots level. In the late 80s we were doing work in PNG, subsequently in Thailand and then substantially in Vietnam for over 20 years, so I experienced a broad range of unique experiences as a young person in what were pioneering locations.
3) How has your background in the property sector and public life influenced the way you approach your clients’ challenges and opportunities at PwC?
Understanding the influence of both really does underpin the value proposition our Real Estate team offers our clients at PwC. A lifetime in and around property ensures our technical approach is influenced by a real practical framework when solving our clients' issues. My time in public office was very much characterised by consultation and collaboration which forces you to become a better listener, and you can't understate the influence or importance that these elements play in making you a better communicator with your clients.
4) PwC recently partnered with the Urban Land Institute (ULI) to undertake a research project into the key emerging trends in real estate across the globe. What do you see as some of the key themes emerging?
Focussing on Australia and the key themes in the residential and commercial sector. On a transactional basis, Sydney and Melbourne are now the biggest real estate markets in Asia after Tokyo. Devoid of options, interest rates and bond yields are low, competition for deals is intense and the influx of foreign sovereign and institutional capital is causing yields to compress and often outbidding local funds. One could argue things are not being supported by the fundamentals however a counter view is that the money is longer term less fixated on opportunistic returns. Student housing, seniors housing and health care are popular as too is the housing bubble thesis for Sydney and Melbourne!
Together with the ULI, our research project results in the annual publication in the Emerging Trends in Real Estate® report. The 2016 report is being launched at the PwC office in Brisbane on 3 December. Those wishing to attend can register here.
5) How have capital markets responded to the increased flow of equity and debt across traditional borders?
It has probably driven up the price of assets in Australia, there is a lot of equity around and too few opportunities now in Australia.
6) What major demographic changes do you think are changing the way that the sector plans and delivers cities?
Briefly, urbanisation, the ageing population and the regeneration of our urban spaces through urban renewal.
7) The world has been shocked by recent terrorist events in Europe and around the world. Does this play on the mind of investors, or is it business as usual?
Without giving too much away this is something which is canvassed in the report and whilst the events around the word are shocking and tragic I personally never let it impact too much on how I think about investment in Australia, so the result was pretty surprising for me.
8) How do you think that developers, owners and investors can adapt to technology, and its influence on the design, construction and financing of real estate?
Real estate, finance and technology are converging. In the near future this convergence is likely to materially change the way Australians search, acquire, invest in, fund, develop, market and manage real estate assets. Real Estate Crowd Funding is the aggregation of smaller amounts of capital from a broad group of investors resulting in the creation of a significantly larger pool of new capital, allowing the crowd 'through technology' to collectively buy properties, lend money to home owners and property developers, and potentially take equity stakes in new development projects as joint venture partners. Technology is also changing the built form. This is evident in cases of monitoring technologies that are in use in aged care and retirement facilities and supply driven in the residential and apartments sector as developers seek to differentiate.