Summer Issue 2021 - 29

ULI MEETINGS HIGHLIGHTS 2021
sitions for Allianz Real Estate, a global real
estate investment and asset management
company based in Munich; and Ralph Rosenberg,
partner and global head of KKR Real
Estate, a provider of equity and debt capital.
Returning to Workplaces
Horstmann said she thinks that, six months
ago, the staying power of the work-from-home
phenomenon was overblown. " The pendulum
swing is already starting to come back, " she
said. People are recognizing the importance
of in-office work with respect to their organizational
culture, as well as their ability to attract
and retain talent. Offices-and cities-are
here to stay, but there is a need to rethink
how they are used, she said.
Gaw said " there is no work-from-home
phenomenon whatsoever in Asia. " Instead, people's
social lives revolve around the workplace.
Moving from Cities?
When Ballon asked panelists if they thought
the pandemic experience has increased the
appetite for suburban real estate in the United
States, Rosenberg noted that his firm is interested
in major city centers and in the inner-ringroad
suburbs. Employers who want to attract a
young, vibrant, diverse workforce should realize
that those employees want the vitality of urban
centers. But, he said, those employees also
want a high quality of life and a lower cost of
living. Beneficiaries will be nongateway cities
such as Lyon, France; Bristol and Manchester,
United Kingdom; and Charlotte, North Carolina,
and Austin, Texas, in the United States.
Gaw added that lifestyle-centered cities such
as Bozeman, Montana, and Provo, Utah, are
more attractive to young workers than are traditional
bedroom suburbs outside major cities.
Consumer Demand and
Preferences
China's early move to shut down borders in
response to COVID-19 outbreaks allowed for
earlier reopening there, Gaw said. " You can
see pent-up demand on the shopping side "
in China, he noted, and that activity is spilling
over to other Asian countries. " Vietnam has
recovered quite quickly. " Also, countries that
export to China, such as South Korea and
Japan, are experiencing spillover of demand.
China is encouraging domestic purchasing.
" Geopolitical influences are forcing the government
essentially to engineer their own
growth inside of China, " Gaw said.
Horstmann said that in the United States,
" people are coming out of hibernation. " She
cited strong growth in gross domestic product
and major steps the government took to
boost the economy, adding, " I see lots of
promise in the U.S. "
The words " experiential " and " retail " have
been coupled for years as the recipe for brickand-mortar
retail to survive the popularity of
online shopping. Panelists elaborated on that
theme, saying the descriptor " experiential "
may soon be applied to other forms of real
estate as well.
In China, some malls are " truly experiential, "
Gaw said, adding that going to dinner
at a mall can make people feel as if they
are on a movie set. The phenomenon is not
restricted to the largest cities but is happening
in second- and third-tier cities as well.
Horstmann said that even the office sector,
which she said has been " one of the dinosaurs, "
may need to focus more on the user's
experience.
While disagreeing with the " dinosaur " connotation,
Charles noted that the technologies
used in offices have developed significantly
over the past 10 years. She asked whether
office real estate will continue to be regarded
in a traditional way-as the provision of
space-or if developers and operators will go
deeper into the service aspects of providing
attractive workplaces. " I don't think the office
is going to disappear at all, " she said. But
that balance between providing space versus
supplying services could shift.
Horstmann said, " It's undeniable we need
to pay attention to the experience of that
space, the experience of that building. "
Real Estate Sectors
Charles noted that though the U.S. nursing
home market was disrupted by the pandemic,
Clockwise from top left: Nathalie Charles, Goodwin
Gaw, Peter Ballon, Ralph Rosenberg, Karen
Horstmann.
there was " zero disruption of the market in
Europe. " The investment appetite, driven by
demographics, is " huge, " with the number of
elderly people in Europe expected to increase
over the next 20 to 30 years, she said. " It's a
fantastic play. "
She also expects a rebound in hospitality
real estate in 2022, though the balance
between tourism and business travel may
never be the same.
Life sciences, data centers, and singlefamily
rental housing were also favored by
panelists. However, Gaw said not to expect
further Chinese investment in single-family
rental housing. " The U.S. is not welcoming to
Chinese investors or tourists buying homes in
the U.S., " he said.
When Ballon asked panelists when the
beleaguered fashion mall sector would finally
become attractive to opportunistic investors,
they showed little enthusiasm for the risk.
" I don't think retail, broadly, has repriced
enough to even make it seductive for me to
consider, " Rosenberg said, particularly over
an anticipated three- to five-year holding
period. " If I can buy a 92 percent-leased
garden apartment in the suburbs of Charlotte,
why not just do that? "
Asked by Ballon to rank their favorite real
estate sector and country, the panelists said:
l Gaw: data centers in China;
l Charles: offices in post-Brexit London;
l Rosenberg: logistics in the United Kingdom;
and
l Horstmann: logistics and residential in the
United States.
ELIZABETH RAZZI is editor in chief of Urban Land.
SUMMER 2021
URBAN LAND
29
Summer Issue 2021

Table of Contents for the Digital Edition of Summer Issue 2021
