Recent mandates we’ve worked on for private equity real estate roles have highlighted changing trends in the sector. In particular, the desire to bring in fresh blood with new and interesting ideas. Firms we’re working with often hire engaged candidates with no prior experience in real estate, including investment bankers looking to make the move into private equity.
Bricks-and-mortar will always be the foundation of the private equity real estate sector but, increasingly, firms are working with the businesses inside their buildings to ensure they secure a profit from their investments. This shift is drawing in a new generation of investors with a more consumer- and technology-focused approach.
The UK property market is fairly stable. Seeking out higher than average returns, means taking on responsibility for building businesses around the real estate portfolio sending firms higher up the risk curve and boosting possible rewards at the end of the holding period. For some, real estate is no longer about single asset investing, there’s much more of the operational business approach that’s seen with traditional private equity.
This hands-on approach comes at a time when disrupters are shaking up the sector and changing the way we own and use buildings. For example, companies like WeWork have changed the office rental market, creating design-led co-working spaces that can be hired out by companies both small and large. Office space, previously a straightforward asset, has become a consumer-focused business servicing a flexible and mobile new workforce.
Another interesting trend we’ve seen is PropTech, which is a growing sector that’s attracting venture capital funding and start-ups to real estate. It’s a broad term that covers the multitude of ways in which technology is transforming the way we buy, rent or interact with property, including smart home technology, iBuyer platforms (such as Opendoor) and short-term property rental platforms (such as Sonder, which recently reached a unicorn valuation).
The tangibility of real estate has always been a massive draw for investors. The physical assets create city skylines and provide spaces for people to call home. Now, investors are developing deeper relationships with these assets, making sure they meet the needs of the people who live and work in them and delivering enhanced returns. As they do so, the sector is adapting to changing customer needs and new technology.
It’s an exciting time to join the real estate sector and there’s demand for a wide range of skills. If you’re keen to work in a fast-evolving market with an increasing focus on the consumer, get in touch to find out more about the opportunities available. We have a number of incoming mandates and we’re always happy to discuss them with you.