The first step towards a return of confidence in real estate? Consensus.

It would not be hyperbolic to describe the past 18 months in real estate as troubling and uncertain. Transactions ground to a near halt, with the first quarter of 2023 kicking the year off with an 11-year low in European commercial real estate dealmaking according to MSCI data, while the European Central Bank recently hiked rates to an all-time high. Dealmaking is now picking back up slowly, but investors are still seeking the perspective that will make clear if this activity represents green shoots or a falling knife.

Against this backdrop, the timing of Expo Real could not have been better. The annual real estate conference in Munich, known as the site of dealmaking and critical conversations, was a welcome opportunity for the industry to come together and talk about where we are going and when we’ll get there. Indeed, I’m not sure a motto or abbreviation has caught on quite like “survive ‘til 25” or since “Tuesdays, Wednesdays And Thursdays” came into use alongside the return to the office in 2020.

So, where are we going and when will we get there? While it would be a stretch to say the sentiment of the conference was confidence, it was certainly more optimistic than one might have expected. Importantly, it felt like the sector was on the first rung of the ladder towards confidence: consensus. There was general agreement that interest rates have peaked, which is creating a more stable environment. Even if interest rates remain higher for longer, another general point of consensus, there is at least clarity, which means plans can be made and hands can be removed from underneath bottoms.

Finally, what will these plans look like? Much remains to be seen about how the final quarter of the year will progress and what that means for 2024. The popularity of beds and sheds and the role of environmental regulations look set to remain, while the marketing and sale of retail assets will no doubt catch the attention of many. However, one of my favourite questions posed at Expo Real was: “are you [the industry] still having fun?” Real estate carries a lot of responsibility on its shoulders, but perhaps a reminder to create change and innovate in the spirit of fun and inspiration is an important one as we look ahead to 2024.