The real estate sector is busy repositioning portfolios, pivoting into new sectors and pouring money into proptech. But will it be enough to meet the elevated demands of building customers in the post-pandemic world? This was the big question behind Bernie Devine’s latest Yardi Proptech Insights webinar. In the fifth instalment of the series for 2021, Brian Sutherland, vice president, commercial at Yardi joined Devine, regional director, APAC, for a chat. Sutherland started his own e-commerce company at age 16 and today is responsible for leading commercial sales and marketing for Yardi across the United States. Sutherland is passionate about the power of technology to enhance engagement and bring asset owners closer to their customers, and his insights were fascinating. Office landlords have enjoyed a clear advantage during the Covid-19 era, Devine and Sutherland agreed. Long leases have given them the luxury of time to consider the future carefully. Tenants are on a “flight to quality,” want shorter and more flexible leases, and are scrutinising sustainability attributes of space, they noted. In response, building owners are amenitising their assets, Sutherland said, to create spaces that facilitate “culture, coaching and collaboration”. This presents new revenue streams, and Devine pointed to a clear trendline towards non-rental revenue growth. “But more services mean more business processes and more complexity.” Office landlords can learn much from the retail sector, which had already faced a tidal wave of disruption from the e-commerce titans, and which had reacted and repositioned assets before Covid-19 hit. In some cases, the pandemic’s reclassification of retail as an essential service had been an advantage, Sutherland said. Some malls continue to struggle, but others are adapting rapidly to the new normal and transforming empty space into distribution hubs and last-mile delivery centres. Sutherland mentioned the local Urban Outfitters store in Santa Barbara, Calif. (where Yardi is headquartered) which now has staff members packing boxes in store – “something we haven’t seen before” but is necessary as competition with Amazon heats up. Retail is often set up for dispatch and delivery and “retasking spaces” for last mile distribution made perfect sense, Devine added. But, again, this repositioning and retasking adds complexity. A new philosophy – one that prioritises user experience – was emerging, Devine observed. “I often like to say a building is a device.” But seeing a building as a device requires mobile-led solutions. A flood of money is streaming into tenant experience apps. HQO raised $60 million in funding in April, while VTS acquired workplace experience platform Lane for $200 million in October. These are just two examples. There is a lot of curiosity from landlords about how apps can make their assets perform better.  “Are they going to be able to produce more yield of have a better experience in their properties?” Yardi’s team is thinking hard about this question. Yardi’s tenant app, which currently has 75-plus active asset owners, is currently being expanded to address how employees, vendors and even visitors connect with the app when they enter a building. What does the future look like? Sutherland believes the office’s outlook is bright, but he can’t see “expectations around the experience within a building” abating. That requires a far greater investment in technology – and in “platforms to support and facilitate a positive experience with the physical environment.” Now is the time for landlords to listen to their customers and “to really push new ideas within their properties,” he...

How will transparent data revolutionise real estate? This was the underlying question for Ben Robinson, CEO of Raffles Quay Asset Management in Singapore, when he sat down with Yardi’s Bernie Devine recently for the latest instalment of Yardi Proptech Insights. Ben oversees the largest integrated mixed-use development at Singapore’s Marina Bay. In real estate terms, One Raffles Quay and Marina Bay Financial Centre constitute 4.5 million square feet of prime Grade A office and 179,000 square feet retail space. In human terms, the precinct is usually the workplace of 26,000 people. Four years ago, RQAM realised digital technology was the key to engaging with this 26,000-plus workforce. “We had no brand with the individuals who worked in our precinct, and we needed to communicate with them directly. That’s where we started our digital transformation,” Robinson says. By the Bay was launched in 2019. More than a tenant app, By the Bay is also a booking system for RQAM’s BaySpace flexible workplace solution. It is a connector that gives people access to BayFit exercise classes and education. It is a platform to support BayDine and the array of food and beverage options, rewards and discounts at Marina Bay. And it puts BayGreen, with information and ideas to live and work more sustainably, into the palm of people’s hands. Fast forward to 2021. With just 15% of people at their desks each day, due to work-from-home orders, By the Bay has proved an invaluable tenant engagement tool. Among the current benefits are mindfulness classes, a national steps challenge, complimentary gym passes and health assessments, as well as dining vouchers and exclusive perks. “We’ve got a great playground at our disposal,” Robinson noted. By the Bay supports RQAM’s vision to deliver “premium” hospitality experiences, Ben added. By the Bay’s digital access controls, for example, not only allow occupants to enter and exit their building safely in a few smart phone clicks. People can also invite guests into the space, which means concierge can “come out from behind the desk and act as experience ambassadors” rather than “taking numbers and handing out cards.” By the Bay’s anonymised data, complemented by data from building information systems, is stored in a data lake dubbed BayWatch. The data lake will take time to fill, Ben said. Understanding future trends is dependent on a solid history of past data. But with the right tools, we can “forecast the future of space – and this is something we haven’t been able to do before,” Devine added. Devine, who is responsible for Yardi’s growth in Asia, said the pandemic had forced a rethink of how people use space right across the region. Real estate organisations now realise they aren’t space providers – they are service providers, he said. “I’m seeing base rent as a percentage of total revenue getting smaller – not because base rent is going down but because the proportion of value add is increasing.” “But that brings complexity” and demands more sophisticated back-end systems. Yardi is on a journey of “connecting the property to the business,” Devine added. In June, Yardi acquired UK-based Forge Bluepoint, a cloud-based visitor management solution that connect turnstile, elevator and parking data to other Yardi platforms, like its all-in-one co-working management system, Kube. While RQAM expects some “rationalisation,” Robinson does not predict a “significant” drop in space requirements. Tenants will be looking for more room for collaboration and projects, for example, and will need more overflow space on peak days of the week. This is where BaySpace can step in. BaySpace is more than a flexible workspace offering. It is an “enterprise solution” that can support tenants with everything from fully-designed and fitted space to financing, Robinson noted. RQAM’s analytics capabilities already provide rich insights into this flexible workspace offering and “forward indicators of growth and contraction requirements are going to be very powerful.” Robinson suggests starting with “quick and dirty...

Canadian commercial real estate tenants and investors are becoming increasingly sophisticated in tracking their assets. Their inquiries are expanding beyond payments and quarterly reports. The overarching theme for the next six to 12 months will be environmental, social and governance (ESG) practices supported by reliable data. To remain competitive, property owners, operators and landlords must take these priorities into account. Upgrades drive ROI An emphasis on healthy workspaces will be a principal legacy of the pandemic, prompting owners and occupiers alike to prioritize such things as HVAC upgrades and touchless restrooms. Many owners are seeking WELL Building Standard™ and Fitwell® certifications, which bolsters facilities’ current status while preparing for potential future virus-related health emergencies. Significant ROI is possible by attaining one of these building certifications, with studies showing that effective rents are between 4.4% and 7.7% higher per square foot for properties that hold them. Such certifications also help satisfy health and well-being concerns among asset and fund-level stakeholders, apply to international assets and contribute to GRESB scores. Tech enables workplace flexibility, energy intelligence With almost half of working Canadians wanting a flexible work schedule and guaranteed safe return to the work environment, corporate tenants and property owners will be seeking platforms for office hoteling to aid with occupancy management. These mobile solutions help organizations streamline communication, enforce capacity limits and allows staff to reserve their desks in advance, in real time. This increased transparency can enhance the employee experience and boost workplace confidence. Similar technology on the marketplace includes ESG-related tools with energy intelligence and automation capabilities that gives operators and maintenance teams real-time access to building performance metrics. These features help staff reduce operating costs, promote efficiency and improve occupant comfort from anywhere. By monitoring HVAC investments and sending automated notifications directing staff to address potential equipment failures, such systems can produce average HVAC energy savings of 5-10%. The investor’s stake These new capabilities are as important to investors as they are to landlords and tenants, according to a  CBRE report on investor strategies. They’re weighing amenities connected to health, safety and shift flexibility more heavily in their investment decisions. ESG also carries more weight in investment decisions, with investors recognizing its impact on energy costs, insurance premiums and other operational elements. That will prompt more investments in capital needs to make buildings more resilient. Investors also increasingly expect on-demand access to key metrics, capital transactions, documents and reports. Similar to energy management platforms, investment managers can leverage a single connected suite of solutions to gain a comprehensive view of investment performance and improve collaboration among property operators and investors. Learn how Yardi solutions for flexible workspaces, energy management and investment management meet and centralize the needs of property owners, tenants and investors of today and...

What’s the best way for a real estate company to flex its innovation muscle? Robust evaluation. That’s the key takeaway straight from two property technology specialists, Cromwell Property Group’s Sean Rowe-Hagans and Yardi’s Bernie Devine. Devine, regional director for Yardi in APAC, caught up with Rowe-Hagans in the latest installment of Yardi Proptech Insights. The series dives deep to get beneath the surface of property technology. Unzipping efficiencies As Head of Enterprise Architecture and Innovation, Rowe-Hagans has been driving Cromwell’s culture of problem solving through technology for more than a decade. Established in 1998, Cromwell has grown from a small Australian property syndicate to a real estate investment trust with 3.4 million square metres across three continents. Cromwell has a razor-sharp focus on operational efficiencies, and technology and data play a big part in unzipping those efficiencies, Rowe-Hagans noted. But Cromwell adopts technology sensibly and strategically – and the secret is to start with business strategy. “You have to identify a gap before you go looking to fill it with technology,” Rowe-Hagans observed. Cromwell doesn’t currently have too many gaps to fill. “But that doesn’t mean we can’t do things better,” Rowe-Hagans added. Technology should be evaluated “almost as if you are a venture capital firm”. Do your due diligence or risk a big “technology debt,” Rowe-Hagans advised. “You don’t want to be driving down that road, especially if your strategy is efficiency.” Cromwell’s short-term strategic focus may be on efficiency, but its long-term lens is pointed on “business resilience” – and that means thinking “not just about how our buildings run but about how our business runs.” Unpacking the business case Building a business case before a big technology implementation is often the easiest step, Devine observed. That is, until two years later, when it’s time to assess the benefits of a technology investment and “no one knows what it has delivered.” Rowe-Hagans, who spent many years in IT project management, agreed. “The bit after the implementation is the tough bit.” That’s when resources and focus fall away. “Without careful management or monitoring, within two years of that implementation the system will be costing you more than you even began to imagine when you were running that evaluation.” Cromwell assesses “not just reactive risk but also future risk,” Rowe-Hagans said. This means more than going with a gut feeling and a lot of time investigating global megatrends and materiality matrices. “We are really interested in that long-term vision – not just plugging a hole for the now.” Technology implementations are also evaluated against the user experience and how it will be maintained throughout its lifecycle. “Smart” organisations appoint “process champions,” Devine said. Others often “neglect” technology after its implementation. “But it’s like a marriage. If you don’t invest in the marriage, it falls apart.” The real estate industry’s challenge is to be both reactive and agile – and that means each player must think big picture. “It’s about the ecosystems we are trying to build in this technology world – and that’s not just about Cromwell. It’s about all of us as an industry.” Building the ecosystem Rowe-Hagans gave a tip of the hat to Yardi for its role helping to build the ecosystems that each sector of the property industry needs to thrive. Yardi’s work capturing the lifecycle of a building – from leads to when a tenant leaves – was case in point, Rowe-Hagans noted. The real estate industry is starting to come together to collaborate and connect around data governance and sharing. “But it’s not there yet,” he added. The challenge ahead, nevertheless, looms large. By 2025, according to Yardi’s most recent whitepaper, the world will be generating an astronomical 175 zettabytes of data. This is “too many zeroes,” said Devine. If each bit was a coin, one zettabyte of coins in a stack would reach to the nearest star system, Alpha Centauri, 600 times....

Get Living creates exceptional communities and neighbourhoods across the United Kingdom. Places where people can live their best lives, homes they feel they belong in, and communities they can connect in with people. The team at Get Living understand the important role technology plays in connecting residents to their communities and that delivering exceptional resident experience goes hand in hand with adopting efficient technology. We caught up with Chris Armstrong, Chief Experience Officer and Steven Osei Head of Brand Experience of Get Living to ask them how they use Yardi’s technology to improve resident experiences and business processes. “We’ve been working with the team at Yardi since 2016/2017, using a wide variety of the solutions they provide, across the entirety of our estate. We invested heavily into Yardi’s solutions to help us grow as a business and to really deliver consistency of experience,” commented Chris Armstrong. Osei expressed that since utilising Yardi’s technology, the team at Get Living have been able to reduce the steps in the applicant journey by 300%. He also explained the importance of adopting technology to achieve Get Living’s growth goals, “As a growing and scaling business with the aspirations of having 12 to 15,000 homes it’s imperative that we have the tools in place that enable us to display real time availability of homes that we have available”. Armstrong also commented that over 4,500 of their residents are registered on the RentCafe Resident App which has given their residents the platform to interact with them on a 24/7 basis, “It’s always there for them, it’s always on.” Armstrong explained that they monitor resident satisfaction by surveying residents using the resident app; freeing up their teams to focus on hands-on customer service. “The best technology is the technology that you don’t know is there, it fades into the background. That’s why we work really hard with Yardi as a partner to make that technology seamless and easy for our teams and our customers to use.” As well as explaining how Yardi’s technology currently benefits their staff and residents, Armstrong also detailed future adoption plans which will see improvements in procurement process and allow for more flexible leasing with Yardi’s technology. Watch the...

Every single person in Lendlease’s 11,000-strong team has their sights set on net zero emissions by 2025. It’s a huge undertaking – one which will be impossible without the help of technology and data. This puts Richard Kuppusamy and Helen Lam – two of Lendlease’s digital leaders – in the driver’s seat as they help steer their company towards Mission Zero. Bernie Devine, regional manager for Yardi in Asia Pacific, recently caught up with the pair as part of the latest installment of Yardi’s Proptech Insights series. A big pivot Lendlease must meet its first net zero target in four years – an aggressive but “very deliberate” decision, Kuppusamy told Yardi’s audience. “Everyone who is in Lendlease today has to deal with this problem,” he emphasized. And it’s a big problem for everyone in the real estate sector, given the global built environment is responsible for almost 40% of the world’s emissions. But Lendlease – which designs, constructs and manages buildings on four continents – is in a rare position of influence across the entire development lifecycle. It is for this reason that Lendlease’s technology strategy is watched by the entire industry with interest. Kuppusamy joined Lendlease in March as Head of Lendlease Digital Asia and is based in Singapore. He oversees leadership, management and performance of Lendlease’s digital business unit across the region – and that includes Lendlease’s new property lifecycle platform, Podium. Podium links everything from building plans and construction programs to the results and realities of operation. It is the foundation of autonomous buildings, he noted. Podium supports data-driven decision-making “at every touch point” of the property lifecycle and is the key to economic and environmental sustainability. With Podium, Lendlease is “pivoting” towards a future as a “software engineering firm,” Devine observed. And that means data is now one of Lendlease’s greatest assets. Data rich, insight poor Globally, the real estate sector remains “data rich and insight poor,” Richard observed. “There are a lot of solutions, but they are all very siloed.” How do we dismantle these silos and unlock the “proprietary data jails,” as Kuppusamy called them, for a greater common good? “It’s not just about sharing – but about sharing in a meaningful way.” The industry must move away from technology that solves “spot solutions” or “siloed problems,” Helen added. “In real estate there are no silo problems – they are all interrelated.” While many systems capture data, only “actionable insights” deliver value, Kuppusamy said. Devine agreed. “I always say to our clients: ‘We deliver actionable insights, but it’s up to you to take action.’” As Head of Innovation and Development Practices in Asia, Helen Lam is responsible for identifying new ideas to be researched, tested and integrated into the way Lendlease works. One of the projects currently underway is to eliminate diesel – which is “really dirty, noisy and hazardous” – from construction sites. “We don’t have the inhouse tech to solve it all ourselves,” so Lendlease is partnering with an Asian start-up with an advanced compact and connected lithium-ion battery system. The technology eliminates 80% of onsite emissions, “is much quieter and emits zero fumes,” she explained. Data can also aid “macro decisions” that deliver a better experience for people, alongside those that are best for the planet, Lam added. Lendlease has installed Internet of Things technology in restroom facilities in retail malls across Asia, for instance, to better understand peak loads. From this data, Lendlease has enhanced the customer experience, while also “making better procurement decision around our contract negotiations and reducing operational expenditure.” Self-driving buildings Devine pointed to the use of digital twins as another tool that can help the real estate sector move towards net zero. In May, Ernst and Young reported that digital twins could save up to 35 percent on project and building costs and reduce city-level carbon emissions by between 50 and 100 percent. Lendlease has...

When Yardi expanded to the Asia Pacific (APAC) market 15 years ago, it entered uncharted territory. Supporting a new team more than 11,000 miles away from the Santa Barbara headquarters required creativity, cultural savvy, a bold sense of exploration—and of course, technology. Since then, the Yardi Systems Pty Ltd. has established itself as a trusted leader in proptech. That trust has developed in part due to the marketing team which consists of three members serving from Sydney and Singapore. The team builds association relationships and develops the Yardi profile as trusted partners to and supporters of the real estate industry. This is done through content-rich materials such as white papers, articles, online events and APAC’s biggest initiative, the APAC-wide PropTech survey. The team is also responsible for translating Yardi’s global identity to the local markets. This includes marketing materials dedicated to the APAC region as well as sales and service materials. Big fish, growing pond Marketing manager Nina Feldman began her career with Yardi APAC five years ago. She was intrigued by working with a global organization that was relatively new to the region. “I get to work in the most awesome corporate environment that also functions like a startup – this gives me a whole heap of challenges but lots of fun, too,” says Feldman. Nina Feldman The APAC marketing team shifts through diverse workflows to accommodate the needs of the region’s sales and services teams. She finds it challenging to balance local agility with the unique demands of a global organization. It’s a challenge she tackles each day with the help of communication. “Communication, communication, communication. I’m a firm believer in one team, one dream. We’re all working for the same outcome. Whilst the ideal process never exists, I will always keep everyone in the loop so they feel informed and comfortable with whatever is happening or the timelines involved,” she says. Get in-depth insights on local best practices at the Mingtiandi Asia Logistics Real Estate Forum, sponsored by Yardi. Building cohesion while working thousands of miles apart Sasha Shatilova and Ian Khoo are marketing associates in the APAC team. Though both virtually joined Yardi during the pandemic, they felt welcomed and engaged from day one. Ian Khoo Sasha Shatilova “A highlight is definitely the first team lunch with Nina and Ian where each of us made a short PowerPoint presentation about ourselves. Very geeky, I know, but we have really bonded as a team through that activity,” says Shatilova. Khoo adds, “It has been a complete work-from-home environment which eliminates that warmth you get when you are in an office. Thankfully, my marketing team has been really warm and supportive and daily video calls with them has generated that sense of camaraderie that you’d get over office lunches.” Both associates were pleasantly surprised by corporate culture at Yardi. “There is an incredible support system here at Yardi,” says Shatilova. “Despite it being a very large company, the culture is surprisingly flat. You really feel that your ideas are being respected and your voice heard.” Khoo agrees. “I am able to feel a sense of community. Nobody shies away from extending a helping hand wherever possible, be it across the world in the U.K. or even locally in a separate department. There is a strong sense of collaboration within each project where everyone feels heard and feel like they are able to contribute their own ideas.” Interested in becoming a Yardi team member? Explore opportunities in your...

The most successful companies are those that utilize data and analytics as a supporting tool to adapt to rapid market changes, but how can you simplify Big Data to improve daily decision making? How can online services help you stay connected while safely doing business miles apart? There are innovative solutions that offer a combination of tools that boost profitability, efficiency, communication and even security. Read on to discover four ways asset intelligence (AI) technology can help CRE operators understand how to navigate market shifts and emerge with a competitive edge. 1. Use data to enhance asset performance On average, more North American organizations have been using big data for benchmarking and prescriptive analytics over the past few years. In fact, according to KMPG’s 2020 CEO Outlook, 92% of Canadian CEOs fast-tracked their transformation to meet COVID-19 challenges, with 76% believing that investments in tech tools such as automation, artificial intelligence and cloud systems are critical to unlocking long-term growth. As a result of the tech adoption, the CRE industry is seeing AI enable teams to identify patterns and recognize trends by easily visualizing broader pools of data that influence KPIs, all within a customizable dashboard. With the assistance of automation and machine learning, the data becomes more refined over time facilitating more informed decisions on everything from marketing spend to concessions and leasing velocity. Having ongoing access to distilled real-time reporting encourages team collaboration, a data driven culture and empowers departments to stay on track of projects – it can even give individuals the latitude to go beyond their day-to-day responsibilities. During challenging times, this refined data also gives operators better insight into deals and key early wins that can reassure and even excite stakeholders. 2. Forge a clearer pathway to success with cloud-based data management Cloud-based asset management platforms offer key insights into portfolio health including revenues, debt, risk, occupancy and sales. Such data helps asset managers make more strategic decisions and set stakeholder expectations. Benefits also abound at the property level. Today’s asset management software seamlessly integrates with site-specific tools. Integrated, cloud-based technology supports facility and construction managers, leasing agents and property-level users. From online rent payments to digital procurement, users save time, decrease redundancies and improve accuracy within a single integrated system. With site staff connected to a single point of truth, they can efficiently make better day-to-day decisions. Structured dashboards enhance the value and practicality of data. “[Commercial clients] want a solution that’s designed for them and which connects them to the central data system with mobile applications and dashboards. That’s why we created a connected ecosystem for the operations side with Yardi Elevate,” explains Brian Sutherland, vice president, sales commercial at Yardi. He continues, “Expanding data access to the back office is tied to the larger issue of data management. The challenge is dissecting data and making it actionable for informed decisions. That’s the importance of role-based dashboards that remove guesswork for building operations people who need to control costs and work more efficiently.” Modern asset management technology platforms assimilate data at the property and portfolio levels and make it universally available. With a complete set of information, asset managers can evaluate pipelines, connect investors with appropriate deals and create an effective management plan. More strategic deal execution paves the way to increased revenues and overall success. 3. Gain greater efficiency and convenience throughout your organization with online services The cloud offers a unique opportunity to work with live data from anywhere with an internet connection. Executives can review reports, approve expenses and authorize payments when and where it’s convenient for them. Asset managers virtually present live reports to stakeholders with real-time data that is consistent throughout reporting systems. Whether in the office or a remote work environment, leaders across the organization achieve greater accuracy and efficiency with online services. At the property level, online portals make it easy to process rent payments,...

The Yardi Advanced Solutions Conference, which began as two annual events in the U.S. and expanded to encompass six events on four continents, will soon continue its two-decade tradition of helping clients maximize the value of their Yardi software. ”The reason I enjoy YASC is to see new product developments and to understand how other corporations are using the platform,” said Katerina Urquhart of London-based M&G Real Estate, who attended YASC Europe in 2019. “I was able to take classes on the newest products, ask questions on topics I didn’t fully understand and dig into things that interest me,” Marcie Trivette of Fore Property in Las Vegas said last year. “No matter how big or small, every client has a voice with Yardi, and these sessions are great ways to reinforce that,” an executive director with Laramar Communities LLC of Greenwood Village, Colo., noted back in 2010. Last year’s presentations were different, of course. All YASC events were combined into YASC Digital and YASC Global, virtual experiences with a full slate of free on-demand classes, social activities and gala entertainment. YASC Global in October drew more than 20,000 attendees and featured an exclusive performance from internationally acclaimed Icelandic band Of Monsters And Men. With every view triggering a donation from Yardi, the event earned $75,000 for charities. A two-time Grammy Award-winning performer is on tap for the May conference and Yardi again will make a donation for every attendee viewing the show. The next edition of YASC Global happens May 18-20, with 280-plus classes on the latest software innovations for property owners, asset managers, real estate investment managers and others working in commercial, residential, PHA, senior living and other real estate markets. Live chat support will also be available. YASC Global participants can also look forward to social media interaction, daily giveaways, networking opportunities and entertainment. All Yardi clients are automatically enrolled in the conference. “This is the era of continuous connection. But in the world of business, continuous connection hasn’t fully come to fruition. Our goal is to make that happen and provide the tools and technologies that you need,” company president and founder Anant Yardi told 2,500 Yardi clients and staff members who gathered in San Diego for YASC in 2019. Two years later, in vastly different circumstances, that remains the purpose of YASC. Learn more about the benefits Yardi’s global client base gains from this...

Is Hong Kong is poised for a real estate resurgence? Two years ago, Hong Kong was the world’s third largest real estate market, trailing only New York and London. The twin challenges of protests and a pandemic have taken their toll. So last week, Yardi called in the experts for their take on Hong Kong’s future. David Green-Morgan, managing director at Real Capital Analytics in Asia Pacific, Tommy Wu, lead economist for Oxford Economics in Asia, and Yardi regional director, Bernie Devine gathered for the first instalment of Yardi’s 2021 Executive Briefing Series. Here’s why they think Hong Kong real estate is ready to bounce back. The macro indicators are positive Political unrest had already damaged Hong Kong’s economy prior to Covid-19, and a 6% contraction followed in 2020, Wu told Yardi’s engaged audience. But Oxford Economics is forecasting a strong recovery, with 4% growth in 2021, and then 2.5% annually out to 2025. All the macro indicators bode well, Devine added, pointing to the vaccine rollout, slowly improving retail performance and unemployment rate, as well as the city’s strong financial governance framework, which remains a source of competitive advantage. Office’s bumpy ride is over Political protests had a greater impact on Hong Kong’s commercial office sector than the global pandemic, Wu highlighted. Office prices fell during the protests, but the market is “bottoming out” and demand is returning. Green-Morgan agreed, pointing to recent deals struck at the 73-storey skyscraper at 99 Queens Road, The Center, which were “more or less on par” with 2018 prices. “Quite a few multinationals have been shifting business functions to other key cities in Asia – like Singapore and Kuala Lumpur – but they are still keeping their offices in Hong Kong,” Wu added. Oxford Economics expects the financial sector “to continue to thrive” and the tech sector, while small, will be a powerful engine for growth. Hong Kong remains “the gateway in and out of China”. Residential remains resilient While Covid-19 hurt the labour market, and unemployment currently sits at 7%, this has not affected housing demand, Wu said. Why is this? Most participants in the housing market are in the financial and other high-paying sectors, and these weren’t hit hardest by Covid. “The real impact on Hong Kong was the protests. In fact, Covid has had hardly any impact on property prices, when you take a high-level view,” Devine observed. Will migration, especially from those who hold British National Overseas passports, affect the housing market? Wu pointed out that the bulk of these migrants are young and footloose, but not asset-rich and were unlikely to be in the market for housing. Meanwhile land supply will remain “tight – at least over the next few years,” Wu added. Risk and rewards in restructured retail Retail could take some time to recover, and Oxford Economics does not expect to see a repeat performance of the bounce back in 2003, following SARS. This marked a golden decade for retail and China’s emergence as a “major force” in tourism. “This won’t happen again,” Wu warned. More than 80% of inbound tourists hail from China, but the falling price of luxury goods in China has eroded Hong Kong’s appeal as a shopping destination. Tourism is now at a “crossroads,” Wu added. Recovery in tourist arrivals will lag other nearby cities, and this will lead to “structural change” in retail. While Hong Kong has some of the highest rents in the world, and while yields have been “incredibly low” in recent years, some investors are beginning to take a punt on the return of Chinese tourism. “This is the big unknown,” but prices are now low enough “that people are willing to take a bet,” Green-Morgan added. Hong Kong stays strong “The last two years have been a real challenge for Hong Kong, but overall investor sentiment towards the city is becoming more positive,” Green-Morgan said. Despite...