RICS is the global brand that stands for confidence through professional standards in key property markets worldwide. Maarten Vermeulen, FRICS, RICS Managing Director for Europe, Russia & CIS discussed the organization’s strategy and made predictions about 2015 trends in the European commercial market.
Can you tell us about your strategy for RICS in Europe, Russia & CIS?
The global financial crisis is not over yet, but despite the political and economic challenges our members are facing, we are still very successful in expanding our membership. This is because our brand and what it stands for becomes more and more recognized by the market and with governments in particular. However, there is always room for improvement.
We are currently in the process of drafting a longer-term strategy for RICS in Europe, Russia & CIS. We need to appreciate that Europe, Russia & CIS is not just one market but a very culturally diversified complex to operate in. Therefore, each submarket across Europe deserves its own strategy, unity in diversity, within the context of RICS’ global strategy. Another starting point for us is that we want to be significant and sustainable in every market we are active in: significant because we want RICS to have impact and sustainable because we want to focus on the long-term benefits, on the basis of active engagement with our membership.
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What is the position of RICS when it comes to Russia?
First of all, RICS is not a political organization and it is not in our objective to lobby or raise an opinion about what is going on at a political level. RICS is an organization that focuses on building confidence through professional standards worldwide. This means that we co-develop standards, offer education & training, qualify people and regulate them when it comes to, for example: property measurement, ethics, construction and valuation. We want to further professionalize and develop property markets and this does not involve politics.
RICS has a very active Board of five people in Moscow, a growing membership, and we experience a significant demand for all the products and services that we offer. Therefore, we will continue to be active in Russia and continue to actively support our staff and membership over there. Having said that, we constantly assess the physical risks in the various submarkets and if we feel the situation is not safe enough anymore, we will temporarily stop our activities in those markets because we would not allow our staff to be exposed to high-risk situations.
How would you describe the current European investment climate?
Until May last year, I was working in commercial and private equity real estate and also in my current position, I talk a lot with market leaders about what is going on in Europe. Based on these discussions, I sometimes get the impression that investors want to invest because they have money that needs to be invested. There are many investors in this position, who often don’t take all the necessary steps to come to a balanced investment decision. The underlying trends and developments simply too often don’t justify a purchase. This is a worrying development and it looks like we haven’t learned much from the recent past.
Investing in international real estate is not an easy job and demands a lot of skills and expertise. Investing in real estate is also per definition a longer-term strategy, but it seems that short-term objectives prevail.
What are the trends in the commercial European property market going to be in 2015?
First of all, investments in Europe become more and more opportunity driven, based on specific demand in a distinct market in Europe. Therefore, it can make sense to buy a logistic development in the south of the Netherlands and a hotel in the center of Paris. This decision is depending on the match between the opportunity and your own risk/return profile.
Secondly, I continue to believe in social infrastructure markets. Municipalities, universities, schools and operators in specific healthcare sectors continue to reconsider their property strategy and this offers interesting opportunities for investors but also for property service providers. However, these are not easy markets to enter, but it is clear that they need to further professionalize and as a result, their property strategies will change. Over time, this will result in new business models involving commercial property parties because they will not be able to deal with their property (portfolio) challenges on their own.
The full article is in Europe Real Estate 2015 reference book. Purchase the book in the webshop
RICS is the global brand that stands for confidence through professional standards in key property markets worldwide. RICS has 118,000 members worldwide and brings expert practicioners together from across all sectors of the market, sharing best practice and bringing about the continuous development of the sector as a whole. RICS members apply the same standards, consistenly, and also bring confidence to the markets they serve. RICS in Europe, Russia & CIS has circa 6,500 qualified members and actively operates in over 25 countries.