What attracted you to this role? Can you tell us a little bit about Allrise and your core business?
I have taken on the opportunity at Allrise to challenge myself and to manage the expansion and development of an up-and-coming business. Allrise started several years ago as a Debt specialist in the US and has grown its business and diversified into investment in real estate equity. The company now has five offices in the US and is involved in several businesses including residential development in California, aircraft engineering in UAE, SME and factoring business in Russia and Ukraine, with a new real estate lending arm is about to launch in CEE. There are also two other categories we cover which include investment in IT and blockchain companies.
What are your views on changes in the real estate market and who are the future winners and losers? Which industry sector fascinates you the most?
The past decade has seen a completely redrawn landscape in the real estate sector with more changes yet to come. There have been many ground-breaking developments in the IT sector starting with internet penetration and e-retailing and continuing with cloud computing and now blockchain. As a result, the segments of the market that have traditionally been considered if not completely “risk-free”, but at least “low risk/core” assets due to their multi-let characteristics and a major food retailer anchor are no longer seen as such. The best example of the changes in real estate dynamics is deterioration of attractiveness of neighbourhood shopping malls and retail parks as a real estate investment segment. Multi-tenancy is no longer seen as a panacea for risk minimization plus it is precisely these food anchors in neighbourhood malls that are struggling. As for my predictions for winning sectors in the next decade they are to include datacentres for hosting and crypto mining, co-working and co-living spaces, pop-up retail venues, which can rejuvenate “tired” high street and shopping malls, offices for biotech companies, real estate on the cusp of real estate/healthcare and real estate/education and more “off the beat” assets such as fertility/family planning clinics and assets targeting minority groups.
However, the sector I would like to draw your attention to is the one often missed from the discussions – it is suitable farmland. Environmental sleuths predict that by 2025, an estimated 1.8 billion people will live in areas plagued by water scarcity, with two-thirds of the world’s population living in water-stressed regions. As fresh water is not an easily tradable commodity, the ways to invest will be either through water infrastructure (such as pipework and desalination equipment), water right or arable land. Investment in the ageing infrastructure might be more obvious but less exciting investment target as the returns are not immediately obvious.
Alternatively, I would suggest investing in in water-rich farmland. As famous investor Michael Burry, once stated “food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas”. I agree with his view and according to various researchers by governmental agencies more than half of the profits of the world’s biggest companies would be at risk if the water was priced to reflect its true value.
What differentiates Allrise from your competitors?
What excites me about being part of this company is what I believe our most distinguishing attributes are compared to our competitors, the willingness and ability to undertake atypical and more time-sensitive deals and be able to diversify our offer. Focusing on small-to-medium ticket sizes with a strong commitment to financial technology and Digitech in generating and processing leads as well as forage into proprietary risk scoring. We look at fixed rates, no pre-payment penalties and quick closing which provide our borrowers with a straightforward path to funding.