FRP’s inaugural Real Estate Conference

FRP’s inaugural Real Estate Conference saw industry leaders and experts gather to discuss the future of real estate amid rapid technological advancements and a shifting economic landscape. From the transformative power of AI to practical strategies for building resilience, the conference provided a forward-looking lens on both the challenges and opportunities shaping the sector.

Globally recognised speaker, adviser and writer, Antony Slumbers delivered a compelling keynote, emphasising the profound impact of AI on the real estate industry. As technology advances, he highlighted that the true competitive edge lies in fostering human-centric environments. A standout moment was when he expressed that: “In the age of AI, paradoxically, human is the new luxury.” With AI systems predicted to match Nobel-level intelligence by 2027, he stressed the importance of designing real estate spaces that foster creativity, collaboration, and human connection.

The ‘Ask the Experts’ panel, moderated by Susan Freeman, also sparked an interesting debate. Panellists discussed the current and future landscape of UK real estate, including investment trends and market confidence. A key takeaway surrounded London remaining a global investment hub despite economic headwinds, while sustainability, data centres, and alternative asset classes are shaping future opportunities. Other significant points surrounded government policies on affordable housing and how net-zero transitions are critical to future market stability.

Packed with thought-provoking discussions, interactive workshops, and valuable insights from industry leaders – the conference provided practical tools and strategies to help businesses navigate challenges and build strong foundations for what lies ahead.

Workshop 1: ‘Redefining hospitality: Adapting hotels and restaurants for a changing world’

Key Takeaways:

1. Consumer resilience: Consumers remain resilient and willing to spend, especially on travel and premium experiences. Hotels are adapting by promoting on-site dining and drinks to increase guest spending.
2. Winners and losers: Budget and luxury hotels are thriving, while some mid-market hotels without cost control or a clear value proposition face challenges. Serviced apartments also stand out due to operational efficiencies.
3. Cautious market optimism: Revenues are currently expected to be robust despite soft Q1, but net profit margins remain hard to protect. More stressed and perhaps distressed transactions are expected, creating opportunities for investors to acquire undervalued assets, especially in the leasehold-heavy restaurant sector.

Workshop 2: ‘Building resilience: Navigating the future of construction and development’

Key Takeaways:

1. Regulatory and economic pressures: The Building Safety Act adds complexity and costs, especially for high-rise buildings. Economic factors like inflation and rising material costs further challenge project viability.
2. Operational and cash flow challenges: Delays in the gateway approval process disrupt timelines and cash flow, especially for SMEs. Developers face increased upfront costs often without clear approval timeframes.
3. Future adaptation and success: Successful developers embrace modern construction methods, prioritise early design accuracy, and adapt to regulatory demands. Government intervention is needed to streamline processes and support affordable housing delivery.

From the transformative power of AI to practical strategies for building resilience, the conference provided a forward-looking lens on both the challenges and opportunities shaping the sector.

David Hudson Partner Restructuring Advisory

Workshop 3: ‘Restructuring Retail Real Estate: CVA vs. Restructuring plans – What’s the best solution?’

Key Takeaways:

1. CVA vs. RP – Key differences: CVAs are more transparent and collaborative, requiring creditor approval. RPs provide greater restructuring powers but allow secured creditors to overrule others and come with higher costs.
2. Landlord concerns: Some landlords favour CVAs due to greater transparency and engagement. RPs can limit landlord influence in some cases and are significantly more expensive to challenge.
3. Mid-market accessibility: High costs make RPs less accessible to mid-market businesses. Efforts to simplify the process are ongoing, but cost reductions remain unlikely.

Workshop 4: ‘When the foundations crack: Practical solutions for construction & property development crises’

Key Takeaways:

1. Consequences of failure: Construction failures cause severe financial loss for lenders and stakeholders. Poor management, lack of technology, and rising costs increase the risk.
2. Mitigating risks: Conduct thorough due diligence on contractors, monitor cash flow closely, and engage with subcontractors directly. Avoid over-relying on monitoring surveyors and ensure material payments are site-specific and secured.
3. Early intervention and communication: Identifying problems early and maintaining open communication with lenders and stakeholders can prevent negative outcomes. Seeking professional advice promptly is critical to finding workable solutions.