Sector discussion meeting 15th April 2024 – Construction & Real Estate sector

Held on Monday 15th April 2024 at 16:30 CET via Zoom conference call, members of the Association meet to hold a Best Practices meeting on the Construction & Real Estate sector.

• The goal of these meetings is to exchange information, help each other, and share what we are currently working on to see if we can collaborate. To strengthen relationships between members, it is important to have API and each other in mind while working day to day.
• Presentation conducted by Vivian Sajet.
• In the construction sphere there are different types of organizations ranging from the architects and installation companies to the actual developers that construct.
• Construction doesn’t only apply to housing and buildings (for offices, hospitals, schools, etc.). It also refers to infrastructure building, such as roads, bridges, railways…
• At M18 they also have clients that are supplying to the constructors, such as HVAC (heating, ventilation, and air conditioning) companies. These are producing those systems, whilst distribution is done by wholesalers and installation by installers.
• In Belgium the construction market is huge. Very diverse and with a lot of different types of clients. Project managers are often in high demand and very difficult to find.
• M18 provides a lot of commercial profiles. In construction, you have to sell to many different types of players, building companies/constructors, installation companies, producers of building products/systems (fire & safety, HVAC, elevators) and architects. In construction there is also the maintenance side, these are often facilities companies that maintain buildings.
• It is very important to understand the complexity of the sector and the different profiles involved in a construction project. Candidates for sales roles also need to understand and navigate this complexity.
• Another key part of the construction market is the wholesalers. They distribute products to the building companies. As sales person in construction, it is important to be there from the beginning of the building process. There are a lot of players and stakeholders. It is fundamental to know about the next building that will be made and influence the whole process.
• Ken Mc Govern shares their experience with property manager roles. They are not a difficult role to find, though they are not very high-paying positions. Property managers can usually be found regionally and are a profile that finds it easy to move around in different locations.
• Vivian Sajet shares that these positions are very difficult to cover in Benelux.
• Anna Garau shares that Santiago Tarín and she recently had a meeting with a company specializing in construction with a very good prospect in future business. It is a company that used to be family-owned but recently has had growth and expansion and needs to adapt to the new market and globalized reality. They work in the plumbing area.
• This is a reality for various family-owned companies: are they ready to change, expand, and bring in talent from outside the family?
• Alicia Luna shares the real estate and construction sector is growing a lot in Mexico. A lot of Canadians and US citizens have moved to Mexico so there are a lot of infrastructure (residential, industry, commercial) needs. They have seen many Private Equity companies specializing and investing in real estate as well as energy and solar panels. These companies need to be working and evaluating these projects in situ to make them financially viable. When looking for project managers, they aim for candidates with financial knowledge. Also, the commercial roles are challenging, because all clients are looking to have this commercial profile in their team. In Mexico, they also have this situation with family companies as well as the challenge of whether they are prepared for change or not.
• Some office buildings are being turned into residential buildings. Some of these apartments are rented especially to digital nomad executives. This business model is growing for many investors.
• Thierry Gaudin from France is also in this market, even though in France it is more centralized in Paris.
• Manuj from Ad Astra shares that the Private Equity investment is an indicator of how a country is doing. In India, it is going up, even though it has been cyclical and has had two peaks in the last ten years. Foreign pension funds have also been investing in the real estate /construction sector in India. There is a lot of movement from the countryside to the big cities. Indians are very fond of owning properties. Many Indian families would first own a house before owning a car.
• Ken McGovern asks: in the US companies buy residential buildings and rent them out. They don’t have a good reputation. Are private equities investing in residential properties or commercial properties? In India, the cycles of selling are shorter, and that makes prices more predictable. They make money by buying and selling and not renting out properties. In the Netherlands there was a change in laws and taxes so big companies are selling the properties they invested in.
• India is a huge supplier of talent in the construction industry especially to the Middle East and Africa, especially the engineering talent. Also southeast Asia, not only engineering but construction workforce. Talent is abundant in India, so It is not a challenge to find talent in this sector, instead, it is a challenge for the workforce to find a good opportunity.
• Final reflection on how politics influence the real estate and construction market and the situation of housing in today’s world.