President and CEO Colin Dyer was the keynote as part of Harvard Business School’s Real Estate Summit. Here is an excerpt from his Q&A with Arthur Segel, Poorvu Family Professor of Management, Harvard Business School.
Q.: I’m impressed with your experience. For the benefit of our students, how did you land the position at JLL?
A: JLL was looking for someone with global, not necessarily real estate experience, to take them to the next level. When I received the position, I was told by a member of the search committee that I was selected on the good word of a London cabbie. My jaw dropped upon hearing the news. I built a friendship with a taxi driver who recommended me for the job. Do not underestimate the footprint you leave with people.
Q: Why is today great for real estate?
A: Today’s macroeconomic fundamentals paint a strong picture with: low interest rates, availability of debt, a plethora of global equity, and low returns on other asset classes. In addition, consumer confidence has recovered.
Q: Where should a real estate investor direct $1 billion?
A: This first depends on the risk profile and horizon of the investor. Assuming a ten-year horizon, I’m bullish on China’s future and the growth potential there. I’m also optimistic about new development in top tier US cities given tightening vacancy rates.
Q: What about Europe?
A: Look for high yield and low security assets. It’s important to focus on transparent markets like London. The overall long term picture for Europe is structurally low growth rates.
Q: How has technology changed real estate?
A: Technology is filling a gap in real estate information. Firms are making data readily available leading to more efficient markets. Also technology drives markets toward best in class space, particularly in cities.
Q: What is the greatest threat to real estate markets?
A: A lot revolves around the global banking system. I would like to see quantitative easing end. I would also like interest rates begin to rise so the central banks can create liquidity again.