When Lonneke Löwik returned to INREV as its chief executive three years ago, she had data on her mind. “It was the number one thing I said when I came in – hey, we need to be smarter about how we use the data,” she says.
If there is one thing INREV has plenty of, it is data. The European Association for Investors in Non-Listed Real Estate Vehicles, to give the trade body its full name, has almost 550 members spanning institutional investors, fund managers, banks and advisers. They all provide INREV with numbers to crunch across a variety of industry surveys and other initiatives.
But if there is one thing the organisation has failed to do well enough, Löwik acknowledges, it is to mine the value that lies in that data. Until now. Löwik, who had worked at INREV for five years until 2014 and then launched the Global Infrastructure Investor Association, is now in the middle of a data drive that she hopes will transform the way the association collects, collates and uses information from its members.
“The more data you have, there’s a risk that you are getting buried,” Löwik tells EG over a video interview. “You need to be able to use it in an efficient way.”
No endpoint
That advice goes sector-wide. Asked whether the investment community has typically been behind the curve in appreciating the benefits that come with a tech-driven focus on data, Löwik replies: “The real estate investment world? I would say yes.”
She continues: “If you look at the equity and bond markets, they are so used to having these trading platforms for years. They have all that data because it’s much more transparent. We have much more data than we think we have, we just need to be smart as to how we use it.”
At INREV, the journey is under way – although, as Löwik notes, “there’s never an endpoint” for a project like this, just an aim of finding clever ways to capitalise on the gigabytes of vehicle- and asset-level information the association receives from members, and help those members buy and manage assets more effectively.
“We have been collecting data for the last 17, 18 years,” Löwik says. “We produce a nice report, give insights to the members, but we fail to make the connection between different data sets or we fail to make connections between a survey [of investment intentions] and actual performance… We need to put it all together and be smart about how we can use it and bring much more transparency to the industry. We have done quite a lot as an organisation but we can do much more now, and that is where technology can help us.”
This calls for some ambitious plans as to how INREV’s systems can be overhauled or even integrated with those of members to make the submission of data simpler and faster calls. It also calls for some mindset changes within the organisation and industry, Löwik adds, including convincing members that they have nothing to dread in providing more granular insight into their deals and developments, despite many demonstrating “some kind of fear that ‘if I share my information, I give away my competitive advantage’”.
Changes have to start in-house, hence INREV’s focus on its own processes first. “It’s not about who sits on what information, but how can you be smart about connecting the right data sets and providing the right insight,” she says. “In order to do that, you need to have your house in order first. We know that a lot of our members are [also] doing it right now, both on the investment management side and on the investor side. So everybody’s working on this. Once everybody has their house in order, you can make connections.”
New priorities
For Löwik, tech joins the environmental, social and governance agenda, as well as the long-term impact of the Covid-19 pandemic, as the trip of issues dominating her to-do list this year.
The effect of coronavirus hangs over everything, with INREV’s team digging into data to make its best estimate as to “how this will impact primary markets, secondary markets, cities, types of offices”, Löwik says. The association’s recent survey estimates there is some €64.6bn (£57.4bn) of new capital likely to be looking for a home in real estate this year, about half of which will target Europe.
Technology advances are critical, the chief executive adds, and central to INREV’s data-led work – not to mention keeping the business moving in the Teams and Zoom era. And ESG is only growing in importance.
“ESG is something where we’ve focused very much in the last 10-15 years on the sustainability side,” Löwik says. “But it is the governance and the social impact that has started [to come to the fore]. What Covid has done is made a lot of things that were already brewing under the surface pop up.”
Löwik believes real estate investors are “quite informed” about the ESG agenda and “very pushy” in driving it, including big names in Canada and Australia. And the demands for disclosure mean there is unlikely to be a let-up. “In Holland, for example, they need to give a climate risk assessment of each of the assets,” she says. “How many of their assets are under threat in the next 50 years by flooding or hurricanes or earthquakes? For that you need data. That’s part of the risk management.”
Discussing all of these themes, Löwik returns repeatedly to data. How to get more. How to do more with it. How to use it to shape the investment market and track the performance of assets more effectively.
“Technology allows us to get more and more data, but it also allows us to do more and more with that data,” she says. “That is where I think the biggest evolution will come from: How can we make more efficient use of the building? How can we improve our buildings on environmental and social aspects? That is where the fundamental change for the industry is – the use of data.”
To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette
