How Current Macro Events Impact Leaders in Real Estate Investment

Written by Holtby Turner

With the US election, BREXIT and market issues in BRIC countries affecting global financial markets and institutional investments, leading through such uncertain times is a pressure many face in real estate investment.

Despite RICS’s recent survey which revealed “not a single central London commercial property market professional believes a pro-Brexit vote would be positive for the sector”, uncertainty over it is abundant and it’s popping up in conversation more and more as June 23rd approaches.

So what can leaders in real estate funds do to reduce uncertainty for clients and staff?

All leaders will be familiar with that sense of isolation during critical management change, when confidentiality and non-disclosures are essential. Yet, leading through uncontrollable uncertainty, such as we’re facing today, makes it even lonelier.  Grainne Gilmore, Head of Residential Research at Knight Frank articulated the issue real estate faces very well in Estates Gazette; “The market can cope with change. What it can’t cope with is uncertainty.”

But what of other uncertainty that is arguably even greater? The US Presidential Election and the recent sell off in Chinese equities are sparking deep-seated levels of uncertainty for leaders in investment management who are damned if they speak up for fear of running unnecessary anxiety through their organisation, and damned if they don’t prepare for the impact of such events.

I recently read in a study by Accenture Strategy that 43% of high-league professionals see uncertainty both as a potential threat and a potential opportunity. Interestingly around half of those surveyed believed their leaders were prepared for hard-hitting political and economic change because they regularly review trends and emerging possibilities.

What threats such as these show, is that the finest leaders in the world of real estate are prepared to act, and their senior managers can see that. The essence of leadership itself means when situations are volatile, complicated, or uncertain, you offer direction, and lead.

So how can leaders in real estate funds and investment do so? In Leadership Imperatives for an Agile Business, Accenture Strategy goes on to identify leading in uncertainty as the number one characteristic of truly great CEOs.

In her recent Management Today piece, How to Square up to Uncertainty as a Leader”, Rebecca Alexander outlined five steps as critical for leaders during uncertain times. I thought they were applicable to market threats from BREXIT, China and the US too:

  • Stay curious: what do others think? What are their ideas? Asking great, probing questions often results in a good outcome.
  • Demonstrate confidence: be prepared to change, ditch or stretch your present thinking.
  • Be an ideas consolidator: notice how different suggestions could be woven together, ensuring you’ve taken heed of all of them.
  • Embrace multiple points of view: put yourself in the shoes of someone you respect. What would your old boss have done – good or bad? What may a competitor be likely to do?
  • Don’t let fear of failure stop you: accept that some decisions you make will be wrong. Full stop.

Whilst these five points are certainly not intended as a remedial checklist in any way, I hope they prompt a pause to reflect on how you might, as a senior leader, handle sudden external change to your business. Solid leaders depend on solid teams to execute strategy and deliver results, we all know this and feeling secure that you have an outstanding team to support you is essential. Because it is indeed, as the saying goes, “lonely at the top” otherwise.

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