One of the core sectors of Rivoli Group AG with its long-term expertise, is the real estate and infrastructure sector. It is sustained by the impact of megatrends, which require a fundamental change of thinking.
Megatrends are long-term changes, which can already be felt both locally and globally in the short term, as various studies on the effects on society and industry already show. Demographic changes, increasing urbanization, the development of digital worlds, or the volatility of the capital markets – these and other megatrends offer numerous opportunities but also risks.
In our experience, it is crucial to be prepared in time for innovative new approaches to the new conditions. Against this backdrop, the investment and consulting team at Rivoli Group AG supports our clients in adapting their business strategy and implementing promising projects in domestic and foreign markets. In doing so, our customers can profit especially from our extensive expertise and experience in the emerging markets.
Due to rising energy costs, growing environmental problems, and global climate change, Rivoli Group AG currently sees sustainability as one of the most important trends. Sustainable management benefits the environment as well as the individual company itself. Consequently, it can be said that an implemented sustainability in the company has a positive long-term effect on business success.
Specifically at company level, a higher sales rate and above-average company growth are emerging. In addition, sustainable management has a positive effect on the satisfaction of stakeholders as well as the company’s image. On the other hand, it requires a strong commitment to sustainability, for example, the optimization of management processes in sustainable construction processes or the processing of sustainable building materials.
Demand for digitalization
Technical progress is a major driver of many megatrends. Without the development of information and communication technologies, the trend “digitalization” would hardly be possible. Experts from the worlds of business and politics are convinced that digitalization will also impact the real estate and infrastructure industry. However, real estate companies in Europe still need to catch up when it comes to digitalization. Within the framework of a survey of industry experts, four potentials of digital transformation were highlighted:
Positive effects of digitalization can already be seen in acquisitions. We believe that the digital transformation will have a positive effect on the purchase volume, the capitalization rates of the purchased properties, and the development of the property value. This is due to the use of powerful tools for the implementation of market analyses or for the creation of transparency in the purchase numbers as well as due to the support of IT systems for risk reduction. We can observe that highly sophisticated tools in risk management protect investors against unexpected disadvantages when making purchasing decisions.
Opportunities and risks through globalization
The globalization of the financial markets offers opportunities for the real estate industry and at the same time carries risks. In conjunction with the increasing volatility of capital, globalization as a risk factor will in the future gain relevance and influence on the real estate sector. Opportunities, however, are particularly evident in the target areas of the purchase and sale of real estate.
Companies that have already responded to this trend were able to surpass their own expectations in sales and purchase volume and recorded above-average success in the capitalization rates of purchased objects. The result is increased financial success for real estate companies.
Because of globalization, financially strong foreign investors are increasingly interested in attractive real estate investments in large western cities. This increase in demand is driving up real estate prices rapidly, but foreign capital also allows the realization of new, innovative real estate and infrastructure projects.
Growth driver urbanization
Globally, more and more people are moving to cities and urban areas, even in industrialized countries. This leads to an increasing demand for raw materials in order to be able to implement new infrastructure or residential construction projects more quickly.
At the same time, this massive increase in population, coupled with a lack of housing and building materials, is exerting pressure on economic decision-makers, developers, investors, and real estate owners.
Time will tell which specific consequences the increasing polarization of certain locations and the scarcity of land will have for the individual players in the real estate sector in the long term. An annual growth rate of 3 to 6% per year is expected for emerging markets. China holds first place in the global economy with a sector share of more than 25%, followed by sub-Saharan Africa, the region with the second highest growth rate. For the year 2025, the total value of investments
in the construction sector is forecast to amount to approx. USD 15 trillion.