The real estate industry is undergoing radical change across its entire value chain. Whether willingly or unwillingly. Over and above the economic crisis that the sector is going through - and it's a violent one - we can see that the business models that have flourished for several decades are being challenged. Challenged by the climate transition, which is forcing us to decarbonize our assets. Challenged by changing uses, which are reexamining the added value of office, retail and warehouse space. Challenged by the big bang of values, which are fracturing into "prime" assets that are being snapped up and others that are being abandoned.
The latest example - and one that is symbolic of the challenges facing the entire real estate industry - is the La Défense district. The Île-de-France regional chamber of the Cour des Comptes has expressed concern about the economic model of this public development establishment, while emphasizing its reliable and efficient internal management. A model whose revenues are running out of steam in the absence of new construction, and which it calls for renewal.
Nothing new under the cobblestones. Numerous reports, starting with those from private players involved in the area, have pointed to the need to reinvent a model based for over half a century on the sale of building rights at the dawn of a cycle that will be one of rehabilitation and transformation.
The problem is that the Chambre régionale des comptes has put forward some hackneyed solutions for balancing the public institution's finances over the next few years. On the one hand, to increase the contribution of local authorities. But it's hard to see how this can be passed on to the mayors... especially just a few months before the municipal elections. On the other, add a levy on businesses, which... are not short of them.
In other words, nothing will happen in the short term. But that doesn't mean we can't start thinking about new ways of financing the company. Not to save a development company, but to prevent a neighborhood from going under.
One way of doing this will be to invest not only in urban infrastructure, but also in real estate assets, by encouraging public developers to take equity stakes in operations. This is what Grand Paris Aménagement has done by opening up to co-promotion.
The next step will be to move towards joint ownership. And to speed it up with local public players. In this way, we can avoid the trial of value capture by a single stakeholder, and give a sense of responsibility to some local councillors who have often been content to collect their local tithes.
La Défense, the showcase for business districts, is an open-air laboratory for the challenges that await industry players in this new cycle. What we expect is a little more innovation, a little less providence.