Q&A Spotlight: CEO Peter Moore On the State of Real Estate Recruitment

In this Q&A session, we speak to Macdonald & Company’s CEO Peter Moore MRICS, to get a candid view of the ongoing developments in real estate recruitment.

Peter shares his insights from the forefront of the field, exploring key factors shaping our industry, such as: attitudes towards flexible working arrangements, the impact of inflation, and the rising cost of living, providing a unique understanding of the challenges faced by professionals.

1. How have you observed recent economic changes influencing the real estate market?

The global real estate market has been significantly affected by high inflation leading to higher interest rates. The majority of investment and/ or development deals involve some form of debt and the significant increase in finance costs combined with construction and material costs remaining high, have led to significant reduction in margin on schemes.

These financial pressures are further exacerbated by a decrease in demand for occupancy and property sales, especially in the U.S., with vacancy and tenant demand statistics reported to be lower than during the 2008/2009 global financial crisis. This has resulted in less real estate being traded, and development activities being scaled back.

On a positive note, there is a substantial amount of available capital (“dry financial powder”) ready to be invested in the real estate sector. Private equity funds, in particular, are eager to deploy their funds when the right opportunities arise. In response to these economic changes, there is an increased demand for professionals in asset management, analysis, and finance roles to navigate the challenges and optimise the performance of existing real estate assets.

2. With the rising inflation and interest rates, how do you see this impacting the salaries offered by employers?

This year 17% of those who received a salary increase did so because of a cost of living increase. Salaries have risen in the real estate sector significantly over the past 18 months or so as the cost of living in most major economies has increased.

Arguably real estate remuneration has lagged behind other professional sectors in the past few years, therefore some argue that the current pay increases are a way to catch up and make up for the past shortfall. Our prediction is salaries will continue to climb at 4% for the year of 2024 – the same rate we saw in 2023.

Salary Benchmarking

Our annual 'Salary, Rewards and Attitudes' online report 2024 is now available.

3. Are there specific sectors within real estate that you think will be more resilient to the economic fluctuations and inflation, and why?

Whilst capital investment has lagged in 2023, capital protection has been high on all peoples agendas. Skills in asset management and property management will remain to be in demand in 2024.

To safeguard assets, there is a focus on meeting the rising demand from occupiers for a Green-Workplace. Consequently, the introduction of ESG job titles in the real estate industry is expected to accelerate in 2024 as part of efforts to protect assets. Around 16 million square feet of office space in Central London will become available by the end of 2027 due to expiring leases.

Data is available for about 80% of this office space, with only 6% being classified as energy-efficient (EPC A or B). The majority, 94% (11.9 million sq ft), is considered energy inefficient (EPC lower than C) based on Sustainable Finance Disclosure Regulation definitions.

This information suggests a trend towards prioritising energy efficiency and sustainability in real estate.

4. What perks/ benefits are now most valuable to employees and how are you seeing employers responding to these?

Flexibility of working arrangements remains the hot topic post covid. Work/life balance has been the most valuable element of work for the past 3 years running. It could be considered a key battleground in the war for talent, knocking off salaries which enjoyed a run of 20 years at the number one spot as the most important element in total packages offered.

Candidates are seeking flexibility and are generally unwilling to work from an office 5 days a week. In fact, businesses that are insisting on staff being in the office full time are outliers and are at a distinct disadvantage. Most Western European businesses now consider it old-fashioned to require employees to work full-time in the office. In contrast, in Asia, the majority of employees have returned to the office for the entire workweek.

Macdonald & Company are able to guide employers through this key area. Get in touch with our team if you have any questions or need some help navigating this.

5. In the current economic climate, what qualities or skills are a priority when recruiting real estate professionals for your clients?

Flexibility and resilience, as if the last 4 years has proven anything, is that change is a constant. Employers need employees who can adapt to meet constantly evolving needs of the market. As always, candidates with strong financial skills remain in demand and will continue to do so.

6. Given the shift towards remote work and flexible arrangements, and more employers keen to get staff back with office-first policies, how do you see this ‘conflict’ playing out? How would you recommend employers navigating this?

72.3% of those surveyed globally have flexibility in when and where they work for at least part of the week.

This statistic has been taken from our 2024 salary survey which references over 15,000 international salaries and has over 3500 survey respondents.

7. In what ways do you believe the emphasis on work-life balance is influencing the expectations of real estate professionals, and how can employers create environments that attract and retain top talent?

The cost and issues related to the daily commute and the allure of work from anywhere programs in other industries means real estate employers are under pressure to ensure their workplaces are the very best they can be.

Accessibility, connectivity, and hotel-isation of the workplace have all come into play in recent years. You can witness this best in the growth of the flex office market.

8. What are the key challenges you foresee in the real estate job market over the next year, and how are you preparing your clients and candidates for these challenges?

Bonus and pay reviews. With such low transaction volumes in 2023, investors and developers have fewer opportunities for major swings in value. Consequently bonus pools will be muted. We expect many employers will be having difficult conversations with staff on lower-than-expected bonuses.

However, we can help prepare the industry with our salary survey. By providing the most detailed and largest sample size of data from real estate, we cover both the financial values of salaries and benefits as well as people’s attitudes to these.

9. How do you assess and prioritise diversity and inclusion in real estate recruitment, and why do you believe it’s essential in today’s market?

Our methods are constantly evolving including the technology used to hire the very best talent.

Video CVs and similar tools allow employers to better understand applicants’ potential. This means that excellent candidates are not held back by traditional barriers like education, location, or personal networks.

10. Given the global nature of the real estate market, how do you navigate recruiting for clients in different regions, considering the varying economic conditions and market dynamics?

Our market is global, following the lack of travel in 2020-22, we have witnessed a greater appetite for working in new markets.

51% of those surveyed expressed an interest in working aboard (this varies by region). However it has become much harder over the past few years to obtain work permits and visas for many countries.

11. In a rapidly changing market, what advice do you have for real estate professionals to future-proof their careers and stay relevant in the industry?

Join a ULI, WPA, or any networking body and get involved in your industry.

Q&A Spotlight: CEO Peter Moore On the State of Real Estate Recruitment

We hope you’ve gained valuable insights into the changing landscape of real estate recruitment, but if you need further help or have specific questions, don’t hesitate to get in touch with us.

Our team has led the way in real estate recruitment for three decades and we can help you make informed decisions when it comes to your hiring practices. Our ‘Salary, Rewards and Attitudes’ survey report remains the benchmark of remuneration and attitudes across the international real estate industry, referencing nearly 15,000 international salaries and over 3500 survey respondents. ​

By leveraging this data, we help you gain a competitive edge in recruiting and retaining top talent. Take a look at clients we’ve helped here.

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