The ESADE Alumni Real Estate Club held its 17th Real Estate Sector Annual Dinner, sponsored by Anticipa Real Estate and CBRE. The guest speaker at this year’s edition was Jaume Guardiola (Lic&MBA 79), CEO of Banco Sabadell, who analysed the Spanish economic environment, financial system and real estate sector.

In his opening remarks for the event, Eduard Mendiluce, president of the Real Estate Club and CEO of Anticipa, stressed that ‘the recovery of the Spanish real estate sector is a fact, and the sector’s professionalisation in this new stage is playing a fundamental role’. Mendiluce thanked the Banco Sabadell CEO for coming and highlighted his ability to drive growth at his organisation and make a huge jump in size during the deepest moments of Spain’s economic crisis. 

The first part of Guardiola’s talk focused on the economic environment. He underscored that ‘the Spanish economy has shown remarkable dynamism and will grow more than 3% in 2017’, adding that it ‘has regained foreign competitiveness’. At the same time, he noted, the public deficit has been reduced, whilst the financial positions of families and companies have grown stronger and credit activity has gradually picked up again. ‘Interest rates are at historic lows’, he explained. However, despite these strong figures, he continued, the Spanish economy still faces significant structural challenges, such as low productivity, an aging population, high levels of inequality and long-term unemployment. To address these challenges, he said, ‘the necessary reforms to ensure more sustainable long-term growth should focus on improving the labour market, the education system, business size, R&D, energy policy and infrastructure’.

‘The real estate sector is currently being reactivated’,  Guardiola explained in the second part of his presentation, although he noted that growth is very uneven, with rising prices but considerable differences between regions. ‘Closing prices are expected to continue to increase at similar rates to those registered last year’, the Banco Sabadell CEO said. The factors that will affect real estate sector dynamics in the medium term include the evolution of the economic outlook, a declining population, monetary policy and greater purchasing efforts. 

Guardiola also spoke about Solvia’s role in the bank’s strategy, with the platform having gone from retailer to real estate leader, thanks to its specialisation and value creation.

In the third part of his talk, Guardiola analysed the financial system and the situation of Banco Sabadell. ‘The financial industry has experienced some very rocky years, as reflected in the increased delinquency ratio, increased capital requirements and, as a result of these things, the falling return on capital’, he explained, calling attention to the huge restructuring efforts financial institutions have made. Now that the crisis has been overcome, the challenges facing the financial industry are fourfold:  dealing with troubled assets, coping with regulatory pressure, low interest rates, and managing digital disruption, which is transforming the sector.

In his closing remarks, Jordi Fabregat, an associate professor of economics, finance and accounting at ESADE, summarised the major challenges facing the real estate industry as a result of the entry of new players and technologies. ‘The good data on the Spanish economy should encourage us to tackle the important structural challenges we currently face’, he concluded.