Published on 08/10/2021 on Creditvillage.news
Before delivering this editorial to the Credit Village editorial staff, I asked to be able to participate and attend the “A tutta R” event on July 15th focused on Real Estate; I thought that, after months of isolation, it would have been more correct to absorb and in some way become a spokesperson also for the thoughts of colleagues, professionals and, why not, even competitors. Only the good ones of course 😊
I think I did well. In this particular historical moment, participating in these events is already a success in itself, all the more so I was convinced that it would still be satisfying to meet people live and exchange opinions with them in the “old way”. The round table in which I participated was well moderated and attended by very competent and polite colleagues who I take this opportunity to greet and thank.
In addition to this, I was able to listen to interesting ideas, explained with competence and above all… new! I had the impression that after the initial hangover that lasted a few years of technology applied to the material, after a series of important regulatory innovations (perhaps too close to each other), a natural skimming occurred and that at first sight only those useful things and whose usefulness could be easily explained even to non-experts. It is as if, in some way, the pandemic has extended its effects on all of this as well.
Some practical examples:
–Reoco: during the discussion with other colleagues, it became clear about the possibilities of using this tool and how it is now used by the market with extreme awareness. However, some issues remain open, one above all the supposed limitation on the use of the instrument to SPVs that buy directly from other SPVs. In this way, all those mortgage loans securitized with GACS or securitized for different reasons would be excluded, generating a disparity and a prejudice that appears outside the ratio legis. It would be interesting to hear what the legislator thinks of it because after all many other privileges, see for example those of 41 TUB, are transmitted to the SPV without any limitations;
– Real estate securitisations: Compared to a year ago, the perception and awareness of the potential of this tool has completely changed. The audience of first movers, initially restricted to subjects already accustomed to securitization and ABS securities, is also expanding to the “pure” real estate world, involving new points of view and new themes (one above all, the possibility of securitizing building land and build using funds from the issue);
–Big Data: is the theme of the new decade, it involves all areas of our life and could not fail to enter the NPL and Real Estate market as well. In recent years there has been a proliferation of software, open data, spiders applied to all possible and imaginable databases, automatic evaluators, etc. For the first time I was able to hear (and share) that paradoxically an excess of data can generate the opposite effect to the one desired at the outset. Taleb readers will recognize the assumption finally made explicit in public. The ability to recover data with ease has gone far beyond what is necessary and what is due; this is true both for our business and probably for many other contexts. We have to start working on the interpretation of the data, machine learning is the right way and compulsive accumulation certainly cannot be.
–Crowdfunding: the regulatory process of this activity is at an advanced stage; there was talk of an upcoming European regulation that will allow cross-border activity, making the sector more attractive. If at an early stage the topic seemed unsuitable for overly regulated and compliant processes, step by step it has adapted and is gaining significant market shares. It will be interesting to understand if in the near future this type of capital will also be able to enter a system until now dedicated to professional clients or even on request.
I could present other examples, following the same fil rouge. These collateral but complementary initiatives to the core business will mean new capital, enlarged supply chains and greater induced activities.
I The process of transformation, at least from an economic / financial point of view, of a real estate into a movable asset really seems to be in the process of maturing.
We operators just have to take advantage of the lesson by drastically reducing the frills and focusing on effective solutions, here and now. We are facing uncertain times and we must stock up on as many certainties as possible.
Emanuele Grassi
