Sebastien Dejanovski (Mint Investments)
What did you learn over the last year? What has the crisis taught you?
On a personal level one has to be ready for anything at anytime. At the end of 2019 we all felt there was a crisis coming. We didn’t know what kind of crisis, because interest rates were still low and there was still a lot of money on the market. But no one thought that we would have such a crisis stemming from a virus. So, what I learned first and foremost is that you never know what’s going to happen. The theory of chaos shows that you can make plans but at the end of the day you have to change to adapt to the changing world.
The first month was extremely stressful. We had two transactions ongoing that we were supposed to close in April, but the pandemic came in March. Both of the deals disappeared. We had already had a strategy set of trying to sell several projects. We had expected some kind of a crisis and wanted to have cash to be ready to make acquisitions.
How did you set about deciding amongst the partners what to do? It was a stressful process for all companies.
For a month we were thinking every day, trying to understand what was happening and where the world was going in order to understand how to change our strategy. What should we be investing in and disinvesting from? That was extremely demanding mentally because of the level of stress and because we didn’t know how bad the situation would be.
But it was an opportunity to change the way we looked at the business. To be honest, I realized that I had become a bit bored by work. Business seemed kind of easy to me, just as it was for everybody — even for people who aren’t that good at business. Until suddenly, it became much more complicated. The pandemic enabled us to come up with a new vision for Mint for the next three to five years that we then applied over the next six months. We felt that the residential sector would remain strong or become even stronger because of the amount of time that we are all forced to spend at home. So, we decided to keep our residential projects instead of selling them and that we would develop them ourselves. We thought that offices in good locations would stay strong. That’s why we tried to buy offices. We were unsuccessful because despite the crisis, there doesn’t seem to be a lot of opportunities out there.
It sounds as if in some ways, you enjoyed the challenge…at least in retrospect.
I tend to think about strategy, because it’s very interesting for me from a personal development view. I like to do it, even without the virus. But the crisis forces you to have more discipline in your analysis. Before Covid, you thought some things in the world were written in stone but all of a sudden everything is different. You lose your sense of comfort and security because the assumptions of your business and of your life change dramatically.
What do you think are the biggest permanent changes in real estate that will result from this experience?
I think that people will never live again the way they did before March last year. There will be changes and I’m not sure which ones are here to stay. But I think business travel will diminish. I am pretty sure that the long-haul travel will not come back right away. People from countries like China will travel a little bit less, and they’ll definitely invest less abroad and in Europe. That will have a huge impact on our countries. I think people will get used to working a bit more from home, maybe one day per week. This increases your quality of life, especially in big cities where commuting is like harassment. This was already in the pipeline but the virus had a turbo effect. Retail is changing much faster than was expected and the big centers will have to redefine what their goal in life is in order to create value for their shareholders.
In general, I don’t have a firm view on what will happen, but what I’m sure of is that things change, they just change and they never come back to what they were.
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