The "most daring real estate event" comes to Ibiza next May 29th. SQUARE, the company responsible for the initiative, led by its CEO and founder José María Pons, is organizing a new edition of its well-known annual event.
Conflicts in regions like Ukraine, China, and the Middle East have effects that extend far beyond their geographical boundaries, and these geopolitical tensions can significantly impact real estate performance globally.
The overall impact on global real estate returns can vary significantly. For instance, increased tension between China and Taiwan has a more significant impact on industrial real estate returns than residential returns. This tension drives energy prices up, squeezes real incomes, and impacts landlords’ ability to increase rents in the near term, affecting residential returns.
On the other hand, a conflict in the Middle East has a more significant impact on residential returns than industrial returns. Under the escalation scenario, Asia Pacific would likely experience the most severe drop in values due to its dependency on importing oil from the Middle East. The spike in oil prices could cause a shock in business confidence and disrupt real estate investment.
The first day of SQUARE Ibiza 2024 will focus on discussing the possible political and economic consequences of the conflicts in the Middle East, including the war between Israel and Hamas and the situation with Iran. It is not only about the war between Israel and Hamas, but also, and especially, the underlying issue of Iran, not to mention the Houthis causing problems in the Red Sea," the organization notes. This discussion will be particularly relevant thanks to the presence of Ayham Kamel, who is the main specialist in the region for one of the most important geopolitical consultancies in the world, the Eurasia Group.
Three wars will dominate world affairs: Russia vs. Ukraine, now in its third year; Israel vs. Hamas, now in its seventh month; and the United States vs. itself, ready to kick off at any moment.
According to Eurasia Group, there are plenty of bright spots. Most of the rest of all those elections, especially the big ones (India, the European Union, Indonesia, Mexico), aren't troubled at all. And then there's a big issue you might find surprising since it's less gloomy than usual: The US and China will be the adults in the room this year. With all the fighting going on in the world, the two biggest economies aren't looking for reasons to start another conflict, despite the lack of trust and mutually unaligned political and economic systems. US-China tensions don't even make the Top Risks list, in part because the Chinese economy and the US domestic polity are so troubled and distracting. Geopolitically, the world's most strategically consequential bilateral relationship has become a cleaner dirty shirt.
SQUARE Ibiza will count with an interactive exercise where participants will be able to formulate strategies for the coming years, followed by a session where investors will share their investment strategies, marking a practical end to the meeting.
In this way, "SQUARE 2024 aims to give attendees bold and non-mainstream ideas on how to face the challenges of a rapidly changing world full of uncertainties generated in large part by wars, ESG and AI," the organization concluded.
More info on the event HERE