As one of the biggest players globally in real estate investment, what would you say are the main trends that Blackstone sees as investment opportunities in the real estate sector for the next five to ten years? In which specific sectors of the real estate market are the greatest opportunities for growth? Have new leading subsectors emerged in recent years?

At Blackstone, we continue to be thematic investors, deploying our investors’ capital into sectors which we believe will benefit from demand tailwinds, based on technological and societal shifts which are changing how we live and work today. In real estate, this includes focussing on logistics, which continues to benefit from the rise of e-commerce; on hospitality and leisure, which is benefitting from increased global demand for travel and experiences; on data centres, which are needed to support the exponential growth in data creation, including as a result of AI; and on housing, where demographic changes, coupled with years of undersupply, require institutional capital to meet rising demand. 

Specifically for Spain, do you see this region as particularly attractive for future real estate investment? What do you consider to be its greatest attributes and advantages for the investor? What do you consider to be Spain's competitive position compared to other countries to attract real estate investment?

We have a diversified portfolio of real estate in Spain, where we have been investing for over 15 years., Spain was the second most visited country in 2023, attracting more than 85 million tourists, underlining the strength of its tourism industry. We invested in Hotel Investment Partners (HIP) in 2017, acquires, and repositions underinvested hotels. HIP is now the largest resort hotel group across the Mediterranean, attracting new investors. We also invest in logistics, owning over 2 million square meters of assets. The Spanish logistic sector benefits from e-commerce growth. Housing, with rising demand, is another focus. Spain’s renewable energy access and available land make it an attractive destination for data centers.

In recent years, and largely due to the global pandemic, society in general has experienced many changes, that have directly impacting the real estate sector, which has had to adapt its spaces in order to respond to the new lifestyles. How does Blackstone approach this transformation and in particular, when it involves a change in the use of buildings to respond to current market demands?

At Blackstone, our investment process and strategy is designed to identify mega trends that indicate how occupier demand for real estate will change over time. This informs our conviction and allows us to determine which sectors will require more investment, and which sectors may see reduced demand. While the pandemic accelerated demand for logistic assets and reduced demand for older office assets in peripheral locations, we have been tracing the rise of e-commerce for over a decade. We started investing in logistics, creating Mileway, Europe’s largest last-mile real estate company. Over time we reduced exposure to traditional office sectors, focusing instead on high-quality, sustainable assets that meet changing tenant preferences.  We take a long term view on future Investments levels.

Regarding technology, what role is it playing in the evolution of the real estate sector and how is Blackstone taking advantage of these innovations?

The advancement and application of AI is one of the most meaningful trends to emerge in recent years. The greater availability of market data combined with the information that we can gather form our $600 billion real estate portfolio, is already improving productivity, enhancing decision making and, where needed, helping us pivot faster than before, to enhance the long-term value of our portfolio.

We recently ran a Blackstone AI Acceleration Challenge – over 80 portfolio companies submitted well over 300 ideas that came from their employees on how AI could improve their day-to-day work. This gave us a view into the opportunities AI can tackle across the broader economy – from safety monitoring to enhancing customer experience and improving productivity.

How are ESG criteria integrated into your real estate investment decision-making process in Blackstone? And in general, how do you think these criteria are going to shape the future of investment in the real estate sector? Is it pure compliance or do you at Blackstone have examples of ESG initiatives that have generated added value to real estate investment?

ESG is integrated into every aspect of our process at Blackstone – and the ESG initiatives we apply have clear and important value creation and preservation functions. We see that pretty much every day across our businesses as we are leasing our assets, selling stabilized assets to institutional investors, or financing our assets and businesses.