Christian Ulbrich: Ups and downs

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Christian-Ulbrich-2015-96The World Economic Forum annual meeting got off to a captivating start yesterday. With Davos providing an eye-catching backdrop of snowy mountains, blue sky and bright sunshine, the real highlight was the opening concert by Andrea Bocelli. In our industry, the word ‘fantastic’ is used quite often, so it doesn’t feel sufficient to choose such an everyday term to describe his performance. However, life can bring you back to reality more quickly than you would hope. Thanks to the recent rise in terrorist activity, security has tightened even more which led me to be queuing for more than 30 minutes from 6.40am this morning in freezing temperatures to get into the main conference hotel. I tried to distract myself with the memory of Bocelli’s concert, but it didn’t work. It was simply too cold.

Fortunately the African Breakfast that awaited me inside the conference hotel provided not just warmth but also the most optimistic session of the day. Not a word about Boko Haram, Ebola or territorial conflicts, but lots instead about outstanding demographics, the growing middle class and the increasingly stable governments in most African countries. Such a bright overall picture prompted thoughts of opening a couple more offices to further expand JLL’s growing presence across the African continent.

Away from the Africa session, the day went downhill. The level of negativity from business leaders about the geopolitical outlook – and Europe’s economic prospects – was in stark contrast to last year. Furthermore, I have never heard a group of senior businesspeople being so outspoken about their frustrations at the unwillingness of political leaders to take the necessary steps for structural reforms. As you would expect, Thursday’s anticipated announcement by the European Central Bank has also consumed a lot of airtime. I will take my chances and predict massive disappointment on all sides. The combination of southern Europeans and people following the thinking of the US Federal Reserve and the Bank of England will consider the ECB’s actions as far too little. Others will be disappointed too – including those following the “German thinking” that further quantitative easing is useless because it is not accompanied by structural reforms and because interest rates are anyway not what is preventing businesses from making investments. It is the lack of confidence.

Thank goodness we are in real estate. The last session I attended focused on the question of where to invest and into what asset class, in the light of all the world’s political and economic challenges. The table could not agree on much… except for real estate in the major cities. Be my guest!

2 thoughts on “Christian Ulbrich: Ups and downs

  1. Anna Panyukova

    Being positive in a negative situation is not naive. It’s leadership.

    Love how this post of Christian is finished on such a positive note, although the situation is described quite realistically above, too.

  2. Giles Wrench

    Christian – thanks for sharing your thoughts while at Davos, probably the last thing you want to do after a long day. In your earlier blog you referenced the ‘unknowns’ that occurred since the last meeting. The price of oil collapsing by 50% has to be one of them. From a US perspective it appears to be the one blemish on an otherwise stellar economic recovery. During the last economic downturn for a period of time many economists talked about a de-coupling of the global economy with many commentators in Asia describing the US financial crisis as a “Western problem .. not ours”. Inevitably contagion set in and we experienced a global slowdown – the myth of a de-coupled global economy dispelled. Now that the US economy is firing on most cylinders, do you sense that other areas of the world are hoping to benefit from the positive growth of the world’s largest economy? Or is the sentiment that the world’s economy is de-coupled after all?

    Thanks, Giles.

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