Human Capital Key to Developing Mindful ProjectsThu, 11/01/2018 - 11:12
A booming market creates abundant opportunities for real estate developers to prosper but one of the best tools for a successful incursion into any market is having a unified vision within the company, says President of Grupo VEQ Jack Levy. “Grupo VEQ places a great deal of importance on the people within the company and what they want to achieve so that together we can grow with a shared vision,” he says.
This shared vision has allowed the company to adapt quickly and often to go with a gut feeling when choosing its projects. But Levy says the company will now be much more focused on strategic development. “Our team has developed skills to identify great opportunities throughout the country, allowing us to participate in many important projects, which includes the tallest residential buildings in Guadalajara such as Torre Q,” he says. “But we were never able to sit down and establish where we wanted the company to move in terms of the sectors we want to specialize in and the products we want to offer.”
In the last three years, however, the company has focused on its core strengths and grown in a sustainable manner. Mexico’s rising demand for real estate development has allowed Grupo VEQ to expand to seven cities and develop over 11,000m2. Levy explains that Grupo VEQ's home market, Guadalajara, has slowly moved into vertical development, and the team has been able to better understand the needs of its clients and to forecast what will happen next in residential development. “Our quick growth says good things about how we conduct our business,” he says.
Grupo VEQ has extensive experience, having been involved in 23 projects. But in such a competitive market, differentiation is key. Its latest project, Meridiano 103, was developed with quality in mind but without sacrificing price. Located on one of Guadalajara’s most important streets, Avenida Vallarta, it is a mixed-use project that consists of three towers divided into 212 apartments and a two-story commercial area. “We wanted to make sure that this would be a development that would truly enhance the quality of life of the people at the best price possible, without sacrificing the quality of the materials and finishes,” says Levy. The development would cater to Guadalajara’s fast-growing middle-income segment.
Although Grupo VEQ's strength has centered mostly on the residential sector, it has started developing projects within the tourism sector, having identified a growing demand. “At the moment, about 10 percent of our portfolio is destined to tourism projects and we would like to continue actively participating in the sector over the next few years,” says Levy.
The company’s own growth has mostly been through organic means but with its goals of venturing into these new markets and regions, it has also began considering new sources of financing. “We have a good relationship with five commercial banks that allowed us to grow at least 150 percent in the last three years,” Levy says. “The next step is to look for new financing solutions through funds or partners that believe in what we are doing.” There are many funds catering to the Mexican market, such as Nexxus and Seven Bridges Advisors, that use money from investors and pension funds whose long-term investment and ROI goals typically align with real-estate projects.
While there has been an abundance of funding availability for real estate development in the last few years, mainly from Canadian pension funds and Afores through new financial instruments such as CKDs and Fibras, Levy insists that despite the opportunities for development, it is important to build with mindfulness and ensure that the projects created add value. “We must build according to demand and not our own preference, ensuring that projects are integrated into the communities and they meet the needs of our potential residents.”