Currently Head of Financial Risk Analysis at Bywater Properties and an Honorary Senior Visiting Fellow at Bayes Business School, Natalie Bayfield speaks after a breakout session that she co-led at the recent Bayes Alumni Forum about the changing face of the real estate industry. She also offers vital tips to students of the many ways in which Bayes can best prepare them for a similar career path to hers.
How did your breakout session go?
Very well indeed. The important thing for me about the session was the opportunity to give back – it was a lovely experience that certainly met expectations. I remember being on the other side of the fence 26 years ago, listening to my lecturers, so today the roles were very much reversed! Bayes student days were some of the best years of my life.
From what angle were you approaching the subject of your breakout session?
The title of the session was “Mega Trends in Real Estate”, which is quite a big, bold topic, but there is plenty to add to that because real estate is going through tremendous structural change at the moment. The carbonization element is very important to the work that we do at Bywater Properties, which includes building timber framed office blocks in key cities in the UK. There are very few modern timber framed office blocks about for now. However, low carbon building will become important in the next few years as global sustainability targets become nearer and analysts start to feel the cost of meeting those targets.
I don’t think it’s hit home yet on the embodied carbon side of buildings. It certainly has on the operational side. It’s quite often fed into people’s business plans, but the embodied carbon hasn’t as much at the moment. When that tipping point comes, there’ll be a rush for timber or low carbon buildings.
To what extent has this change in the industry been a conscious decision or forced by circumstances?
Forced by circumstances, plus the circumstances are already there! It’s how it feeds into the collective consciousness that matters. It’s all very well and good having macroeconomic trends, but what does that mean for me as an investor? What does that mean for me as an occupier?
We’ve got jobs, which include making money for shareholders. Will we be able to do business under these paradigm changes? We also need to understand the scale of it and when the tipping point will be reached. I think we are perhaps one to two years away.
When you were a student at Bayes, was there any notion that such change was going to come about?
Not really. I think we started thinking about all of this, or it started seeping into our consciousness, 10/15 years ago more on the operational side, less so on the embodied side.
Back then, the investor presentations would have an ESG slide at the end, as an afterthought. Then the pandemic happened and every occupier understood the cost of operational efficiency and started actually building that in. Fast forward to today and we absolutely need to deploy it so we’re now building the understanding for embodied carbon and insisting on zero carbon buildings.
How has this shift shaped your career?
The mega trend that I was involved in was the technological aspect of operations. I started my own business teaching people how to do financial modelling, which went hand in hand with learning how to use a spreadsheet. I was going into very senior people’s real estate offices, CEOs, and partners to teach them how to put basic models together.
I was sitting in investment management meetings giving advice on the regeneration of parts of London, the risk profile of those, and how you would measure those financially, et cetera. I was at a very senior level very quickly, and I put that down to some of the cutting-edge topics that were being taught by Bayes at the time.
How have these changes impacted real estate as a career?
Now it is imperative that everybody who works in real estate have some sort of financial modelling awareness. In the past, maybe 10/20 years ago, if you had financial modelling, you were seen as a rocket scientist, and you would move through the company quite quickly. Now it’s kind of de rigueur.
Part of my job at Bywater, given my background running Bayfield Training and teaching, is that I make sure everybody has confidence in financial modelling. We also have experts on hand to look at every single detail that we can identify for risk and opportunity when we’re underwriting properties. All of this kicked off from being at Bayes. So the Alumni Forum is a fantastic opportunity to sit here, explain my journey and just say thank you to everyone.
What challenges should current students considering a career in real estate be aware of?
There’s everything to play for. Real estate goes through cycles and sometimes when you’re at the bottom of the cycle and real estate programs dip, that’s where you cut your teeth and really learn about the industry. There’s no bad time to join a property cycle.
How can Bayes help prepare them for the industry that awaits them?
In terms of how you prepare yourself, if you’re at Bayes, make full use of all the technical training that is on offer and get competent at the Mathematics, financial modelling, and financial theory. You don’t necessarily need to specialise in all of these, but you need to understand them so avail yourselves of that.
The other thing I would recommend is to get yourself a good mentor. You have some fantastic faculty, so hunt down the ones that you feel you can get on with and get their help. If you’ve got a spark with a particular lecturer or faculty member, the enthusiasm can often be reciprocated. The other thing is to make full use of the second to none location that the Bayes Business School is in. You’re right in the centre of the financial centre of the world. And as such, all of the headquarters and all the membership bodies are here in London, so go to the events whilst you’re a student. I didn’t have websites that were as populated when I was here, but now you can look them all up.
There’s no excuses not to go to these things. And network, network, network. You know, the opportunity you have as a student at Bayes, in the centre of the financial universe is second to none, make full use of that.
So it’s a magic combination, I think, at Bayes. You have the fantastic, world-class faculty, you’re in the centre of London, and the technical competencies that are available to you to access are all on tap.
View Natalie’s Linkedin profile: https://www.linkedin.com/in/financialmodelling/