Hello everyone, welcome to the Intramuros podcast, a conversation at the heart of the office of real estate leaders. I am lucky today to be alongside Nordine Hachemi, Chairman and CEO of Kaufman & Broad. Hello Nordine.
Before we start, I would like to begin with a little exercise. To introduce you, I asked our AI to do a Chinese portrait. I will read you a few words. You will tell me what you think and introduce yourself to our listeners. So, the first proposal from Lia in this Chinese portrait is: if Nordine were a place, it would be a neighborhood that comes to life where plans become a home.
I would like that to be the case, but indeed it is a beautiful image. Well, I think it is also part of your desire to transform the city and what you have been doing for years.
Well, it is a bit the role of a company like Kaufman & Broad to bring not just building homes but building an environment in which our clients, whether individuals or investors, have access to a place where they want to live and not just inhabit.
I completely agree. If Nordine were an element, it would be the rock at the heart of the storm.
That will make me blush because I find it very flattering too. I think it is a bit the role of leaders to reassure. And then it may be a bit presumptuous to say this, but I think it is also the role of a company leader to protect his company and not just follow fads. There is a responsibility that consists of saying: we are entrusted with the keys of a company, we work there for a certain time, and we must return the company at least in as good condition, if not better, than when it was entrusted to us. And in a context that is not easy to follow when you want to do good for your company.
Yes, absolutely.
So, if he were an architecture, it would be the main beam that guarantees the solidity of the building.
Always very flattering. Well, it is a bit biased. I think it must be the paid version because I believe when you pay, it is much nicer than the free version. But no, it is a sort of repetition of what was said before. Again, I think it is the role of a leader and not just to be carried away by events, but to steer the company through events.
So, to be totally objective, it is an AI that belongs to JLL called JLL GPT, so it is not biased, but it must be the combination of elements. You can hire it as a salesperson, it is very good. So thank you. If he were a gesture, it would be maintaining course in rough weather with the conviction of a builder. We are more or less on the same elements. It comes back anyway. Lia considers it a founding element. Anchoring and journey. To start, we are in your office. Does this place resemble you?
I have never personalized my offices. Around here, there is just a photo, and it is recent, it is the photo of the motorcyclist on the old Harley Davidson, which is very old by the way. That is the only personal element in the office. Otherwise,
Are you a motorcycle fan?
I am a fan of motorcycles and boats. Two great passions.
So, I was at the Enduro du TK weekend. Indeed, it is something for motorcycle lovers, it makes you vibrate.
Do you also have works of art in your office?
Yes, but they are there, I like them but I cannot say that I chose them. But I like them. I like the egg.
Yeah, it is very elegant. It is very pleasant. If we go back to your beginnings at B Construction, was there a meeting that was decisive in your career?
Yes, I had a boss who was the CEO of Big Public Works, Michel Cotte. So I was doing large infrastructure projects internationally where there was a lot of risk. You had to take a lot of risks, manage them, and develop. I was the director of development at the time, and he taught me a lot about this balance between risk management, the posture to have while being ambitious on development. And in fact, we will make parallels with sailing, with the idea of always being maneuverable. You can be ambitious on projects. There are many variables, many uncertainties, and the most important thing is to manage that with partners and clients in total transparency to be mobile and succeed on the project. So he inspired me a lot.
So that is a lesson that serves you today on a daily basis.
That, for the rest of my career. Yes. I met him when I was about 28 or 29 years old at the time, and he entrusted me with a lot of responsibilities on very large projects. I built highways in South Africa, tunnels in Germany. So being always very far from base, that required a certain autonomy, and he was very inspiring.
You have been at the head of Kaufman & Broad since 2014. If you had to describe the evolution of your own vision of the business, what would be the biggest change?
So Kaufman & Broad is a developer that is almost 60 years old now, a very solid developer. When I arrived, it was a developer that was still quite focused on housing, on operations of relatively limited size. There was not necessarily this culture of the project. Perhaps not necessarily a very strong technical culture, even though it existed in the company, it was not necessarily highlighted. So the two big changes: first decision was to put the technical managers in the committees. I was surprised not to see them. Whereas before being a developer, we are first builders. In my eyes, what our clients buy is not a promotional act, but a building, a logistics platform, housing built with quality. So it was to put technique back at the heart of the system and also to say, we have talents, I don't see why we wouldn't use these talents to do larger-scale projects, to develop in land development, in commercial real estate, all with the teams in place. The talents were there, they just needed to be given a chance to flourish.
That is the definition of the leader you indicated, the responsibility also to make employees do what they love and what they do very well.
Bravo. What would be the project you are most proud of today at Kaufman & Broad, looking back or forward?
So the natural answer, because it is a very structuring project for the company, would be obviously our project of La Garde Austit, which is a project that marked an important part of the company's evolution, a commercial project. We also have a parking infrastructure, we also build retail in these countries. But there is also another project that makes a real difference, it is the project of R where we are developing a little over 60,000 square meters. We are truly a developer. So we are building an entire neighborhood, including the geothermal heating system which is very innovative. We allow the establishment of a school, the Neoma business school. We will build housing, retail, and that is a real break, a real evolution of the company as I said earlier, where we build a complete neighborhood. And we have other projects now of the same type, and I think these are exciting projects. And also, we must not lose sight that each project is a project of a lifetime for our clients, and the studio we will build in Courbevoie must receive as much attention as Gard Sterlitzah, which is a project worth over a billion euros. So we must not lose sight of that either.
Low-carbon real estate is a major issue. We were talking earlier about the innovative heating system. Is this transition for a developer today a real opportunity to reinvent itself?
Yes and no. Yes, because it forces us to ask questions, find answers. No, because in France, it immediately translated into a pile of regulations that somewhat killed creativity. And regulations, by definition, are always off the mark because they want to find a unique answer to a problem that is by nature multiple. You don't treat low-carbon in the south of France the same way you treat it in the Vosges or in the north of France. In one case, it will be a problem of thermal insulation. In the other, on the contrary, it will be a problem of maintaining acceptable temperature during heat waves. And the regulation, well, it is basic, it is a few lines or a few thousand lines often, and it gives an answer that is always off the mark. So it is an opportunity, it is exciting if we had more freedom to provide answers.
So, I allow myself to ask you a perhaps slightly delicate question, but if you had the Minister of Housing in front of you, what urgent measure would you take to unblock the situation in general?
So, I have already answered this question publicly. It would be to abolish the Ministry of Housing. I think that would be the first good decision. So why do I say that? Not just provocation, even if it is a bit, it is that we give ourselves, and we see it well, government after government, we appoint a Minister of Housing and then we say, there you have your minister, we have done the job. It is a minister who has no power. It is not the Minister of Housing who issues building permits, it is not the Minister of Housing who has a budget to improve financing for anything. And so we think we have responded. But since he doesn't know, it's human nature, and they will occupy themselves with the void. So from time to time, they occupy themselves in a good direction by discussing with professionals, but very quickly they are blocked because it is Bercy that has the power, the Ministry of Economy and Finance. Or else they start doing like some ministers, they start making apartment plans while we are working on projects over 10 or 15 years, we have ministers making two-room, three-room apartment plans explaining that they must be cross-through, and on top of that they are off the mark. So that is often the case, and then they make regulations because it costs nothing, it's paper, and so it is often counterproductive. The housing problem is first a local problem that is dealt with by local elected officials. They are the ones who issue building permits, the mayors are the first builders of France. Then it is an economic and land-use planning problem that could be the role of the state, to discuss with the regions on major development programs and needs, define housing needs, but in no case is there a need for a Ministry of Housing at the national level.
