A coffee with Aldo Mazzocco

Aldo Mazzocco, CEO and General Manager of Generali Real Estate since May 2017. In March 2021, he also took over the role of Head of Private Markets and Real Assets in the business unit Generali Asset & Wealth Management. In addition, he is Chairman of Generali Real Estate SGR and CityLife.

This article was originally published in Domus May 2022 issue. Interview by?Walter Mariotti.

A coffee with the CEO for an overview

We are global to the extent that we are now among the best in Europe. The next step is to expand into Asia, and then into America. We have significantly changed business model; previously Generali Group companies and investors invested directly in real estate, with the support of Generali Real Estate consultants, now they can invest in investment funds managed on their behalf by Generali Real Estate, choosing from a dozen or so funds with differing risk profiles, specialized in the various sectors of real estate (executive, residential, logistics, etc.) and geographically diversified.

Aldo Mazzocco is a civil engineer and an Italian Alpine Trooper with a polite yet direct manner. It is unclear where one role ends and the other begins, but the alternation is a remarkable one. One thing is, however, clear right from the outset; in five years at the helm of Generali Real Estate, Mazzocco’s role has been revolutionary, setting off the only revolution that an Alpine Trooper can; one of transparency in processes and reliability of statistics, pillars that have been a common thread throughout his career.

“First of all, we have made geographic changes. We now invest on an international level in the 15 top European cities, and in the six-seven most dynamic Asian cities, with a specific real estate perspective on the basis of a precise portfolio strategy that is updated every six months; we seek out cities that appear the most promising for the next seven years. This allows us to offer our financial services to third parties.”

Another step was to centralize a number of functions, in order to standardize processes and share competence on an international level, thus complementing knowledge of local markets.These are functions that handle transactions, development and requalification projects, and asset management, where the rapid exchange of information, experience and data renders the organisation as a whole agile and uniform.

Everything is now uniform on a European level.

For example, an international client looking for space to rent will see the same Generali method and style throughout Europe. Locally managing relations with clients and suppliers with centralized support greatly increases both negotiating power and brand credibility. The same goes for project management; with an annual CapEx (capital expenditure) of around 300-400 million, Generali Real Estate is one of the most important private commissioning bodies in Europe, with processes for the selection of designers, suppliers and contractors, as well as methods of cost/ quality and time control that are shared with all our local teams, with extremely positive effects on efficiency and transparency.

The most significant form of harmonization overall is in the introduction of uniform guidelines for the evaluation of portfolio properties. The same selection criteria as the best independent international evaluators; three-yearly rotation to guarantee objective evaluations, and a clear hierarchy for evaluation models, based principally on cash flow, have raised us to levels of excellence in real estate evaluation in line with those of listed companies. When we claim that the portfolio managed by Generali Real Estate exceeds 36 billion euros (five years ago it was 26), it is because the value has been calculated with balanced, strict and independent criteria. If a company does not have clear figures, nothing else can work.?

“My position here is almost ideological. Over 27 years of career, I have seen many cases of bad real estate portfolio management; in most cases this is down to bad, or at least clumsy, property evaluations.”

Another focal point for active real estate management was the centralization and digitalization of tenant lists. We have more than 3,100 non-residential clients who, during the initial months of COVID lockdown, we were able to segment, identifying those most vulnerable to the crisis (closed shops, struggling offices, closed hotels, etc.) and offering them a couple of months’ grace on rent. This proactive approach minimized requests for withdrawal or renegotiation and increased loyalty.

The first coffee with Mazzocco inevitably ends with a personal assessment.

Where are we now?

In company terms, I believe that we are effectively one of the best property owners in Europe, and one of the most important in the world. The next important step will be to replicate the model developed in Europe in Asia. We will begin immediately with a new “replica” structure based in Singapore, from where we will cover Japan, Australia and South Korea. The European organisation functions extremely well, and this was demonstrated last year, with record figures in all areas and achievement of all the goals set; acquisitions, sales, portfolio performance, and a reduction in vacancies and costs. This was despite the heavy restrictions caused by the COVID pandemic and, above all, a reduction of my – also physical – presence in the real estate sector after I was assigned a further role in covering private market infrastructure investments, which took up much of my time. Thus, and now I come to my personal assessment, I am convinced that in the end my job is to create and reorganize companies and allow them to stand on their own two feet. It is a source of great satisfaction for me and creates value for the group and its stakeholders.?