Weekend Interview: Mirastar CEO And Co-Founder Ekaterina Avdonina On Space, Logistics And Embracing Uncertainty

This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities that keep CRE interesting.

Mirastar CEO and co-founder Ekaterina Avdonina is used to times of uncertainty. Growing up in Kazakhstan just as the country gained independence from the disintegrating Soviet Union and the child of a Soviet military scientist, she learned that the world can change very quickly. 

That upbringing, which combined a love of science, maths and space, showed her that women can be leaders, too, and helped forge a career that led Avdonina first into real estate and then to logistics when the sector was not the cash cow that it is today.

Following spells with GVA in Moscow and Dutch bank ING’s real estate lending team in the Netherlands, Avdonina co-founded European logistics specialist Delin Properties in 2010 before leaving to co-found Mirastar in 2019. Mirastar has a portfolio of standing assets and developments across six countries in Europe, including the UK, and the 34-strong team has a track record of investing €16B (£14B, $17B). Private equity firm KKR is among its backers. 

Avdonina talked Bisnow through her path to founding her own company, being a female leader in real estate and how, despite a slowdown in leasing, the logistics market remains set for rental growth.

This interview has been edited for length and clarity. 

Bisnow: Tell us a little bit about your background and how it led you to where you are today.

Avdonina: I was born in Kazakhstan, in a closed military town called Leninsk. The first man who went into space, Yuri Gagarin, the flight was launched from the town where I was born. My dad was a scientist in the Russian military, so we moved around a lot.

I don't remember much about Kazakhstan because I was quite little when the Soviet Union collapsed, and we then moved back to Moscow. But [Leninsk] was also very specialised. It's one of those towns where you can't get in or get out because it was a military town. It was just a very strange kind of experiment on people’s lives.

It shaped me in a lot of ways. Because we travelled so much, our life was always disrupted. So I'm OK with dealing with change. I’m not attached to things as much as maybe a lot of people are. I embrace change, I like the disruption, I like what it brings, and I think that helps me a lot in business.

Bisnow: Has coming from a family of scientists influenced the company you founded? 

Avdonina: I'm a complete science lover, especially when it comes to space, and that is why Mirastar is Mirastar. This was one of my requirements when we launched the business. Now that I can finally have a say in the company name, it needs to have some affinity and some link to space. So the Mirastar is actually the brightest star in space. It was discovered by Galileo in the 14th century, and it's actually the only true shooting star because when it is completely dark, then it shines the brightest, brighter than the Pole Star and the North Star. So we wanted to be that true shooting star.

Bisnow: So how did you get into real estate?

Avdonina: I started my career as an accountant auditor. I've always been very good with numbers. I like logic. And then very quickly, I sort of embarked on a lot of projects in real estate. A lot of my clients were in real estate, and I was like, “Wow, it's a physical asset,” and I started to become very interested. And it went from one thing to another, and then I ended up in logistics. In late 2010, I co-founded Delin with Christian [Jamison] and became a sector specialist.

Bisnow: What made you pick logistics rather than any other sector?

Avdonina: E-commerce. It was starting out at that time. It was fresh and it was scalable. We decided we had to be a specialist to survive in the post-GFC era, and sectors like beds are so focused on the particularities of individual cities. But our clients are global companies, it's ultimately the global trends that are driving the differences in the industry. That globalisation was very attractive to us. 

Bisnow: Real estate suffers from a paucity of female professionals, and logistics has a reputation of being more male-dominated than other sectors, certainly in the UK. Did that put you off the sector at all, and have you ever found gender an issue? 

Avdonina: I never felt burdened by that, being the only woman in the room. Where I come from, I've seen a lot of female leadership. You know, if you look at Russia and China, in particular, most of the boards are dominated by women. There's really strong female leadership. And this comes from the communistic upbringing. We have small families, and everyone was contributing to GDP. And that's why I think the roots of a lot of strong female entrepreneurship and leadership come from that. It was just not an acceptable way of life to not contribute to the society. And as a result of that, we've seen some extraordinary performance on diversity in these countries, which sort of contradicts with the way things are politically there.

Because of my very analytical mind and that love of infrastructure, logistics felt like the most interesting sector because of what's happening in a building ... all the transport links and changes in transportation, you have to analyse the investment. You have to look at the zoning maps for the next 10 to 15 years, you have to look at all the infrastructure around, to look into power, labour availability, you have to analyse so many interesting things. Because a lot of standard locations may not be established locations in a few years' time. So I think that intellectual part was overcompensating for those strange meetings where I would get a couple of strange looks or be asked to bring a coffee before people recognised that I'm a decision-maker in the room. 

But it's absolutely amazing to see so much more female talent in the industry now. To see all the young women so passionate about the same things I was passionate about 15 years ago. It's really, really nice to see this and be part of that change.

Bisnow: What have been the best and worst things about running your own business? 

Avdonina: The best is it 100% suits my personality. I love creating things, I love doing things. So I'm definitely doing the right thing. The worst was probably the timing of setting up my business. I had a 2-week-old baby when the business was launched. So if I did it again, I would have not timed it this way. And as we’re approaching our fifth anniversary, my daughter is also approaching her fifth anniversary. We always say that Ariana is our nonexecutive chairman because she was sort of contributing to a lot of early decisions in the business and the CEO’s availability in the first few months.

Bisnow: During and immediately after pandemic lockdowns, logistics leasing was flying, with people forced to buy more online as shops shut. Since then, leasing levels have moderated. What does that mean for the sector?

Avdonina: I think, fundamentally, we still require a lot of physical storage to support the economy and a transformation from old to new, and the supply chain transition has not been smooth. Nearly 90% of the stock in the core Western European markets is below EPC level C. In other words, it requires a lot of modernisation and a lot of investment. And a lot of it, it's just not fit for purpose. So a lot of that supply chain transformation is still going to happen.

And the other important stat, which is a reason I’ve been bullish on the industrial sectors, is that this is the only sector in the last 20 years that has seen total stock decrease. So in the last 20 years, we added 5% of office stock in Europe, 10% to the residential stock, but in industrial we’ve lost 3% of total stock in 20 years. Industrial land has been supporting urbanisation in big cities, and the land loss in all the key metropolitan areas has been so significant that there is structural undersupply in the sector of good-quality space. And even with some challenges, with any possible recession or macroeconomic performance as a whole, the industry is very sound because of the lack of supply and also no land supporting any future development. 

Bisnow: What does that mean for how the industry evolves?

Avdonina: We'll need to innovate a lot as an industry. We'll need to try to retain the existing properties, upgrade the existing properties, retain the carbon and not try to create a new carbon through new development. We're spending a lot of time with the business on thinking about how we can improve the decarbonisation journey of industry as a whole, to create a service that is not only about decarbonising our existing portfolio but maybe being at the forefront of helping industry players on the decarbonisation journey as well. 

Bisnow: In the UK, when interest rates started to rise in 2022, industrial prices fell faster than in other sectors. Why was that, and what are values going to do now?

Avdonina: It was because of liquidity. There were willing sellers and willing buyers, and that still continues to be the theme. Yes, there's still surprises happening in some markets, and the price gap still exists in some markets. But overall, as a whole, there were sellers who could make a return at those prices. And they were not distressed sellers, but there were some opportunities in the down market where you could capture some interesting deals and special situations, and that brought willing buyers. We've seen two rounds of bidding, three rounds of bidding, whereas in other sectors, sales processes have just come to a stop. 

As a whole, we haven’t seen any further shocks. For the last three to six months, I think people feel reasonably aware of where pricing is. There's been enough transactional evidence in each of the markets. And actually, we’ve seen some yield compression in some markets because of that.