26,000 real estate, city and political leaders, including 5,400 investors, from over 100 countries came together between March 13-16 at MIPIM, the world’s leading international real estate business, conference and networking event.
Among the key talking points in Cannes were the growth in real estate investment expected this year, urban development, the move to target cities rather than countries in investment strategies and how tech is now being more fully embraced by real estate companies. MIPIM delegates settled down for the week’s intensive business and networking against a background of relative industry optimism for the upcoming year. In its annual ‘Global Investment Atlas 2018’ leading property agents Cushman & Wakefield noted that a strong global economy across all markets will encourage investors to release more funds into real estate this year compared to the record $1.6 trillion in 2017. Cushman & Wakefield reported that Asian investors were particularly active, increasing their investment in Europe by 96 % year on year. Investment from Asia Pacific to Europe hit $39.5 billion in 2017 compared to $20.9 billion heading towards the Americas. The Asian delegation at MIPIM was drawn from 15 countries. In its annual EMEA Investor Intentions Survey, released during MIPIM by CBRE, the world’s largest commercial real estate services and investment firm noted that 33 % of investors intend to deploy more capital in 2018 than last year, with 70 % of investors actively pursuing ‘alternative’ assets. In the alternatives sector, investment volumes have risen 45 % in the last 10 years to hit €23.6 billion in 2017. Among the assets drawing strongest investor interest are student housing and retirement living. CBRE confirmed that 2017 was a record year for real estate investment in Europe with volumes totaling €291 billion. The report said that for European investors the most sought-after real estate assets are industrial, notably logistics. CBRE noted that is the first time industrial has overtaken office investment and the interest in logistics clearly reflects the growth in e-commerce.
MIPIM maps world urbanity
With hundreds of ambitious urban development projects on show throughout the event, MIPIM 2018’s central theme ‘Mapping World Urbanity’ focused attention on the need for city authorities and real estate companies to take a joined-up strategic approach to urban development at a time when cities house over 50 % of the world’s population. Urban populations are growing fastest in Africa and during MIPIM’s inaugural African Forum, Nick Langford, Head Kenya at Africa’s largest urban land developer Rendeavour, told a packed conference room that proper infrastructure, including planning, waste management, transport and road systems, as well as future-proofed water supplies and support of the local government were among the key factors to ensure successful urbanization. Turkey’s Minister for the Environment and Urbanization, Mehmet Ozhaseki, said his country is now totally focused on its environmental strategy, particularly regarding the country’s cities. “The primary problem is the urban environment, which emerged as a result of unauthorized and unplanned housing construction.” The minister added that unplanned industrialization is also a cause of concern. “Industrial areas without sufficient infrastructure and organization cause exposure to major environmental pollution.” Turkey has recently launched its ‘My Environment is You’ and ‘Zero Waste Project’ initiatives. Mayor of Oslo, Raymond Johansen, underlined the importance of addressing the major challenges facing city administrators. “We are responsible for 70 % of CO2 and climate change is visible. We have to act. We cannot let the next generation be responsible for the problem,” he told MIPIM attendees at the Reinventing Cities conference panel.
Urban future & investment opportunities
With real estate playing such an important role in many national economies, MIPIM welcomed government ministers from a host of countries that included France, Turkey, the UK, Russia, Poland, Egypt, Israel and the United Arab Emirates. France’s Minister of Territorial Cohesion, Jacques Mezard, conducted the official opening of MIPIM 2018 on March 13. Speaking to reporters about investment opportunities in his country, the minister said that France’s President Emmanuel Macron is pro-investment and that France now has a dynamic international image. Jacques Mezard’s optimism reflected data in CBRE’s ‘EMEA Investor Intentions Survey’, which said that European investors now see Paris as the most sought-after destination in Europe, while non-European investors continue to favor London. Attending MIPIM to promote Poland’s Tricity region comprised of Gdansk, Sopot and Gdynia, former Polish President Lech Walesa told developers that they should forget the past and build with the younger generation in mind. Mayor of Paris, Anne Hidalgo, current Chair of the C40 alliance of world cities devoted to carbon neutrality and urban regeneration, reminded MIPIM delegates that cities are now “at the vanguard of great change”. Mayor Hidalgo said that Paris has opted to support the most innovative, quality schemes, rather than the cheapest projects. In a significant development, Leipzig attended its first MIPIM. Cities from Western Germany have been part of MIPIM for years, but their Eastern counterparts have been scarce at the event. Mayor Burkhard Jung said Leipzig had suffered significant population decline in the post-unification period but is now the fastest-growing city in Germany. He noted that the city has rebuilt itself around five sectors – automotive, logistics, media & creative, environment and healthcare. With over 100 countries and more than 500 city delegations in Cannes, MIPIM continues to be the international property community’s Davos. In line with previous years, the United Kingdom (2,401 +10,4 % vs 2017), France (2,071 +9,9 % vs 2017) and Germany (1,150 +10 % vs 2017) sent the largest number of companies to Cannes. The US delegation of 550 participants, including more than 150 investors, represented a 10 % increase on 2017. Romania had around 30 delegates registered from the country, without a few others that were registered by their international offices – branches. Outside the main Palais des Festivals MIPIM venue, large beach-side tents reflected the wide range of attending cities and regions as Dubai-based developer Nakheel promoted its famous Palm Jumeirah project and $2.5 billion of investment opportunities, alongside packed pavilions housing London, the Paris region, Istanbul, Moscow and the West Midlands. Inside the Palais, South Mediterranean countries were noticeable for their increased presence. In particular hotel and tourism investment opportunities were promoted for Portugal’s Algarve Region, Greece’s Peloponnese Region and across Spain. Brazil was also actively promoting inward investment opportunities particularly in the tourism sector.
Founded in 1963, Reed MIDEM is an organizer of professional, international markets that are essential business platforms for key players in the sectors concerned. These include MIPIM in Cannes, MIPIM UK in London, MIPIM Asia Summit in Hong Kong, MIPIM PropTech Summit in New York and MIPIM PropTech Europe in Paris for the real estate industry; MAPIC in Cannes, MAPIC Russia in Moscow, MAPIC Italy in Milan, MAPIC China Summit in Shanghai and IRF brought by MAPIC in Mumbai for the retail real estate sector. www.reedmidem.com
by Ionut OPREA