Cannes, 17 March, 2017 – 24,200 real estate and city leaders from 100 countries, including 5,000 investors and financial institutions, came together at the world’s property market MIPIM this week against a background of continued debate on how Brexit will impact the market.
In the midst of political change – fuelled by the US presidential elections, the Brexit vote, elections in France, Germany and the Netherlands – accelerating tech innovation and a growing global urban population, MIPIM chose The New Deal for Real Estate as its central theme, providing industry leaders and investors with the opportunity to discuss evolving real estate strategies.
According to Cushman & Wakefield, the amount of new capital available for global real estate investments stands at $435 billion – lower than in 2016 but still the second highest figure recorded since 2009.
Cushman & Wakefield identified the United States as the leading target for investors, followed by China and the United Kingdom. Real Capital Analytics reported that in 2016, some €30.15 billion of Asian capital headed to the US which invested some €14.4 billion in Asian real estate markets.
At the annual MIPIM RE-Invest Summit, bringing together some 60 representatives from the world’s leading institutional investment funds, two thirds of participants said they would be net buyers in 2017. Combined, the RE-Invest delegates manage over $600 billion in real estate assets.
What was clear at MIPIM this week was that the British government, spearheaded by the Department of International Trade (DIT), in partnership with the British Property Federation, was sparing no effort to reassure investors that Britain’s real estate sector remains a key destination for property investment.
For the first time in the history of MIPIM, the UK government was represented with its own pavilion and Britain’s ‘Invest in Great’ marketing slogan was highly visible. And at 960, the number of UK exhibiting companies and cities increased by 24% compared to 2016.
With the MIPIM doors barely open, senior representatives from Manchester, London, Amsterdam and Stockholm gathered on Manchester’s stand to debate the likely impact of Brexit.
Manchester’s outgoing Chief Executive, Sir Howard Bernstein, said that at a time of uncertainty it was more important than ever for Manchester to promote the fact that it is open for business.
Jules Pipe, Deputy Mayor of London, commented that the UK capital will continue to attract major investment. Referring to Brexit, Pipe noted “whatever happens, London will come through this.” The Deputy Mayor predicted that if real estate investors seek alternative destinations to London, they are likely to look at New York, Singapore or Hong Kong rather than European capitals.
Eric van der Burg, Deputy Mayor of Amsterdam, argued that his city’s highly skilled, multi-lingual workforce and excellent infrastructure would attract international companies from the UK to Amsterdam.
Returning to MIPIM for a second time in two years, Valérie Pécresse, President of the Ile de France Region, noted that all the public authorities in the Paris Region were represented in a single pavilion – a sign of a collective approach to attracting international investors and companies. She described the strategy put in place to attract investors and entrepreneurs from all over the world, insisting on the exceptional innovation ecosystem and the depth of the real estate market, as well as on the fact investors now don’t hesitate to bet on Paris Region.
“Among the major development projects currently being built, the Paris Region have 3 million sq m of office space available and the biggest business park of Europe with 53 million sq m. We launched a massive investment plan of €30 billion to double the capacity of the Paris subway by 2030. On the education side, we launched €5 billion of investment to welcome 22,000 new high school students in the next 10 years and to renovate 6.5 million sq m of existing real estate,” declared Valérie Pécresse.
Mega-infrastructure projects were to be found throughout the MIPIM exhibition halls and pavilions. Istanbul Grand Airport promoted its gigantic Airport City Istanbul as a sustainable project that could serve as a model for other airport cities around the world. The airport on its own is costing around €7 billion. The Stuttgart 21 project provides underground and surface links to the city’s airport and trade-fair site and is budgeted at €6.5 billion. In Amsterdam, the first metro line to cross the Ij river is due to open in 2018 at a cost of €3 billion. Meanwhile work continues on the €30 billion Paris: Grand Paris Express which is due to be completed in 2030. Finally, London’s €17 billion Crossrail link between east and west London is heading for phased introduction by 2020.
With 5,000 investors and financial institutions in Cannes, MIPIM welcomed a growing number of institutional investors. Among them, over 60 pension and insurance funds and 15 sovereign wealth funds, including ADIA, QIA, GIC, Gingko Tree, KIC, Temasek, KIA, KWAP, Hanwha Life.
An armada of leading politicians descended on MIPIM in support of city, regional and national real estate projects. Among the senior politicians attending MIPIM, France’s Minister of Housing and Sustainable Habitat Emmanuelle Cosse was joined by Former French Prime Minister and Mayor of Bordeaux Alain Juppé, Gavin Barwell, Britain’s Minister of State for Housing and Planning, Russia’s Minister of Construction, Housing and Utilities, Mikhail Men and Turkey’s Minister of Environment and Urban Planning Mehmet Ozhaseki.
“In addition to the core real estate business which is conducted at MIPIM, the event brings urban and political leaders together to support their domestic property industry and discuss some of the major challenges facing a world where 60% of the population will soon be living in cities,” commented newly-appointed Director of MIPIM, Ronan Vaspart.
The international scope of MIPIM meant that a plethora of major real estate projects were on show from around the world.
Outside MIPIM’s Palais des Festivals venue, Dubai-based developer Nakheel’s pavilion showcased €1.5 billion worth of real estate investment opportunities including the Palm 360, a 220-metre twin tower hotel and residential development within the Palm Jumeirah complex.
Next door, Dubai Holding unveiled a 20-year masterplan for a new Jumeirah Central district including six projects in phase one of the scheme. Dubai Holding used MIPIM to find investment partners for the mixed-use projects. When complete, Jumeirah Central will comprise 75 city blocks, 278 buildings and provide residential accommodation for some 35,000 people.
From Africa, Semer Investment Group (Emirates/Senegal) and Dubai-based architects FSS Consult unveiled Diamniadio Lake City – a residential business and leisure destination billed as the largest urban masterplan in sub-Saharan Africa.
French city Bordeaux was in Cannes promoting its Brazza district project to build 5,000 new homes and 130,000 sq m of office, leisure, hotel and retail development. While Russia’s Regions Group brought its Dream Island entertainment and retail complex located south of Moscow on a 100 hectare site.
One of the more intriguing development projects launched at MIPIM was Vignole Island in the northern part of the Venice Lagoon. Controlled by Italy’s Ministry of Defence, the 200,000 sq m site will be offered to developers under 50-year concessions to develop hotel and leisure facilities.
“The diversity of projects presented at MIPIM from all around the world is breathtaking,” said Filippo Rean, Director of Reed MIDEM’s Real Estate Division. “Whether in office developments, retail, logistics, hotel and tourism or residential, the opportunities for investors to strengthen or diversify their portfolios are huge.”
Five years after introducing tech innovation as a part of MIPIM, the MIPIM Innovation Forum moved to the centre of the exhibition hall to host 70 exhibitors across 1,500m². And investment in real estate-related technology was the subject of lengthy discussions as institutional investors sat together at this year’s RE-Invest Summit.
Tech companies competing in the MIPIM Startup Competition demonstrated the wide range of ways the tech industry is moving into real estate. New York’s Envelope won the ‘Cities’ category with its 3D urban map-based software allowing real estate companies to visualise, analyse and run scenarios on development potential under zoning constraints. In the ‘Transaction’ category, London-based Storefront took top prize. Storefront reports to be the world’s largest specialist in short-term retail for pop-up stores, shopping malls and showrooms. Final winner of the Startup Competition was Ravti in the ‘Building’ category. The US company produces software that tracks, manages and procures heating, ventilation and air-conditioning for CRE owners and operators.
“When tech elements were introduced to MIPIM some people were slightly bemused. Today, crowdfunding, big data, virtual reality, the internet of things, smart cities and smart buildings are part of the world of real estate. The growing influence of tech companies on the property sector has encouraged Reed MIDEM to launch the MIPIM PropTech Summit in New York on October 11, 2017, in partnership with MetaProp NYC,” said MIPIM Director Ronan Vaspart.
Upcoming MIPIM events include MIPIM PropTech Summit in New York, October 11, 2017; MIPIM UK in London’s Olympia, October 18-19, 2017 and the MIPIM Asia Summit in Hong Kong, 28-29 November, 2017.
MIPIM 2018 will take place on 13-16 March in Cannes.
About Reed MIDEM:
Founded in 1963, Reed MIDEM is an organiser of professional, international markets that are essential business platforms for key players in the sectors concerned. These sectors are MIPTV, MIPDOC, MIPCOM, MIP CANCUN and MIPJUNIOR for the television and digital content industries, MIDEM for music professionals, MIPIM, MIPIM Asia Summit, and MIPIM UK for the real estate industry and MAPIC, MAPIC China Summit in Shanghai, MAPIC Italy in Milan, REX brought by MAPIC in Moscow and IRF brought by MAPIC in Mumbai for the retail real estate sector.
About Reed Exhibitions:
Reed MIDEM is a division of Reed Exhibitions, the world’s leading event organiser, with over 500 events in 43 countries. In 2015 Reed brought together over seven million active professionals from around the world generating billions of dollars in business. Today Reed events are held throughout the Americas, Europe, the Middle East, Asia Pacific and Africa and organised by 41 fully-staffed offices. Reed Exhibitions serves 43 industry sectors with trade and consumer events. It is part of the RELX Group plc, a world-leading provider of information solutions and analytics for professional and business customers across industries. www.reedexpo.com