Despite weakening construction output data in the UK the key talking points at MIPIM 2018, the world’s leading international real estate business conference 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. Adrian JG Marsh reports.
With more than 100 countries and over 500 city delegations in Cannes, attendance from the United Kingdom was 9.6% up on previous years, with major representation from the UK Government, London, the Midlands, Manchester and the North East – all geared to attracting and protecting inward investment.
British architects, contractors and professional consultants were all out in force and networking hard. The headwinds of Brexit remain concern, with investors into the UK still being cautious, and many delegates claiming all the industry wants, and needs, is clarity. Miles Gibson at CBRE said that while 2016 property investment was weak, 2017 turned out to be above expectations and forecasts for 2018 are similar.
Concerns about resources featured widely. Jasmine Whitbread the chief executive of ‘London First’ said a survey of members found that one third of business in London are finding it more difficult to retain staff, while outside London a quarter of businesses find it difficult to retain staff. Ms Whitbread said: “In the construction industry in London there are 13,000 job vacancies and that 20% of the existing workforce will be retiring over the next five years.
Against a background of relative industry optimism for the upcoming year 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. 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 and they confirmed that 2017 was a record year for real estate investment in Europe. CBRE noted that is the first time industrial has overtaken office investment and the interest in logistics clearly reflects the growth in e-commerce.
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.
Throughout the week, investors acknowledged that the increasing importance of cities as economic drivers, has led them to adopt a city-by-city investment strategy compared to a country or regional approach of previous years. During a series of presentations many specialists agreed that the real estate industry needs to increase its expertise in new technology in order to integrate tech developments in mid and long-term strategies. KPMG’s UK Head of Real Estate, Andy Pyle, commented that some investment companies are asking themselves whether they are set up correctly to deal with the future challenges of technology