During early spring, more than 20,000 property executives made their annual pilgrimage to Cannes on the French Riviera for the 27th MIPIM international property conference and exhibition. Throughout the show, real estate advisers and investors expressed a mixture of optimism and caution over the state of the global market but added that the overall picture for 2016 and beyond is positive. Adrian JG Marsh reports.
Bringing together the largest single gathering of international investors, alongside developers, end-users, architects, hotel groups, public authorities, tech specialists, start-ups and property associations, MIPIM yet again underlined its credentials as a unique opportunity to conduct business, network and discuss the major issues facing both urban and real estate leaders.
MIPIM is an eclectic mix of property professionals and members of the supply chain. Architects and contractors alike were engaging with building investors and owners. In 2016, attendance rose 10 per cent compared to 2015, as some 23,500 senior real estate executives, urban leaders and politicians from around 90 countries met in Cannes for this networking and deal-making event.
Many UK cities and local authorities chose MIPIM as a platform to attract inward investment. Cities teaming up to promote themselves is fast becoming the norm and leading the way was the Northern Powerhouse ‘alliance’ of Manchester, Liverpool, Leeds, Sheffield and Newcastle. MIPIM also saw the launch of Midlands Engine’s regeneration opportunities. Created in December 2015, the Midlands Engine brings together 11 Local Enterprise Partnerships (LEPs) to develop the region and attract inward investment.
Speaking to a packed MIPIM auditorium, Andy Street, the chairman at Greater Birmingham and Solihull Local Enterprise Partnership, said: “We have never had collaboration across the Midlands on this scale.” Their development pipeline contains 33 projects worth a combined £14.4bn.
The central theme ‘Housing the World’ saw the real estate industry share its vision of cities that create liveable and affordable spaces for all and particularly work together with public partners to provide affordable housing.
Tony Pidgley, the chairman of housing giant Berkeley Group, said: “After 50 years of house building, why are we such NIMBYs? House building is a force for good and an economic driver that helps the economy to grow and develop strong communities. What’s holding us back is the lengthy planning procedures and the right infrastructure to support schemes.”
Neill Werner, a partner at architects Pellings, said: “The top issue for the UK industry at the moment is getting the cost right so we can move projects through the procurement route. It’s noticeable that contractor supply chains are really under pressure. Costs have peaked and the right price may now be outside the client’s budget. If costs are too high a project will be stopped and a number of high-end residential jobs have been put on hold because of rising costs.”
In the residential sector, MIPIM clearly showed that property investors are diversifying their portfolios to include ‘alternative’ investments in flexible working space, student housing, hotels, and private rental and retirement homes.
European developer Kārlis Gedrovics plans to create a chain of Urban Powerhouses – branded co-working spaces for creative companies in historical buildings – and has identified three northern cities where he’s looking for developments. Mr Gedrovics said: “Although it is challenging to predict how people will work in the future, the patterns of today show that there is a vast potential for innovation in the knowledge-based economy represented by creative companies.”
The explosion of e-commerce is accelerating the emergence of what were once described rather dismissively as ‘sheds’. These large industrial warehouse and distribution centres have become one of the hottest assets in real estate as demand for logistics grows and warehouse returns have been outperforming some office portfolios since the recession.
In the Innovation Forum, delegates enthused about Schindler’s myPORT transit management app. The mobile app-controlled system recognises users as they enter a building, calls a lift for them and, once they have reached their floor, opens their office or apartment door. According to Michael Dobler from Schindler, “myPORT allows seamless movement in a building without having different badges and keys.”
A new information resource for the property industry called Infabode was revealed. Targeted at anyone looking to access real estate industry research and information, Infabode uses new technology to change the way information is gathered and distributed within the sector.
MIPIM is the place for anyone who wants to move with the movers and shakers at the top client table. It sets the tone for property investment, and what was clear, despite the storm clouds gathering, is that the industry is positive about the future, which augers well for the finishes and interiors supply chain.