COMMENT The sun is shining, there is a nice cool breeze coming off the sea and the streets hum with activity as property professionals from all over the world stroll up and down Boulevard de la Croisette. MIPIM is back and you can feel the energy all around.
The conference is like no other time in the property calendar – everyone is more relaxed and information is spread more freely. The anti-MIPIM brigade will always preach that anything you can do at MIPIM you can do over a coffee at home, but that is just not the case.
The inhibitions that surround a meeting on a cold Wednesday morning in London are not there. Cannes is three days in the year where you can be yourself, relax around your clients and peers in the industry, and relationships are formed or solidified. It is odd that you can have one impression of someone in a strictly working environment but throw in a glass of rosé and a clear blue sky and it is so much easier to truly connect.
Having been present at every MIPIM for six years prior to the pandemic, we had not attended the event since. But we launched our commercial investment agency Tuatara at the end of January, and we saw this week as an opportunity to network, gain insights and expand our connections within the industry.
Here is our take on what was a fantastic week.
Mind the gap
Despite the challenges faced by the real estate sector in recent months, conference attendees demonstrated a cautious optimism about the industry’s future.
This upbeat outlook was driven by various factors, such as opportunities to buy better real estate in the UK than over the past five years, increasing urbanisation and the growing demand for sustainable and technology-driven properties.
But although the longer-term market sentiment was generally positive, MIPIM also showcased the current frustration from agents and purchasers over a lack of transactions in the UK.
A combination of factors, such as uncertainty surrounding the current banking crisis, an increase in build costs, the interest rate hike and the shift towards hybrid work have all contributed to a slowdown in deal-making.
Another big topic of conversation was the pricing gap. The consensus in the commercial world is there is still a price gap of 15-20% between the figure a vendor is willing to sell for and the price a purchaser is willing to pay.
The feeling is, with the impending interest rate rise, this gap may reduce to 10%, which will encourage negotiation and transactions will increase. There is optimism that Q3/Q4 could be highly transactional.
A key trend we observed was the influx of new capital targeting the UK commercial real estate market. Investors from various parts of the world are seeking to take advantage of the current downturn and capitalise on the potential for outstanding returns in the UK. This interest is driven by the nation’s strong economic fundamentals, transparent legal framework and strategic location.
For overseas investors, this presents a unique opportunity to enter the UK property market while the UK institutions remain relatively inactive.
White men in blue suits
In a world where inclusion and diversity remains a hot topic, MIPIM was still dominated by white males in dull navy-blue suits.
Our feeling recently has been that the UK real estate world is becoming more diverse but perhaps some
people fear travelling to MIPIM because of the perception that it is a male-dominated environment full of debauchery and excess.
Post-Presidents Club scandal, MIPIM has certainly toned down. Although the heavy drinking and excess eating remains, there is a far more professional approach from the majority, and we would actively encourage people of all genders and backgrounds to attend next year.
Simon Perlmutter and Dan Cohen are founders of Tuatara Real Estate
