One of the leading events for the property sector – starts and the sun shines down on another beautiful French Riviera morning, it’s a pleasant (yet stark) reminder that the last 12 months has been a hell of a year. A lot has happened since MIPIM 2016 – the world is a very different place. So is MIPIM 2017 a time to reflect and regroup or a time to look forward and realise that it’s not all doom and gloom?
For many, MIPIM is the four single most important dates in the calendar. It can set the scene for the year and be the start of many a profitable relationship. It is no stranger to well-rehearsed and very thoughtful conversations. So the question is, after the last 12 months, what is the mood of the real estate industry? What will we be dancing to at MIPIM this year? Is it down beat or upbeat? Or is it one of cautious optimism with all the change that the year still has in store for us, planned and unplanned, as it maybe.
So what is the UK view? If this morning has been anything to go by, the mood music for the UK is very upbeat. Many are leaving the changes of BREXIT to one side. They are also not discussing the additional changes imposed on us or picking one side or the other. Instead the picture is changing and we have some very clear messages.
Competition: The market is more competitive and for investment funding it is becoming increasingly an international market. Significant progress is being made by African and Asian trade blocs in expanding their free trade initiatives (some lessons to learn for the UK perhaps). The Association of Southeast Asian Nations is now the third-largest trade bloc in the world increasing globalisation of business ownership and supply chains means organisations need to put more effort into building cross-border relationships with the private sector, trade bodies and governments in other countries, and high-growth emerging markets in particular. Relationships can serve as both sources of capital and information. Understanding different cultures, new ways of doing business and the opportunities and threats in different regions will help businesses delving into new terrain to work on an international scale.
Structure: It is important that we ensure that we create the right structures – be it regions, the northern powerhouses, city regions or sectors – and they must work together as the competition and scale of the competition cannot be under estimated. Some of the scales of new cities in China are mind blowing.
Advantage UK: With that all said global investors still like the UK, as our location (Time zone advantage) and our history create a very stable rule of law and the transparency and professionalism with which we do business still maintains. Add this to currency devaluation.
Volumes: However there are ripples in the pond. Volumes are materially down with a big threat is that occupier is demand down. This is not to be confused with some of the headline deals which have recently been completed, most notably in London. These may give an artificial and healthier picture than is truly in the market as a whole.
Vision: There is clear message from MIPIM that for the UK to really drive and to compete there needs to be more ‘clusters’ either from a sector or regional approach. With such clear vision (cities must be able to articulate their offer) and cohesion, investment and funding will follow. As these clusters evolve, they need to improve their productivity and enable regeneration, which improving the infrastructure which joins them. Within these ecosystems driving up skills also becomes important.
Finally for us at MIPIM we are continuing to promote the ‘value’ proposition around BREEAM, releasing the latest in the series of research documents demonstrating how BREEAM helps investors and developers achieve a better return. “Delivering Sustainable Buildings: Value of BREEAM to Retail” is our new report published with Currie & Brown. It draws upon on examples of the approaches and benefits seen by some of the largest and most experienced developers and retailers, and includes guidance for those aiming to get the most out of their investment in sustainable retail buildings, whatever their size or role in the sector.