European Developers Still Cautious at 2011 MIPIM Conference

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By Nick Keable
Vice President, UK Operations
The Saint Consulting Group

What is MIPIM, you ask? It is the European property industry’s annual conference and marketplace held each March in Cannes on the French Riviera.

It is a curious conference in many ways. It is held in a hugely ugly, 1950s, grey concrete exhibition venue — a fine example of the “brutalism” school of architecture, more akin to a Soviet prison than the location for (among other events) each summer’s Cannes Film Festival — which is perched on the beach next to the harbor.

In the boom times up until 2008, some 28,000 property professionals from all over Europe came there to do business. Now that number has slipped to around 18,000; but with everyone now needing to justify the costs of attending, and with fewer inebriated 30-year-old property agents running from party to party, the conference is a better place to do business.

This year there were a number of observations to make. First, there were fewer exhibitors. This is a product of there having been less development in the last three years and, hence, there are fewer new schemes looking for fewer occupiers. Local authorities promoting their region/city/town were also thinner on the ground.

Also, the “new Europeans” from Central and Eastern Europe are now coming in much smaller numbers. In the boom times, it was wall-to-wall Russians promoting regions of their country most of us had never heard of (but which were the size of several European countries combined).

From a selfish, UK perspective, most interesting this year was the stark difference in confidence of the three main property sectors.

Residential developers are in fifth gear. Having sorted out their problems, slimmed down, refinanced, and with cash in the bank, they are buying land and preparing planning applications to make sure they have the right product for the next housing growth period, starting from 2013. You heard it here first!

Right now, commercial developers are slightly behind this timeline. Viability is returning to their UK schemes, but they are some way behind.

Which leaves retail. Although no longer on the critical list, the patient is still in the hospital and with the commercial mortgage-backed securities (CMBS) issue still to unwind, the hospital release date is not yet clear. A relapse is still possible.

And the difference between where these three UK property sectors are right now is striking, even in the Cannes sunshine.

Nick Keable is vice president of UK Operations, The Saint Consulting Group, email, phone +44 207 592 7050

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