Last week, First Names from our Guernsey, Ireland, Isle of Man, Jersey, Luxembourg and Netherlands offices travelled to Cannes in the south of France to meet with other property sector specialists attending MIPIM 2017 – a four-day real estate exhibition, conference and networking event gathering 21,000 international property professionals.
Looking back over the week, Funds Director Andrew Maiden commented that he thought there was a renewed buzz around MIPIM this year and the mood was generally positive, although there was some uncertainty around factors such as Brexit, the EU and the wider international situation. Real estate, especially in the UK and Europe, continues to be a growing allocation for many investors, with global demand seeing great value in investing in real estate, both in terms of capital appreciation and generating regular income flows.
Andrew found that it wasn’t just the large real estate corporates that were at MIPIM this year, as he met with family offices and high net worth (HNW) individuals who were all very interested in setting up fund structures to invest in UK and European real estate. Speaking from a private client point of view, Group Business Development Director Matt Haynes agreed that even with the continued uncertainty, the attendance at MIPIM confirmed that commercial real estate (CRE) remains a key asset class for HNW individuals to invest, with a core driver being diversification of investments.
Further, both Matt and Andrew noted that many HNW individuals continue to team up with other investors, be they other HNW individuals (forming club deals), sovereign wealth funds or other joint venture partners. Corporate-focused Client Services Director Paula Thompson added that all the people she spoke to said they were seeing club deals more frequently than fund deals, so it will be interesting to see where that leads in 2017.
Andrew also commented that interest in the private rental sector appears to be growing; there were clear signs that the UK private rental sector (PRS) is maturing and following the lead of the US market. Paula echoed Andrew’s comments regarding the positive atmosphere and agreed that PRS is a hot topic alongside purpose-built student accommodation (PBSA). It seems that alternatives are definitely the more attractive option for 2017, and other asset classes that appear to be gaining momentum are hotels, retirement villages and social housing.
Paula further mentioned that source of capital was a big topic in her conversations, with comment on the continued flow of US and Canadian money into PRS, and many noting the significant increase in Far Eastern money coming into the UK (particularly in the hotel sector) as well as the role that Hong Kong and Singapore have to play in this.
Matt agreed with both Paula and Andrew, commenting that the scope of investment continues to evolve with specific interest in hotels, sheds, PRS and PBSA with a focus on the UK, mainland Europe and key international hubs. He asserted that the challenge for many investors continues to be finding assets that will deliver the desired returns. In this regard, many of the attendees at MIPIM will play a key role in assisting their clients to find the best deals.
Speak to the ‘First Names’ in real estate
If you’d like to chat with Paula, Andrew, Matt or anyone else in our expert real estate team about their key takeaways from MIPIM this year – or if you’d like to find out more about our real estate services and how we could help you or your clients – please don’t hesitate to get in touch.