What I heard from global property leaders at MIPIM

CREOpoint and its members were well represented at MIPIM, the world’s most important international real estate event. 18,000 leading real estate investors, end users and property professionals from 80 countries gathered in Cannes last week for the event. I am still running around Europe but had a chance to reflect on what we observed:

- Hope is back but some of the survivors are concerned about a double dip recession
- European investors clearly favor the U.K., “hard core” plays and the office sector followed by retail (while in the US, investors are currently most attracted by the residential sector)
- End users are focused on slow growth, portfolio rationalization and new models (including more flexibility and better collaboration from their landlords).
- The role of the public sector continues to grow (with many economic development agencies in attendance to attract fewer investors and to discuss public private partnerships)
- Marketers are experimenting how to actually do more with less thanks to Twitter and other new online platforms
- Interesting new projects in places like London, Paris, Korea and Bahrain

A better mood:

Everyone returned home tired yet hopeful compared to last year (which was all about «gin and panic»). This year the going is still tough but the tough had champagne in their hands and were happy to have survived the last 12 months.

We started on Monday with an exclusive pre-MIPIM party in my family home in Cannes with many friends encountered over 21 consecutive MIPIMs. People were speculating over who might mint money in this new environment—and how they might accomplish it. However there were no premature celebrations due to lingering issues such as debt, the possibility of a double-dip recession, growing European unemployment, uncertainty regarding the looming UK election and likely new regulations.

Attendance at MIPIM 2010 was down 38% from the 2008 peak and there were far fewer yachts and lavish parties (even our friends at CBRE did not have a party). However the sun was out and most people enjoyed a serious MIPIM where quality decision makers took their time to source new business, present new projects and launch partnerships.  What was also evident right from the start was that governments and banks are stepping up and becoming major players and funding partners.

Some of the exhibitors from the Middle East and Russia from past MIPIMs were gone. Many of us did however notice how many times male property figures took the shortcut through the small Russian area and could not help but glance at the beautiful models dressed in outrageous red satin outfits.

The buzz online reflected the mood and the new mix of attendees professions (source: CREOpoint proprietary data mining of 4,000 CRE-relevant sources of ... you could also leverage for your brand and content development): 

 
What I heard from global leaders: 

The presentations certainly were not the group therapy sessions we witnessed last year. I had a chance to meet a number of fascinating people listed below and, if you are interested in what some of them said, watch this short "Best of" MIPIM video (click here) and/or scroll down.

From left to right Boris Johnson (Mayor of London), Denis Tersen (CEO PREDA Paris Region Economic Development Agency and the largest exhibitor), Mark Dixon ( CEO Regus), Dr. Jan Siemons (Partner and head of Real Estate Consulting Ernst & Young Holland) and Gordon Dugan (CEO W.P. Carey) and Tim Strongman (Head of Real Estate, Environmental Resources Management)

 
From left to right Paul Danks (Senior VP-Corporate Services, NAI Global), Laurent Lehman (Directeur Général Adjoint, CBRE France), Reggie Winssinger (Board Member, W.P. Carey), Francois Ortalo Magne (Department Chair, Wisconsin School of Business), Dan Fasulo (MD Research, Real Capital Analytics), Mark Faithfull (Editor, CNBC and Retail Property Analyst) and Ahmet Kayhan (CEO and Co Founder REIDIN.com)

 
Investments moving to the U.K. and from risky to core, core - hard core!

The biggest investors in Europe in the last twelve months were Blackstone, La Caisse des Depots, Union Investment Real Estate, RREEF and Area Property Partners per Real Capital Analytics, a CREOpoint partner.
 
There were some fine distinctions between Europe and the US as well as between the Continent and the UK:

'Whilst European investors clearly favor the office sector followed by retail, US investors are currently most attracted by the residential sector; the office sector ranks only third.' Raymond Torto, Global Chief Economist for CB Richard Ellis

Michael Rhydderch, head of cross border capital at Cushman & Wakefield, also commented that "Investors, including UK institutional and retail funds, rushed to buy UK commercial property in the second half of 09, despite the continuing slide in rents. This is unique across Europe and to some, looks like madness».

I also had an interesting conversation with Laurent Lehman of CBRE (they advised HSBC for the $2Bn sale of their London and Paris HQs.)
 
 
Corporate end users

Senior corporate property execs who at the end of the day are paying all of our bills agreed that «buildings in emerging markets were better as landlords there are more flexible» (Microsoft, Google and Shell). Nigel Baker, senior director for EMEA real estate and facilities at Microsoft added: « Investors don't understand occupiers. CRE is one of the least advanced in adoption of technology».

"We listen to our tenants through a global tenant survey program. But, there is a caveat about tenant surveys" says Bernhard Klein Wassink, Chief Marketing Officer for GE Capital Real Estate: "Owners shouldn't seek tenant input unless they're wiling to take action."

Mark Dixon, Regus CEO (who was recently shortlisted in the FTSE 250 Entrepreneur of the Year awards), was interested in collaboration technologies: “In a recession you have to be more flexible. People today are not working in offices as they used to do. Thanks for technology and an increased focus on cost reduction, offices will be built where people live, not where they commute to.”
 
Tim Strongman of Environment Resources Management agreed there was « increasing talk by end-users and investors alike on cost reduction through operational efficiency measures and portfolio restructuring. The hot topic seems to be green buildings and the carbon reduction commitment (is compliance enough or should we be market leaders?)»

Change is in the air for end users and their advisors. Tenants had some leverage to renegotiate their leases but were slow to transact. Now they seem focused on new models and portfolio rationalization. «Services for end-users will be one of the fastest-growing activities for CBRE here» said Michael Strong, president EMEA at CBRE who currently derives 45% of its revenues from corporate services in the US, compared with 15% in Europe.


Growing importance of the public sector:

Mayor of London and capital cheerleader in chief Boris Johnson was not shy about commenting about competitors. He said that London was the best place to live and do business and one is 4 times more likely to be murdered in NYC than in London who will soon « host the world" for the Olympic Games. He also joked about moving his office to the upcoming tallest building in Europe to have a view of France...

Denis Tersen, CEO of the Paris Region Economic Development Agency and the largest exhibitor, had an interesting reply about the competitive advantages of the Region: "Paris is the first real estate market in Europe neck to neck with London. However the future is at the intersection of creativity and technology and both are uniquely very present in Paris."

Marc Lhermitte, the Ernst & Young Partner and author of the European Attractiveness survey, provided unique data about a decreasing number of European FDI projects (about 3,000 in 2009) while the competition among locations continues to increase. 
 
Dr. Jan Siemons, head of RE Consulting Ernst & Young Holland, recommended: "Governments could save money by unlocking value out of their own real estate and by giving higher priority to public private partnerships"
 
Thanks to Ernst & Young International Location Advisory Services for sponsoring the public sector part of this newsletter. Contact my former colleagues and CREOpoint members Marc Lhermitte or Jan Siemons for information.
 

Thanks to our other partners

 
Last week was very good for CREOpoint as we left MIPIM 2010 with new clients, investors and partners. Special thanks to this newsletter sponsor: GE Capital Real Estate is one of the world's premier commercial real estate companies with US$80 billion in assets and a presence in 31 markets throughout North America, Europe, Asia and Australia/New Zealand. GE Capital Real Estate has a depth of knowledge and experience and a history of buildings relationships, finding opportunities and opening doors for more than 5,000 owners, builders, borrowers and brokers worldwide. Follow us on Twitter.
 

You could also become a CREOpoint partner like these other leaders

Please contact me directly at jcgoldenstein@CREOpoint.com or + 1914 310 4189 to see how we could put our experience to work for you.
 
 
Marketers are experimenting how to do more with less
 
With thousands of organizations banging their own drum, often it’s almost impossible to differentiate one tune from another. And it’s not necessarily relevant as sometimes the biggest attention-takers comes from "people you have never heard of, from companies you'd never work with in countries you don't want to do business in" as one non-returning attendee put it. Without clear objectives and focus, scarce marketing budgets can be pushing out promotional material to the wrong people.
 
The most savvy organizations are also drawing more qualified prospects by complementing (not replacing, which I think would be short sighted) their events with innovative online initiatives (click here for RICS paper). While last year CREOpoint was one of the first organizations using Twitter to share thought leadership and break global news, hundreds of professionals at organizations such as Estates Gazette, JLL, MIPIM, Property Week and Real Capital Analytics were tweeting and blogging this year. It was fascinating to see what others were saying who could not afford to be at MIPIM or that had scaled back to their domestic market.
 
In these tough times, professionals have to extend their personal digital branding and improve their networking even more. This is not about someone unknown trying to friend you on LinkedIn because they have some oil-rich, Nigerian beach frontage property!
 
I know that one cannot tweet a handshake but why ignore new media? Do you know which online mover and shaker is already talking about you and what are they saying where you are not listening? For example you could get some inspiration from MIPIM’s own iForum powered by CREOpoint (a summary of all the sessions brought the four day action to Blackberrys™, iPhones™ and computers around the world.
 
Please let me know if you'd also like a branded iForum for a topic you are a leader in, your organization, fund or property. Think of it as the next natural step in the extension of your events and an online sales office.

Share our stuff
 
150,000 property decision makers from 50 countries now get these notes. I’m glad you took the time to read them and thought they were important. If this is insightful to you, please forward to a colleague or invite them to join our exclusive community at www.creopoint.com. They could read what's happening in property around the world and continue the conversation in one of 13 languages.
 
You could also quote it, blog about it, tweet it -- whatever makes you happy! But please don't change it and do give us credit by linking back to www.CREOpoint.com. © Copyright CREOpoint 2010. All rights reserved.
 
Hope that helps and that I'll see you soon, latest at my 22nd MIPIM next year. Meanwhile please let me know if you have any questions or comments. Best, JC
 

 
JC Goldenstein
Founder and CEO, CREOpoint      
 
Cell: + 1 914 310 4189
www.Twitter.com/CREOpoint
1040 First Avenue #343
New York, NY 10022



Featured on CREOpoint this week
 
- Bernhard Klein Wassink, Chief Marketing Officer for GE Capital Real Estate, who just posted "Want Renewals? Boost Tenant Satisfaction!" 
 
- Paul Danks, Senior VP-Corporate Services, NAI Global who commented that "although top markets in Europe will continue to be a source of opportunities, more significant, long-term prospects will be outside Europe in markets like Brazil, India and China."

- Online networking and trust discussed at the CREOpoint member breakfast hosted by the California Real Estate Journal
 
- Save the dates for the next CREOpoint member breakfasts next Friday April 1st at ERM HQ in London, April 9th in Chicago and at ULI Boston April 16th. Also happy to schedule a conference call if/when you are interested?
 
- Among the biggest development projects at the show was the Seoul-based Yongsan International Business District, designed by Daniel Libeskind and covering some 570,000m. An eyecatcher from the Middle East was the EUR 1.8 bn mixed-use Bahrain Bay project, situated on the north-eastern shore of the capital Manama and designed by Skidmore, Owings and Merrill. Please also see below for the award winner and an interesting comment about London!

French architect Jean Nouvel had to give up on finding investors for his 300m Tour Signal at Paris La Defense. However he won the highest accolade for the above London One New Change scheme in the overall MIPIM Future Projects Awards. Also heard at the London booth:

Thank you to U.S. MIPIM executives Patric Dolan and his Paris-based colleague Alain Courbon for their hospitality.
 
Gordon Dugan, John Miller and Reggie Winssinger, top executives and Board Member at W.P. Carey, also deserve special thanks. They hosted the best party of the week where property leaders enjoyed very interesting conversations and the most amazing opera music!