With the last of the 18,000 delegates safely back behind their desks after the week-long MIPIM jamboree, real estate professionals could reflect on how much was made of overtly bullish indicators of increased allocations, property prices and even salary rises. However, from private conversations there were some other key take-aways to be had from MIPIM. Robin Marriott
1. Mixed messages: LPs want different things nowadays and that is serving to make life challenging for fund managers, placement agents and advisers. Certainly many UK pension funds want low risk, high quality prime assets in Continental Europe. On the other hand, large pan-Europe insurance companies, such as Generali and Allianz for example, are shying away from third-party managed funds.
2. Fund fortune: There are a lot of firms, some of which are new, others well established, that are in various stages of raising capital for real estate blind pools or investment clubs. Expect to hear more in due course from the likes of Germany’s ECE, James Caan’s firm Hamilton Bradshaw, London-based Wainbridge Limited, CEE specialist NEP Partners, Mosaic Property, Tristan Capital, Mount Kellet, AREA Property Partners, and Nordic heavyweight Niam to name but a few.
3. Poland emerged as a winner: It was the country of honour at this year’s MIPIM, with a key note address by Rafal Baniak, Under Secretary of State in Poland’s Ministry of Economy. The country gained kudos with delegates for managing GDP growth in 2009 while most other European countries went into reverse. Some investors will take profits now. Others will see reason to invest anew in the country.
4. Grab your coat: No question the event was quiet compared to previous years. Thursday night – usually party time at MIPIM – was somber. That said, plenty of established private equity real estate firms were in attendance throughout the week. Benson Elliot, The Blackstone Group, Niam, Rockpoint Group, Drago Capital, Colony Capital, Resolution Property, Patron Capital, LaSalle Special Situations, Lone Star, Orion Capital Managers, Europa Capital, Jensen Group, Grove International, Palmer Capital, Revcap and alternatives firms such as Och-Ziff Capital Management made it to Cannes.
5. Deal volumes are on the rise: Though it is still hard to find acquisitions that make sense, there were some high level deals getting progressed at MIPIM and some big ticket investors such as The National Pension Service of Korea were in town.
6. Bank blockage: Familiar gripes about banks failing to unclog their balance sheets was one of the main topics of conversation on board the yachts, in cafes and at private lunches and dinners. On the plus side, banks are much more eager to lend than they were a year ago.
7. Power to the REITs: Some argued that REITs are in the best position right now, helped by their transparency, low leverage and the capacity to issue stock in exchange for properties. Private equity funds will find it more difficult to take advantage of the current environment because they won't have cheap leverage to boost returns.
8. NAMA: Ireland’s National Asset Management Agency was the subject of whispered conversations at MIPIM. Some funds can smell deals coming out of the agency, which was recently formed to deal with the fall-out from the plight of the country’s credit institutions. Sometimes refered to as a 'bad bank', it has taken control of billions of euros worth of assets.