Erwan Quintin was at MIPIM this year with his team of students from the University of Wisconsin, to present a segment in the final Wrap up. After several days of participant and exhibitor interviews, the students clearly witnessed a marked shift in market perception over the past year. Mr. Quinton said that there is a visible and “distinct rise in optimism” since 2013. The study concluded a growing appetite for risk, yet a hold on investment in emerging markets – all the while, a growing trend towards using local expertise in cross border investments. Perhaps the most revealing sentiment was the notion that we were once again in a bubble similar to that of 2005/2006. Regardless of certain fears and long term risks associated with the large debt held by Western nations, is was universally evident that “the property market is definitely back in business!”
Mary Fleischman, President of the Counselors of Real Estate, was also present at the Wrap-up to present the Top 10 Issue Affecting Real Estate. Among them were interest rates – and the fact that so long as they remain low, they will continue to drive the economy. That being said, we are sure to see them rise. The question is, When?
Other key factors to greatly affect real estate were energy, housing, technology and climate change. In fact, visionary and economist Graeme Maxton, who spoke at the Big Debate, also had strong opinions about how climate change will deeply impact the evolution of the property market.
Last up was Dr. Mahdi Mokrane, Head of Research & Strategy with LaSalle Investment Management, with a presentation on their annual investment strategy. He presented 4 main challenges and 4 opportunities to look out for in 2014.
- Economic growth below capacity
- Normalization of monetary policies
- High prices, low yields in gateway cities
- Rising flows of debt and equity
- Harvest gains from core assets
- Improving fundamentals
- NOI growth, not cap rate compression
- Follow “DTU” themes
Image: Image & Co : S. Halloy