MIPIM 2017 Final Wrap: Industry remains positive despite political uncertainty
Political uncertainty may have been the backdrop to MIPIM this week but the real estate industry has remained positive, recognising the long-term importance of globalisation, diversification and the key megatrends shaping society.
That was the message from Michael Keogh, associate director of research and strategy at TH Real Estate, as he delivered his keynote presentation at MIPIM’s wrap-up conference session.
Keogh told delegates: “Urbanisation and connectivity together will probably be one of the biggest and most powerful factors in shaping the 21st century and the markets we move in. The key challenge lies in identifying the growth cities and the migration of capital but it’s an opportunity too.”
Keogh picked up on another important theme of the week – the merging of real estate with sectors such as infrastructure into real assets generally, even if it means investors and fund managers such as TH Real Estate “lowering our return expectations”.
Not unconnected to the real assets movement is the idea of diversification, which has been a “real buzzword” at MIPIM this week, given the fact that there is more and more capital going to fewer and fewer markets.
Keogh also highlighted the importance of technology, not only as a disruptive force but in routine real estate work. “You can’t ignore it. You have to embrace it,” he said.
In many respects MIPIM has reflected the growing importance and use of technology in real estate. At the same conference session — which was moderated by Barnes Media International’s Richard Barnes — Fillippo Rean, real estate division director of Reed MIDEM, described the remarkable growth of MIPIM’s Innovation Forum, from the mixed reception when it was introduced several years ago to its position today as an integral part of the show.
As Rean said, the growing success of the Innovation Forum has reflected the industry’s growing acceptance of technology and societal change, as well as the “changing views and conceptions of built assets”.
“The thinking about property occupation and ownership of assets is changing,” Rean said. “The relationship with the assets is changing – how can we maximise the utilisation of the assets and ensure that they don’t become obsolete?
“Real estate will always be about financial transactions, and buying and selling properties – that’s the core of the activity. But we have this innovation all around us and it is happening in an accelerating way.”
MIPIM and TH Real Estate will publish a white paper next month, outlining some of these themes and issues. It will be a timely analysis of the forces at work in global real estate.
As Keogh observed, the industry is grappling not just with fast-changing technology, but short-term movements in investment markets. “You can move in and out of markets and you may have missed some opportunities but you should try and look beyond short term horizons and stick to your business plans,” he said.
Finding the correct balance between short-term considerations and long term returns is the challenge for the industry – and very much a theme of MIPIM during the week.