Andrew Charnley, Managing Director
As Q1 closes and we look ahead to Q2 including all that will bring for businesses, households and consumers alike, I have taken some time to fully reflect on my own and Assetz Capital’s attendance at MIPIM24, considering what 2024 and beyond may look like, including the many opportunities that exist as well as how the challenges can be overcome, or at the very least, managed effectively to mitigate downsides.
The annual gathering at MIPIM has always served as a barometer for the global real estate market, offering insights into the challenges and opportunities that lie ahead. This year’s event was no exception, with several key themes dominating conversations among industry leaders, investors, and policymakers.
A critical topic of discussion was the impact of interest rates on real estate investments. With central banks around the world adjusting rates to navigate economic complexities, the real estate sector finds itself at a crossroads. Higher interest rates typically increase borrowing costs, which cools down investment activity. However, participants noted that strategic investments in high-demand areas continue to show resilience, emphasizing the need for agile investment strategies. These included PBSA, data centres, logistics and the care sector.
Inflation remains a hot-button issue, directly impacting investment returns and property values. MIPIM 2024 attendees discussed strategies to hedge against inflation, including investing in assets with potential for appreciation and rental income growth. The consensus underscored the importance of staying informed and flexible, adapting investment portfolios to mitigate the risks associated with inflationary pressures.
Environmental, Social, and Governance (ESG) criteria have transitioned from optional to essential. Stakeholders are increasingly prioritizing sustainability and social responsibility in their investment decisions. Discussions at MIPIM 2024 highlighted innovative ESG-compliant projects and the growing demand for green buildings. Moreover, there was a clear call to action for the industry to embrace ESG principles not just in design and construction but also in operational practices.
Closely linked with ESG, sustainability emerged as a standalone theme, reflecting the urgent need to address climate change and resource depletion. Attendees explored sustainable development practices, including energy-efficient designs and the use of renewable materials. The conversations underscored that achieving sustainability goals requires collaboration across sectors, as well as innovation in financing and technology.
With an upcoming election in several key markets, MIPIM 2024 provided a platform for speculation and preparation. The political climate can significantly affect regulatory environments, funding for infrastructure projects, and market confidence. Participants shared insights into potential policy changes, stressing the importance of staying ahead of the curve to leverage opportunities and navigate challenges that political shifts may bring.
The residential market was as in previous years, a key focal point, with a particular interest in understanding shifts in housing demand and investment opportunities. Discussions highlighted the growing trend towards remote work and its impact on residential preferences, with a noticeable shift towards suburban and secondary city markets. The consensus was that the “new normal” offers both challenges and opportunities, with adaptive re-use and innovative housing solutions being key areas of interest.
The overarching theme of economic outlook permeated discussions, as attendees sought to understand the broader implications of current trends on the real estate market. The consensus was cautiously optimistic, recognising the uncertainties posed by geopolitical tensions, pandemic recovery, and financial market volatility. Industry leaders emphasised the importance of resilience, adaptability, and strategic planning in navigating the complex economic landscape ahead.
Attendees all commented on the investment of time required to attend and the challenges of balancing this with “the day job” supporting clients. However, there was also a resounding sense of the value achieved by not only being present, but maximising time with those who attendees wished to meet with, whether as part of the conference itself, or in a social environment. Relationships are what business is built on and MIPIM is an ideal way to continue to build these and indeed start new ones. It never ceases to amaze me, how many people I can meet in a 72-hour period in one place, but as always, the real success comes from the follow up. The work starts now as they say!
Finally, and I know from the many meetings (both formal and informal) I had whilst in Cannes, that I am not the only attendee, who (once again) is calling out the pressing need for the wider real estate market to focus on improving inclusion and diversity. I recall arriving at Café Roma early on the Tuesday afternoon, to be greeted (once again) by what appeared to be a sea of male conference delegates in navy suits! This is not in any way to decry or devalue the quality and expertise that many attendees bring to the event. However, if we are serious about the wider sector, we all work in and are passionate about, we must collectively mobilise to ensure it truly reflects the society and communities we all live in. Can we honestly say we are doing that at the pace needed? I wonder what the “optics” will look like at MIPIM34 in 10 years’ time, and will we have created a truly inclusive environment?
In conclusion, MIPIM 2024 provided a rich tapestry of insights, highlighting the need for the real estate sector to navigate a complex array of challenges with agility and foresight. From the macroeconomic impacts of interest rates and inflation to the microeconomic shifts in residential market preferences, the conversations at MIPIM underscored the importance of staying informed, adaptable, and committed to sustainability and social responsibility. As the industry looks forward, these themes will undoubtedly continue to shape the direction and dynamics of global real estate. Overall sentiment was positive and that bodes well for us all as we move into Spring and look to help our clients realise their real estate related ambitions.
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