In the several years I've been coming here, there's no
question that yesterday was my best ever at MIPIM. Every client
conversation delivered a tangible outcome, and some very positive
agreements and opportunities. So, a lot of momentum for the rest of
the week, and a really decent list of actions to follow-up on.
Excellent.
The superlative of yesterday has been pretty much matched so far
today, but for totally different reasons. I don't think
I've ever had such a wide-ranging and seemingly random series
of discussions! If MIPIM should come with a list of health
warnings, the prospect of this happening should certainly be one of
them. I've been engaged in conversation on topics from the
panacea of thorium to our energy supply challenges, the commercial
opportunities and pitfalls for those prepared to develop mobile
Apps, the dynamics of the European M&A market, and the
prospects and limitations of crowd funding real estate investment.
Try making sense of that lot!
One theme of conversation which merits some decent reflection
though, was that hosted by the wonderful Jane Hollinshead (@JHollinsheadAG) at Addleshaw Goddard, in
association with the British Property Federation (@BritProp).
It focused on international capital investment trends into the UK
property market, and featured representatives from a significant
Chinese firm that has invested into a large real estate project
outside of London. This can be taken as pretty serious validation
of overseas investment interest in the UK market as a whole, where
regional opportunities are considered increasingly to provide
decent prospects for sustainable returns. Importantly, this
particular investor has every intention of broadcasting its
experience of doing business in the UK with other Chinese firms. It
is critical, in my view, that organisations such as the Regeneration Investment Organisation, set up
to attract overseas capital to UK real estate and infrastructure
investment opportunities, harness the ambassadorial qualities of
the international investors already doing business in the UK,
especially those from the emerging markets.
Now here's something that gives me great pleasure to report:
whilst obvious assets like the British education system are central
to competing to attract investor interest from places like China,
so too, it seems, is the professionalism of the advisors and firms
who operate in the domestic real estate market. This remark was a
big thumbs up for the professional services community in the UK, so
those of us on 'that side of the fence' were able to enjoy
a rare opportunity to bask in collective glory! High fives all
round.
I had the opportunity to put a question to the panel on the
whether the push for fiscal devolution of UK cities, a theme
we've seen playing strongly at MIPIM week, is seen by overseas
investors as a threat or positive prospect for future investment in
the UK outside of London. The answer was resounding. Whilst in
principle this is taken as a good opportunity to be more agile and
locally responsive with the deployment of capital (the argument
being that cities are better placed to determine the right time,
place and format of capital investment to generate growth) there
were two strong cautionary notes:
- The variation in capability across UK cities to deliver capital investment in well-placed projects is considerable. Whilst there is the potential for greater autonomy to deliver great results where the leadership and talent mix is right, there is also a risk that poor execution will undermine positive impact and suppress future capital market appetite.
- Big lot sizes tend to be highest on the agenda for international investors, and these are fewer and less liquid in regional locations compared to London. Furthermore, if greater local autonomy means that more direct negotiation is needed with a greater number of stakeholders to deliver large infrastructure projects which span administrative boundaries (think HS2) then capital market players will, without question, be put off.
Right, it's time for me to get back out there and into the
mix. Next on the agenda today is an update on Airport City at the
Manchester stand (@mcrMIPIM), followed by a drinks reception with
one of London's premier housing developers. Tonight, we're
holding one of our signature events of the week – a private
dinner for a select group of investment clients. We've got a
first-rate list of clients attending, so it should be an absolutely
top evening.
I wonder if I'll have the strength for another run up the
coast tomorrow morning?!
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