MIPIM 2011: ‘More positive’ than last year

Europe’s fund managers say the atmosphere at this year’s MIPIM property show in Cannes is more optimistic than in 2010, with capital from Asia, the Middle East and, to an extent, the US interested in the region.

Fund managers say there is a greater sense of optimism at the annual MIPIM property show in Cannes this year than in 2010.

Pierre Cherki, global head of RREEF, said that, although participants were questioning the current pace of economic recovery and what assumptions should be made about the speed and longevity of a bounce-back, there was “more business being done”.

Christian Delaire, chief executive officer at AEW Europe, added that, in the run-up to the event, his firm had been holding “more concrete” conversations with investors from Asia and the US that were interested in investing in Europe. In the case of investors from Asia and the Middle East, they were often deploying capital as they sought greater diversification.

“They feel they have to go beyond their borders
,” said Cherki.
“Some are starting from zero allocation to overseas property and are looking to reach around 10 percent – that’s a lot of capital to deploy.” He added that, in some cases, there was interest in value-added strategies, though the success of that depended on the strength of the economic recovery.

In summary, Cherki insisted: “Sentiment among investors has improved a little since last year. They are willing to invest in Europe and are talking about doing so in partnership with us.”

Just today, property services firm Jones Lang LaSalle said there was £52 billion (€60 billion; $84 billion) of equity targeting the UK commercial real estate market, and it predicted that  Asian capital would be the dominant overseas purchaser in central London
in 2011.