Party like its 1991

For real estate veterans who have attended MIPIM from its inception, MIPIM 2009 felt like 1991.

The French property show on the Côte d'Azur was far less crowded, the yachts were cheaper to hire and it was possible to get a table at a restaurant without booking the whole venue first.

With the price of a party at historic lows, the on-location PERE edit team opportunistically booked a venue of its own.

Five minutes’ walk in the sunshine from the main La Croisette strip and the Palais des Festivals exhibition hall, we hosted the first-ever PERE/MIPIM Breakfast at Le Pistou restaurant.

The mix of guests was eclectic; opportunity funds, mangers of listed, core-plus and value-added vehicles, placement agents, bankers (including the European Bank for Reconstruction and Development), one of the largest limited partners in Europe and the global head of real estate at a prominent law firm.

Our goal was to exchange orange juice, croissants and congeniality for market intelligence. Our notes from the event reveal a clear message: these players are in real estate for the long-term.

Sure, everyone has challenges. Whether that be how best to tell an investment guy he needs to do more asset management, having to work twice as hard to raise equity for clients, dealing with the vagaries of marking to market, being unable to find a banker with a term sheet to your liking or having to suddenly switch to “work out” transactions for clients you previously helped acquire an asset – this market is providing its share of headaches.

Our guests shared many reasons why they believe real estate professionals will soon become very busy. GPs and their placement agents are managing to raise fresh capital; opportunity funds are sensing the time to invest has nearly arrived; lawyers who advised on acquisitions in boom times are now advising on a wave of restructurings.

Not everyone will survive.

There was a lot of talk at MIPIM in general about certain funds that have gone “off-piste” and made bad investment decisions in unexpected ways and also about the future of the private equity real estate fund model at large Wall Street banks. 

But from the creative destruction will emerge a re-energised private equity real estate industry, wizened from its tribulations and hungry for more growth. In short, there will be many MIPIMs to come.

See our detailed coverage of MIPIM and read the market views we gathered at our breakfast session in the April issue of PERE magazine.