Amid the morning press conferences, presentations, dinners and parties at MIPIM in Cannes, PERE hosted a gathering for winners of the 2009 PERE Awards last Wednesday. You can read all about it in the April issue of PERE out soon, but for now we present what our co-host said about MIPIM this year and about the market in general.
Chris Morris, global head of real estate at Freshfields Bruckhaus Deringer, which won law firm of the year in Europe for transactions (and which co-hosted the PERE Awards Breakfast on board the Serendipity Blue Yacht in the Jetée Albert Edouard), said this year’s event was different in that banks were lending again.
He said: “The most noticeable change from last year's MIPIM was that bankers were once more in evidence looking for products on which to lend. True, that product has very narrow parameters, being primary not secondary assets, and fully let rather than development, but nevertheless, this was a big change from 2009.”
He also said that similar to Expo Real, the trade show in Munich last October, there was a constant refrain of ‘find the right product and we have the money – all equity if need be – but we can't find the right product’.
“There was a sense of frustration that nobody, least of all banks holding many loans which are in trouble, wants to sell and see someone else take all the upside,” he said.
“Many jurisdictions appeared to be choked and there was a suspicion that reducing yields for prime assets in jurisdictions such as London are symptomatic of a tiny number of deals against large demand, rather than a fluid market.”
In a warning that perhaps things are not as rosy as some of the outwardly optimistic press releases coming out at MIPIM would suggest, Morris argued that there is a mismatch going on.
“Behind it all is a real concern about the potential impact of an apparently anomalous situation, which is hardening yields and a weak economy,” he said.