FEATURE: MIPIM uncensored

It is an unsettling truth to admit that very little actually happens at MIPIM, the annual property show held each March at the French Riviera resort town of Cannes. For no matter how vast the sums of money spent by firms on attending and schmoozing during the week-long event, it always seems that the major happenings are taking place elsewhere. Neither the organisers of MIPIM nor the attendees should be blamed for that, but this year – as others – proved to be no exception.

Just as 18,000-plus delegates prepared to plunge headlong into the fray on Wednesday, it was the awakening earlier that morning of two gentlemen by police and officers from the Serious Fraud Office in London that was to become the talk of the town. Arrested on 9 March and released without charge, UK property entrepreneurs Robert and Vincent Tchenguiz had made headlines and everyone from the UK was talking about it. In the most graphic demonstration of how MIPIM really is a place to meet and talk about things happening in other places, attending media made a beeline for one of the brothers’ yachts to ‘report’ on the story, even though no one of note was aboard.

In previous years, it has happened to varying degrees as well. In 2005, it was the collapse into receivership of a property services firm called Chesterton that was the major talking point. The London-based firm went under the night before the first day of the show, and news flashes sent to Blackberries provided the subject of most discussion. More recently – in the last three years to be precise – it was what had happened in the US to the American investment banks and their subprime exposure that dominated every facet of proceedings. Again, nothing actually happened at MIPIM.

However, when you have 18,000 people all rubbing shoulders with real estate investing as a common denominator, what is generated is a fascinating if erratic mix of conversations that somehow adds up in its totality to something of a picture of European and global real estate. Over the next few pages, PERE attempts to capture that picture through the selected journal entries of our team on the ground: senior editor Erik Kolb, Asia editor Jonathan Brasse and Europe editor Robin Marriott.

Pooled as one, PERE’s journal entries provide a snapshot of some of the themes at play. Here’s a taster: Asian investors are looking at Europe and vice versa, fundraising is sparse and sporadic, fund managers are thinking about extending their funds, China is making noise, Russia is still a wannabe place to do business and the irrepressible mayor of London, Boris Johnson, could talk up the prospects of a three-legged horse winning the Dubai World Cup. So, without further ado, here is what we saw and heard.

Tuesday, March 8
10 am: Meeting with Noel Manns of Europa Capital Partners at the London stand outside the main Palais des Festivals. He talks about mezzanine debt and EMIR – the European regulation on over-the-counter derivatives that many are worried about, but few seem to be objecting to.
11 am: Coffee with a US core property fund manager at the Martinez Hotel – one of the large five-star hotels on the beachfront. Our contact just heard the rumoured multiple paid by CBRE Investors for ING REIM and thinks the former got a good deal.  
11:30 am: First foray into the Palais itself. There is the usual concentration of cities and regions peddling grand designs, looking for inward investment (are they serious?) and, of course, handing out tchotchkes.
12:15 pm: Bump into a contact plugged into the global secondaries market. He declines to name names, but he claims there are several large portfolios coming out. In addition, he offers the investment tip of the week: Indian secondaries.
12:30 pm: Have lunch in the exhibit hall, consisting of hors d’oeuvres, finger sandwiches and pastries from various regional and city pavilions. Champagne and wine were even flowing at some stands. Missed out on substantive lunch offered by Munich: weisswurst, pretzels and Paulaner beer from the tap!
1 pm: Caught up with Gordon Black at the Heitman stand. Watch this company – it has big plans.
2:30 pm: We take our place in the queue to hear Boris Johnson, mayor of London, deliver a keynote address. The UK is this year’s country of honour, which is why he is getting the red carpet treatment. He doesn’t disappoint, regaling the packed auditorium with witty comments as well as some hype of London and the upcoming Olympics.
3 pm: Coffee at Café Roma with the affable Julian Schiller, national director of indirect investment at Jones Lang LaSalle. We have lots of themes to talk about, including the general paucity of large fundraising activity, the elevation of club-style deals and M&A activity.
4 pm: Meeting at the Radisson Blu Hotel with an interesting new contact at Reviva Capital, which is based in Luxembourg. They are working on the assets of collapsed Icelandic bank, Glitnir, so we agree to talk again in the near future.
4:30 pm: Go to the Urban Land Institute’s stand to hear a presentation on European funds. The good news is the organization has published a report on the topic. The bad news is the presentation has been cancelled.
4:45 pm: Back to Café Roma to meet with someone from Dutch fund of funds group, Composition Capital. The sense is that the firm is going to be making investments again soon.
5:30 pm: Cocktails with RREEF aboard the Motor Yacht Alaska on the Jettee Albert Edouard. Gianluca Muzzi, managing director and head of RREEF Europe ex Germany, provides an update on the firm’s performance and milestones in 2010, as well as a preview of its strategy for this year.
7 pm: More cocktails and dinner with Credit Suisse’s Real Estate Private Fund Group at 38 the Restaurant in the Hotel Gray D’Albion. Global head Anthony Carpenito thanks the numerous private equity shops in attendance for their continued support during a difficult year.

Wednesday, March 9
9:30 am: Back aboard the RREEF yacht to meet with Pierre Cherki and Gianluca Muzzi. The chat is off the record, but suffice it to say that Asia is proving a fruitful place for capital partners.
11 am: Attend Cushman & Wakefield’s presentation on the global outlook for real estate investment in 2011. According to the firm’s panel of regional experts, investment activity is likely to exceed expectations and rise by 5 percent to 10 percent this year, with core yield levels likely to stabilise in North America and Europe. Things are looking up!
2 pm: Arrive fashionably late to Cushman & Wakefield’s beach party at the firm’s pavilion on C Beach, opposite The Grand Hotel along the Boulevard de la Croisette. Realise most of the food is gone and cut the visit short. Hoof it to a rented apartment near the Palais to discuss the latest in responsible investing with AXA Real Estate.
3:30 pm: Another coffee on a yacht, this time courtesy of Henderson Global Investors.
5 pm: Meet in a chilly outside area of the Majestic Hotel with one of the few Russian real estate funds with foreign investors. Still confused about Russia: is it about to take off or are there too many challenges?
6:30 pm: Attend Taxand’s cocktail party on the Plage Royale along the Croisette. Hear brief presentations from global real estate tax leader Keith O’Donnell and others on the latest tax issues impacting multinationals.
8 pm: Catch a shuttle to Villa l’Abri in the hills of Cannes for what will turn out to be arguably the most lavish bash of the conference – the WP Carey annual party. Live tigers! Opera singers! A four-piece band! All-you-can-eat oysters, duck breast and foie gras! Oh my!
11 pm: Wander the streets after returning from the WP Carey bacchanal and stumble upon a party sponsored by an undisclosed fund mananger at restaurant/nightclub Tantra. Drinking and dancing ensue until last call.

Thursday, March 10
3 am: Crash out back at the hotel for a few hours rest before it’s up and at ‘em time. Ouch!
8:30 am: Back to the Motor Yacht Alaska (again!!!) for PERE’s breakfast get-together of winners of the 2010 Global PERE Awards. In addition to our host RREEF, real estate pros from Rockspring, Aviva Investors, Hines, Apollo Global, CBRE Investors and GE Capital Real Estate all stop by.
2:15 pm: Meeting with Natale Giostra, head of UK and EMEA debt advisory at Richard Ellis, at the firm’s stand in the exhibition hall of the Palais. We discuss current real estate financing trends in Europe and how they may change as the year progresses. Note to self: good fodder for our magazine feature on financing this month.
3 pm: Attend a session on opportunities in the US property markets. A panel of US-based private equity real estate firms told the audience that US investment opportunities will move beyond the 24-hour international gateway cities to a “second tier of core markets” in 2011. Finally, activity outside New York and Washington DC!
5 pm: Seems all this talk of a double-dip recession hasn’t dampened the spirits at the stand of French city Rennes, where representatives were quaffing copious amounts of oysters and champagne.
7 pm: Arrive for cocktails with AEW Europe aboard the catamaran Lady Paca on the Jettee Albert Edouard. With work behind us, the PERE team can finally relax and enjoy its final night in Cannes.