MIPIM 2013 PREVIEW

FEBRUARY 2013

mipim

www.mipim.com The official MIPIM magazine

®

preVieW KEYNOTE

INNOVATION

Stark speaks out on prospects for recovery

MIPIM Innovation Forum points the way to the future

SEE PAGE 16

SEE PAGE 45

Also inside:

Investment • Industrial & logistics • Cities & urban development • Market insights • Hotels • Sports & leisure • Residential • Retail • Awards...

ADVERTISING

Adding value

We feel at home in Public Sector and Real Estate Finance in Germany and Europe. As a specialist bank, we have both extensive experience and the necessary skills to support your projects. Efficient structures and processes provide a client focused culture. www.pfandbriefbank.com

Visit us at MIPIM, Stand No. R33:20

WOWOBAU Residential Assets “Mein Aubing”, Munich € 46 million

Plaza Global Real Estate Partners Prime Office Building £ 106 million

Investment Financing Germany December 2012

Acquisition Refinancing London, UK December 2012

AB Sagax Light industrial & warehouse portfolio SEK 4,300 million

JPMorgan European Property Fund 6 Place d’Alleray € 96 million

Investment Financing Sweden & Finland December 2012

Senior Loan, pbb as Facility Agent Paris, France January 2013

Ready to refurbish However attractive a shopping center may be, it will lose its appeal one day. We will be there for you: ECE is the refurbishment expert – improving, extending, revitalizing, and setting new, thriving trends. We are currently planning and realizing extensive refurbishments for a total of 15 shopping centers with excellent value creation potential. In the next few years, MIPIM t all these centers will celebrate a glamorous reopening – attracting a multitude of a s u t Visi visitors once again. d 16.01

Stan

Shopping | Office | Traffic | Industries ECE Projektmanagement G.m.b.H. & Co. KG Heegbarg 30, 22391 Hamburg, Germany Phone: +49 (0)40 60606-0, Fax: +49 (0)40 60606-6230 www.ece.com, info@ece.com

EDITORIAL

COntents i nEWs

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Turkey Country of Honour

Filippo Rean Director of MIPIM & MIPIM Asia

W

ELCOME to MIPIM 2013, where some 20,000 leading real estate executives, including over 4,300 investors, will come together to conduct business, form or renew acquaintances and discuss the key international property issues.

In a challenging economic climate, MIPIM will focus on providing delegates with the platform to consolidate their business and identify new opportunities.

Some of the high growth real estate markets of the moment, including Brazil, Turkey and China, will be showcasing their major projects to investors seeking to diversify their portfolios.

And of course, we’ll also be welcoming familiar faces and new and exciting projects from the traditional MIPIM nations of Western and Eastern Europe and the United States.

The conference and events programme is set to provide delegates with networking and business opportunities during MIPIM’s four days. REInvest, the MIPIM Real Estate Institutional Investors Summit, returns for a second year, gathering over 35 of the world’s leading sovereign wealth funds and pension funds for closeddoor talks on real estate strategies in 2013.

To help us all understand the global economic situation, we are proud to welcome keynote speaker, leading German economist and former member of the executive board at the European Central Bank, Dr Jürgen Stark.

This year we have introduced a new area dedicated to sustainable cities, architecture and property management, the MIPIM Innovation Forum, comprising of an exhibition area, a 20-session conference programme and networking opportunities.

2013 sees Turkey as the MIPIM Country of Honour, with the country’s Deputy Prime Minister, Ali Babacan inaugurating the Turkish Pavilion.

In this Preview magazine, you can discover what this year’s MIPIM has to offer, read about key trends and issues affecting the real estate community that will be at the centre stage of MIPIM delegates discussions and get an early insight into what our conference speakers will be discussing.

I hope you find it an enjoyable and informative read and the MIPIM team looks forward to welcoming you in Cannes.

i focus

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Investment • The funding gap • Legal & General Property

38 42

MIPIM innovation forum • Office refurbishment

45

Industrial & logistics • The omni-channel challenge • SEGRO in profile

51 54

Cities & urban development • Aedas in profile • Urban infrastructure investment

56 58

i market insights France UK Germany Russia

63 64 67 71 74

i sector insights

77

Hotels Sports & leisure Residential Retail

79 / 83 85 89 93

i conferences

95

iawards

101

itips&serVices

107

Programme of conferences and events

Visit our awards pages to view this years entries from across nine categories

www.mipim.com I preview magazine I February 2013 I 3

What’s on in Oslo? nd a t s t a s Meet u 4 2 .

5 1 / 3 2 13.

More than anywhere in Europe. If you want to keep up on the latest developments and investment opportunities in the fastest growing region in Europe, visit our website oslomipim.no

nEWs TURKEY

MIPIM rolls out red carpet To mark Turkey’s role as MIPIM 2013 Country Of Honour, the Turkish Pavilion in Cannes will be visited by the country’s Deputy Prime Minister, Ali Babacan

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Discover Turkey in a dedicated pavilion specially designed to highlight top Turkish real estate players, with a dedicated programme of conferences and events – full conference programme on page 95 6I

preview magazine I February 2013 I www.mipim.com

© Photograph: Sebastian Derungs

N MAY 2012, the Turkish government abolished a rule that banned certain foreigners from buying property. This change of legislation should stimulate realestate investment in the country. Indeed, GYODER, the Turkish Association of Real Estate Investment Companies, estimates that the change could open the floodgates to as much as $10bn of new investment a year.

And investors seem hungry to take advantage of the opportunity. The latest Emerging Trends In Real Estate survey by PwC and the Urban Land Institute found that Istanbul is the most attractive destination in Europe for new investments and developments for the second year running. The investors polled by PwC highlighted hotels as the most attractive sector in Turkey in the short term. For long-term investment, they voted care centres, data centres and hospitals as attractive asset classes.

“Above all, we have chosen Turkey as our Country Of Honour this year because of its strong potential and extensive market opportunities,” said Filippo Rean, director of MIPIM. “MIPIM provides an opportunity to find out more about a highly dynamic country that is increasingly attracting the international real-estate market.”

The Turkish Pavilion will play host to Agaoglu, Globe International, Is REIT, Konutder, NEF, Nurol REIT, Proplan, Proje Yönetim, Tahincioglu, TSKB, Vadistanbul, Vicem. In addition, conferences dedicated to the opportunities in Turkey will be held throughout the MIPIM week, focusing on the upsurge in office real-estate, hotel developments, and investment prospects and opportunities in the Turkish market.

As part of the MIPIM Awards, a special prize will also be awareded to a Turkish project.

Deputy prime minister Ali Babacan will open Turkey’s MIPIM 2013 Pavilion

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i neWs TURKEY

C&W BOOSTS TURKISH PRESENCE ACCORDING to Cushman & Wakefield, Turkey has the fastest economic growth rate in Europe and, as a result, the real-estate advisor is stepping up its operations in the country.

While less affected by the global financial crisis than most other parts of the world, Turkey has also recovered faster than most other territories. Its mean annual economic growth rate between 2002-2006 was 6% — and its GDP growth rate in 2011 was 8.5%. Per

capita, GDP has also tripled in the last 10 years, from $3,400 to £10,400 [DOLLARS OR STERLING?].

And using the measure of Purchasing Power Parity (PPP), Turkey’s GDP per capita is now over $16,000.

C&W has strengthened its Turkish team in recognition of the pivotal role now being played in the world economy by the regional giant.

Togrul Gonden and Tugra Gonden have joined Cushman & Wakefield from Jones Lang LaSalle.

Togrul Gonden, who was previously director and head of retail property and asset management for JLL in Russia, becomes managing partner for Cushman & Wakefield in Turkey.

Tugra Gonden, who was previously a director for commercial markets at JLL in Turkey, becomes Cushman & Wakefield’s head of office and industrial in Turkey.

Gondon: Cushman & Wakefield’s new managing partner for Turkey

FOCUS ON TURKEY

Multi ready to talk Turkey with world’s top investors For Multi Corporation chief Heino Vink, Turkey is key to the company’s growth plans, with €700m earmarked for investment MULTI Corporation is one of the leading shopping-centre developers, shopping-mall managers and investors in Europe, as well as a major force in the dynamic Turkish market.

“For Multi, MIPIM is the ideal place to organise meetings with all the professionals we look forward to doing business with, or with whom we already do business,” said Heino Vink, the company’s CEO. “The most important investors and city representatives are present at MIPIM.” Vink added that, with Turkey being MIPIM’s Country Of Honour this year, there is an even stronger reason for Multi Corporation to be present in Cannes.

Multi is currently investing €700m in new developments in

Multi Corporation’s Heino Vink: “Turkey is a very interesting market”

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preview magazine I February 2013 I www.mipim.com

Turkey. “Construction will start within the coming months on Forum Adana, Forum Diyarbakir and Forum Canakkale,” Vink said.

Construction on Forum Corum and Forum Elazıg is scheduled to start soon after.

LOW RETAIL-SPACE RATIO According to consultant Cushman & Wakefield, Turkey has the low ratio of 72 sq m of retail space for every 1,000 inhabitants, which compares with an average of 240 sq m the European Union.

“So for Multi Corporation, Turkey is a very interesting market,” Vink added. “Our Forum Turkey Fund [FTF] owns a large commercial real-estate portfolio in Turkey, consisting of seven up-and-running shopping centres and one that is under construction.

All of these projects were developed by Multi and have made FTF the leading retail fund in the country.”

Over €600 billion in commercial property traded globally in 2012 Come discuss the transactions and trends with RCA’s team

Simon Mallinson Exec Managing Director smallinson@rcanalytics.com

Steve Williams Exec Managing Director swilliams@rcanalytics.com

Find out why CRE professionals around the world look to Real Capital Analytics as the premier source of commercial property information and data Join in the discussion “Why is the United States So Attractive to Global Investors?”

Wednesday 13th March 17.30-18.30 in room Audi A Moderated by RCA’s Simon Mallinson

Joseph Kelly Director, Market Analysis jkelly@rcanalytics.com

Bryan Grad SVP, Sales

bgrad@rcanalytics.com

THE PANELISTS INCLUDE: Chris Ludeman

Bernard Haddigan

Jim Fetgatter

Will McIntosh, PhD

President, Capital Markets CBRE CEO AFIRE

Nidhya Ramasubbu Client Services

nramasubbu@rcanalytics.com

Monica Wolfson Director of Sales

mwolfson@rcanalytics.com

To schedule a meeting at our stand please contact: Henny De Pelet: +44 (0) 207 297 6860 service@rcanalytics.com

www.rcanalytics.com New York | London | Silicon Valley

Principal Haddigan Capital

Global Head of Research USAA

Visit us at MIPIM Stand 11.30

i neWs TURKEY

TURKEY REMAINS PRIORITY FOR ECE GERMAN investor ECE continued its rapid push into the Turkish market in late 2012 with the opening of the €220m Marmara Park shopping centre in

Beylikduzu-Esenyurt, Istanbul. The scheme, owned in a joint venture with DWS, has a leasable area of 100,000 sq m, making it one of the largest

The 100,000 sq m Marmara Park shopping centre in Beylikduzu-Esenyurt, Istanbul

shopping centres in Turkey. In addition to 250 shops, it includes an indoor Bauhaus market and a Real Hypermarket, as well as 4,000 parking spaces.

With the Marmara opening, ECE’s Turkish portfolio has grown to 11 centres from a standing start in 2000. The company now serves 1,800 retail partners operating from 600,000 sq m.

ECE Turkiye also manages MetroCity, Migros Beylikduzu, CarrefourSA Bahcepark, CarrefourSA Maltepe Park and Neomarin in Istanbul; ANKAmall in Ankara; CarrefourSA Karsiyaka in Izmir; the Migros-Center and TerraCity in Antalya; and the Espark in Eskisehir.

And together with Carrefour, ECE is currently extending the existing Maltepe Park in eastern Istanbul by 44,000 sq m to a total leasable area of 75,000 sq m,

housing 250 shops. The extension is planned to be completed by the third quarter of 2013.

So why has ECE made expansion into Turkey such a priority? “For us as a shopping-centre developer and operator, Turkey is one of our most important markets and provides excellent opportunities for investment in the medium and long term,” an ECE spokesperson said. “This applies to new developments as well as to investments in existing shopping centres that can be refurbished and extended. Turkey is one of the fastest growing markets and is of great interest to many international investors. The country’s growing population, its young average age and its consumer behaviour are all very positive characteristics.”

TURKEY

The Cologne-Turkey connection COLOGNE’s links with Turkey are being celebrated at MIPIM this year.

Cologne is the second largest Turkish centre in Germany. Around 81,000 people with a Turkish passport or a Turkish background live in Cologne and, at 40%, represent the largest foreign group within the city’s population.

As a result, Cologne attaches particular importance to the development of business relations with Turkey. A Turkey-oriented business initiative was started in 2008, part of which is a ‘Turkey desk’ to provide information about the location advantages of Cologne and the special offers available to interested parties. The desk also helps with company formation and the arrangement of real-estate and co-operation partners. A special service is the optimisation of the approval procedure for company relocation, which ensures that applications are processed within four weeks from the submission of completed visa documentation.

Active across most business sectors, Cologne’s community of Turkish companies includes Guven Brot Backwaren, Turkiyem Lebensmittel Fleisch, Egeturk, Oz-Yufka Teigwarenproduktion, Turkish Airlines and Turkcell Europe.

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Cologne companies are also aiming to make their presence felt in Turkey. Cologne-based Convalor Beteiligungs-und Verwaltungs won the competition to design the 18,000 sq m Hilton Garden Inn Istanbul Golden Horn. Convalor developed the new hotel building in partnership with the Turkish project development company

Amplio Real Estate Investments.

The 210-room hotel, which opened at the end of 2011, is located in an area of Istanbul that is currently being transformed from its primarily industrial use into a residential district in the context of an extensive urban-renewal programme.

Cologne-based Convalor developed the Hilton Garden Inn Istanbul Golden Horn in partnership Turkey’s Amplio Real Estate Investments

preview magazine I February 2013 I www.mipim.com

CIT Y OF THE FUTURE CZECH REPUBLIC

2013 ( Stand # 08.24 – 10.23 )

Stand # 08.24 – 10.23 Come and taste genuine Moravian wine!

You are cordially invited to a reception hosted by the City of Brno and its partners on Wednesday, March 13, at 4.30 p.m. The reception is organised under the auspices of Lord Mayor Roman Onderka.

General partners

Partners www.brno.cz

© iStockphoto.com/holgs

COME TO VISIT BRNO AT MIPIM 2013

i neWs LONDON MAYOR

JOHNSON PLEDGES REGENERATION FOR LONDON LONDON’s Mayor Boris Johnson told MIPIM News of his plans for MIPIM 2013 when he will again lead the London delegation. He gained worldwide profile during the 2012 Olympic Games, which took place only weeks after his was re-elected for a second term in office.

Johnson made attracting inward investment one of the key priorities for his second term. “The Mayor and the LDA [London Development Agency] are determined to promote London even more effectively overseas, capitalising on its position as one of the world’s ‘big 3’ in finance, alongside New York and Tokyo, and developing a brand that powerfully projects London as the vibrant modern city it is,” he explained.

London Mayor Boris Johnson

And he pledged to use his position to encourage new development across the UK’s sprawling capital city. “The Mayor and the London Assembly has a role in all sorts of things,” he told MIPIM News, “but our principal role has been to ... use our powers to get to the point where the urban landscape is suitable for development.”

And he made it clear that was about social, as much as economic regeneration. “The overwhelming evidence is that when you get development it drives business. It brings people to the area and creates economic activity,” he said. “We’re seeing massive investment in London at places like Croydon and Battersea, where it’s been very difficult to get things moving.

But suddenly it’s coming together.”

MIPIM INNOVATION FORUM

Modelling the building of the future THE MIPIM Innovation Forum will host part of the ‘Porous city – Open the tower’ exhibition which formed part of the Venice Architecture Biennale.

The installation, by The Why Factory, includes nine 1:100 scale models of towers built out of white lego bricks. Designed to investigate possible new relationships between mass and void in large-scale architecture, they each have a preset proportion of 50% of each.

The Why Factory is a global think-tank and research institute, run by MVRDV and Delft University of Technology and led by professor Winy Maas. The Why Factory’s Future Cities research programme explores possibilities for the development of cities by focussing on the production of models and visualisations for cities of the future.

According to professor Maas, the results represent the first step in exploring new ways in which porosity could define novel building typologies, which could allow for a deeper penetration of the built structures with the public sphere in the vertical and volumetric sense.

The MIPIM Innovation Forum will be hosted in the Gare Maritime, next to the Palais des Festivals.

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The Porous city RELATED CONFERENCE DURING MIPIM ’Can skyscrapers be sustainable?’ moderated by Winy Maas. Wednesday, March 13, 10.00 -11.00 MIPIM Innovation Forum – Gare Maritime

preview magazine I February 2013 I www.mipim.com

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BREEAM – Driving sustainable real estate across the world

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See us in the MIPIM Innovation Forum

i neWs MIPIM KEYNOTE

ROUND TABLE

Juergen Stark breaks silence

ITALY RELOADED

ONE YEAR after he resigned from the Eu rop ea n Cent r al Bank (ECB), leading German economist Dr Juergen Stark will return to the international stage with an address to MIPIM delegates on the financial crisis in Europe and how member states can pull themselves out of the downturn.

Dr Stark was a member of the ECB Executive Board from 2006 to the end of December 2011.

A secretary of state in the German Federal Ministr y of Finance from 1995 to 1998, he was the personal repreMIPIM keynote speaker Dr Juergen Stark sentative of the Federal Chancellor during preparations for the G7/G8 economic summits. He then worked for the Deutsche Bundesbank as vice-president in charge of European and international affairs.

Known in Europe for his forthright views, Dr Stark resigned from the ECB in December 2011 in protest at the ECB policy of buying bonds issued by countries on the periphery of the eurozone. He then advocated the creation of a board of experts to monitor the budgets of member countries as the forerunner to a European ministry of finance.

Dr Stark said: “The break came in 2010. Until then, everything went well.

Then the ECB began to take on a new role [and] to fall into panic. It gave in to outside pressure from outside Europe. If the global economy stabilises, the potential for inflation has grown enormously. Governments have recognised that returning to budgetary discipline is indispensable.”

A year after his resignation created a stir in European economic circles and raised doubts about the single currency, Stark has chosen MIPIM as the platform for his first formal speech, since his departure from the ECB, about the current financial climate — a crucial factor for the future of the real-estate sector. His address will take place on Thursday, March 14.

RELATED CONFERENCE DURING MIPIM Join Dr Jürgen Stark for his first official speech since resignation from the European Central Bank ’The global economic outlook and the EU financial crisis’ Thursday, March 14, 10.00 -11.00 — Grand Auditorium 16 I

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LAW firm Studio Legale Chiomenti will host a MIPIM round-table conference as part of Italy Day on March 14, attended by some of the top players in the Italian real estate industry. Among the topics to be covered at the session, entitled Italian Real Estate Reloaded, are the valorisation of public assets and the rotation of foreign investors as drivers of investments in Italian real estate.

Studio Legale Chiomenti provides

integrated legal advice in the corporate, banking, finance, capital markets, tax, administrative, employment, EU, trusts and antitrust, public utilities, copyright, financialmarket regulation and intellectual property practice areas. The firm, which employs 270 attorneys and tax advisers, has offices in Rome, Milan, London, Brussels, New York, Beijing, Shanghai and Hong Kong.

INVESTMENT

Major US cities top institutional investors’ wish list FOUR of the top five property investment targets for institutional investors are in the US, according to a new survey from the Association of Foreign Investors in Real Estate (AFIRE). The top five global cities are: New York, London, San Francisco, Washington DC and Houston.

This is the first time the annual foreign investment survey among AFIRE’s

membership has shown such a strong focus on the US, according to chairman Christoph Kahl, founder of Jamestown US-Immobilien.

The biggest survey news from outside the US is the emergence of Turkey as one of the top four markets targeted for capital appreciation and the thirdranking among the emerging countries selected for AFIRE members’ investment dollars. In the US, the preferred product type remains multifamily housing, as it has been for the past five years.

AFIRE is a not-for-profit association headquartered in Washington DC. Founded in 1988 by Dutch pension funds, the association’s membership consists of approximately 200 institutions from 21 countries that have an estimated $2.0 trillion under management globally. Full AFIRE membership is restricted to nonUS institutions investing into the US real-estate market as principals.

AFIRE’s board and leadership are controlled by these institutions.

AFIRE chairman Christoph Kahl: strong focus on the US

NORDRHEIN-WESTFALEN

MORE THAN A PROMISE. The best addresses are to be found in NORDRHEIN-WESTFALEN | NRW (North RhineWestphalia), Germany‘s No. 1 investment location: high consumer demand, social stability and low volatility in

of¾ce, retail and residential real estate. ([cellent commercial ]ones are complemented by innovative architecture, outstanding connections and a high Tuality of life. ,nterested" 'iscover further e[amples of e[cellence at our booth at MIPIM 2013. Or visit us at www.nrwinvest.com

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i neWs NEWS IN BRIEF

URBAN DEVELOPMENT

INVESTORS IN RETAIL

Bessan’s new Helios district is golden investment opportunity

CBRE Global Investors will be back at MIPIM 2013 with a 30-strong team. The key focus this year will be on the depth and expertise of its retail platform, as well as its separate account business and various areas of expertise. It is a leading investment manager in Europe, the Middle East and Africa (EMEA), with €13.9bn of non-listed retail assets under management. Its portfolio includes 414 retail assets — of which 132 are shopping centres — across 15 countries and over 7,800 retail tenants.

Individual clients and funds are managed by focused investment teams, which are responsible for executing a single strategy, fund series or account.

Each team employs the same research-based investment management process to maintain consistency and performance.

The business also has a strong track record in separate accounts and, with a number of Asian pension funds awarding CBRE Global Investors mandates in 2011/12, the focus will be on promoting its strength in managing these accounts and meeting its clients’ requirements.

Retail development in Liege, a key sector for CBRE Global Investors

SPOTLIGHT ON CEE AND SEE To highlight the increasingly important real-estate markets in Central, Eastern and South-Eastern Europe, MIPIM will be staging an afternoon conference on the CEE and SEE regions on Tuesday, March 12.

MIPIM’s partner in sponsoring the conference is CEEQA, the Central & Eastern Europe Real Estate Quality Awards.

The afternoon’s programme, which starts at 14.30, is as follows: 14.30-14.50 Introductory keynote speech 14.50-15.40 Finance In CEE: Forward Perspectives For Debt And Equity Finance In An Uncertain Climate 15.40-16.10 Coffee break 16.10-17.00 Panel conference on Development – what does the future hold?

17.00-18.00 Cocktail party in the Grand Auditorium Verriere.

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Scheduled for delivery in 2015-2016, the 67,000 sq m Helios project will create a new urban district in the city of Bessan, a 20-minute drive west of regional capital Montpellier CFA Midi-Pyrenees/Groupe Financiere Duval’s Helios project in Bessan

“Within four to five years, Bessan’s population will double”

THE NEW Helios urban district is a response to the rapid growth of the population of Bessan, according to Alexandre Malavielle, deputy general manager in charge of the economic development of the Communaute d’Agglomeration Herault Mediterranee.

“Within four to five years, Bessan’s population will double,” Malavielle said, explaining that a population increase of 30%-plus is expected in the next 10 years — the highest in France.

Developed by CFA Midi-Pyrenees, a subsidiary of Groupe Financiere Duval, Helios is located on the Mediterranean coast, close to Montpellier and the resort of Cap d’Agde. The catchment within a three-hour drive includes Barcelona and Clermont-Ferrand and comprises more than 10 million people.

Spread over an 11 ha park, Helios will include 31,000 sq m of retail, featuring mediumsized stores, boutiques, restaurants and three

Spread over an 11 ha site, Helios will serve as “the showcase” of the Herault Mediterranee region

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covered markets; 3,700 sq m of office space and services; 27,000 sq m of business facilities; and 3,500 sq m of hotels.

“Marketing started last autumn, but we foresee a peak during MIPIM. We will take this opportunity to explain the project and its various assets,” said Jean-Philippe Amic, director of CFA Midi-Pyrenees.

Malavielle added: “Helios will be the showcase of the region. We hope to attract national companies and brands, as well as local companies drawn by the dynamism of our region. We will be coming at MIPIM with a whole array of ready-made solutions for investors.”

Groupe Financiere Duval specialises in mixeduse programmes in the city centres. Other development programmes are currently under way in Limoges, Castres, Reims, Nimes, Salon-de-Provence, Maubeuge and Rennes Metropole.

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i neWs HAMBURG DEVELOPMENT CORPORATION

Hamburg makes a move — and sets a green example THE HAMBURG Development Corporation will unveil its new home at MIPIM this year: an imposing stand in the Lerins Hall. Its new neighbours will include the stands of Germany’s North RhineWestphalia region, real-estate advisor Jones Lang LaSalle, and the cities of Luxemburg, Gdansk and Warsaw.

For the first time, the Hamburg stand will offer an interactive map of the city displaying current projects. It will also feature a ‘virtual news agent’, allowing direct access to digitised image folders and literature on the participants included in Hamburg’s presentation. Hamburg’s decision to digitise content to reduce printed advertising material underlines its commitment to the environment and is intended to set a positive example to other exhibitors.

Hamburg has also teamed up with The Urban Land Institute (ULI) to create a series of events at its new stand.

Hamburg Development Corporation’s partners on the stand include both old hands and first-timers: ECE, HafenCity, Ludger Inholte Projektentwicklung, Angermann, Robert C Spiess, Deutsche Immobilien, Dr Helmut Greve Bau und Boden, Grossmann & Berger, Hamburger Sparkasse, Hansainvest - Hanseatische Investment, Procom Invest, Quantum Immobilien and Wolbern Invest.

A new MIPIM location for The Hamburg Development Corporation 20 I

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ONE STOP FOR ITALY TWO ITALIAN trade associations — ANCE and ICE — will take a joint stand at MIPIM 2013. The stand will provide a networking base, a meeting venue and a focus for keynote presentations.

Both ANCE, the Italian national association of construction companies, and ICE, the Italian trade promotion agency, will be attending MIPIM for the second time this year.

Italian construction companies are also

being invited to hold their own networking activities, events and meetings at the stand, using it as a platform to promote their brands and showcase their latest development projects.

The stand will also host presentations by leading developers on topics including energy efficiency, smart buildings and investment, innovation and technology, and smart cities. ë ,7$/< '$< is Thursday, March 14

INSPIRATIONAL ARCHITECT

Jurgen Mayer keynote Jurgen Mayer’s border checkpoint in Sarpi, Georgia

$:$5' ZLQQLQJ DUFKLWHFW -XUJHQ 0D\HU is to give one of the keynote addresses at The MIPIM Innovation Forum.

0D\HU IRXQGHG - 0D\HU + $UFKLWHFWV LQ 1996 in Berlin and the studio focuses on works at the intersection of architecture, communication and new technology.

5HFHQW SURMHFWV LQFOXGH WKH YLOOD 'XSOL Casa near Ludwigsburg, Germany; Metropol Parasol, the redevelopment of the Plaza de la Encarnacion in Seville,

6SDLQ WKH UHVLGHQWLDO EXLOGLQJ -2+ LQ Berlin; and several public and infrastructure projects in Georgia, including the airport in Mestia, the border checkpoint in Sarpi and two rest stops along the motorway in Gori.

From urban planning schemes and buildings to installation work and designs with new materials, the relationship between the human body, technology and nature lie at the heart of Mayer’s unique approach to space.

i neWs NEWS IN BRIEF

CITY SCHEMES AIM HIGH

AAREAL BANK: 90 NOT OUT

Grenoble’s economic buoyancy reflected in development slate

AAREAL Bank, celebrating its first 90 years at MIPIM this year, started business in Berlin in 1923.

It ascribes its staying power to its belief that a bank must be both flexible while also standing firm on its values, the most important of which is trust.

This approach has made Aareal Bank what it is today: a leading international property specialist, operating in more than 30 territories on three continents: Europe, North America and Asia. The bank has been providing finance to this year’s MIPIM focus country, Turkey, for more than 10 years and has a representative office in Istanbul.

Over the course of its 90-year history, Aareal Bank’s core strengths — local market and property expertise, personal contact and precise analysis of its customers’ needs, and ongoing client support — have remained constant.

The French Alpine city of Grenoble returns to MIPIM after a six-year break — but with no gaps in its portfolio of investment-friendly property schemes

MIPIM is sponsoring the first issue of the ESSEC Real Estate and Sustainability Chair workbook — Real Estate And The Changing Society: Ideas For The City Of Tomorrow — which brings together European experience on how innovations are gradually shaping the city of tomorrow.

The first issue of the book, a bilingual edition in French and English, will be published and distributed free in e-document format (interactive PDF and ibooks Author) during MIPIM. The publication benefits from the support not only of MIPIM, but also of the three partners of ESSEC’s Chair for Real Estate and Sustainable Development: Poste Immo, Fonciere des Regions and Form’a.

This first issue of the workbook takes a look at the changes in society and real estate that are transforming the urban environment. Interviews with 20 academics and property experts highlight the issues facing the various real-estate sectors in today’s rapidly evolving society.

MIPIM sponsors ESSEC’s new sustainability workbook

Scan here to receive your copy of the workbook 22 I

©Mark Buscail/tous droits réservés

SUSTAINABILITY

BY THE BOOK

Grenoble: back at MIPIM after a six-year gap A REGULAR MIPIM participant for many Projects include the GIANT — Grenoble years, Grenoble will be back in Cannes to Innovation for Advanced New Technologies demonstrate how its economic dynamism and — programme. innovative property developments have earned Also to be showcased at MIPIM is the E splanade district at it European city status. the north-west entry to Two new tramlines are G renoble, wh ich ha s under construction. The “Grenoble’s designed, like the 11 km E line runs northinnovative property been Presqu’ile scheme, by south, while the B line exdevelopments have Christian de Portzamparc. tension now runs to the Other key projects include earned it European centre of the new 250 ha Grenoble’s completely rePresqu’ile district. The latcity status” designed central train stater — designated an ‘ecotion, the Parc d’Oxford city’ — consists of urban, scientific, academic and economic developments business park, and Portes du Vercors, a 60 ha mixed-use urban development at the foot of in which €1.3bn will be invested over 15 years.

The new Presqu’ile campus to the west of one of the three spectacular mountain ranges Grenoble city centre is aiming for world-class surrounding the Alpine city. One of the surinnovation status in information and commu- rounding ranges, the Vercors, will be linked to nication technologies, energies of the future, Grenoble by an 11.5 km cableway — an all-seathe environment, biotechnology and health. son, eco-friendly, soft transport link.

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energy services

environmental services

natural gas

electricity

GDF SUEZ actively contributes to the development of sustainable cities throughout the world by using technological innovation to serve people and their well-being, as well as fully respecting environmental standards : Heating, hot water, waste management and recovery, home automation, maximum energy efficiency for buildings, etc.

Bordeaux, Barcelona, Nanterre, AngoulĂŞme, London, Balma, Casablanca, Amsterdam, Tianjin and more, have already involved GDF SUEZ in their urban renovation projects.

GDF SUEZ HOSPITALITY SUITES, LEVEL 3, HALL DEBUSSY

gdfsuez.com

i neWs SUSTAINABILITY

UK CITY FOCUS

HOBALLAH TO SET OUT UNEP’S AGENDA FOR RESOURCEEFFICIENT CITIES

Coventry marks 20th MIPIM with partnership initiative

PRESENTING one of the keynote speeches at this year’s MIPIM Innovation Forum will be Arab Hoballah, chief of the sustainable consumption and production branch of the United Nations Environment Programme’s (UNEP) division of technology, industry and economics.

UNEP co-ordinates the UN’s environmental activities, assisting developing countries in implementing environmentally sound policies and practices.

Hoballah will touch on a series of issues of vital importance to the built landscape and its impact on the urban environment. By 2050, more than two-thirds of the world’s population, of the resources consumed and of the waste produced will be in cities. The conditions for urban inhabitants in terms of employment, environment, health, education and overall quality of life not only depend on how urbanisation is planned and managed, but also how cities process and use resources.

The decisions and actions needed to move society towards more sustainable patterns of consumption and production will have to be decided and implemented by cities. There are genuine opportunities for national and city leaders to contribute to sustainability by improving resource efficiency, reducing carbon emissions, minimising environmental risks and enhancing ecosystems, Hoballah will say.

To respond to these challenges and develop opportunities, UNEP has launched the Global Initiative For Resource-Efficient Cities, a collaboration of stakeholders concerned about cities’ resource efficiency, and sustainable consumption and production. The initiative seeks to connect different entities around the world, mobilising partners at the international, national and local levels.

The ultimate goal of the initiative is to decouple quality of life and growth in the cities from resource use and environmental impact, and to distil resource efficiency, and sustainable consumption and production into policies and tools aimed at changing policy and the habits of both citizens and business.

Coventry will have its strongest ever presence at this year’s MIPIM, marking the 20th year in succession that the UK city has attended the world’s largest commercial real-estate exhibition

RELATED CONFERENCE DURING MIPIM Keynote panel on energy efficiency

by Arab Hoballah, Chief Sustainable Consumption and Production, UNEP and Gaetan Siew, CEO, Global Creative Leadership Institute Tuesday, March 12, 14.15 -15.00 MIPIM Innovation Forum Gare Maritime 24 I

The UK city of Coventry: working hard to “secure new developments and investment” COVENTRY has pioneered a partnership doubt that the MIPIM partnership benefits approach to MIPIM that sees private-sec- everyone. But most importantly, of course, it tor developers and other related businesses benefits the city, which is what our attendance come together under the banner of the MIPIM is all about.”

Coventry will be showCoventry Partnership. casing its City Centre This approach has enSouth development, sured that the city’s “It’s vital that we are at which it has been workMIPIM delegation has, MIPIM, shouting loud ing on in partnership in recent years, been with Aviva. The £300m cost neutral to the city about what a fine city plan will create 52,000 council. we are for business sq m of retail and leiCouncillor Lynnette and investment” sure floorspace, includKelly, cabinet member ing an anchor store, a for Coventry city devel1,200-space car park, a opment, said: “There is strong competition to secure developments cinema complex, a hotel, apartments, and new during these difficult times, so it’s vital that we and refurbished retail units. are at MIPIM, shouting loud about what a fine Other projects set to figure prominently are the city we are for business and investment. You Friargate mixed-use development, which will have to go out and fight hard to secure new de- create 300,000 sq m of commercial space; and velopments and investment, and there is no Barberry’s Bishopgate retail scheme.

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i neWs BRAZIL

INVESTORS JOIN THE RIO CARNIVAL THE STATE and city of Rio de Janeiro will attend MIPIM this year, at a time when both Brazil and Rio are coming into greater world focus. Brazil is not only a rising economic star as one of the BRIC countries, but its biggest city will host the Football World Cup in 2014, and the Olympic and Paralympic Games in 2016.

According to the state’s promotional body, FIRJAN (Federation of Industries of Rio de Janeiro) System, a series of investments are well under way in Rio to ensure the success of the world’s three major sporting events, as well as securing the city’s continued prosperity.

FIRJAN System is composed of 104 syndicates, including SINDUSCON-RIO, which brings together construction companies and plays a major role in interfacing with public bodies.

The huge figure of $120bn will be spent on investment in Rio de Janeiro city and state between 2012 and 2014. This is made up of public and private

Rio de Janeiro: preparing to host the 2014 Football World Cup, and the 2016 Olympic and Paralympic Games investment, both domestic and foreign.

Of the total, $85bn relates to industrial investment, including oil facilities, steelworks, car factories and

manufacturing.

Some $29bn will go directly into infrastructure and, of this, $12bn will be earmarked for transport and

CANADA

Montreal on the up and up THANKS to its diversified economic base and its status as a gateway to North America, the Canadian city of Montreal has a positive story to tell inward investors.

“We did not experience an economic trough,” said Jacques Saint-Laurent, president and CEO of the public-private inward-investment agency Montreal International. “Canada’s conservative approach meant that it didn’t have a bubble.”

According to Saint-Laurent, vacancy rates for class A and B downtown offices have fallen from 7.7% to 5.8%. “We are now seeing a rebound in construction, with €13bn of projects under way,” he added.

Montreal International’s pitch to inward investors takes a two-pronged approach. “We can offer a quality of life that’s second to none, 26 I

but you also have to build the business case — and here we have succeeded by focusing on commercial clusters, such as aerospace, health sciences, IT and communications,” SaintLaurent said.

Looking ahead, the Montreal International chief said Quebec’s abundant natural resources are attracting increasing global attention, with the new Plan Nord economic, social and environmental project looking to open up prospecting north of the 49th parallel.

“The theme we have developed is that Montreal is a safe and reliable city in which to diversify your portfolio,” Saint-Laurent concluded.

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Montreal International’s Jacques Saint-Laurent: “a rebound in construction”

logistics. The most important of these schemes are metro line 4 ($2.4bn), which will connect the south zone to the west zone of Rio de Janeiro; and the deployment of the Bus Rapid Transit (BRT) system ($1.6bn).

In the maritime sector, the main investments comprise the construction of the Acu Port complex ($1.5bn), the expansion of the port of Rio de Janeiro ($0.8bn) and the construction of the Sudeste port ($0.7bn).

There are two stand-out urban development schemes: the $2.7bn Porto Maravilha project, which will revitalise Rio’s port area; and the $1.2bn Morar Carioca slumredevelopment programme.

Investment in the 2014 World Cup and the 2016 Olympic and Paralympic Games stands of $10.1bn, of which $4.9bn will be used for projects in the public and private sectors, including hotels, infrastructure and the construction of football and Olympic facilities.

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RELATED CONFERENCE DURING MIPIM Keynote address by Caroline Barat, Architect, Agence Search, Philippe Chiambaretta, Architect, Philippe Chiambaretta / PCA, Jürgen Mayer, Principal, J. Mayer H. Architects and Ihsan Murat Tabanlioglu, Founding Partner / Architect, Tabanlioglu Architects – co-organiser: Lordculture.

Thursday, March 14, 11.15 - 12.15

ARCHITECTURE KEYNOTE

BARAT SHARES DESIGN PHILOSOPHY CAROLINE Barat, co-founder of architectural design house Agence Search, is to give a keynote speech at the MIPIM Innovation Forum.

Barat will outline the design essentials of a series of recent Agence Search projects, including the Mantes-La-Jolie Water Sports Centre, an urban renewal project along the river Seine; the Maison des Sciences de l’Homme, a social-sciences and media research centre; the Condorcet Campus to the north of Paris; and the Francois Pinault Foundation’s travelling exhibitions in Lille and Moscow.

Barat and Thomas Dubuisson founded Paris-based Agence Search in 2005. In 2006, the firm won the Nouveaux Albums de la Jeune Architecture (NAJA), a prize awarded by the French

culture and communication ministry.

Agence Search has since grown to become a 10-strong team specialising in

large-scale public architecture. Its commissions cover a wide range of building types, including cultural

Agence Search’s Maison des Sciences de l’Homme in Paris-Nord is now under construction

institutions, sports facilities, housing, educational facilities and art exhibition.

The practice recently opened a regional Indian Ocean office in Mauritius.

The firm is currently working on the Pyramid Project, which consists of a major renovation of the Louvre Museum. The project is twofold, with the first phase consisting of restructuring 11,000 sq m of the infrastructure under IM Pei’s signature Pyramid, and the second phase comprising an interior graphic and multimedia design to guide visitors through the entire museum and its collections.

Agence Search was also recently chosen to participate in the second round of the competition to redesign the lighting of the Eiffel Tower.

NORTH AFRICA

PPP succeeds in Morocco THE MOROCCAN government has signed agreements with two partners for public/private initiatives to open up and stimulate the internal economy of the North African country.

Both CasaNearShore and Technopolis are creating office and industrial campus projects across Morocco — and both will be profiled at MIPIM. Under the deal, CasaNearShore and Technopolis are pioneering 600,000 sq m of fully developed and integrated industrial parks in four locations in Morocco. Over 70,000 new jobs will be created in the process.

T he first result of the agreement is CasaNearShore Park, located on a 53 ha site near Morocco’s business capital of Casablanca.

The Park, which makes use of the city’s considerable pool of skilled human resources, offers 300,000 sq m of office space and integrated services. Businesses looking to locate to the park are offered a special incentive framework and competitive operation costs.

Technopolis Park, situated near the Moroccan capital of Rabat, also offers 300,000 sq m of office space. The park is pioneering a new development and lease model designed to serve the 28 I

high-tech industry, such as microelectronic, biotechnology and nanotechnology companies.

I n c reat i ng t he s e new pa rk s , b ot h CasaNearShore and Technopolis have been able to enhance their core business processes to improve the design and construction of

CasaNearShore Park: a 53 ha site near Casablanca

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office parks, professional office space and specific industrial units for the high-tech industries. Both partners have also succeeded in reducing the cost of construction, as well as the costs associated with building and operating business park infrastructure.

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i neWs DESIGN

DESIGN

Enodo urges designers to start playing the game

SHOWING IT LIKE IT IS

THE WORLD of design and architecture can learn much from the world of video games.

This is the message from virtual reality maker Enodo, a first-time MIPIM partner. Gamers have been accustomed to 3D realities for a number of years. Now, the technique is morphing into design, architecture and town planning.

Enodo takes blueprints, drawings, technical documents, geographic information systems data and other sources, and synthesises them into 3D virtual realities. The results are design projects that feel like ‘gamescapes’: a photorealistic virtual reality with real-time 3D rendering.

MIPIM attendees will be invited to play the Enodo video game Double Bind, which will be launched at MIPIM. Players will be able to build sections of a city in 3D animation, the objective being to experience how the technology can help urban and property development.

THE FUTURE is three-dimensional, according to MIPIM first-timer Stereograph, which creates virtual models and real-time 3D applications of buildings, projects, developments and town plans.

Architects and designers have always had a problem: how to help clients visualise what their drawings will look like in concrete form. The solution, according to Lille-based Stereograph, is a 3D virtual model, which can accurately represent a

finished development.

“Inventing and reinventing buildings and bringing them to life has been Stereograph’s job and passion for over five years,” said chief executive, Christophe Robert. “From Dubai to San Francisco via Paris, Stereograph’s virtual models and real-time 3D applications provide virtual solutions that truly match real-estate realities.” ë 9LVLW WKH 0,3,0 ,QQRYDWLRQ )RUXP LQ the Gare Maritime

ITALY

Three of the best from Italy

Participate in the DOUBLE BIND game in the Double Bind game lounge on level 01

IDeA FIMIT’s Massimo Brunelli

Enodo’s 3D realities have role to play in design and architecture 30 I

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IDEA FIMIT — the largest management company of real-estate funds in Italy, with over €10bn of assets under management — comes to MIPIM 2013 with three major development projects that will r eshape the urban landscape of Rome, Milan and Bologna.

IDea FIMIT CEO Massimo Brunelli said: “We hope these projects will contribute to a prompt and strong recovery of the Italian economy and, particularly, of Italy’s realestate industry. Definitely our industry will need the support of the banking sector to overcome the impact of the credit

crunch on both households and funds.”

No less important, according to Brunelli, is the regulatory framework in Italy.

“This needs to be reshaped so as to bring retail as well as institutional investors back into real-estate funds,” he said.

“The legal framework needs to be changed too. Areas such as taxation, urban planning and environmental legislation need to be simplified. And this year we hope to see the Italian government start with the sale of some of its real-estate assets.” ë ,WDO\ 'D\ 7KXUVGD\ 0DUFK

i neWs FRANCE

Immochan’s recently opened Zenia Boulevard in Alicante, Spain

ADI MAKES ITS MIPIM DEBUT ADI, THE French association of real-estate managers, will exhibit at MIPIM for the first time this year.

“MIPIM is a ‘must’ in real-estate events, so it is very important that ADI is present with a stand,” said Christian Cleret, president of ADI and realestate director at Groupe La Poste. “We hope 2013 will be the first step in a long-term relationship with MIPIM.” With close to 400 members, ADI was set up to protect, promote and facilitate the job of realestate managers as end-users. In 2013, the association will focus on attracting real-estate managers in the public sector, as so far most of its members have been drawn from the private sector.

Created in 1996, ADI sees 2013 as the launch pad for a new phase in its development. By the end of the year, the association plans to have achieved national coverage by creating new regional delegations in Nord-Pas-de-Calais, Bordeaux, Strasbourg and Rennes/Nantes to add to the existing three in Lyon/Rhone Alpes, Toulouse and Marseille.

“ADI will co-organise and sponsor a conference during MIPIM based on the work of the international commission and the sustainability commission,” adds Cleret. “We want to take the opportunity of MIPIM to develop international partnerships and to look at what is being done abroad in terms of sustainability in real estate in the medium- and long-term.”

ADI’s Christian Cleret: focus on international partnerships and sustainability

32 I

FRANCE

Immochan adds mall projects to broaden property portfolio Immochan, the commercial real-estate arm of Groupe Auchan, is participating in MIPIM for the first time, offering investors partnership opportunities in Western and Eastern Europe made it one of the counTHANKS to its membertry’s leading shopping-mall ship of one of the larg“Immochan has owners. It also acquired est international retail completed 18 Simon Property’s shares in groups — Auchan — projects to create Gallerie Commerciali Italia Immochan has expanded to obtain full ownership of into 12 countries, where 700,000 sq m of the subsidiary and drive its it has already completed shopping-mall development in Italy.

18 major building and exspace” At the end of 2012, Groupe tension projects to create Auchan acquired 91 Real 700,000 sq m of shoppinghypermarkets in Central mall space.

Recent openings include Zenia Boulevard in and Eastern Europe, and 13 shopping cenAlicante, Spain, which features 150 shops to- tres in Russia and Romania from Germany’s talling 80,000 sq m. And 2013 will also see the Metro Group. opening of the 92,140 sq m Aquarelle mall in While Immochan remains primarily focused Volgograd, Russia and the 33,600 sq m second on its historical-property development activity, it is now also looking at public and private phase of Lomianki in Warsaw, Poland.

In addition to this organic growth, Immochan investment partnerships in development and acquired seven Hungarian shopping centres in sales, joint investment, joint development, sale 2012 from Groupe Louis Delaize, which has and leaseback, and third-party operations.

preview magazine I February 2013 I www.mipim.com

SPECIALIST CONSULTANCY FOR THE PROPERTY SECTOR Strategic Communications Corporate Finance / Restructuring Economic & Financial Consulting Construction Solutions Global Risk & Investigations

www.fticonsulting.com

CRITICAL THINKING AT THE CRITICAL TIME™ FTI Consulting is the official communications partner to MIPIM

Focus Growth areas under the MIPIM spotlight CONTENTS INVESTMENT P38 The ongoing slump in bank lending has been a major brake on the recovery of the global commercial realestate market. But new sources of debt and equity finance may be starting to fill the funding gap P42 Legal & General Property — one of the UK’s largest institutional property fund managers — has invested nearly £500m in alternative real-estate sectors over the past 18 months

Continued economic pressures and wider technological change are driving innovation across the real estate industry. MIPIM 2013 will highlight four of the fastest-moving industry sectors

BUILDING INNOVATION P45 New-build projects have raised the bar for sustainability and efficiency in workplace design.

But how easy is it to translate these ideas into existing buildings? And is there such a thing as a green refurbishment?

INDUSTRIAL & LOGISTICS P51 The rise of omni-channel retailing has put new pressure on logistics suppliers. It is no longer enough for them to serve stores; now, they must also serve consumers directly. What impact has this had on their property requirements — and how is the property industry reacting P54 Logistics property specialist SEGRO is reaping the rewards of a new investment strategy, with the stated aim of being ‘the best owner-manager and developer of industrial property in Europe’ CITIES AND URBAN DEVELOPMENT P56 Design powerhouse Aedas says the global downturn has an upside — a surge in infrastructure business from the emerging economies P58 Cities around the world must invest to expand and renew their infrastructure, as well as to adapt to change and keep ahead of their competitors. How is the global downturn affecting the way in which capital projects are planned and financed?

www.mipim.com I preview magazine I February 2013 I 37

i focus INVESTMENT THE FUNDING GAP

Retrench warfare R

The ongoing slump in bank lending has been a major brake on the recovery of the global commercial real-estate market. But, writes Doug Morrison, new sources of debt and equity finance may be starting to fill the funding gap

ESEARCH by consultant CBRE reveals a fall in the number of mezzanine real-estate lenders ‘active’ across Europe in 2012 — 54 versus 69 in 2011. And yet the volume of mezzanine lending was up from €450m to €500m during the first half of the year.

What is more, 21 asset managers are raising money for debt funds and, in one case — Goldman Sachs with its plans for a $3bn fund — the aim is to provide both senior and mezzanine loans to the property sector.

“Most of them are still trying to lend money out or still trying to persuade investors to give them the equity necessary to create these funds. But we really believe that the market is shifting towards this type of lender,” says Natale Giostra, CBRE’s head of UK and EMEA debt advisory.

“Diversification is a major driver, as investors seek assets outside their home country” Andrew Cruickshank

Insurance companies, too, are increasingly looking to bolster their traditional equity investment in property by providing debt finance. Giostra says US insurers are making their presence felt in Europe by lending against offices in core locations and shopping centres — in other words, traditional safe, income-producing assets. “It’s all about core prime locations, certainly in the UK but also in France and Germany,” he says, “I think there will be more players coming into this space — more insurance companies through fund managers or setting up their own lending platform in-house.”

C&W’s Luca Giangolini

38 I

Commenting on changes in the debt landscape, Luca Giangolini, a partner in the EMEA corporate finance team at consultant Cushman & Wakefield (C&W), says: “At a general level in Europe, the reduced supply of debt is clearly impacting on transaction volumes and, in many cases, yield levels. But with lending markets becoming more localised, the picture differs country by country across the eurozone and broader Europe.”

He adds: “Whereas in 2007, lenders from the UK, Ireland, Germany, the US and France were lending on a pan-European basis, many of those still active have re-trenched to their domestic market. Debt is therefore more widely available in markets such as Germany and the UK than in Spain, Portugal and Italy.”

Giangolini points out that the all-in cost of secured

preview magazine I February 2013 I www.mipim.com

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makes the region in NORDRHEIN-WESTFALEN | NRW (North Rhine-Westphalia) one of the most important economic centers in Europe. Energy, logistics, healthcare, chemicals or the creative economy â&#x20AC;&#x201C; research, development and production are closely linked here, with e[pertise spanning all sectors. $nd with žve universities, 15 universities of applied sciences and an art college, the signs are already pointing clearly to the future. Interested? www.nrwinvest.com

i focus INVESTMENT Retrench warfare property debt is at an historic low and yet the ongoing uncertainties in the eurozone have resulted in many fund investors focusing their opportunistic allocations on Asia, and more core allocations on the US and Australia.

“That said, we have recently seen a number of successful opportunistic fund raises in Europe, including Patron Capital and Europa, which may lead to an increased appetite for non-core product,” he says.

Despite the new wave of debt providers, Michael Rhydderch, C&W’s head of EMEA capital markets, believes that investment markets nonetheless remain “substantially impacted” by the lack of traditional bank finance. Rhydderch is, however, heartened by the enduring presence of equity investors, albeit with some caveats.

“Equity for real estate is, in theory, plentiful and many pension funds and private investors see pricing relative to bonds as historically attractive when it comes to top-quality property,” he says. “The impact on volumes has not been as great as might have been hoped, however, as the supply of core investment-grade product has decreased and deal-making timescales have slowed.”

40 I

A lot of this equity investment continues to be directed at the UK. Prime London property appears top of the wish list for mainstream institutions, whether it be sovereign wealth funds, Australian and Canadian pension funds, or Malaysian and Korean life companies, according to Andrew Cruickshank, international investment director at property adviser BNP Paribas Real Estate.

This “abundant supply of investment money” has been bolstered by “a wave of new investors” from the Middle East and Far East, many of which are making their first forays into UK property. “Diversification is a major

preview magazine I February 2013 I www.mipim.com

“Even in Europe we see an improving picture, with banks and new providers bringing liquidity to the market” David Green-Morgan

driver, as investors seek assets outside their home country,” Cruickshank says. “But the UK is also benefiting from a preference for GBP [sterling] investments, as investors wait to see stability in the eurozone before investing there.”

He adds: “Many of these investors see the UK as an effective diversifier for dollar income and the UK continues to be perceived as a safe-haven investment location.

These criteria dominate decision-making and forecast internal rate of returns tend to be of secondary importance, meaning they are often able to outbid traditional investors.”

The UK’s safe-haven status certainly boosts overall global investment numbers. As this article goes to press, consultant Jones Lang LaSalle (JLL) calculates that 2012 will account for some $400bn worth of deals worldwide, which is 10% down on 2011.

“Commercial real-estate volumes have reached a level of consistency despite the ongoing difficulties in the debt markets,” says David Green-Morgan, JLL’s global capital markets research director. “We are recording volumes of on average $100bn a quarter globally. Many of the debt

issues are just in Europe, although even here we see an improving picture, with banks and new providers bringing liquidity to the market.”

Green-Morgan adds: “The bigger, more liquid markets are generally seeing greater levels of transactional activity, with developing and fringe countries seeing activity levels plateau, but off cyclical lows. In terms of cities, London, Paris, New York, Hong Kong and Singapore continue to attract a large amount of capital.

On a global basis, Europe is attracting more money than the Americas and Asia Pacific, although we expect the Americas to have a better 2013.”

And in its latest research, JLL has gone beyond the usual capital flows number-crunching and analysed the impact of worldwide gross domestic savings, which are forecast to increase from $8 trillion in 2004 to $37 trillion by 2022.

The firm claims that an extra $2 trillion worth of crossborder direct real-estate investment could be generated from this rise in domestic savings.

This may be an exercise in sophisticated crystal-ball gazing, but it may also offer some encouragement to those property players still scrabbling around for every last penny of debt finance.

www.mipim.com I preview magazine I February 2013 I 41

i focus INVESTMENT LEGAL & GENERAL PROPERTY

Embracing the alternatives LGP sees investment in student housing as an attractive proposition

Legal & General Property — one of the UK’s largest institutional property fund managers — has invested nearly £500m in alternative real-estate sectors over the past 18 months. Doug Morrison finds out why

L

EGAL & General Property (LGP) believes that such real-estate sectors as social infrastructure, healthcare, student accommodation and leisure assets provide an attractive proposition for investors, given their lower level of volatility than mainstream property and therefore their greater diversification benefits relative to other asset classes.

As Rob Martin, LGP’s director of research, suggests, the availability of long leases to strong tenants with indexlinked income also makes alternatives a particularly good fit for investors seeking to match long-term liabilities.

“Alongside the additional diversification and liabilitymatching benefits of alternatives,” he says, “we view them as offering an important avenue for accessing structural economic change. Over time, we are devoting a greater share of national income to healthcare, leisure and education, supporting demand for real estate that services these parts of the economy.”

Martin points out that, because assets in this space are often more specialist than mainstream property, understanding occupier performance is even more critical.

LGP can draw on valuable experience, however, having run a top-performing leisure fund for more than 10 years.

But the group has certainly stepped up its exposure to alternatives significantly of late and, in 2012 alone, completed the UK’s only university-backed, forward-funding deals.

Totalling over £250m of commitments, these three deals involve student-housing schemes for the University of Southampton, University of Greenwich and London’s 42 I

Imperial College. They are all based on 35- to 45-year leases, with rental income subject to increases in the Retail Price Index (RPI) — one of the UK’s main measures of inflation. In other words, once these developments are completed, all three will provide index-linked, long-dated sources of income backed by investmentgrade covenants.

Another important deal for LGP was the £50m forward funding of the English Football Association’s (FA) national football centre, St George’s Park at Burton on Trent, which completed in October. This deal required a sophisticated understanding of the covenant strength of a tenant not usually rated by external credit agencies.

LGP’s capital here was drawn down over the construction period to provide a source of development funding.

Income is generated by the accommodation on site and underpinned by a 30-year, RPI-linked lease from the FA. Gordon Aitchison, LGP’s director of investment and development, says: “As with the university-backed forward fundings, St George’s Park is yet another deal that demonstrates our growing appetite to look to alternative sectors as attractive investment opportunities [underlining] the increasing role that the private sector will play in funding critical social infrastructure.”

He adds: “We continue to explore new and innovative ways in which to invest in the alternative sectors. We expect to see this as a growing area of activity for the business and one that complements our core asset-management focus.”

preview magazine I February 2013 I www.mipim.com

“We continue to explore new and innovative ways in which to invest in the alternative sectors” Gordon Aitchison

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i focus MIPIM INNOVATION FORUM OFFICE REFURBISHMENT

Making old as good as new New-build projects have raised the bar for sustainability and efficiency in workplace design. But how easy is it to translate these ideas into existing buildings? And is there such a thing as a green refurbishment?

Peter Clucas reports

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HERE can be no doubt that increasing sus- Environnementale), while in North America it is LEED, tainability and efficiency in existing build- short for Leadership in Energy and Environmental ings is not easy. Retrofitting insulation and Design. There are steps being taken at the moment to more efficient services can be more complicated, expen- standardise assessments across Europe but this, inevitably, is taking time. sive and time-consuming, both at Architects Stride Treglown crethe design stage and during conated the UK’s first BREEAM struction, than new-build. Both “Our brief was simple: ‘outstanding’ office buildbuilding types need care and ating in the form of its own stutention to detail to get it right, but to reduce carbon dio in Cardiff, Wales. It was the refurbishment adds a whole new emissions by 40%” firm’s experience with this prolevel of complication.

John Wright ject that put it in a good posiIn the UK, the Building Research tion to work on the refurbishEstablishment’s BREEAM rating ment of Wiltshire’s County Hall is the benchmark for sustainability and efficiency. ‘Very good’ is hard to achieve, ‘excellent’ in Trowbridge. “Our brief was simple,” says John Wright, even harder — and the most difficult of all is ‘outstand- director of Stride Treglown. “The County wanted to reing’. In France, the standard is the HQE (Haute Qualite duce its carbon emissions by 40%.”

The updated County Hall in Trowbridge achieved a BREEAM ‘excellent’ rating

www.mipim.com I preview magazine I February 2013 I 45

i focus MIPIM INNOVATION FORUM Making old as good as new The County Hall comprises a 1930s original building and a ‘modern’ extension added in the 1970s. The whole complex was outdated in terms of its efficiency, both as an office and from a sustainability standpoint.

The two-phase project involved covering an open courtyard to create a new enclosed public-services hub. Phase one, which consisted of the refurbishment of the 1970s building and a new atrium, is complete, with phase two now nearing completion.

“In principle, we made the building as airtight as we could,” Wright says. “Then we added in, through forced ventilation, the exact amount of fresh air needed for heating and ventilation.” He explains that ETFE (ethylene tetrafluoroethylene) cushions, inflated by a small air pump, cover the roof of the atrium. These cushions — made of the same material that was used on the National Aquatic Centre in Beijing and the Eden Project in Cornwall — are not only extremely energy efficient,

“It is imperative for the industry to focus on actual energy performance rather than just design intent” Jones Lang LaSalle

but also self-cleaning. They are printed with a screen to reduce solar gain and, being very lightweight, can span three times further than an equivalent glass roof.

The office areas were lined internally with new insulation and all the windows replaced. In the 1930s building, which is of local importance from an architectural point of view, secondary glazing has been installed. Overall, County Hall Trowbridge achieves a BREEAM ‘excellent’ rating.

The lightweight ETFE-covered atrium at the County Hall in Trowbridge, UK

46 I

preview magazine I February 2013 I www.mipim.com

i focus MIPIM INNOVATION FORUM Making old as good as new Notably, the project does not involve any ‘eco-bling’, as it is sometimes called — in other words, it has no wind turbines or photovoltaics and features conventional, albeit efficient, gas heating. In this particular area of the UK, there is a shortage of biomass to fuel heating systems, so gas was the best option.

Another building that has recently been retrofitted is 199 Bishopsgate in the City of London. Built in 1990, it is located on a prominent corner site of Broadgate, with frontage on to the historic thoroughfare of Bishopsgate.

The building has been ‘sustainably refurbished’ by London-based John Robertson Architects (JRA), which reused the original cladding system, as performance testing found it to be performing as well as new systems. The significant carbon emissions savings made through structural re-use are complemented inside the building, where investment in the latest lighting and ventilation equipment and control systems has lowered annual emissions by 60% and given the building an Energy Performance Certificate rating of B. JRA had to contend with a combination of rail lines below the building and a small roof area above, which put the two most common forms of renewable energy — solar and ground source — out of its reach. Despite these difficulties, the retrofit has exceeded the performance expected of newly built commercial developments. And as with Trowbridge County Hall, there is no eco-bling — just sound energy conservation principles.

More challenging was the upgrade of 25 Soho Square, London, the former headquarters of the British Football Association. Architects BuckleyGrayYeoman created a commercial development that reflects the trendsetting character of Soho, while achieving excellent environmental performance. The refurbishment opens up the floor plate of the office accommodation, adding floor-to-ceiling glazing away from the Soho Square facade. The result is open, naturally lit internal spaces.

A meticulous level of detailing was applied to 25 Soho Square’s building services. The ducting remains exposed to allow for higher ceilings, which contribute to the increased sense of space. The galvanised steel casings of the service equipment, custom manufactured for the project, mirror the use of the material in the flooring. Through upgraded building services, improvements to the thermal performance of the building fabric, the installation of photovoltaic panels on the roof and the use of an air-source heat-pump system, BuckleyGrayYeoman has achieved annual carbon emissions savings of over 30%.

When SEGRO wanted to upgrade its E2 building at its business park in the UK’s Reading, it stripped it back to its frame. E2 is being retrofitted to offer a sustainable

48 I

business location — a speculative project that will provide 49,500 sq ft (4,5987 sq m) of grade-A office space.

SEGRO is introducing a number of sustainable features, such as self-contained changing facilities with showers and a drying room, and electric-car charging points.

Consequently, the company is targeting a BREEAM ‘very good’ rating as a minimum standard.

It is clear that many organisations are moving towards greener retrofits. But a word of caution was offered recently by Jones Lang LaSalle (JLL), which has been looking at the actual energy consumption of a portfolio of buildings with different EPCs (Energy Performance Certificates). JLL has found that there is little correlation between the theoretical EPC and the actual energy consumption. “It is imperative for the industry, backed by government direction, to focus on actual energy performance rather than just design intent,” said JLL in the conclusion to its report.

The pace of green refurbishment is increasing and, as architects and engineers develop new techniques, it is becoming more efficient both financially and environmentally. Occupiers and governments are demanding greener buildings, both new and refurbished. The property industry is finding new ways to provide them, increasingly without the obvious eco-bling embellishments.

THE GREENEST OF THEM ALL CARLO RATTI, director of the SENSEable City Lab at MIT and founder of Carlo Ratti Associates, has masterplanned the new Sustainable City Saudi Arabia.

The Gulf scheme aims to be the most sustainable city on the planet, as well as a research centre of world renown, and a place of unparalleled beauty, pleasure and convenience. Ratti says the city will be a place for people to enjoy living and working.

“By creating a balanced mix of uses, it is possible to achieve a good quality of life, integrating the commercial, research

Sustainable City, Saudi Arabia

preview magazine I February 2013 I www.mipim.com

and educational areas with the more community-based areas,” he says.

Ratti’s design for the Sustainable City will be flexible and open-source, ensuring that the project evolves and adapts in the best way possible as it grows over space and time. It is, he claims, a new evolutionary model for designing a revolutionary new city in harmony with its environment.

According to Ratti, the crucial innovation is the use of the latest digital technologies to produce an interactive digital model inseparable from both the design and operation of the city.

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i focus INDUSTRIAL & LOGISTICS THE OMNI-CHANNEL CHALLENGE

The flight to e-fulfilment “There is no ‘one size fits all’ approach to optimising distribution efficiency” Gregory Goodman

DHL is opening specialised delivery sites

The rise of omni-channel retailing has put new pressure on logistics suppliers.

It is no longer enough for them to serve stores; now, they must also serve consumers directly. Liza Helps asks what impact this has had on their property requirements — and how the property industry is reacting

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OLDMAN Sachs has estimated that the global e-commerce market could be valued at $1 trillion next year. And in Europe, Forrester Research predicts that, by 2015, it will be worth $184bn — a massive 16% year-on-year growth.

This is having a profound impact on the supply chain as retailers adapt to fulfil customer expectations. Garret McClean, senior director of CBRE EMEA, says: “Retailers are going multichannel. 70% out of a group of 500 brick-and-mortar retailers told us that, and 63% of those said they would be fully integrated within two years.”

Richard Holberton, head of industrial and logistics research at CBRE EMEA, adds that, in the same period, “online retail could drive up to 60% of logistics take-up in the core [European] markets”.

Indeed, according to developer Prologis, every additional €1bn of online sales has resulted in an average additional warehouse demand of approximately 72,000 sq m in the UK, Germany and France over the past five years.

Logistics property needs to adapt to accommodate

changing shopping habits, and there are increasing demands on the supply chain, from parcel hubs to regional distribution warehouses, as consumers demand ever more rapid delivery of items direct to their homes.

McClean adds: “There is the potential for existing stock to be adapted to accommodate direct delivery alongside delivery to store, and major new developments will almost certainly aim to capture the demand for e-commerce with improved technology. Centralised regional distribution hubs are playing a bigger role in distribution supply chains, whether to support high-street and online businesses or solely internet consumers. CBRE research shows that retailers across the board are pursuing multichannel expansion opportunities, and 95% of retailers surveyed in a recent CBRE study indicated that they would need at least as much regional distribution space in the next two years as they do now — and in some cases significantly more. The spread of high-speed internet and 4G across Europe has also made mobile shopping more convenient for consumers, and this is likely to have a growing impact on retailers’ distribution networks.” www.mipim.com I preview magazine I February 2013 I 51

i focus INDUSTRIAL & LOGISTICS The flight to e-fulfilment Colliers’ director of EMEA corporate solutions, Karel But it’s not all about the large regional e-fulfilment cenStransky, observes that, because e-commerce is based on tres. There is also a growing requirement for more ura business-to-consumer model, one or many intermedi- ban logistics space, according to Andrew Gulliford, manaries are being eliminated from the supply chain. “This aging director, continental Europe, of SEGRO. “Those is multiplying the number of customers the e-tailer/ware- larger delivery stations frequently need the support of house occupiers are dealing with into the thousands,” a smaller shed in the urban logistics area, where pophe adds. “Logistics facilities were traditionally built for ulation densities are high. It’s important to be as close B2B, but e-tailers are now shipping directly to consum- to the chimney pots as possible to guarantee last-mile deliveries.” ers, which is changing design Amazon, Gulliford says, is looking requirements. Most large playat delivery stations in the region of ers like Amazon will contin“It’s important to be 3,000-5,000 sq m in more densely ue to operate in their own fulas close to the populated areas to ensure last-mile filment centres, but a growing fulfilment. number of companies are conchimney pots as The UK, meanwhile, has seen the sidering outsourcing their suppossible to guarantee emergence of the dark store to help ply chain to a third-party logislast-mile deliveries” facilitate online grocery shopping. tics provider.”

Andrew Gulliford Gulliford explains: “These buildings typically range from 10,000– As omni-channelling grows, 15,000 sq m and require a good some think the consequencmany docking stations to get vans es could be the development of e-fulfilment centres embracing the whole supply chain, in and out fast for that last-mile fulfilment.” from suppliers through storage, sorting, packing and In France, Watt reports, food retailers such as Auchan and Leclerc are pursuing ‘click and collect’ depots, usutransfer to carriers, as well as managing returns.

Jones Lang LaSalle’s director of industrial and logistics, ally located close to roundabouts with direct access to Tim Johnson, says: “There is a change in the specification the arterial road network, and typically in the range of and layout of buildings required now. Sites have a lower 2,000-3,000 sq m. The idea is that customers shop ondensity development — 30% rather than 40%-45% — line and then select a two-hour time window for collecand many will need to be cross-dock facilities. As such, tion at the depot. This enables customers to select a time that is convenient for them, rather than waiting at home the majority will need to be built-to-suit.”

Alexandra Tornow, head of EMEA logistics and industri- for deliveries. al research at Jones Lang LaSalle, notes: “For some, especially those doing cross-border merchandising, securing a good infrastructure position will be important. We may see e-tailers selecting port-centric locations, especially if they are importing stock on a global basis.”

However, Tornow adds that retailers and e-tailers are still trying to find “the best way to operate and to locate their properties”.

Goodman Group’s CEO, Gregory Goodman, agrees: “What is very apparent is that there is no ‘one size fits all’ approach to optimising distribution efficiency, with e-tailers in different markets adopting very different fulfilment and distribution strategies.”

Steven Watt, logistics and industrial partner at Cushman & Wakefield’s Paris office, adds: “Big e-tailers such as Amazon and Zalando are looking for very large bespoke facilities, usually on a build-to-suit basis and not necessarily in grade-A locations.”

These mega e-fulfilment centres, usually in the range of 75,000–90,000 sq m, employ hundreds if not thousands of people and need to be located relatively close to highpopulation densities.

52 I

Richard Holberton, head of industrial and logistics research at CBRE EMEA

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PARCELDELIVERY BOOMS INTERNATIONAL parceldelivery companies have been investing heavily on a global scale. In Germany alone, where Deutsche Post DHL has just opened the first of 25 new mechanised delivery sites at the former main freight depot in Braunschweig, the company is investing some €750m in technology and facilities to support its expansion plans. Meanwhile, DPD — the UK arm of France’s La Poste — has announced €215.6m for a new 30,000 sq m state-of-the art hub and 10 new depots over the next five years. Royal Mail is also investing €93m over four years in technology and facilities.

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i focus INDUSTRIAL & LOGISTICS SEGRO IN PROFILE

‘Buy smart, add value, sell well’ Logistics property specialist SEGRO is reaping the rewards of a new investment strategy, with the stated aim of being ‘the best owner-manager and developer of industrial property in Europe’. Graham Parker reports

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According to Sleath, these core marHE MAN responsible for kets outperform because “demand is achieving SEGRO’s ambi“Our aim is to stronger and growth is stronger in the tion to set the gold standard achieve critical dominant markets. But at the same in European logistics is chief execumass in a time, the amount of industrial stock tive David Sleath. “There was a time has dwindled as other uses take over.” smaller number when we were seen as a ‘stamp collecIn smaller cities, however, he says tor’, growing for the sake of it,” he says. of markets” “there has not been that rate of conver“But now we are seen as a value-based David Sleath sion to other uses to create scarcity”. investor, there to make money for our shareholders. That means actively reWithin the logistics sector, Sleath sees cycling assets. Now our motto is, ‘Buy a number of factors driving change. “We are seeing more smart, add value and sell well’.”

Sleath says conversion to REIT status helped to drive this demand for edge-of-town distribution to serve convenichange. “Income return is the key,” he adds. “And over ence stores,” he says. “That demands cross-dock warethe long run, industrial and logistics property has outper- houses to break the loads down from artics to vans.” formed other sectors, primarily because it offers a supe- The other big growth market is consumer delivery: “The likes of Amazon can operate from 100,000 sq m rior income return.”

SEGRO’s new approach has been accompanied by a refo- sheds in remote locations, but they have to cusing of its portfolio, selling traditional industrial prop- outsource the last mile of the delivery erty to buy distribution facilities. “Industrial property is chain to third parties, who need their really a misnomer for our sector,” Sleath says. “It’s all own facilities.” about the supply chain.” Exceptions to this rule are the A frequently overlooked facet of the Slough Estate to the west of London and the Rhine/Ruhr growth of e-commerce is the need region of Germany, where SEGRO retains some indus- for specialist server facilities. “You need good fibre-optic links and trial assets. tons of power to provide a data Late in 2011, Sleath announced that a third of the centre,” Sleath points out. He adds SEGRO portfolio would be sold. “Anything that doesn’t that SEGRO has already built 15 fit the core portfolio will go,” he says. So far, disposals to- data centres on its Slough Estate and talling £500m (€600m) have been achieved — but there is now looking to extend this approach across Europe. is another £1bn (€1.2bn) to go.

The proceeds are being reinvested in new development “All these are specialised uses, and acquisitions, including vehicles such as the UK so there’s a need for landLogistics Fund, set up jointly with Legal & General and lords who can demonHermes. And in France, a €160m portfolio was brought strate that specialised expertise,” Sleath from Fonciere des Regions. concludes.

“Our aim is to achieve critical mass in a smaller number of markets,” Sleath says. The target locations are London and the south east of England, the Ile-de-France and Lyon, the Rhine/Ruhr region and Munich in Germany, SEGRO chief executive Warsaw, central Poland and Silesia, and, to a lesser exDavid Sleath: “all about tent, Benelux. the supply chain” 54 I

preview magazine I February 2013 I www.mipim.com

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i focus CITIES & URBAN DEVELOPMENT AEDAS IN PROFILE

Infrastructurally sound Design powerhouse Aedas says the global downturn has an upside — a surge in infrastructure business from the emerging economies. Steve McCormack reports EDAS is one of the world’s leading design practices with nearly 1,500 staff members.

Established in 2002 as the result of a merger between two prominent UK- and Hong Kongbased architects, today Aedas has 32 offices across Asia, the Middle East, Europe and the Americas, offering architecture, interior design, masterplanning, landscaping, urban design and building consultancy.

According to David Roberts, Aedas’ CEO, more than 80% of the practice’s infrastructure work now comes from outside Europe and the UK, reflecting the realities of the current economic situation.

“Global opportunities are larger just now, not smaller, particularly in the emerging economies,” Roberts says.

“The prospects are real and we expect infrastructure workflow to increase in the future.”

Roberts has over 21 years of experience in Hong Kong and Asia. He has worked to establish new links in international markets including China, North and South Asia, India and the Middle East and, more recently, Europe and the Americas. He continues to be involved in some of the firm’s larger projects, specialising in rail, air transportation and infrastructure.

A

Roberts believes transportation is a global market and that infrastructure design knowledge is transferrable from country to country. “Cities have to continually invest in infrastructure to both keep pace with growth and to improve quality to match expectations,” he says. “This investment often brings associated property development opportunities — as can be seen alongside the new rail lines in Hong Kong and Singapore. These create increased value to help pay for the infrastructure. This approach is becoming increasingly popular.”

At the Express Rail Link West Kowloon Terminus project in Hong Kong, for example, Aedas’ design includes 294,000 sq m of topside commercial development.

This high-speed rail terminus will connect Hong Kong to various major cities in China via the world’s most extensive high-speed rail network. Equipped with 15 tracks, the landmark structure will be one of the largest belowground terminus stations in the world. With its signature sweeping profile and rooftop gardens, it will function more like an international airport than a rail station, 56 I

featuring both custom and immigration controls.

As well as its extensive work in Hong Kong and Singapore, Aedas is also involved in several major infrastructure schemes, such as metros in Delhi and Dubai. In the latter, the firm is designing 47 railway stations and two rail depots for the United Arab Emirates’ first metro system.

“Everywhere you look in Asia, there are metro schemes under way,” Roberts observes. “The market is very robust. In the Middle East, for example, Qatar has very ambitious plans for its railway network.”

Meanwhile, Aedas continues to work on projects in Europe, including Crossrail in London where it is providing architectural design services for the £300m (€370m) Farringdon Station, scheduled to be fully operational in 2018.

“Whether we are looking at brand-new schemes in emerging markets, or replacing old, ageing infrastructure in the developed countries, going forward governments will continue to prioritise investment in infrastructure,” Roberts says. “There is every reason to be optimistic.”

Aedas CEO David Roberts

preview magazine I February 2013 I www.mipim.com

“There is every reason to be optimistic” David Roberts

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i focus CITIES & URBAN DEVELOPMENT URBAN INFRASTRUCTURE INVESTMENT

Investing out of trouble

“The recession has not stopped spending on infrastructure” David Roberts

New Doha International Airport will have a capacity of 12 million passengers per year

Cities around the world must invest to expand and renew their infrastructure, as well as to adapt to change and keep ahead of their competitors. Steve McCormack examines how the global downturn is affecting the way in which capital projects are planned and financed

T

ODAY’s economic climate is compelling cities to find new and innovative ways to fund urban investment.

Current debt levels and the increased pressure on banks following the global financial crisis mean the traditional public funding of infrastructure is no longer the norm for many cities in the leading economies. Indeed, since 2007, overall infrastructure investment in Europe and the western countries has declined dramatically, creating a reported €4 trillion investment deficit in the EU alone.

“Put simply, in most of the west of the north, bank finance and public grants and transfers that were commonplace five years ago have all but dried up,” says Prof Greg Clark, global advisor on cities and chairman of the MIPIM Mayors’ Think Tank.

The question is, despite the urgent need to close the investment gap, are new urban funding mechanisms

58 I

developing fast enough to mitigate the overall shortage of public funds?

Today, cities must attract investors that are highly mobile and have an enormous choice of investment opportunities. Cities must be innovative in the way they package investments and engage with the market. Finding a way forward is imperative, because not all cities around the world are facing the same funding constraints.

Top-tier cities such as London, Paris and New York are where the effects of the crisis have been the most pronounced, with public-sector debt the highest and investment the most squeezed. Elsewhere, conditions are not so severe and development continues, if at a slower pace.

Signs of this trend include the multi-billion dollar New Doha International Airport (NDIA), which opens for passenger traffic in the second half of 2013, plus rail and metro schemes planned or under construction in cities as

preview magazine I February 2013 I www.mipim.com

i focus CITIES & URBAN DEVELOPMENT Investing out of trouble diverse as Dubai, Delhi and Bangkok. Faced with such resilience, today’s leading cities will have to find a way to keep pace — or risk losing their world standing.

According to David Roberts, CEO at Aedas, the picture from the international design practice’s 32 offices worldwide is encouraging, particularly in the emerging economies, where governments and local authorities prioritise the enhancement of airports, and rail and metro networks.

“The recession has not stopped spending on infrastructure,” he says. “Governments are not shy of pursuing significant investment in ‘enablers’ of the future economy.”

Among its current infrastructure projects, Aedas is working on the Express Rail Link West Kowloon Terminus in Hong Kong, which was named Best Mega Futura Project at the 2012 MIPIM Awards. Also in Hong Kong, Aedas was recently appointed to the expansion of the international airport’s Terminal 2.

“Investing in transport is a key pivot in economic development,” Roberts adds. “The international scene is healthy outside of the UK and Europe, although even here we are seeing continued activity, such as Crossrail in London and the new Grand Paris express metro network.”

It is clear that a sustainable solution must be found to close the investment gap, tapping into public and private sector resources, expertise and experience. However, no single model is appropriate for all world cities, and those that succeed in the coming decades will be the ones that offer private investors the best possible return through a mix of options.

Tax incentives have re-emerged as a development tool, combining with initiatives that focus on new sources of cap-

off-set by the growth of new urban investment tools, even though there are many that are now being developed. A new approach to developing PPPs [public-private partnerships] is emerging in many parts of Europe, but there is an insufficient institutional framework for local governments to use these in many countries,” Clark says.

Mea nwh i le, the Eu rop ea n Investment Bank (EIB) launched its Europe 2020 Project Bond Initiative in November, designed to stimulate capital-market financing for infrastructure delivered under ‘project finance’ structures, including PPPs. The pilot phase will receive €230m from the EU budget and will seek capital-market contributions worth more than €4bn for infrastructure investment in the transport, energy and communications sectors.

“The Project Bond Initiative provides an opportunity for re-opening capital markets as a source of financing for the transport, energy and communications infrastructure essential for ensuring growth and competitiveness in Europe,” said Werner Hoyer, president of the EIB, at the 2020 Project Bond Initiative launch. He added: “The pipeline of potential projects looks prominent, with the first expected project signatures in early 2013.”

Against this background, those cit“The pipeline of potential projects looks ies that are facing a shortage of funding cannot procrastinate for long. prominent, with the first expected project Infrastructure is one of the key indisignatures in early 2013.” cators of the long-term success of a Werner Hoyer city and, under the dual drivers of increased globalisation and growing environmental concerns, the pressure is ital, such as sovereign wealth funds, and more traditional on to invest in expansion and renewal. investors, such as pension funds. The market has also seen “These projects are not going away,” Roberts says. “They the evolution of project bonds, tax increment financing may have been slowed down, but funding will be found (TIF) and other forms of value capture financing (VCF). for key elements of infrastructure.

It’s all about timing.

Under VCF, increases in the private land values generPut it this way — we are not going to see less infrastrucated adjacent to public transportation investments are ture built in the next decade.” ‘captured’ to repay the cost of the public investment.

Similarly, TIF allows local authorities to fund projects Clark agrees: “What is clear is that cities cannot run an by borrowing against the future tax revenues expected to infrastructure deficit for long before it has an impact on be generated by the proposed scheme. VCF is being used productivity and efficiency, plus economic and environby cities around the globe, including Cape Town, Hong mental performance. However, while failure will lead Kong, London, Istanbul and Barcelona, as a means of un- to medium- and long-term problems, those who find a means to continue to invest in infrastructure will reap a locking investment potential.

“The overall shortage of public funds has not yet been long-term dividend.”

60 I

preview magazine I February 2013 I www.mipim.com

Werner Hoyer, President of the EIB

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market

INSIGHTS

Investors bet on flight to quality Under pressure from the prolonged downturn, investors and occupiers are looking to the biggest and most dynamic markets to deliver performance.

MIPIM News looks at Europe’s Big Four CONTENTS FRANCE P64 Given the uncertain economic climate, the French real estate market performed better than many other European markets and continues to be a safe location for secure investment UK P67 Banks that won’t lend and planners that won’t commit are not helping UK developers to row back from the downturn. But there are still opportunities for bold and brave investors GERMANY P71 The German market has fared better than most, fuelled by sustained economic growth at a time when many other economies are in recession.

What are the prospects for German’s regional centres?

RUSSIA P74 Russia — the world’s largest country — offers investors opportunity aplenty, particularly on the development front. But, it pays to treat the Russian bear with respect so which sectors offer investors the most security?

www.mipim.com I preview magazine I February 2013 I 63

i market INSIGHTS SPOTLIGHT ON FRANCE

France remains an attractive proposition for investors despite a tense economic climate In 2012 more than half of investment volume was concentrated in Paris

Given the uncertain economic climate, the French real estate market performed better than many other European markets and continues to be a safe location for secure investment. Anika Michalowska reports

L

AST November, Amazon, one of the world’s leading e-commerce providers, announced plans to open a 90,000-sq m logistics centre in Northern France, in Lauwin-Planque, near Douai. It will be Amazon’s fourth logistics site in France. Scheduled to open during the second half of 2013, it will have 2,500 employees and will be developed and managed

by Goodman, the Australian global developer, investor and manager of logistics properties. This latest transaction is the second deal that Goodman signed in France in the fourth quarter of 2012. The group currently has over 120,000 sq m under development in France across two sites, and 750,000 sq m in assets under management.

This announcement highlights the latest trend in logistics and industrial space in France where players are in search of good quality, well-located offers. Two major warehousing portfolios were sold in 2012: Fonciere Europe Logistique sold the Axiom portfolio to SEGRO for €160m and Gecina sold the Mercure portfolio to Blackstone for €220m.

Despite the efforts of developers like Goodman to bring forward projects, good quality supply is shrinking in France as CBRE pointed out in its latest Market View report. “The supply of class-A warehousing accounted for 50% of supply nationwide as of 1 October 2011 (as compared to 52% a year previously) and Ile-de-France and Rhone-Alpes are the most affected by the deterioration,” the agent noted. As a result of increasingly hesitant and cautious players, lead times to close deals are increasing.

In the office sector, sluggish economic growth and intense uncertainty is weighing on companies and making occupiers cautious. Companies are tending to defer their relocation projects, preferring to renegotiate existing

64 I

leases instead. Office take-up in Ile-de-France, the country’s leading office market, topped 2 million sq m in 2012, close to the average of the last 10 years. The market is driven by transactions of more than 4,000 sq m which represent close to 50% of all take-up.

Companies that want to relocate are looking for new or newly eco-friendly restructured office space, a supply which is becoming increasingly scarce. “The scarcity of quality offer in the months to come will contribute to maintaining prime rents at a high level” says Olivier Gerard, CEO of Cushman & Wakefield (C&W) France.

Out of the 3.9 million sq m available in the next six months, only a minority of office buildings are new buildings. La Defense, the top business district in Europe, was particularly impacted in 2012 by a lack of quality new buildings. With take-up at 61,100 sq m (down 32% yearon-year) as of October 1, 2012, La Defense registered its lowest level of sales and lettings in 10 years according to CBRE. Fortunately, a new offer will soon come on to the market: the 40,000 sq m Carpe Diem Tower will be delivered in 2013.

In the investment arena, some €9.2bn has been invested in French real estate during the first nine months of 2012.

Experts expect the figures to have reached €14bn by the end of the year. “The market decreased by 15% as compared to the previous year” says C&W’s Gerard. “But the decrease is smaller than could have been expected taking into account the lack of dynamism of the economy.”

Increasingly, the market is driven by large transactions.

Sovereign wealth funds and insurance companies are active in operations above €100m. There were even three

preview magazine I February 2013 I www.mipim.com

“The scarcity of quality offer will contribute to maintaining prime rents at a high level” Olivier Gerard

FRANCE

transactions exceeding €250m: Generali sold a 50% stake in a portfolio of five Parisian buildings to Norges for €275m; Immoselect sold a 46,000-sq m building (Liberte 2) in Charenton to CNP and Cardiff for €255m and ADI bought the Amundi headquarters in Paris 15 for €252m.

At the other end of the market, the small transactions segment has been very active. “This trend is exaggerating the already bipolar nature of the market” says Aurelie Lemoine, head of research at CBRE France.

Transactions in the middle — between €50m and €150m are the most penalised.

In an environment that encourages secure investment, offices have remained the key product for most investors.

Offices in Paris and major regional cities like Marseille, Lyon and Lille accounted for two thirds of investment in 2012. Retail performed well. The year has been fuelled by the acquisitions of high-street shops and retail galleries in Paris, and a return of the sale of property portfolios belonging to branded retailers and more activity in the shopping-centre market.

As safe investments are the priority, the quality of the asset’s location is more than ever the top criterion for choice which acts in favour of Paris. In 2012, more than half of investment

volume was concentrated in Paris, up from 36% in 2011.

Cross border investors accounted for more than half of investment volume in 2012 which reverses the trend seen since 2008, with French investors being the largest source of capital.

The year 2012 was marked by the arrival in France of sovereign wealth funds from the Middle East (Qatar, Saudi Arabia) and Asia (Korea, Singapore), attracted

by Parisian trophy assets. In just four transactions taking place in the first nine months of 2012, they alone accounted for 22% of invested volume. Norwegian investors were also very active. German funds however were less of a force and were mainly interested in retail.

“The wait-and-see policy will probably continue in 2013 but France’s fundamentals are still good and real estate a safe investment for investors,” says CBRE’s Lemoine. A lot of capital is available for investment in real estate, in the hands of institutional investors. Already, some banks seem to be willing to take some more risk with debt.

“This may give impetus to value-added or opportunistic investment while investors looking for secure long-term investments will continue to be interested in the French market, mainly in Ile-de-France” adds C&W’s Gerard.

www.mipim.com I preview magazine I February 2013 I 65

i market INSIGHTS UK

SPOTLIGHT ON THE UK The City of London, helping the UK ride the economic storm

Opportunism knocks Banks that won’t lend and planners that won’t commit are not helping UK developers to row back from the downturn.

But, writes Ben Cooper, there are still opportunities for bold and brave investors

T

HE LAST thing the UK economy needs after the malaise of the past four years is to be smothered in self-made problems. But this, says Glentree International’s managing director Trevor Abrahmsohn, is exactly what is happening, through a refusal by the banks to lend and a ‘can’t do’ attitude among town planners.

“Around 40% of all European transactions are in the UK — and that could go up” Stuart Jenkin

He says: “The constraining factors, such as funding and planning, have been brutal in terms of asphyxiating the ability of developers to do what they’re good at. When banks say they’re lending, the question is, on what terms? Lending with massive interest all the way down is not lending. They are hoarding cash, terrified about capital ratios.” www.mipim.com I preview magazine I February 2013 I 67

i market INSIGHTS Opportunism knocks But is this the whole picture? Or is a fundamental lack of demand also stunting any kind of growth? UK real estate has had a torrid time across all sectors and, in retail in particular, it is fair to say that a fundamental reform is taking place in which the whole demand model is changing. So what’s really going on? And what does 2013 hold for an industry craving stability?

First, the good news. It might not prove much comfort to international funds but, compared with much of continental Europe, the UK has ridden through the economic storm relatively well, partly kept afloat by the strength of London. Stuart Jenkin, director of fund management at Frogmore, says: “In real-estate terms, the UK is attracting increasing interest. It has adjusted to the current scenario quicker than the continent and that’s created quite a lot of investor confidence. Around 40% of all European transactions are in the UK — and that could go up. Investors are looking at factors like currency fluctuations and the problems with the euro, and sterling looks more attractive. Europe is really going to be struggling next year.”

The catchphrase of 2012 — and one likely to carry on this year — was ‘safe haven’. Investors, many of which have been severely burnt in the last five years, are sitting on an estimated $5 trillion globally. No longer willing to throw darts at a board, they are considering only the most select, prime properties. Luckily, London — in particular the London office market — has a lot of that.

International investors are more interested in London offices than perhaps any other sector in any other market in Europe.

But that is only speaking for a small corner of a large field. So what about the rest of the country? Jenkin admits that it has been much tougher outside of the UK’s ‘safe haven’, but believes there are still opportunities for those in the know.

He says: “Basically, there’s London and then there’s the rest. The regions have been badly affected by the downturn. But there are a lot of opportunities emerging outside London for experienced fund managers.” He cautions, however, that “it takes real skill to identify the right assets. But if you can do it, then you can still make great returns.”

While Jenkin rues the lack of finance and the inefficiencies in planning, Abrahmsohn believes that the demand is there if only the system could be invigorated. He says: “The outlook is surprisingly good in some areas. One surprising thing is how robust the market is given that we’ve had a double-dip recession. There is more demand than supply.”

One sector where this is undoubtedly the case — and to an alarming degree — is logistics. An almost complete

68 I

freeze came over the warehousing and logistics pipeline when the crisis hit and, unlike in other areas where some fluidity has returned, this is still largely the case in logistics four years later.

SEGRO chief operating officer Andy Gulliford says: “There’s been a lack of new supply and there’s been an active reduction in grade-A supply.”

One of the key challenges for logistics is that, up until the crash, it was a sector abundant with speculation — and justified speculation at that. Financers did not need much assurance that a tenant was guaranteed because the demand was so high and needs predictable enough to be pretty certain that one would be found.

Now, although demand for quality warehousing is still high, partly driven by the evolution of retail and the growth of e-commerce, developers are simply unable — or unwilling — to speculate.

But, Gulliford says, even in logistics there are scattered opportunities open to SEGRO and other industrial investors. “You’d be pretty brave to look at a large-scale scheme speculatively in this market,” he adds. “People are taking longer to make decisions, but there is demand.

Where we see opportunities, we’ve been able to undertake projects selectively. From an in“One surprising thing is vestment perspective, we’re seeing strong interest, but it’s a very how robust the market defensive type of investment.” is given that we’ve had Gulliford also believes there is a double-dip recession” still a case to be made for specuTrevor Abrahmsohn lation, although this is now about the delicate supply/demand balance, and finding the perfect sites for development. “There are markets where we believe speculative build is an attractive proposition, such as where there is demand but little supply,” he says.

And another thing in industrial property’s favour is that it is generally a better bet for income return because there is less churn in tenants, especially in tougher times when, as Gulliford puts it, “people tend to stay put”.

With more strife likely in the coming year — especially on the European continent, where there will almost inevitably be more economic upheaval — it would be facile to predict a very different picture from 2012 for the UK real-estate industry. The country’s retail-sector vacancy rates are still alarmingly high and even worse news could be on the way as thousands of leases come to an end this year, unlikely to be renewed even by some of the biggest hitters, such as Arcadia.

Property operates on fundamental rules and, as Jenkin says: “I don’t see how the fundamentals will be any different.” But one of those rules has always been that tough times present big opportunities. For the UK, the proof of that remains to be seen.

preview magazine I February 2013 I www.mipim.com

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i market INSIGHTS GERMANY

SPOTLIGHT ON GERMANY

Time to think provincially The German market has fared better than most, fuelled by a less than 1% growth in GDP that, in less troubled economic times, would have been greeted with gloom. With the OECD predicting 0.5% growth for 2013, Peter Clucas looks at the market and its prospects

Frankfurt, one of Germany’s ‘Big Six’ cities

T

HERE is much talk of the ‘Big Six’ cities in Germany — Munich, Frankfurt, Hamburg, Berlin, Cologne and Dusseldorf — and some speak of a ‘Big Seven’, adding Stuttgart to the list. But to focus purely on these major conurbations is to lose sight of the overall picture, which is much more diverse.

The geography of Germany means that some regions are hundreds of kilometres from these cities, especially those of the former East Germany. The result is that many major provincial secondary towns and cities have very strong property markets of their own.

This characteristic is best seen in the retail market, where Comfort Research & Consulting has identified 19 cities with a catchment in excess of one million. Some of these cities are relatively small. For instance, although

Mannheim has a population of only 313,000, it has a retail catchment of 1.3 million. And Saarbrucken, with a population of mere 176,000, still manages to reach over one million shoppers.

Retail sales, according to Comfort, follow the Big Seven pattern, ranging from €2.95bn per year in Munich to €1.3bn in Frankfurt. Not far behind is Hannover with €1.13bn, followed by a further 16 German towns and cities with a turnover of more than €0.5bn each.

The retail market in Germany is relatively buoyant, with yields in prime shopping centres as low as 5%, according to BNP Paribas. The French bank believes the outlook for the national retail property market in Germany is “very encouraging, attracting new and for the most part foreign retailers”.

“Investors are still very keen to invest in German retail properties” Jan Linsin

www.mipim.com I preview magazine I February 2013 I 71

i market INSIGHTS Time to think provincially Jan Linsin, CBRE’s head of research, Germany, notes a slowdown in investment caused by lack of supply rather than demand. “Up to now, retail investment volume in 2012 totalled €4.8bn, accounting for around one third of the overall investments in commercial properties,” he says. “Year on year, retail investment volume decreased by 42%, although the average volume invested per transaction remained almost the same at €26.4m compared with the previous year [€28.6m]. The decline in the invested volume can be mainly attributed to the shortage in supply — investors are still very keen to invest in German retail properties. The short supply has another consequence: investors increasingly invest in the B locations as they can hardly find appropriate products in the top-five investment centres.”

This shortage of supply is illustrated by the fact that there are only five new-build completions scheduled for 2013: Leipziger Platz in Berlin, Bikini Berlin, Skyline Plaza in Frankfurt, Pasing Arcaden in Munich and KoenigshofGallerie in Mettmann. The last is typical of the vagaries of the German market. It is the country’s most densely populated rural area, but is not well known outside the country, being overshadowed by nearby Dusseldorf.

A similar situation is found in the commercial office market. Here, speculative office development is slow, with only four new-build speculative office completions anticipated by CBRE by the end of 2013: Mercedes-Benz Vertriebszentrale in Berlin, two projects in Dusseldorf — Vodafone Campus and Silizium — and Quartier Alpha in Frankfurt.

“In the first three quarters of 2012, office take-up amounted to 1.81 million sq m and was thus around 10% below the result of the previous year. Owner-occupiers had a share of around 7% of the total take-up in the first nine months. For [the whole of] 2012, we expect take-up to be around 2.5 million sq m,” Linsin says.

He quotes the highest prime office rents as €38.00/ sq m/month in Frankfurt. The figure stands at €31.50 in Munich, falling to €22.00 in Berlin. Moderate increases are expected as vacancy rates continue to decline.

compiled the survey, says: “Investors seem to be prepared to pay a premium for the high level of safety that the Munich market offers them. Multipliers in Munich currently stand at 20-fold the annual net rental income, while in Regensburg they equate to 16-fold.”

He adds: “Aside from Munich, we have found that more expensive markets for residential stock include Passau, Berlin and Konstanz. Comparatively underpriced markets include Mainz, Gelsenkirchen, Mannheim and Flensburg.”

CBRE has seen the residential investment market double in the last year: “German residential portfolios continue to remain one of the most popular asset classes among institutional investors. Thus, despite the very strong first half of the year, the transaction volume for residential portfolios comprising more than 50 residential units continued to increase in the third quarter by €1.58bn to a total of about €8.18bn. Consequently, in the first three quarters, the transaction volume throughout Germany was twice as high as the transaction volume of the same period last year.”

With many European economies stagnant at best, or in serious decline at worst, it is no surprise that Germany is regarded by many property investors as a safe haven.

Money is pouring in from European countries such as Italy and France, and there is considerable investment from Russia. This is certainly borne out by low yields, strong demand and a shortage of supply.

But the obverse of ‘safe haven’ is ‘bubble’. Many observers consider that only a small spike in interest rates or a minor increase in unemployment could derail the market. Over the coming years, Germany will not be immune to the economic buffeting affecting its neighbours, so canny investors should research the markets thoroughly and spread their risk accordingly.

A new report by Savills finds that the German residential market is the largest in Europe, comprising approximately 1.4 billion sq m at an estimated value of more than €2 trillion. It offers attractive investment opportunities at both ends of the risk spectrum for core and opportunistic investors, with considerable regional disparity.

In a study across Germany’s 127 largest housing markets, the firm notes that rents increased by more than 80% between 1995 and 2010 in Greifswald, in northeast Germany, but declined by 20% in the same period in Leipzig and Gorlitz. Savills identifies Munich, Regensburg and Stuttgart as the lowest risk areas for investors.

Matthias Pink, head of research at Savills Germany, who 72 I

preview magazine I February 2013 I www.mipim.com

“Investors seem to be prepared to pay a premium for the high level of safety the Munich market offers” Matthias Pink

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i market INSIGHTS FOCUS ON RUSSIA

Developers push the outer limits The mixed-use Skolkovo Innovation Centre

Russia — the world’s largest country — offers investors opportunity aplenty, particularly on the development front.

But, warns Ben Cooper, it pays to treat the Russian bear with respect

W

HEN a city is set to be the future home of Europe’s tallest building and Europe’s largest shopping centre — both of which are under construction — it’s worth taking a closer look at its present. Moscow, the ‘big village’, is getting bigger.

It is part of a surge of activity in Russia that is seeing an injection of huge swathes of new real-estate investment both internally and, increasingly, from over the border.

The chances to invest are plentiful and, potentially, very lucrative — but not without complications.

So what are the new opportunities in the growing Russian real-estate market? And what do investors need to be aware of before they take the big step?

“There are still some big question marks from foreign investors interested in Russia,” says Maxim Karbasnikoff, head of retail services and a partner at Cushman & 74 I

Wakefield Russia. “Russia is not seen by most outsiders as a safe haven, but there is a lot of potential. There are not enough quality assets, but that’s a great opportunity for developers.”

This is a real understatement given that, only last year, the Russian government gave the nod to an incredible masterplan to double the size of Moscow. With a population of more than 13 million — and growing by some 150,000 per year — and a famously crammed and chaotic city centre, the only way was out.

The seed for a ‘New Moscow’ has been planted, and a whole area of land to the south of the city is where the concept will take shape.

There is a “strong political will”, Karbasnikoff says, which is driving much of the progress. Not that it would take that much stimulation from government to encourage the

preview magazine I February 2013 I www.mipim.com

“Every dollar you put into the Russian economy accelerates very quickly” Thomas Devonshire-Griffin

RUSSIA

market. Already investors — predominantly from within the Russian Federation — have seen the potential represented by Moscow, St Petersburg and other cities.

In fact, Karbasnikoff says, the key is to think big: “The real opportunity is not for people just looking to do one project, but for people who are able to build a whole portfolio in Russia. Developers are looking at building multiple projects. They are looking to get critical mass. One project can fund another and you can release the equity on completion.”

Evidently, nothing is done in halves in Russia. One only has to look at the Skolkovo Innovation Centre to see the scale and ambition of the Moscow development. The bold mixed-use scheme is intended to put Moscow on the map as an ultra-modern hub of technology and learning.

And next year the Federation Tower will be completed — a building that, at 506 metres (1,660 feet), will be the tallest in Europe. It will stand in the extraordinary MoscowCity area, which is home to no fewer than two previous European record-holders.

Moscow-City — or to give it its full name, Moscow International Business Centre — sits to the west of the capital and will, when completed, be a multi-use, ultramodern space with a staggering line-up of prime buildings. But it certainly doesn’t stop there.

Moscow is not just bolstering its financial credentials; it is coping with an expanding population. And in St Petersburg, too, it is the old equation that a rapidly growing population is pushing the boundaries of the city outwards.

Paul Grace, Turner & Townsend’s general director for Russia, says that residential offers a serious proposition for large investment, especially what he describes as ‘comfort class’ residential, or accommodation suited to Russia’s burgeoning middle-class population. “There are major residential schemes in big cities,” he says. “These are some of the best performing schemes in Russia and more big schemes are being considered. It’s where the biggest capital spend is in Russia at the moment. There’s some very poor residential property in Russia. It’s from a bygone era and it needs modernising.”

Inevitably, masses more residential property will lead to a need for a lot of retail, particularly in Moscow, where whole new neighbourhoods will begin to spring up.

True to form, the response is a truly staggering retail property project — the Avia Park development in Moscow. With a total leasable area of 236,000 sq m (2.3 million sq ft) over four floors, with space for 460 stores, Avia Park will go straight into the top spot as Europe’s largest shopping centre when it is completed in 2014.

Incredibly, this is not the only big retail scheme in the pipeline. Thomas Devonshire-Griffin, regional director and head of capital markets at Jones Lang LaSalle Russia and CIS, says there will be even more — and with good reason.

“Retail is very strong in Russia,” he adds. “There is very

little personal debt, with relatively few mortgages and credit cards. 70% of pre-tax income in Russia is spent on retail, so every dollar you put into the Russian economy accelerates very quickly.”

“Every dollar you put into the Russian economy accelerates very quickly.”

But it cannot be denied that social and economic problems, political volatility and fears Thomas Devonshire-Griffin about internal machinations have held back foreign investment, especially from the West.

Turner & Townsend’s Grace says: “Foreign direct investment in Russia is still quite low compared to other emerging countries like Brazil and India. There’s a lot of investment coming in from Eastern Europe and countries like Kazakhstan. The finance is still quite internal.”

But in the European Union, investors are struggling to find places for their money. Tentatively searching across all sectors, cities and markets and finding few opportunities that even resemble a safe haven, many are preferring simply to sit on their cash. Some staggering figures suggest the amount of capital that international corporates and fund managers are stockpiling could be as high as $5 trillion worldwide.

Russia might not be perfect — indeed, it has been included in the list of questionable investments, which is partly why such high levels of cash are in stasis — but whichever way you look at it, doubling the size of Moscow is going to create opportunities on an almost unprecedented scale for investors from both inside and outside of Russia.

And with the right approach and timing, companies could reap the benefits for many years to come.

“When you look at the Russian investment market, in many ways it’s still in its infancy,” Grace says. “We’ve still got a long way to go.”

Jones Lang LaSalle regional director Thomas Devonshire-Griffin www.mipim.com I preview magazine I February 2013 I 75

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INSIGHTS

Diversity breeds new opportunity CONTENTS HOTELS P79 Major hotel operators are continuing to operate an assetlight strategy, separating the realestate and operational sides of their industry. But what is the impact of this approach on their ability to roll out new formats that meet changing consumer trends?

P83 A highlight of the MIPIM 2013 conference programme is the Masterminds Hotel And Tourism session, in which three senior hotel executives â&#x20AC;&#x201D; Stephen Joyce, Rui Barros and Simon Vincent â&#x20AC;&#x201D; will offer their perspectives on the hospitality industry

Investors are considering a wider range of opportunities in their search for attractive returns. MIPIM News asks where will the smart money be going in 2013?

SPORTS AND LEISURE P85 Sports venues are tricky. They are used infrequently yet cost a fortune to build, are expensive to operate and need to be served by heavyduty transport links. Operators are asking how stadiums can be integrated into wider developments to justify the huge costs involved RESIDENTIAL P89 Healthcare/senior accommodation and student housing are attracting increasing attention from institutional investors. So what are the niche markets that are threatening to develop into global asset classes?

RETAIL P93 Leisure components have become increasingly embedded in the fabric of most decent-sized shopping centres. But just why are restaurants, cinemas and gyms so important?

www.mipim.com I preview magazine I February 2013 I 77

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i sector HOTELS HOTEL TRENDS

Accommodating change

Major hotel operators are continuing to operate an asset-light strategy, separating the real-estate and operational sides of their industry. Chris Bown looks at the impact of this approach on their ability to roll out new formats that meet changing consumer trends

T

HE TOP hotel operators are continuing to Yet following the banking crisis, it is more difficult than sell off their assets and concentrate on mar- ever to persuade investors to commit to a business secketing and managing their brands. Business an- tor with which many are unfamiliar. And incidents such alysts prefer the separation between real estate and man- as the 2012 restructuring of Travelodge in the UK, which agement, as they can view the performance of a hotel left some hotel landlords suffering the loss of rent and, in group without the complication of hotel valuations or the some cases, their tenant, does not help confidence. But there are now signs that some of more lumpy business of property the major brands are looking at management. creative ways to help pump prime But the salami-slicing of hotel op“One very positive hotel property developments, in erations provides challenges, pardevelopment is that order to help feed their own deticularly in a market constrained sire to expand in key markets. by a lack of funding. Without hothe brands are ready Some groups, such as tel groups prepared to invest in to put some balanceInterContinental, have already the properties they want to opersheet capital in play” essentially completed the process ate, it is down to developers and John Wagner of stripping down to the assetinvestors to have faith in building light model and now own only a for the sector.

German chain Motel One is on the hunt for prime sites in Europe

www.mipim.com I preview magazine I February 2013 I 79

i sector HOTELS Accommodating change few, trophy hotel property assets. Others, such as Francebased Accor, are still divesting themselves of hotel properties. The group recently sold seven hotels in Australia and New Zealand, and two in Beijing, which it will continue to operate, realising €110m.

The challenge, then, is for these asset-light companies to persuade developer and investor partners to work with them to deliver the product they need. In some parts of the world, where hotel demand is strong, such as the expanding markets of China and Brazil, such partners are relatively easy to find. In early December, for example, Marriott announced its developer partner Prisma Engenharia would create three new hotels for the company in Brazil, enabling it to launch its mid-market brands — Courtyard by Marriott and Fairfield Inn — into the country. In this instance, Prisma Engenharia has a track record of building 14 hotels across southern Brazil. It also has the facilities and the appetite to add more in a market where both the soccer World Cup and the next summer Olympics are set to bring in a wave of tourists and generate international interest. In markets experiencing softer demand, this can be more of a challenge.

operations.

Wagner expects to continue to work with Patron, recycling the sale proceeds into further hotel developments.

“We are working on several deals,” he reports. While Patron allocates only a modest amount of its overall investments specifically into hotels, “the experience with them at Stratford has been very positive”, Wagner adds.

One player thinking outside the box is Dutch developer TVHG. The group is part way through a series of developments that will deliver 19 new, mainly budget-brand hotels in locations across the Netherlands. The €120m development programme was put together after TVHG’s founders spotted a shortage of budget-sector hotel rooms in their home market, at the same time as an oversupply of office space. Agreements struck with the landlords of the empty office buildings and operators including InterContinental, Hilton and Marriott have led to a series of conversions.

“TVHG identified a shortage of select service hotels and, at the same time, a glut of offices that they could convert,” says Marc Finney, head of the international hotels and resorts consultancy team at Colliers International, who helped introduce funders and “For Motel One, it’s management company Interstate. all about getting The new Holiday Inn, Hampton by Hilton, Ibis, Aloft and Courtyard the best sites and

by Marriott hotels will open in sevdelivering quality” eral Dutch cities over the coming Stefan Lenze months.

Now, however, there are signs that the constrained debt markets are encouraging the big brands to think again about their aversion to investing in real estate. John Wagner, a partner at Cycas Hospitality, has observed a recent shift in attitude among the major hotel companies, indicating that they are responding to the new situation. “One very positive development is that the brands are ready to put some balance-sheet capital in play,” he says.

Wagner elaborates: “With limited exceptions, the big brands are rarely going to buy a hotel. But I’ve had a number of conversations with the brands that, six months ago, I wouldn’t have thought possible. Their attitude is to bridge the funding gap and put a little more of their skin in the game.”

That commitment could take a number of forms, Wagner says, including so-called key money, a lease/rental guarantee to help attract other funding, or even an initial partial funding of a new development.

Wagner recently agreed the sale of a joint development in Stratford, East London overlooking the 2012 Olympic Park. Cycas, with the backing of funding partner Patron Capital, constructed a combined Holiday Inn and Staybridge Suites apartment hotel in a block above the Westfield Shopping Centre, with both units opening ahead of the Olympics. With the event completed and the hotels able to demonstrate successful trading, they are now being handed on to a long-term investor. Cycas, however, will retain the day-to-day management of the hotel 80 I

Other new hotel brands are taking a more fluid approach in a marketplace that still presents growth opportunities if there are funds to invest.

German chain Motel One, for example, is adopting a mixed approach as it expands its budget-style hotel brand into Austria and the UK. The company signs leases, buys sites and funds development, even choosing between conversions of existing buildings and new builds, with its approach dictated by the need to secure the best locations in city centres.

“For us, it’s all about getting the best sites and delivering quality,” says Motel One’s deputy head of legal, Stefan Lenze. “We put a strong emphasis on design and quality — leasing or owning gives us much better control over our mix.”

Motel One has the benefit of a strong balance sheet and supportive bankers, assisted by the fact that a Morgan Stanley fund is an investor in the company. And its expansion plans are substantial. Following a first UK opening in Edinburgh, a development pipeline of 1,500 rooms is in place. Meanwhile, in Vienna, the company recently announced its largest project to date — a 530-room hotel in an 18-storey block close to the city’s main station.

preview magazine I February 2013 I www.mipim.com

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i sector HOTELS HOTEL TRENDS

Three hosts with the most A highlight of the MIPIM 2013 conference programme is the Masterminds Hotel And Tourism session, in which three senior hotel executives — Stephen Joyce, Rui Barros and Simon Vincent — will offer their perspectives on the hospitality industry. Chris Bown reports

A

MONG the senior executives from the ho- international expansion tel industry that will be gathering at MIPIM plans: it has launched ho2013 are the three speakers at the Masterminds tels in Istanbul, Turkey Hotel and Tourism session on Thursday, March 14: and Costa Rica during Stephen Joyce, president and CEO of Choice Hotels the last few months. In International; Rui Barros, senior vice president and man- November, Wy nd ha m aging director of Wyndham Hotel Group; and Simon also launched its Days Inn brand into Saudi Arabia, Vincent, president, EMEA, at Hilton Worldwide.

Tourism continues to be a global growth industry, yet re- with plans to open 10 hostrictions in development finance are constricting the tels in the Kingdom in the supply of new hotels, according to Joyce. “Choice Hotels coming years. The compais a pure-play franchisor, but we are very much impact- ny’s development pipeline ed by development and financing conditions,” he says. amounts to more than 900 “While new development in the US in slowly improv- hotels, representing an ading, we expect Europe to continue to have a very slow re- ditional 108,000 rooms of turn to new construction. As a result, you can expect to see most of our activities aimed at conversion “Financing is finally opportunities.” coming back” However, Joyce sees conditions in Stephen Joyce the market improving: “Financing is finally coming back. We’re seeing more hotels trade hands. We’re seeing an uptick in development — not anywhere near the which close to half are for projects outside of the US. levels we experienced in recent years, but steady growth At Hilton, meanwhile, Simon Vincent is one of a senior management team driving a global hotel group with nonetheless.”

Joyce says that, in Europe, the banks are focusing on the 650,000 rooms across 90 countries. Three quarters of the strength of the operator when deciding whether to fund 865 hotels in Hilton’s expansion pipeline are destined to debt. He adds: “The asset, location and brand are in- be developed outside its home US market, as the compacreasing considerations, with a greater emphasis now be- ny drives through an ambitious international growth plan. ing placed on having an association with a brand for sup- One of Vincent’s key responsibilities is growing Hilton’s DoubleTree brand within Europe. During 2012, Hilton port — which is good news for Choice.”

At Wyndham, Barros drives an international company opened new DoubleTree hotels in Zagreb in Croatia and consisting of more than 7,200 hotels in 66 countries. The Oradea in Romania, as well as three hotels in London hotels operate under brands including Wyndham, TRYP, and Emporda on Spain’s Costa Brava. The DoubleTree brand now extends to 320 properties in 26 countries, with Ramada, Days Inn and Howard Johnson.

Recent openings give a flavour of the company’s further European expansion planned.

Stephen Joyce

The HTL Lounge (open to all MIPIM participants) on Level 3 will host many events, project pitching and highlevel panel sessions on topical hospitality real estate issues.

www.mipim.com I preview magazine I February 2013 I 83

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i sector SPORTS AND LEISURE THE VENUE DILEMMA

Good move or expensive mistake?

Sports venues are tricky. They are used infrequently yet cost a fortune to build, are expensive to operate and need to be served by heavy-duty transport links. Steve Killick considers how stadiums can be integrated into wider developments to justify the huge costs involved

Architect Populous’ Rostov Stadium, to be built for the 2018 FIFA World Cup

T

HERE is no doubt that the 2012 London Moreover, 20 of the other 21 venues built for the 2004 Olympics delivered on every front. However, games lie abandoned and derelict. And given the current just like other cities that have produced a top- economic situation in Greece, nothing is likely to change flight sporting event, there is still that nagging doubt in the foreseeable future. about what happens to the stadium when the carni- So, with rumblings already starting about Brazil’s abilival leaves town. At the moment, the London Olympic ty to deliver safety and comfort in the venues planned for Stadium looks very much like a new home for Premier the 2014 World Cup football tournament, it is remarkable League football club West Ham United or, er… nothing. that the directors of any major sports teams even think And for the millions spent on delivering an iconic venue about moving home without backers comparable to the well serviced by public transport along first-class access sheikhdom that owns Manchester City football club or routes, an Olympic stadium without an anchor tenant the billionaire Russian oligarch who funds Chelsea FC. from a major sport spells financial ruin. The Bird’s Nest Yet move they do. Katie Kopec, head of development in Beijing, which had architectural critics drooling in consultancy at Jones Lang LaSalle, says: “Unless clubs 2008, is now an empty shell containing a Segway track. It have land to release to create sufficient funds for enabling development building, a new cost $480m to build and needs $11m stadium for anyone can be really, rea year to maintain. A lot of Chinese ally difficult.” tourists still go to see it, but it is gen“A new sports While grants are sometimes availaerating nowhere near enough income ble from a local authority desperate to be kept in good order. stadium can to keep a club that raises the profile But at least Beijing’s stadium atprovide a beacon of the area, the vast majority of clubs tracts visitors. In Athens, where the for regeneration” that look to move are from the upper Olympics cost the Greeks $14.4bn, Stuart Robinson tier. “At the lower level many clubs the purpose-built stadium has seen simply cannot afford it,” Kopec says. little use other than for concerts. www.mipim.com I preview magazine I February 2013 I 85

i sector SPORTS AND LEISURE Good move or expensive mistake? and certain London boroughs One football club counting the — one reason why Tottenham cost of such a move is the UK’s “Generally, clubs will Hotspur’s proposed move to the Coventry City, which was relelook at sites already Olympic Stadium in Stratford, gated from the Premier league well served by road East London, was met with such in 2011 after 34 years in the horror by many in North London. top flight. It moved from its and rail rather than Tottenham’s revised scheme, Highfield Road base to the undertake costly local which will allow the club to reRicoh Arena in 2005, having sold transport projects” main at its existing stadium, its former ground for residential Julie Clark forms part of a much larger, development. mixed-use scheme known as the Despite the move to a stadiNorthumberland Development um situated within easy access of the M6 and close to the Arena Park Shopping Project (NDP). Haringey Council has approved the deCentre, the plight of Coventry City — relegated from the velopment, which will see a 6,700 sq m Sainsbury superChampionship to the third tier of the Football League at market opening alongside a second convenience store. the end of the 2011-2012 season — means that it is strug- The scheme provides employment and regeneration, and gling to meet its rental obligations to the owners of the allows a Premier League team to remain at its historical Ricoh Stadium. As a result, the club’s venture-capitalist base. “A new sports stadium can provide a beacon for regeneration,” Robinson says. backers are thinking of withdrawing funding.

So how does a football team — and within Europe, it is primarily a football team — manage to balance the books One of the biggest hurdles to be overcome in developing when it comes to moving to a new venue? In the case of new stadiums is coping with the historic and mainly urLondon-based Arsenal FC, there was the old Highbury ban street layouts where grounds are traditionally based. stadium to be sold off for luxury apartments, although And despite what is said in their development prospecthe downturn in the housing market made this a far more tuses, football clubs rarely make any major improvements to local transport or infrastructure. Wembley Stadium is drawn-out process than was originally envisaged.

Stuart Robinson, executive director and head of UK still just as difficult to get to as it always was. planning at CBRE, says: “Football clubs have long since “A few cosmetic improvements have been made to appreciated that stadiums cannot simply be used for foot- Wembley underground station — in the same way ball matches once every two weeks. They must find alter- that Arsenal contributed to an upgrade of its lonative uses, be it concerts or ground-share arrangements. cal Arsenal station,” says Julie Clark, leader of And do not forget how important these clubs are in terms PricewaterhouseCooper’s UK sports and leisure sector. of employment, which is why local authorities are so loath “But generally, clubs will look at sites already well served to see a club — especially a Premiership club — move by road and rail rather than undertake costly local transport projects of their own.” away from the area.”

Football clubs employ between 50 to 200 full-time staff According the Clark, local council support is vital: “With and a further retinue of part-time employers when match- it, it is possible to access grants and get the planning proes or other events are taking place. The resulting multipli- cess through so that, in the end, the community will beneer effect on shops, pubs and restaurants in the area means fit. Look at Brighton’s Amex stadium — it’s not only prothat stadiums play a key role in the local economy, espe- vided a new focus for the football club and a boost to the cially in impoverished areas, such as North East England community, but is also extremely pleasing aesthetically.”

ROSTOV HIRES OLYMPIC ARCHITECTS POPULOUS, the architect of the London 2012 Olympic Stadium, the Sochi 2014 Olympic Stadium and Soccer City 2010 World City Stadium in Johannesburg, has been selected to design the new Rostov Stadium.

The fourth stadium that Populous has designed in Russia, it will be used for the 2018 World Cup, together with 86 I

venues in Kazan, Saransk and Sochi.

In September, the 11 host cities that will organise the 2018 FIFA World Cup football tournament in Russia were announced. The 64 matches will be staged at 12 venues, including Moscow (the only city with two stadiums selected), Saint Petersburg, Kaliningrad, Nizhny Novgorod, Kazan, Samara, Saransk, Volgograd, Rostovon-Don and Yekaterinburg.

Part of an overall landscape, the

preview magazine I February 2013 I www.mipim.com

Rostov Stadium design will set the standard for the whole region. It is inspired by the ancient earthworks — known as kurgans — along the banks of the river. These archaeological mounds of earth, which were used for pagan burial rituals, are major features of the landscape.

The stadium will have a 45,000-seat capacity for the World Cup, but will be scaled down to 25,000 seats in legacy. The concept had embraced

sustainable credentials and will form the core of a green city project, in order to protect the wetlands to the south of the river.

Damon Lavelle, principal at Populous, says: “It’s been a pleasure to work with Intex, the city and the governor of Rostov-on-Don to promote the project.

After our experience on the World Cup in 2010 and London 2012, we are certain that the stadium will be a great catalyst for the city and this part of the river.”

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i feature RESIDENTIAL HEALTHCARE/SENIOR AND STUDENT LIVING

The alternative model Blackstone sold its Nido student housing business to Round Hill Capital and Dutch fund PGGM

Healthcare/ senior accommodation and student housing are attracting increasing attention from institutional investors.

Doug Morrison examines the niche markets that are threatening to develop into global asset classes

I

NVESTORS look beyond traditional commercial property when they cannot find decent stock or the right returns — and, over the past year, their search has taken them headlong into two so-called ‘alternative’ investment sectors: healthcare/senior living and student housing.

The most emphatic evidence of this can be seen in Standard & Poors’ US REIT index where, at the December 2012 year-end, three of its top-10 REITs by market value were companies specialising in healthcare/ senior living.

It was a year in which this sector was seen to come of age, epitomised by Health Care REIT’s $844.6m takeover of Sunrise Senior Living in a deal that will create one of the biggest owners of nursing homes in the US, Canada and the UK. Student housing has also been subject to remarkable investment activity, notably in the UK, with Blackstone’s

$669m sale of its Nido business to Round Hill Capital and Dutch fund PGGM paying $1.35bn for a majority stake in leading operator UPP. In the UK alone, student housing investment deals topped $3bn in 2012 — more than in the US. Here we analyse the growth of these two sectors.

HEALTHCARE/SENIOR LIVING Health Care REIT’s takeover of Sunrise Senior Living is a transformational deal not only for the companies involved but possibly for the sector as a whole, since it has made many institutional investors sit up and take notice of healthcare for the first time.

As Phil Hall, director of healthcare of Jones Lang LaSalle (JLL), observes: “Private equity has long been a fan of

“In my opinion, 2013 will be the start of a major shift in sentiment towards healthcare investment” Tom Morgan

www.mipim.com I preview magazine I February 2013 I 89

i feature RESIDENTIAL The alternative model the healthcare sector, with over 70% of all merger and acquisition deals in Europe, the Middle East and Africa being private-equity backed. Pension funds and other forms of institutional capital, on the other hand, have been harder to persuade of the sector’s merits.”

Their resistance owes much to the high-profile collapse of Southern Cross, the UK care-home group, in 2011, which has undeniably cast a long shadow over the sector.

But Hall points to the “quiet revolution” taking place in the US with the rapid expansion of specialist healthcare Real Estate Investment Trusts (REITs).

Initially focused on the US, the REITs’ attention is now spreading overseas — not least in the case of Health Care REIT. The company swiftly followed the corporate acquisition of Sunrise in August with the buyout of the latter’s partners in joint ventures across the US and UK. That tidying up exercise made the combined real-estate value of the deal as high as $3.2bn.

Tom Morgan, healthcare director of CBRE, points out that another US REIT, HCP, provided debt finance to the UK’s Four Seasons Health Care in 2012, while Canadian REIT NorthWest Value Partners has established a German investment offshoot.

Morgan believes more money will flow overseas from the North American REITs. “They are raising capital at 2%; they are paying dividend yields of 4.5%-5%; they are buying over here [UK] at 6%-7% [yields]; and they are investing in scale. It’s not too great a leap of faith to think that you could look at the scale of their likely investment in billions,” he says.

Morgan adds: “The UK is the obvious first step from the US. We are a known quantity and we speak the same language. Commissioning in terms of the healthcare sector is relatively visible and understandable. But you have to think that Germany, Benelux, Scandinavia and France would be obvious next stages of development for them.”

Hall believes that the Sunrise takeover has ignited interest from EMEA and other international sources of institutional capital in the potential of healthcare. “In my opinion, 2013 will be the start of a major shift in sentiment towards healthcare investment,” he says. “While there remain issues of covenant strength, reputational risk and government policy to be tackled, the healthcare sector across EMEA offers the savvy investor great opportunities.” Hall adds: “Healthcare is coming of age.”

STUDENT HOUSING Student housing across the world is worth more than $200bn, according to Jones Lang LaSalle, which the firm believes signals the emergence of “a mainstream global asset class”.

JLL’s extraordinary $200m valuation is based on record student housing investment activity. In the year to June 2012, $4.7bn-worth of student housing transacted worldwide, says JLL, with the most active markets being the 90 I

US and UK, followed by Spain, Sweden and Germany.

The sector’s rapid growth has been underpinned by the rise in student numbers worldwide — growth increased from 98 million in 2000 to 165 million in 2011, and is expected to top 263 million by 2025. Over half of these students come from Asia, followed by Europe, Africa and South America. Such a rapid increase in demand has resulted in an undersupply of student housing and, consequently, an unbalanced student-housing market.

According to Philip Hillman, London-based lead director of JLL’s student accommodation team, this imbalance has helped student housing in the UK and US outperform other commercial property sectors, delivering total returns of between 11%-15%. Stable income and solid rental growth plus resilient performance in downturns are key attributes, resulting in high occupancy levels where enrolments are rising at a higher rate than supply.

Jeffrey Cooper, Savills’ New York-based chairman and executive managing director, says a 38% increase in US student registrations over the past decade has helped turn American Campus Communities and Educational Realty Trust into two of the best performing US REITS. Cooper adds: “The REITs avoided a downturn last summer when Congress passed legislation that prevented the doubling of student-loan interest rates that would have seriously impacted college enrollments and the affordability of student housing. Since that time, the student housing REITs have increased in value in line with the broader market.”

“The biggest barrier to financial institutions investing in many student accommodation markets is lack of quality stock” Philip Hillman

Under-supply is the common theme and it applies to most other regions too, although JLL acknowledges that mainland Europe, for instance, is up to 15 years behind the UK and the US in the evolution of student accommodation. In student-housing terms, that means much of Western Europe can be classified somewhat unusually as an ‘emerging market’.

Hillman adds: “Institutional investors in this sector require scaleability — the potential to secure significant operational portfolios with a development pipeline. The biggest barrier to major financial institutions investing in many of the emerging student accommodation markets is the lack of quality stock to invest in. However, these emerging markets should benefit from an accelerated acceptance of the investment characteristics of the sector as a result of the growth of the UK and US markets.”

preview magazine I February 2013 I www.mipim.com

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i sector RETAIL THE REPOSITIONING OF RETAIL

So much more than shopping

Puerto Venecia in Zaragoza, Spain, was Europe’s largest retail opening last year

Leisure components in retail schemes have become embedded in the fabric of most decent-sized shopping centres. But just why are restaurants, cinemas and gyms so important? Mark Faithfull reports

T

HE NEED to create destinations out of shopping centres has resulted in an unprecedented level of leisure within malls, with almost all major shopping-centre developments including a cinema, an increasingly sophisticated array of dining options, sports facilities from 10-pin bowling to adventure parks and urban surf offers, and child-focused and educational facilities aimed at the family market.

Despite the sector experiencing a wobble a few years back, as a number of investors and developers got the jitters about cinema covenants and just what to do with that huge box at the top of the mall if the operator pulled out, cinemas have firmly re-embedded themselves as the key leisure anchor.

“Cinemas continue to be a huge draw and they also encourage food and beverage operators,” says Thomas Rose, associate, leisure and restaurants, at Cushman & Wakefield. “So although they are a traditional adjunct to a mall, they remain essential to many schemes.”

He adds: “The issue for investors in successful prime

schemes is about finding new space for leisure, because the retail is fully let. For example, at Gloucester Quays in the UK, we were able to add two metres to the height of a large storage area above the retail to turn it into a cinema, bringing in new revenue and leisure without impacting the retail provision.”

There has been an increasing convergence of technology, leisure and social media in recent years. Ice-World is a good example. The Netherlands-based temporary ice-rink specialist has been trialling a digitally interactive version of its rinks in the Netherlands with CBRE Global Investors.

The rinks include entrance screens, which link directly to Facebook and other social media, and interactive ice, which illuminates reactively or proactively for skaters. The system is entertaining, allows instant downloads to social media and captures data.

The company is now looking for branding partners for a global roll-out, says Ice-World’s director of partnerships,

“The issue for investors in successful prime schemes is about finding new space for leisure” Thomas Rose

www.mipim.com I preview magazine I February 2013 I 93

i sector RETAIL So much more than shopping street-food vendors and popJochem Feldberg. “Ice rinks have up market stalls into a shopproven their value as temporary, “I’d like parents and ping-centre environment in a seasonal components of retail, children to get here street market curated by Richard but there are huge opportunities and say, ‘What are we Johnson, the UK food journalist to combine this with brand and and broadcaster and the brains promotional offers,” he adds. going to do today?’” behind the emerging British There has also been a rise in Ian Sandford Street Food movement and more outlandish leisure offers.

British Street Food Awards.

Aerial Adventures director Mark Murray builds features such as extreme adventure rides Ashley Blake, Land Securities’ director of retail portfofor shopping spaces and he wants to encourage land- lio management, says: “This allows us to bring in retaillords to think about their buildings in a different way. ers who would never normally operate in a mall environ“Landlords might not be thinking about having an ex- ment. We can rotate them and allow them to go off to treme-sports adventure in their midst, but they should,” festivals and the like during the year. From an investment point of view, this only represents 5% of our income. I he insists. think, at that sort of level, you can persuade investors to try new things out.”

Cite des Sciences et de l’Industrie, the exhibition arm of the French Science Museum, has brought its brand of ed- Cushman’s Rose points out that the level of leisure within ucational entertainment to malls, signing its first deal at a shopping centre will vary depending on the economic the Mirdif City Centre mall in Dubai, operated by Majid situation within the mall. “Prime schemes tend to be fully let so, in that case, you are looking to create new space Al Futtaim.

“We can provide something that not only creates a great because you do not want to reduce the retail provision,” environment for children, but that also helps to promote he says. “For a secondary mall, you might want to rejig our mission to ‘spread the light’,” says international pro- the provision to take up vacant space. An issue has been ject manager Fatima Ouali. “We provide the equipment that restaurants do not tend to pay at the same rental rate and the training, and help the mall to connect with edu- as prime retail pitches. But mitigating that, they often cational bodies in its area. It really is a community-based take off-prime spots and the leases tend to be longer.”

For European landlords, that increased confidence is evapproach.”

Orion Capital Managers director Ian Sandford— one of idenced in a sea change in provision. Food and beverthose behind Europe’s largest retail opening in Zaragoza, age used to make up as a little as 6% of the offer within many malls, but that is expected to at least double.

Spain last year — says that the days of people arriving at a shopping location with a pure shopping mission in Westfield Stratford City already sits at around 18% and mind are over. “Our idea is that families arrive at Puerto many believe the Asian model of 25% could become the Venecia Zaragoza without a preconceived idea of what European norm. they will do, but simply aware that the quality and quantity of options provides them with all the choices they need,” he says. “I would like parents and children to get here and say, ‘What are we going to do today?. And that might be different for each of them.”

The Puerto Venecia concept will be replicated in Valencia, a Spanish city not enjoying the happiest of times at present but well served by infrastructure and with a climate that lends itself to such a major leisure component.

Many retail destinations are also looking to put a contemporary spin on their food offering. At MOOD in Stockholm, the upscale food offer gives the centre much of its personality and buzz. Investor/operator AMF says that, since its opening in 2012, the restaurants have helped redefine the whole area around MOOD. Late last year, Land Securities revealed a multi-million pound investment in a new approach to food and leisure.

It will launch its Trinity Kitchen concept at Trinity Leeds, which opens in March 2013.

Trinity Kitchen will bring cooking demonstrations, 94 I

WHAT’S IN THE LEISURE MIX? ë &LQHPDV these remain popular as the leisure anchor. New technology means smaller footprints may be required in future. ë 5HVWDXUDQWV there is a wider mix of dining going into schemes. These are seen as vital to the extended-hour economy of shopping centres and add dwell. ë %RZOLQJ niche operators are extending the offer, but there are very defined space requirements. ë $FWLYLWLHV surfing, climbing walls, ice rinks, kids’ zones, etc usually prove popular, although they are capital-intensive for the landlord. ë *\PV these are a good adjunct but should be seen as a bedfellow rather than complementary to retail.

AMF Fastigheter’s MOOD development in Stockholm used restaurants to create a point of difference

preview magazine I February 2013 I www.mipim.com

EV PROGRAMME OF CONFERENCES &

ENTS

PERSPECTIVES, CHALLENGES AND OPPORTUNITIES FOR THE NEXT 12 MONTHS IN REAL ESTATE

12 - 15 MARCH 2013 Palais des Festivals Cannes, France

www.mipim.com

+ 70 CONFERENCES, 250 SPEAKERS Find out what’s in store this year: an impressive selection of conference sessions and networking events.

Photo credit: ©Michel Denance

MEET SOME OF THE SPEAKERS

DR. GEORG ALLENDORF,

MUSA AYKAC,

CAROLINE BARAT, Architect, Agence Search

Senior Vice President and Managing Director, Wyndham Hotel Group

Chief Executive, Manchester City Council

PROF. GREG CLARK,

ALAN COLLETT,

RALPH DINOLA,

BERNARD HADDIGAN,

KENT MARTINUSSEN,

JÜRGEN MAYER H.,

CEO, Nurol REIT

RUI BARROS,

SIR HOWARD BERNSTEIN,

PAUL BEVAN,

Secretary General, EUROCITIES

Photo credit: Henry Roy

Head of RREEF Alternatives Germany, Austria and Switzerland RREEF Management GmbH

Global Cities Advisor, The Business of Cities Ltd

President, Royal Institution of Chartered Surveyors

Principal, Green Building Services, Inc

STEPHEN JOYCE,

DAVID LUNTS,

Executive Director Housing and Land, Greater London Authority

PROF. IR. WINY MAAS, Director - Architect, MVRDV

Chief Sustainable Consumption and Production, UNEP, United Nations Environment Programme

CEO, The Danish Architecture Centre

SEDISE MOSENEKE,

Principal, J. Mayer H. Architects

CEO, SAPOA

Photo credit: Lars Krüger www.lumivere.com

President and CEO, Choice Hotels International

ARAB HOBALLAH,

President, Haddigan Capital

Photo credit: Rob ‘t Hart

Architect, Philippe Chiambaretta / PCA

Photo credit: Paul Green

PHILIPPE CHIAMBARETTA,

CARLO RATTI,

STEPHEN RENNA,

CEO, CRE Finance Council

GAETAN SIEW,

ANDREW SMITH,

CEO, Global Creative Leadership Institute

Global Head of Property, Aberdeen Asset Management

ALEXANDER TAFT,

Managing Director, Structured Finance Europe, Invesco Real Estate

FRANÇOIS TRAUSCH,

CEO - Asia Pacific, GE Capital Real Estate

IHSAN MURAT TABANLIOGLU,

Founding Partner / Architect, Tabanlioglu Architects

DR JÜRGEN STARK,

Member of the European Central Bank Executive Board (2006-2011)

JOHN STINSON,

Managing Director, Capital Markets Group, Asia Pacific, Cushman & Wakefield

Photo credit: VVSG

Photo credit: Thomas Mayer

Director, MIT Senseable City Lab and founder, carlorattiassociati srl

FRÉDÉRIC VALLIER,

Secretary General, Council of European Municipalities and Regions (CEMR)

SIMON VINCENT,

President, EMEA, Hilton Worldwide

MURAT YILMAZ,

Senior Director, Development & Acquisition EAME, Starwood Hotels & Resorts

THE MIPIM TEAM WISHES TO THANK ITS CONFERENCES SPONSORS Gold & Mayors’ Think Thank sponsor:

RE-Invest Platinum sponsor

Silver sponsors

MME OF CON RA G O PR S AS CL DRL O W A R VE O SC DI AND TAILORED NETWORKING EVENTS

FERENCES

Stay on top of the latest news and trends in the real estate industry and connect with the most influential leaders in the property community thanks to the MIPIM programme of conferences & events.

FIND THE ANSWERS TO YOUR STRATEGIC QUESTIONS Gain insight from industry experts about: Geographical focuses Finance & Investment Innovation Cities & Infrastructure Industrial & Logistics Hotel, Tourism & Leisure Retail

Photo credit: Image & Co

Health Photo credit: Image & Co

NOT TO BE MISSED! Turkey, 2013 Country of Honour Connect with key Turkish decision makers and discover a dedicated programme of conferences and events under the Turkish Pavilion.

4 Power Meetings to boost your network These rapid targeted networking discussions, based on the concept of speed dating, will allow you to break the ice with other serious parties one-on-one. The Power Meetings will focus on sellers and vendors of both the logistics and hospitality markets.

Hotel, Tourism & Leisure Presentations Over 50 hospitality professionals will showcase their dynamism by presenting current projects or achievements.

New MIPIM Innovation Forum A 1,000m² showcase of the most innovative solutions and a specific schedule of conferences and events to increase the value of property assets.

A cycle of 4 “Masterminds” keynote addresses Delivered by the most successful CEOs and leading executives, who will share their vision of the industry’s evolution in the next 6 to 12 months.

EXPLORE EXCLUSIVE NETWORKING OPPORTUNITIES Business Accelerators

Photo credit: Image & Co

MIPIM Awards

Photo credit: Image & Co

Cocktails & Thematic Lunches

Photo credit: Image & Co

Leadership Events (by invitation only)

Photo credit: Image & Co

More details about speakers, content and conference venues on www.mipim.com Access to MIPIM 2013 conferences is free of charge for all registered delegates, within the limit of space available.

Programme as of 28th January 2013. All information contained in this programme may be subject to change.

and events s ce en er nf co of e m m ra og pr e nc la At-a-g

TUESDAY 12 MARCH 11.30 - 12.30 GEO

14.15 - 15.00 INNO

Japan Breakfast

China - Asia’ s destiny

By invitation only

Co-organiser: Cushman & Wakefield

KEYNOTE PANEL ON ENERGY EFFICIENCY Arab Hoballah, Chief Sustainable Consumption and Production, UNEP, United Nations Environment Programme Gaétan Siew, CEO, Global Creative Leadership Institute

8.30 - 10.00

8.30 - 12.30

GEO EVE

FIN

11.30 - 12.30 GEO

EVE

RE-INVEST SUMMIT Real estate strategies: Navigating through the uncertainty Managing risks and opportunities against global economic headwinds By invitation only Platinum sponsor: AXA Real Estate Industry partner: KPMG Research partner: IP Real Estate

13.00 - 14.30 Investors’ Lunch

Russia: influence of socially significant events on developer business Co-organiser: Vedomosti

14.30 - 15.30 GEO

11.30 - 12.30 LOG

Investment in Japan: the time is now!

What are the perspectives for the logistics real estate market?

14.30 - 15.30 LOG EVE

12.30 - 13.00 Meet the speakers

Power Meetings Invest in logistics Pre-registration required

11.30 - 17.00 INNO

By invitation only Platinum sponsor: AXA Real Estate

Innovation showcases every 30 minutes

10.00 - 11.00 GEO

12.30 - 14.00 GEO EVE

MASTERMINDS ASIA: challenges & perspectives for the next 12 months

Asia Lunch

Back to the future - The next ten years for the CEE & SEE property markets In partnership with: CEEQA

14.30-14.50 Keynote address

By invitation only

13.00 - 14.30

14.30 - 18.00 GEO

FIN

EVE

10.00 - 11.00 GEO

Investors’ Lunch

14.50-15.40 Panel conference on Money

Switzerland – still a safe haven for real estate investors?

By invitation only Platinum sponsor: AXA Real Estate

15.40-16.10 Coffee break

13.45 - 15.00 INNO

16.10-17.00 Panel conference on Development

Co-organiser: Immobilien Business

10.00 - 11.00 GEO International capital for Germany – who are the deal makers?

Innovators’ Vision: MIPIM Awards’ screenings - Best hotel & tourism resort - Best industrial & logistics development

Co-organiser: Heuer Dialog GmbH

Powered by Pecha Kucha*

10.00 - 11.30 LOG

14.00 - 14.30

3 logistics pitching sessions

KEYNOTE ADDRESS Sir Edward Lister, Chief of Staff and Deputy Mayor, Policy and Planning, Greater London Authority

11.00 - 12.00 INNO Sustainability without tears – how to achieve improved building performance with minimum effort and disruption Co-organiser: BPF

Sponsored by CEEQA

15.15 - 16.15 INNO

CIT

14.00 - 17.00 HTL HTL Presentations: Resort hotels - the leisure business

11.00 - 14.00 HTL

17.00-18.00 Cocktail in Grand Audi Verrière

Co-organiser: PKF hotelexperts

Case studies 16.00 - 16.30 TUR Where is Turkey situated within Europe and the Middle East real estate universe: outlook and alternatives Co-organiser: Reidin

16.00 - 17.00 GEO Passages to Africa: South Africa and its neighbouring markets

HTL Presentations: Tourism & leisure projects - infrastructure & demand drivers

Co-organiser: IPD

Co-organiser: PKF hotelexperts

*Pecha Kucha: creative format of presentation based on 20 images, 20 sec of talk per image

GEO Geographical focuses

FIN

Finance & Investment

HTL Hotel, Tourism & Leisure

SEG Focus by segments

INNO Innovation

LOG Logistics

TUR Turkey, Country of Honour

EVE MIPIM Events

Access to MIPIM 2013 conferences is free of charge for all registered delegates, within the limit of space available.

Programme as of 28th January 2013. All information contained in this programme may be subject to change.

CIT Cities & Infrastructure

and events s ce en er nf co of e m m ra og pr e nc la At-a-g

TUESDAY 12 MARCH 16.00 - 17.00

17.00

CIT

Best practices of inner city development

17.30 - 18.30

LOG EVE

Survival in a world of multi-channel: European retail as an investment

17.00 - 18.30 INNO

Co-organiser: IPD

Co-organiser: Property EU

16.00 - 17.00 LOG EVE Power Meetings Find tenants for logistics buildings

Innovators’ Vision: MIPIM Awards’ screenings - Best office & business development - Best refurbished building

Pre-registration required

Powered by Pecha Kucha*

16.30 - 17.30 INNO

17.30 - 18.30

Case studies

Minimising risks and maximising value in volatile markets: the role of international standards

17.00

HTL EVE

17.30 - 18.30

FIN

Pooled funds at a cross roads?

17.30-18.30 INNO

FIN

Case studies

Co-organiser: RICS

HTL Cocktail reception

FIN

Logistics Cocktail reception

19.30

EVE

MIPIM Opening Cocktail

WEDNESDAY 13 MARCH 10.30 - 11.30 INNO

11.30 - 12.30

Private equity real estate

10.00 - 10.30 TUR

Innovators’ Vision: MIPIM Awards’ screenings - Best residential development - Best shopping centre

11.30 - 17.00 INNO

Office investments in Turkey: a rising star?

Powered by Pecha Kucha*

Innovation showcases every 30 minutes

10.00 - 13.00 HTL

11.30 - 12.30 LOG

HTL Presentations: Boutique hotels - urban hideaways

Logistics hub: multimodal and intermodal freight transport

Co-organiser: PKF hotelexperts

12.30 - 13.00 Meet the speakers

9.00-10.00

INNO

Sustainable development, post-crisis scenario?

Co-organiser: ADI

Co-organiser: REImonitor

10.00 - 11.00

FIN

Green and performing buildings, what are the new perspectives in Europe?

Co-organiser: Juridim

10.00 - 11.00

11.00 - 13.00

FIN

MASTERMINDS INTERNATIONAL: challenges & perspectives for the next 12 months 10.00 - 11.00 GEO Brazil: new grounds for development Co-organiser: Vida Imobiliaria

FIN

Co-organiser: PERE

CIT

MAYORS’ THINK TANK Local authorities’ perspectives and opportunities for the next decade.

What are the measures of attractiveness and competitiveness?

11.30 - 13.00 INNO

By invitation only Sponsored by GDF Suez In partnership with: BPF, CCRE/ CEMR, Eurocities, UNEP

HTL Presentations: Luxury hotels and resorts - hospitality at its best

Case studies 14.00 - 17.00 HTL

Co-organiser: PKF hotelexperts

10.00 - 11.00 INNO

13.00-14.30 Mayors’ Lunch: Political leaders meet end-users

KEYNOTE PANEL: can skyscrapers be sustainable?

By invitation only Sponsored by GDF Suez

10.00 - 11.30 LOG

11.30 - 12.30 SEG

3 logistics pitching sessions

Healthcare real estate: a global overview

14.00 - 14.30 TUR Turkey: keynote address by a political leader 14.00 - 14.30 INNO Case studies

Co-organiser: Your Care Consult

*Pecha Kucha: creative format of presentation based on 20 images, 20 sec of talk per image

GEO Geographical focuses

FIN

Finance & Investment

HTL Hotel, Tourism & Leisure

SEG Focus by segments

INNO Innovation

LOG Logistics

TUR Turkey, Country of Honour

EVE MIPIM Events

Access to MIPIM 2013 conferences is free of charge for all registered delegates, within the limit of space available.

Programme as of 28th January 2013. All information contained in this programme may be subject to change.

CIT Cities & Infrastructure

and events s ce en er nf co of e m m ra og pr e nc la At-a-g

WEDNESDAY 13 MARCH 14.30 - 15.30

16.00 - 17.00

CIT

MAYORS’ KEYNOTE

17.00 - 17.30 TUR

CIT

UK: The future of city funding

Middle Eastern investors attracted to the Turkish market: the effects of the Reciprocity Law

Co-organiser: GVA

14.30 - 15.30

FIN

Evolving investment structures in Europe: finding value in European funds and REITs

16.00 - 17.00

FIN

Co-organiser: Reidin

Co-organiser: IPD Sponsored by Aberdeen Asset Management

MASTERMINDS EUROPE: challenges & perspectives for the next 12 months

14.30 - 15.30 INNO

16.00 - 17.00 SEG

Pre-registration required

The future of CRE: trends to set to revolutionise our industry

RE-entertainment: an upcoming trend for developers and investors?

17.30 - 18.30 LOG

Co-organiser: CoreNet Global

Co-organiser: BRC Imagination Arts BV

Airport areas as economic engine

14.30 - 15.30 HTL

16.30 - 18.30 INNO

17.30 - 18.30 GEO

Key lessons from successful hotel projects

Case studies

Why is the United States so attractive to global investors?

17.00

14.30 - 17.00 LOG

HTL EVE

17.00

15.30 - 16.00 INNO EVE

17.30 - 18.30 GEO

LOG EVE

Investing in the Netherlands

Meet the end-users cocktail

Logistics Cocktail reception

15.45 - 16.15 INNO

17.00 - 18.30 INNO

Current progress in smart buildings

Innovators’ Vision: MIPIM Awards’ screenings - Best futura project - Best mega futura project

In association with: ESSEC Business School

Power Meetings Hotel groups meet investors

Co-organiser: Real Capital Analytics

HTL Cocktail reception

5 logistics pitching sessions

17.15 - 18.00 HTL EVE

Co-organiser: Property EU

Powered by Pecha Kucha*

THURSDAY 14 MARCH 8.30 - 9.30

FIN

10.00 - 11.30 LOG

EVE

Leaders’ breakfast “Private Talks” with Dr Jürgen Stark, Member of the European Central Bank Executive Board (2006 - 2011) By invitation only

10.00 - 11.00

11.30 - 12.30 LOG

3 logistics pitching sessions

XXL warehouses: optimisation and resource mutualisation

10.00 - 13.00 HTL

12.30-13.00 Meet the speakers

HTL Presentations: Budget hotels - cheap and chic Co-organiser: PKF hotelexperts

FIN

PLENARY KEYNOTE ADDRESS: The global economic outlook and the EU financial crisis Dr Jürgen Stark, Member of the European Central Bank Executive Board (2006-2011) 10.00 - 11.00 INNO Case studies

11.30 - 12.30 GEO

11.15 - 12.15 INNO KEYNOTE ADDRESS BY ARCHITECTS Co-organiser: Lord Culture

Jürgen Mayer H. , Principal, J. Mayer H. Architects Caroline Barat, Architect, Agence Search Philippe Chiambaretta, Architect, Philippe Chiambaretta / PCA Ihsan Murat Tabanlioglu, Founding Partner / Architect, Tabanlioglu Architects

Is Scandinavia as stable as it seems or just late in the cycle?

Co-organiser: Fastighetsnytt

11.30 - 12.30 GEO Italian Real Estate. Reloaded.

Co-organiser: Chiomenti Studio Legale Sponsored by IDeA FIMIT

*Pecha Kucha: creative format of presentation based on 20 images, 20 sec of talk per image

GEO Geographical focuses

FIN

Finance & Investment

HTL Hotel, Tourism & Leisure

SEG Focus by segments

INNO Innovation

LOG Logistics

TUR Turkey, Country of Honour

EVE MIPIM Events

Access to MIPIM 2013 conferences is free of charge for all registered delegates, within the limit of space available.

Programme as of 28th January 2013. All information contained in this programme may be subject to change.

CIT Cities & Infrastructure

and events s ce en er nf co of e m m ra og pr e nc la At-a-g

THURSDAY 14 MARCH 11.30 - 17.00 INNO

14.30 - 17.00 LOG

Innovation showcases every 30 minutes

5 logistics pitching sessions

HTL Cocktail reception

12.30 - 13.00 INNO

15.00 - 16.00 HTL

17.00 - 17.30 HTL

KEYNOTE ADDRESS Decalogue for a senseable / smart city

MASTERMINDS HOTEL & TOURISM Perspectives on the hospitality industry Rui Barros, Senior Vice President and Managing Director, Wyndham Hotel Group Stephen Joyce, President & CEO, Choice Hotels Simon Vincent, President, EMEA, Hilton Worldwide

Hotel developments and investments in Turkey: your major destination

Carlo Ratti, Director, MIT Senseable City Lab and Founder, carlorattiassociati srl 13.00 - 14.30 HTL EVE Hotel & Tourism Lunch By invitation only Sponsored by ApexBrasil

17.00

15.30 - 16.00 INNO EVE Meet the end-users cocktail

13.00 - 14.30 GEO EVE

HTL EVE

Co-organiser: REImonitor

17.15 - 18.00 HTL EVE HTL Power Meetings Co-organiser: PKF hotelexperts

17.30 - 18.30

FIN

Opportunities in commercial real estate finance - U.S and European perspectives

By invitation only Sponsored by IDeA FIMIT

15.45 - 17.15 INNO Views of 8 stakeholders - Manage innovation for a better return on investment

17.30 - 18.30

14.30 - 15.30 GEO

16.00 - 17.00 HTL

The importance of retail in mega mixed-use projects

Iberian Peninsula (Spain & Portugal): economic perspectives

Hostels and budget hotels

Italian Lunch

Co-organiser: Jones Lang LaSalle

14.30 - 15.30

FIN

16.00 - 17.00 GEO

Case studies

Chile: the strategic platform

19.00 - 19.30 EVE

Co-organiser: AOA & Prochile

16.00 - 17.30 SEG

Co-organiser: IPD

Investing in residential and social housing

MIPIM Awards Red Carpet & Cocktail

Co-organiser: ISA

17.00

19.30 - 20.30 EVE MIPIM Awards Prize-giving Ceremony

Co-organiser: IPD

Does being green create value for end-users?

FIN

17.30 - 18.30 INNO

Co-organiser: PKF hotelexperts

The regulation game: implications of Basel III, AIFMD, Solvency II for investment and financing debt

14.30 - 15.30 INNO

Co-organiser: CRE Financial Council

LOG EVE

Logistics Cocktail reception

FRIDAY 15 MARCH 10.30 - 12.00 INNO Innovation showcases every 30 minutes

10.30 - 11.30

11.45 - 12.30 INNO

FIN

MIPIM Wrap-up In partnership with the Wisconsin School of Business

GEO Geographical focuses

FIN

Finance & Investment

HTL Hotel, Tourism & Leisure

SEG Focus by segments

INNO Innovation

LOG Logistics

TUR Turkey, Country of Honour

EVE MIPIM Events

Access to MIPIM 2013 conferences is free of charge for all registered delegates, within the limit of space available.

Programme as of 28th January 2013. All information contained in this programme may be subject to change.

Ten golden guidelines to increase the value of the property asset

CIT Cities & Infrastructure

i 2013awards

The Jury PRESIDENT OF THE JURY Mr. Michael STRONG CBRE Chairman & CEO - EMEA United Kingdom

Dr. Thomas BEYERLE IVG Immobilien AG Managing Director and Head of CS & Research Germany

Mr. Alan COLLETT RICS President United Kingdom

Frank KHOO Axa Real Estate Global Head of Asia Singapore

MIPIM AWARDS 2013

Without further ado...

T

HE shortlist for the upcoming 23rd annual MIPIM Awards, representing the most outstanding and accomplished projects completed or yet to be built, has been announced. “This year, we have received a record number of applications” said Director of MIPIM & MIPIM Asia, Filippo Rean. On Tuesday 29 January, over 175 projects from 46 countries were shortlisted to four finalists in each of the eight categories (illustrated in the following pages), by an international jury composed of real estate professionals and chaired for the third time by Michael Strong, chairman and CEO-EMEA at CBRE. With Turkey as the MIPIM 2013 Country of Honour, the jury has also selected four projects to compete in the Best Turkish project category.

New this year, in addition to the traditional onsite vote at the Awards Gallery showcasing the shortlisted projects, MIPIM delegates will have the opportunity to discover the finalists through brief image presentations at the Innovators’ Vision: MIPIM Awards screenings* held at the MIPIM Innovation Forum. Attend the finalists’ pitches, make up your mind and vote for your favourite projects!

The winners will be determined by both the jury’s rating and the MIPIM delegates’ vote. The results will be announced during the prestigious red carpet ceremony on Thursday 14 March at the Palais des Festivals in Cannes.

Mr. Hulusi BELGÜ Multi Development Türkiye CEO Turkey

For the second year running, the public will have the chance to voice their opinion thanks to a pre-MIPIM online vote which will be launched on February 11. Out of the 36 finalists, one project will receive special recognition as the winner of the People’s Choice Award. *Powered by Pecha Kucha: 20 images, 20 seconds per image, less than 7 minutes to convince you.

Mr. Philippe CHIAMBARETTA PCA Architecture Architect & Founder of the agency France

Mr. Paolo GENCARELLI Unicredit Group Head of Corporate Real Estate Italy

Dr. Alexander KOLONTAY Government of Moscow Committee for Architecture and Urban Planning Deputy Director Russia

Sponsored by

www.mipim.com I preview magazine I February 2013 I 101

i 2013awards Best Turkish project BOSPHORUS CITY Istanbul, Turkey

Agenda

Architect: Mimarlar Workshop Developer: Sinpas Gyo

MIPIM People’s Choice Award online vote Monday 11 February to Monday 11 March www.mipim.com and Facebook

MIPIM Awards onsite vote Tuesday 12 March (9:00) to Thursday 14 March (noon) Awards Gallery, level 01

MIPIM Awards Red Carpet & Cocktail Thursday 14 March (19:00) Grand Auditorium’s entrance & foyer, level 1

MIPIM Awards Prize-giving Ceremony

KAGITHANE OFISPARK Istanbul, Turkey Developer: Tekfen Real Estate Development Co. Architect: EAA Emre Arolat Architects

Thursday 14 March (19:30-20:30) Grand Auditorium, level 1

Remember the 2012 MIPIM Asia Awards

TEKFEN BOMONTI APARTMENTS Istanbul, Turkey Developer: Tekfen Real Estate Development Co. Architect: DB Architects

TRUMP TOWERS ISTANBUL Istanbul, Turkey

The MIPIM Awards is the world’s real estate competition held biannually in Cannes and Hong Kong to recognize the very best of the industry.

Look back to the winners of the MIPIM Asia Awards 2012 and the prestigious gala dinner held on Thursday 8 November, 2012 at the Grand Hyatt Hotel in Hong Kong. www.mipimasia.com

102 I

preview magazine I February 2013 I www.mipim.com

Developer: Ortadogu Otomative Ticaret A.S. Architect: Brigitte Weber Architects

Best hotel & tourism resort BAKU FLAME TOWERS Baku, Azerbaijan Architect: HOK International Ltd. Developer: Azinko Development MMC

Best industrial & logistics development AMORE PACIFIC BEAUTY CENTER PROJECT Osan-si, Gyeonggi-do, Korea Architect: Junglim Architecture, M.A.R.U

CITIZENM LONDON BANKSIDE London, United Kingdom Owner/Developer: citizenM Hotels Architect: concrete Architectural Associates

FAZENDA BOA VISTA / FASANO HOTEL Sao Paulo, Brazil Architect: Isay Weinfeld Developer: JHSF, Fasano Group

THE BULGARI HOTEL & RESIDENCES London, United Kingdom Developer: Prime Development Ltd. Concept Architect/Interior Designer: Antonio Citterio, Patricia Viel and Partners Project Architect: Squire & Partners

BESTSELLER LOGISTICS CENTRE NORTH Haderslev, Denmark Architect: C.F. Møller Architects Developer/Client: Bestseller A/S

STEEL HEADQUARTERS Louvain-la-Neuve, Belgium Architect: ASSAR Architects Developer: Steel SA

WASTEWATER TREATMENT PLANT IN NORTH ALT MARESME Pineda de Mar, Spain Architect: Baena Casamor Arquitectes BCQ, slp Developer: Agència Catalana de l’Aigua ACA - Generalitat de Catalunya www.mipim.com I preview magazine I February 2013 I 103

i 2013awards Best office and Best refurbished business development building 1 ANGEL SQUARE Manchester, United Kingdom Developer/Occupier: The Co-operative Group – David Pringle, Director of NOMA Architect: 3DReid

STATOIL NEW REGIONAL AND INTERNATIONAL OFFICES Fornebu, Norway Architect: A-Lab (Arkitekturlaboratoriet AS) Developer: IT Fornebu Property

THE SQUAIRE Frankfurt am Main, Germany Investor/Developer: IVG Immobilien AG Architect: JSK international

CENTER FOR RENHOLD (CLEANING FACILITIES CENTRE) Copenhagen K, Denmark Architect: KBP.EU - a joint venture between KARRES EN BRANDS and POLYFORM Developer: City of Copenhagen

KING’S CROSS London, United Kingdom Architect: John Mcaslan + Partners Other: Arup (Engineering), Vinci (Construction)

SOUTHEND PIER Southend-On-Sea, United Kingdom Architect: White arkitekter AB Developer: SouthendOn-Sea Borough Council

UNICREDIT TOWER Milan, Italy Developer: Hines Italia Srl Architect: Pelli Clarke Pelli Architects (Cesar Pelli, Gregg Jones)

THE NATIONAL MUSEUM OF KOREAN CONTEMPORARY HISTORY Seoul, Korea Architect: Junglim Architecture Developer: Ministry of Culture, Sports & Tourism

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Best residential development ABSOLUTE TOWERS (PART OF ABSOLUTE WORLD COMPLEX) Mississauga, Canada Design Architect: MAD architects Local Architect: Burka Architects Developer: Fernbrook Homes, Cityzen Development Group

AKASYA ACIBADEM LAKE & WOODS PARCELS Istanbul, Turkey Architect: Mimarlar Workshop Developer: SAF GYO

Best shopping centre MARMARA PARK Istanbul, Turkey Developer: ECE Projektmanagement G.m.b.H. & Co KG Architect: ECE Projektmanagement

MECENATPOLIS Seoul, Korea Design Architect: The Jerde Partnership Local Executive Architect/Towers Design: EAWES Developer: GS Engineering & Construction

SHIBUYA HIKARIE Tokyo, Japan

ISBJERGET / THE ICEBERG Aarhus, Denmark Developer/Investor/ Builder: PensionDanmark A/S Architect: Cebra, JDS Architects, SeARCH, Louis Paillard

THE LIBRARY BUILDING, CLAPHAM ONE London, United Kingdom Developer: Cathedral Group Plc and United House Group (joint partnership) Lead Architect: Studio Egret West Delivery Architect: DLA Architecture

Architect: Nikken Sekkei Ltd., Tokyu Architects & Engineers Inc. Developer: Council for Promotion of the Shibuya New Cultural District Development Project

THE STAR Singapore Architect: Aedas Limited (Andrew Bromberg) Developer: Capitaland Retail Project Management Pte Limited & Rock Productions Private Limited www.mipim.com I preview magazine I February 2013 I 105

i 2013awards Best futura project BEIRUT TERRACES Beirut Central District, Lebanon Developer/Investor: Benchmark Architect: Herzog & de Meuron

CULTURE CASBAH

Best futura mega project MILANEO Stuttgart, Germany Developer: ECE Projektmanagement G.m.b.H. & Co. KG, STRABAG Real Estate, Bayerische Hausbau Architect: RKW Rhode Kellermann Wawrowski Architekture + Städtebau in cooperation with ECE architects

Malmö, Sweden Property owners: MKB Fastighets AB Architect: Lundgaard&Tranberg

NANJING RIVER WEST CBD Nanjing, China Architect: Jahn Developer: Suning Real Estate Development Co.

THE SQUARE ³ (SQ3) Berlin, Germany Developer: Moritz Gruppe GmbH Architect: LAVA, Prof.

Dr. Tobias Wallisser

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NOMA Manchester, United Kingdom Developer: The Cooperative Group Architects: Aedas Architects, 3DReid, Ian Simpson Architects, PLP Architecture, Roger Stephenson Architects

THE 5 LAGOONS North Malé Atoll, Maldives Master Developer: Dutch Docklands Maldives PVT LTD Other: Dutch WaterValley, Christie’s International Real Estate

THE NATIONAL CREATIVE CLUSTER Beijing, China Architect: Sasaki Associates, Inc. Developer: Hengtian Hi-Tech Investment and Development Co., Ltd.

tips & serVices Dear Participant, Your experience and satisfaction at MIPIM are important to us. The entire MIPIM team is committed to ensuring your market runs as smoothly and efficiently as possible, so that you can focus on making deals, meeting the right people and achieving your objectives.

To ensure you start off with a bang, please refer to our Quick Checklist

Things to do before the Show: Have you prepared your transportation to the Côte d’Azur? Have you arranged your transfer to Cannes?

Have you booked your accommodation? (If not, call our accommodations department for preferential pricing on your lodging: +33 (0) 1 79 71 99 07/ 95 29

INSIDE: 1. USEFUL TIPS s !22)6).' ). #!..%3

Remember to print your e-ticket before the show to save time at the registration area and collect your badge easily.

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Have you visited the Online Database on my.mipim.com to find out in advance who else is attending the show, to set up meetings and discover projects of your interest?

2. SERVICES

Have you checked the show programme to plan the week around events not to be missed?

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Find answers to all those questions on the following tips & services section.

For more details please refer to our website my.mipim.com

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3. GENERAL MAP OF MIPIM

1. USEFUL TIPS ARRIVING IN CANNES CANNES INFORMATION The Palais des Festivals is situated on the seafront along the famous Croisette. It is clearly signposted throughout Cannes.

The exact address is:

Palais des Festivals Esplanade Georges Pompidou 06400 Cannes Country dialling code: +33 Time zone: GMT +1 Electricity: 220 volts AC, 50 Hz. Round two-pin plugs are standard.

Measurement system: Metric.

Currency: Euro.

BADGE

s .ICE !IRPORT

Your Badge is your primary means of identification during MIPIM. It provides access to all exhibition areas, conference sessions and networking events during opening hours. Please carry it at all times, and be ready to show it at entry points and security points around the area.

E-ticket holders: E-tickets will be sent to you via email a few days before the show. They include a barcode for ID recognition. Print it out to collect your badge at a self-service delivery point and save time at the registration area.

From Monday 11, 8.00, to Wednesday 13, 22.00.MIPIM desk in Terminal 1 & 2.

You can collect your badge at several badge collection points:

s (OTELS From Sunday 10, 14.00, to Wednesday 13, 19.00.

- Majestic (on the Croisette) - Carlton (on the Croisette) - Martinez (on the Croisette) Please note that the full payment has to have been made in advance to pick up your badge at the airport and in hotels.

REGISTRATION OPENING HOURS Sunday 10 March 14.00-19.00 Monday 11 march 9.00-19.00

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Tuesday 12 March 8.30-20.00

From Sunday 10 March, 14.00 to Friday 15 March,

Wednesday13 March 8.30 -19.00

13.00. Hall Méditerrannée Level 0 of the Palais des

Thursday 14 March 9.00 -19.00

Festivals on the Croisette in Cannes.

Friday15 March 9.00 -13.00

www.mipim.com I preview magazine I February 2013 I 107

i tips

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MARKET OPENING HOURS 0ARTICIPANTS !CCESS Tuesday 12 March 9.00 - 19.00 Wednesday 13 March 9.00 - 19.00 Thursday 14 March 9.00 - 19.00 Friday 15 March 9.00 - 16.00 Exhibitors have access to all the exhibition areas starting from 8.30 via the Artists Entrance situated between the Palais des Festivals and the Riviera Hall.

EVENTS, OPEN TO ALL DELEGATES The Opening Cocktail Tuesday 12 March from 19.30 at the Martinez Hotel.

Please note that your badge will be required to enter.

4HE -)0)- !WARDS CEREMONY Thursday 14 March at 19.00, Grand Auditorium, Level 1, Palais des Festivals.

THE EXHIBITION HALLS EXHIBITION HALLS The Palais des Festivals is comprised of distinct exhibition areas: There are two buildings connected via mechanical escalator

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2. SERVICES Start your services experience with the Conciergerie Our on-site Concierge provides a complete range of services, including restaurant, taxi, and flight reservations; as well as shuttles, sightseeing activities and other tips to help you make the most out of your stay in Cannes.

Need assistance on a specific issue before the market? Fill in the request form or call +33 (0) 1 79 71 99 99 for assistance.

NETWORKING AREAS Visitors’ Club Palais des Festivals – Level 01 Open to all participants, the club includes the ‘Netherlands gateway’ and offers a large scope of services like Wi-Fi, a meeting area with 4 private rooms available for reservation, tables and an area for refreshments.

VIP Lounge Palais des Festivals – Level 3 Set up in a specially arranged area, this club is intended for investors, end users, VIPs, and directors of exhibiting companies. This private lounge offers free Wi-fi acces and a complimentary bar. A number of hostesses will be at clients’ disposal to help organise their meetings.

4HE -)0)- )NNOVATION &ORUM Located in the Gare Martime, one of MIPIM’s most central and bustling locations, the MIPIM Innovation Forum will be a key destination for 2013 delegates, showcasing the most innovative solutions to increase the value of property assets.

MIPIM Logistics Pavilion Palais des Festivals - Level 01 Through a dedicated programme of conferences and networking events, the MIPIM Industrial & Logistics Pavilion demonstrates logistics solutions for key international stakeholders involved at the different stages of logistics real estate projects: development, location and financing.

Press Club Palais des Festivals – Level 01 This facility for journalists includes computers, internet connection, a printer and the full-time presence of a member of staff.

preview magazine I February 2013 I www.mipim.com

(OTEL 4OURISM ,EISURE ,OUNGE Palais des Festivals – Level 3 The HTL Lounge, open to all MIPIM participants, on Level 3 will be the host of many events, project pitching and high-level panel sessions on hospitality real estate topical issues.

Hospitality and property professionals can meet in an informal, yet profitable setting to discuss hospitality trends, hotel investment, tourism real estate and more.

The HTL Lounge is co-organised with PKF hotelexperts and Interna.

ADDITIONAL SERVICES Business Centre Level 01 It provides a complete range of secretarial and administrative services for all participants. Professional services are offered at competitive rates for photocopying, word processing, printing,and faxing. )NFORMATION 0OINTS Clearly signposted, information desks can be found around the Palais des Festivals. s ,EVEL

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Should you have any doubts or questions do not hesitate to ask one of our Bilingual hostesses. They will be happy to help you on all matters.

-OBILE !PPLICATION

TAKE MIPIM TO GO! The official MIPIM app is designed to enhance your client experience by providing essential show information including: full event schedule, exhibitor list, floor plan to locate exhibitors and set itineraries, speaker lineup, social networking, practical Cannes info, and more...

Please note that every effort has been made to include as much data in the app as possible so that it can be used whilst offline and abroad. Some features, such as Twitter, use live data and may incur charges depending on your carrier and plan.

Download the MIPIM app for free today on the App Store!

FOR MORE INFORMATION ABOUT TRANSPORT, SERVICES...

PLEASE VISIT MY.MIPIM.COM

Sixt - official car rental supplier of MIPIM

Our cars are available elsewhere.

Our prices arenâ&#x20AC;&#x2122;t.

(Special discounts for MIPIM visitors and exhibitors.

Call +33 (0) 1 44 38 55 55 and state the promotion code 9983828 or book online on www.mipim.com)

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& serVices

3. GENERAL MAP OF MIPIM Mistral Hall Sea Breeze

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Sunset Hall Azur Village Veolia Environnement

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mipim preVieW The official MIPIM magazine February 2013. Director of Publications Paul Zilk Director of Communications Mike Williams EDITORIAL DEPARTMENT Editor in Chief Graham Parker Technical Editor in Chief Herve Traisnel Deputy Technical Editor in Chief Frederic Beauseigneur Graphic Designer Carole Peres Sub Editor Joanna Stephens Proof Reader Debbie Lincoln Contributors Chris Bown, Peter Clucas, Ben Cooper, Mark Faithfull, Liza Helps, Steve Killick, Steve McCormack, Anika Michalowska, Mark Moore, Doug Morrison PRODUCTION DEPARTMENT Publishing Director Martin Screpel Publishing Co-ordinators Nour Ezzedeen, Emilie Lambert, Amrane Lamiri Production Assistant, Cannes Office Eric Laurent Printer Riccobono Imprimeurs, Le Muy (France) Reed MIDEM, a joint stock company (SAS), with a capital of €310.000, 662 003 557 R.C.S. NANTERRE, having offices located at 27-33 Quai Alphonse Le Gallo - 92100 BOULOGNE-BILLANCOURT (FRANCE), VAT number FR91 662 003 557.

Contents © 2013, Reed MIDEM Market Publications. Publication registered 1st quarter 2013. ISSN 1962-9974. Printed on 100% recycled paper ®

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