Mipim 2014 preview magazine

FEBRUARY 2014

www.mipim.com The official MIPIM magazine

PREVIEW INVESTMENT

MIPIM 25

Also inside:

• Asset managers converge on Cannes • Funds boost allocations as property returns to growth

• 25 years in the making • How MIPIM grew from an exclusive club to a global gathering

SEE PAGE 47

SEE PAGE 23

• Countries of honour: Brazil, Russia, Turkey • Emerging property sectors: Senior housing, student housing, healthcare, sports & leisure • Building innovation • Port-centric logistics • Office-tohotel conversions.

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EDITORIAL

CONTENTS iNEWS

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EPADESA unveils two project in western Paris; EC focus on low-energy buildings; RIO’s Bear bullish on UK regions

Filippo Rean Director of MIPIM

W

ELCOME to MIPIM 2014. A 25th anniversary is an exciting milestone and as part of this edition of MIPIM, we’ll be celebrating in style, looking back at some of the industry landmarks of the past 25 years and looking forward – via the inaugural ‘Big Debate’ – to what is in store for the international real estate business.

When MIPIM opened for business in 1990, there was significantly less cross-border real estate activity. The notion of sustainable development or green buildings was virtually unheard of, and international property was just beginning to become an asset class in its own right.

Today, we see an industry that is truly international, with investment opportunities around the globe. The concept of sustainable development is now the norm rather than the exception when it comes to designing new buildings – and the MIPIM Awards Best Innovative Green Building category is one of the most hotly contested.

MIPIM has developed with the industry and this year we have plenty that is new. The conference programme will bring real estate leaders together to map out the next 25 years of real estate. We have introduced dedicated workshop programmes for specific asset classes and a complete afternoon of talks on infrastructure. And because MIPIM is in the business of looking forward, the second Innovation Forum will focus on energy efficiency, smart buildings and smart cities.

On behalf of the MIPIM teams, past and present, I would like to thank you for supporting the event. We’re looking forward to celebrating 25 years of a great industry when we all meet in Cannes in March.

iMIPIM 25

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MIPIM has been 25 years in the making what were the landmarks on the real estate industry’s road to globalisation?

iMIPIM EXPERIENCE 30 A users guide to the Palais des Festivals and all that MIPIM has to offer

iPROJECT NEWS

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A selection of the diverse range of real estate projects showcased at MIPIM 2014

iFOCUS

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Special reports on investment, building innovation, cities, offices, logistics, retail, residential, hotels and alternative real estate assets

iMARKETS INSIGHT

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Updates on France, Germany, the UK, USA, Japan, Belgium and the Nordic markets

iAWARDS

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The MIPIM Awards celebrate the real estate industry’s brightest and best. Which projects have the judges shortlisted?

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iTIPS & SERVICES

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iCONFERENCES

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Programme of conference and events

www.mipim.com I preview magazine I February 2014 I 3

NEWS FRENCH CAPITAL DEVELOPMENT

EPADESA unveils two major schemes in western Paris

EPADESA’s Rose de Cherbourg urban development programme in Paris

EPA DESA , the La Defense Seine Arche development agency charged with promoting development in western Paris, will launch two major projects at MIPIM 2014.

The Coeur de Quartier, located on the site of Nanterre university, is set to enter phase two.

During a MIPIM conference, EPADESA will announce the name of the winner of the 70,000 sq m mixed-use scheme, as well as the name of the other two finalists. The project includes 10,000 sq m of retail, 26,000 sq m of office space, 34,000 sq m of housing and a 3,000 sq m hotel. Due to be delivered by 2017-2018, phase two is part of a larger urban development programme totalling

120,000 sq m. Phase one of the Coeur de Quartier scheme is already under construction.

EPADESA is also showcasing the urban development programme La Rose de Cherbourg, a district located in Puteaux to the south of La Defense. The scheme, designed by Jean Nouvel, includes office space with a tower of 80,000 sq m and around 25,000 sq m of housing. Associate investors are Hines, AG Real Estate and Gecina. Delivery is planned for 2019.

Another topical project is Les Groues, located to the west of La Defense. New stations are planned for the district on both the RER E line and the new Paris Express line.

WARSAW’S CHOPIN CITY Festival time for Liverpool PREPARES FOR TAKE-OFF CHOPIN Airport City, the new 23 ha business and leisure park next to Warsaw’s Chopin Airport, has moved into its next stage of development.

Consultant Arup is undertaking a detailed land management and impact survey to assess the effects of the business park on the environment.

Initial ground works for the project will follow in 2015.

Developed by Polish Airports State Enterprise (PPL), Chopin Airport City is the first project of its kind in Poland. The 170,000 sq m office and retail complex is sited next to the country’s largest airport — and one of the biggest airports in East-Central Europe. At present, the annual capacity of Chopin Airport is 15 million passengers. Once the scheduled development projects are

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completed in 2015, it will be able to serve around 22 million passengers a year.

In line with modern design thinking, Chopin Airport City will balance sustainability and a communityoriented approach with business functions.

The site, which will be linked to the city centre by urban railway, buses and taxis, will feature low-rise buildings surrounded by greenery and water. A centrally located square will offer recreational services, galleries and restaurants.

Established in 1987, PPL’s activities include the construction and operation of commercial airports and terminals, with its core business being the provision of services to airlines and passengers.

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Peel Holdings’ Liverpool Waters development THIS year, Liverpool will host the International Festival for Business, expected to draw 250,000 visitors to the UK city. And as a result, Liverpool has stepped up its involvement in MIPIM 2014.

“The International Festival for Business is a flagship international event, so we decided we had to be at MIPIM,” said Sean Beech, Deloitte partner and chair of the steering committee for the Liverpool delegation. “The difference now is that Liverpool’s presence is private-sector led. The past few years have been pretty

torrid, and now we have to put our own money into driving growth into our city.”

According to Chris Brown, head of Marketing Liverpool, the city’s offer has been changing over the past five to six years. “The economy may be tight but there are significant opportunities,” he added, pointing to the city’s maritime and port developments as key drivers for growth, particularly Peel Holdings’ Liverpool Waters and Wirral Waters projects on either side of the river Mersey.

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i NEWS EXPO 2015

MILAN LOOKS TO POST-EXPO ERA THE NEXT Universal Exhibition — Expo — will take place in Milan in 2015 and will take the theme: Feeding The Planet, Energy For Life.

The organisers claim that Milan Expo will be “the global event of the year”. But the real challenge for the city’s metropolitan area will be what happens after. And the question for investors is what will happen to the site after the Expo shuts its doors.

Arexpo, which owns the land area earmarked for the event, was set up jointly by the Lombardy region, the municipalities of Milan and Rho, the Fiera Internazionale di Milano, and Milan province. At MIPIM 2014, Arexpo will present the Expo 2015 site as a development opportunity for investors who want to participate in the economic and social growth of the vibrant Milan metropolitan area.

The 105 ha site will be available for post Expo projects from November 2015. The land in question is located in the northwest quadrant of Milan’s metropolitan area. It is easily accessible from Milan airport, as well as being connected to the underground, railway and regional, national and international highway networks.

The infrastructure systems envisaged for Expo 2015 will also provide a framework for the development of future urban projects to remodel the greater metropolitan area of Milan.

At MIPIM, Arexpo is keen to meet companies, investors, corporate end-users, industrial and logistics players, corporate real estate funds, sovereign wealth funds and other real estate professionals looking to invest in projects in one of the most dynamic regions in Italy.

REGENERATION INVESTMENT

RIO’s Bear bullish about the FDI opportunities beyond London Manchester Airport City: backed by Chinese investment

SIR MICHAEL Bear, former lord mayor of London, has been appointed by the UK government to spearhead a new drive to attract international investors into regeneration projects.

The newly formed Regeneration Investment Organisation (RIO) is billed as “a one-stop shop to showcase foreign direct investment opportunities around the country”, Bear said.

Already 163 potential projects have been identified by RIO, all worth a minimum of £100m (€120m) and all with planning permission,

TUEV SUED takes the guesswork out of project assessment AT THIS year’s MIPIM, German consultant TÜV SÜD will provide information on its portfolio of services designed to increase the long-term value and sustainability of real estate projects.

TÜV SÜD’s services include valuation reports, energy-efficient building management, and due diligence and consulting services for MEP (mechanical, electrical and plumbing) systems.

The consultancy also will present BREEAM sustainability certifications and international 6I

building-control services.

Dr Ulrich Klotz, chief executive of TÜV SÜD’s real estate service and infrastructure division, said: “Energy efficiency and high construction quality together with location-related factors are the key criteria for the successful long-term use of real estate. Using our expertise, investors, contractors and building owners receive reliable assessments of their properties.”

TÜV SÜD is ‘gold sponsor’ of this year’s

preview magazine I February 2014 I www.mipim.com

allowing for an early start on construction. Half of these are outside London. “Investors have an appetite to go beyond London,” Bear said. “Returns in London and the south east of England are tight but, if you look outside in the regions, you can get a much better risk/return equation.”

As an example he pointed to the Chinese investment in Manchester Airport City, where Beijing Construction Engineering Group is backing the £800m (€1bn) development of a 160 ha mixeduse project beside Manchester airport.

MIPIM Innovation Forum — a pavilion showcasing innovative solutions and practices to increase the value of property assets.

“TÜV SÜD is an international technical service organisation catering to the industry, mobility and certification segments,” Klotz said. “Our experts and technology consultants are dedicated partners in their clients’ processes, offering comprehensive industry expertise throughout the entire value chain. They focus their services on their core competencies of consulting, testing, certification and training. We have 20,000 employees committed to optimising technology, systems and know-how at over 800 locations in Europe, the Americas, Asia Pacific and Africa.”

Expect:

Promises fulfilled.

Mercure Moscow Mebe Hotel Expect more

World-class comfort

A landmark building promised 14 months ago.

A landmark building delivered 14 months later.

Mebe One Khimki Plaza completed.

At MIPIM 2014, MEBE makes another promise.

A landmark hotel to be delivered by 2016.

Mebe made its debut appearance at MIPIM in 2013, where we promised to deliver a world class commercial building in Khimki, the gateway to Moscow. We are proud to say that we have delivered that promise and the first tenants will move into the building in Q2 2014.

At MIPIM 2014 MEBE is proud to announce the development of a

new hotel situated next to Mebe One Khimki Plaza. Operated in conjunction with Accor, Mercure Moscow Mebe Hotel will cement Khimki’s position as a key economic and business gateway to Moscow.

Learn more about Russia’s most exciting developer by visiting the MEBE stand: 11:18 / 13:17 at Level-1.

21 Stanislavskogo Str 6th floor, Building 2 109004 Moscow Russia

T: F: E: W:

+7 (495) 580 70 35 +7 (495) 580 70 36 info@mebe-group.com mebe-group.com

i NEWS NEWS IN BRIEF

NEW DUBAI EVENT Dubai’s inaugural Festival of Lights will echo Lyon’s illuminations, which have set “a global benchmark” in festive lighting

BROOKFIELD ON THE UP CONTRACTOR Brookfield Multiplex, which specialises in high-profile projects, last year generated $3.3bn of turnover from just 51 schemes.

“Operating in capital cities around the world means we have a wider spread and are not exposed to one cycle,” said CEO Ashley Muldoon. “At the same time, we are able to share construction solutions across markets.”

For example, a Chinese facade was used on the St George’s Wharf project on the banks of the Thames in London. “We are always challenging our suppliers, but we also tend to pick those that are innovative by nature,” Muldoon said.

That rigorous approach to procurement is shared with clients, he added: “On every project we look to add value, either by material savings or by adding net lettable or saleable space back into the project. We always ask: ‘How can we do this better?’”

LEGAL ISSUES ON MIPIM AGENDA A NUMBER of MIPIM conferences will focus on the legal aspects of investment. For example, Loan Market Association, which brings together credit professionals, will hold a conference on Thursday, 13 March at 2:30pm on the lessons learned from the global economic crisis and how to turn them into opportunities for the future.

And the American Bar Association will hold a conference focussing on the role of ‘bad banks’ in the reconstruction of the markets in Ireland, Spain and France. Matteo Cidonio, managing director at GWM Capital Advisors and Ronnie Hanna, head of asset recovery at NAMA will be speaking on Thursday, 13 March at 4:00pm.

ITALY BEGINS TO DRAW INVESTORS ITALIAN legal practice Chiomenti Studio Legale is seeing signs of renewed interest from domestic and international real estate investors, according to partner Umberto Borzi.

“The restated political scenario, attractive pricing and an increasing supply of quality assets including some from funds in liquidation is revamping the flow and turnover of investors,” Borzi said.

“Important investors including Middle-Eastern sovereign wealth funds and primary international investment funds are increasing their activity.”

And with the Cassa Depositi e Prestiti bank likely to give the green light for the valorisation of public assets in 2014, Borzi said MIPIM’s Italian conference session will look at the specific measures being put in place to foster investment acivity.

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Dubai set to bask in glow of inaugural Festival of Lights SOME spectacular outdoor lighting is set to brighten the sky in Dubai this year thanks to the inaugural Dubai Festival of Lights, which takes place from March 20 to 29.

Property developer Emaar Properties has joined forces with the French city of Lyon, which operates its own Festival of Lights, to light up its flagship development with a series of artistic light installations.

Using energy-efficient lighting, Dubai Festival of Lights will envelope the 200 ha (500 acre) Downtown Dubai development in a flood of light.

Dubai’s recent major projects, including the Burj Khalifa and The Dubai Mall, will be enhanced by a facade of festive lighting during the 10-day event.

The Dubai event echoes Lyon’s Festival of

Lights, the city-wide illumination held every year in December.

The length and breadth of Downtown Dubai will be illuminated during the Dubai Festival of Lights, making it one of the brightest spots on earth. Each lighting installation will be undertaken by a different artist, all of them with proven credentials in creating landmark events and concepts.

Ahmad Thani Al Matrooshi, managing director of Emaar Properties, said: “Dubai Festival of Lights is set to be a celebration of artistic creativity and light installations on a scale never experienced before in the region. The City of Lyon has set a global benchmark in festive lighting and we are honoured to partner with it to bring the world’s finest lighting concepts to Dubai.”

NATURE CENTRE STAGE AT NEW CANADIAN ECO PARK DEMAND for industrial and distribution sheds on Canada’s Prince Edward Island has grown since the opening of the eight-mile long Confederation Bridge in 1997 that links the island with the Canadian mainland.

Seeking to cater to this demand while creating a park that adheres to modern environmental standards, Summerside — the second largest town on the island — is set to establish an ‘eco-industrial park’.

Summerside defines an ecoindustrial park as one in which businesses co-operate with each other and with the local community to

preview magazine I February 2014 I www.mipim.com

reduce waste and pollution; share resources, including information, materials, water, energy, infrastructure and natural resources; and help achieve sustainable development, with the intention of increasing economic gains and improving environmental quality.

At MIPIM, Summerside is looking for equity partners and tenants to help bring the project from concept to reality. The proposed park — Greenwood Eco Park — will develop a layout on a 24 ha (60 acre) site. It aims to concentrate development to minimise infrastructure investment; take advantage of

passive solar heat and daylighting to reduce overall operating expenses; acknowledge existing contours to minimise fill and allow natural drainage; and maximise the undeveloped and natural areas with the park.

Greenwood Eco Park will include lowimpact development and prioritise bicycle and pedestrian travel. The site itself will use natural stormwater drainage, energy-efficient buildings, industrial networking, solar orientation and wind-energy storage. It will work in partnership with nature rather than dominate it or work against it.

i NEWS MIPIM UK

MIPIM UK launches in London As MIPIM reaches its 25th birthday, its latest offspring prepares to take the stage at London’s Olympia on October 15-17, 2014

Photo: Fuse/Fuse/Thinkstock”

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UPPORTED by Estates Gazette and FTI Consulting, the event is being held in response to demand from global investors for a major property event in London, reflecting the UK’s status as the real estate capital of the world. The fourth quarter of 2013 saw the UK investment market reach a new high, with more than £9bn of turnover in three months according to CBRE. MIPIM UK is already on target to be the UK’s biggestever property exhibition and conference, with an audience of more than 3,000 people from across the UK and global real estate industry. It has been developed with the support of UK Trade & Investment, The Mayor of London, the British Property Federation and the RICS. MIPIM UK is also being held in response to demand from the UK’s major cities and towns, with city leaders and delegates set to travel from across the UK, attracted by an `Early Bird’ entry price of £295 for three days.

In all there will be 100 exhibition stands at MIPIM UK, hosted by the UK’s biggest cities and towns, major property companies, institutions, advisers, developers and banks. There will be a transactional focus on the exhibition floor, with an emphasis on agreeing deals and securing business leads.

MIPIM UK will also feature dedicated events for investors and occupiers with its own version of the invitation-only Re-Invest forum and an occupiers’ summit.

MIPIM UK’s conference element will run across all three days, with dedicated streams for residential; industrial, infrastructure and transport; offices; finance and alternative investment; retail and design and future cities.

And some of the biggest names in property have agreed to be keynote speakers at MIPIM UK including Robert Noel, chief executive, Land Securities; Chris Grigg, chief executive, British Land; David Atkins, chief executive, Hammerson; Tony Pidgley, chairman, The Berkeley Group; Mark Clare, chief executive, Barratt Developments; Pete Redfern, chief executive, Taylor Wimpey; Toby Courtauld, chief executive, Great Portland Estates; John Burns, chief executive, Derwent London; Brendan Jarvis, head of Barclays Real Estate, EMEA and Ian Lindsay, land and property director, Crossrail. In total, there will be more than 150 speakers across the three days of the event.

We look forward to seeing you at the inaugural MIPIM UK in London in October.

www.mipim.com I preview magazine I February 2014 I 9

i NEWS NEWS IN BRIEF

ILE-DE-FRANCE REBRANDS AS PARIS REGION MIPIM 2014 will be the first year that the Paris Region brand will be used to describe the Ile-de-France region surrounding the French capital.

The rebranded Paris Region pavilion, managed

by Agence Regionale de Developpement de Paris Ile-de-France, will house all the parties involved in real estate in Ile-de-France under one banner.

Ile-de-France has been a regular exhibitor at MIPIM. This year, the Paris Region pavilion will reflect the area’s real estate potential and the variety of its offer. “We consider MIPIM as an excellent showcase for Ile-deFrance,” said Sabine Enjalbert, general manager of Agence Regionale de Developpement de Paris Ile-de-France. “The event allows us to show the wide diversity of a region that cannot be ignored in Europe. It also allows us to inform the market about the vast potential we can offer investors and developers.”

Spearheading the region’s development agenda is the Nouveau Grand Paris project.

The scheme, which represents €32bn of investment, involves the construction of 72 new railway stations, which will generate outstanding urban development opportunities.

Focus on low-energy buildings will help stimulate EU economy THE EUROPEA N Commission (EC) believes increased investment in low-energy buildings would give the real estate and construction sectors, which are crucial to the European econEuropean Commission vice-president Antonio Tajani European commissioner for energy Gunther Oettinger omy, fresh impetus.

Construction generates most cost-effective way to reduce emissions, almost 10% of the EU’s GDP and provides improve energy security and competitiveness, 20 million jobs. Consequently, improving the and make energy consumption more affordacompetitiveness of the construction economy ble for consumers. can help to increase general growth and create Already, the Energy Performance in Buildings business opportunities.

Directive obliges EU countries to develop a At MIPIM 2014, European Commission vice- methodology to rate the energy performances president Antonio Tajani, who is responsi- of buildings, and define minimum energy-perble for industry and entrepreneurship, and formance requirements for new buildings.

Gunther Oettinger, commissioner for energy, And the Energy Efficiency Directive also will discuss the EU’s approach to overcoming asks EU countries to create long-term nathe sector’s challenges and unleashing its full tional strategies to improve their existing potential, as set out in the Construction 2020 building stock. action plan published in July 2012.

A number of EC initiatives, such as the Build In early 2013, the EC set up a high-level forum, Up web portal, aim to share best practice with a working with member states and industry rep- view to boosting energy efficiency in buildings. resentatives to monitor the implementation of Moreover, in recognition that access to finance the strategy and recommend initiatives to bring remains another key challenge, the EU is efabout concrete results. And the plan has wider fectively doubling the funds available for eneraims than simply creating employment: max- gy efficiency and renewable energy sources to imising the energy efficiency of buildings is the €23bn by 2020.

Grenoble powers up for MIPIM 2014 GRENOBLE — traditionally the centre of France’s hydro-power industry — has benefitted from the initiatives and innovations associated with modern electrical power generation by sustainable means.

In 2013, Forbes magazine ranked Grenoble fifth in a listing of the world’s most inventive cities. And at MIPIM 2014, the Grenoble metropolitan area is set to continue the story.

Grenoble has gained a reputation as a research and development hub over the past few decades. The city is home to 20,000 researchers, plus a university campus of 50,000 students. It also claims one of the highest numbers of patents filed per head of population in Europe — and has been said to be France’s Silicon Valley.

Believing that innovation goes hand in hand with 10 I

information, Grenoble will this year incorporate a TV studio on its MIPIM stand. The studio will provide in-depth coverage on three themes: Be In Grenoble, devoted to the advantages of the local lifestyle; Born In Grenoble, showcasing the latest innovations produced by the city; and Build In Grenoble, highlighting the city’s planning and development projects. Some of Grenoble’s leading scientists, industrialists, political and economic opinion leaders, and start-up companies will be featured in the broadcasts.

As well as the TV studio, the Grenoble stand will also feature a presentation of the i-Road by the Toyota team, which will be launching this revolutionary means of transport in partnership with the Grenoble metropolitan area in autumn 2014.

preview magazine I February 2014 I www.mipim.com

Toyota’s revolutionary i-Road will be launched in Grenoble

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Sustainable real estate around the world See us on

stand MIF.03

KN5668 Š BRE Global January 2014

in the Innovation Forum

i NEWS NEWS IN BRIEF

RUSSIA’S PIK GROUP AIMS TO GROW ITS MOSCOW PORTFOLIO PIK Group, the Russian residential developer which has been listed on the London Stock Exchange since 2007, will be showcasing its large-scale residential projects at MIPIM once again. Its development programme is concentrated in the Moscow Metropolitan Area and selected Russian cities including Perm, Rostov-on-Don, Kaluga, Obninsk, Novorossiysk, Kaliningrad and Yaroslavl.

Since 1994 PIK Group has completed over 13 million sq m of affordable housing across the country in more than 220,000 residential apartments. The group’s substantial diversified landbank of 6.5 million sq m is mostly concentrated in the Moscow Metropolitan Area - the largest residential submarket in Russia - which accounts for 4.6 million sq m or 88.5% by value of the group’s total landbank. The company has the capacity to deliver over a million sq m of new projects every year in the Russian capital and its suburbs.

By concentrating on district-wide projects and by using directly-owned contractors and manufacturers, PIK achieves economies of scale and is able to constantly improve its production technologies to lead the market in modern affordable housing.

At the same time PIK has implemented an environment management system at its production facilities in order to minimise environmental damage and waste disposal expenses while saving energy and materials.

PIK is growing in Moscow 12 I

Quantum leap in transport to move Moscow into the future MOSCOW will be retaining a significant presence at this year’s MIPIM. In a recent speech looking at the massive development and infrastructure activities currently taking place in Moscow and the forward economic prospects for the city, Marat Khusnullin, deputy mayor for urban development and construction for Moscow City Government, said the aim of the authorities was to make Moscow “among the most modern, high-tech cities in the world, convenient both for living, work and recreation”.

According to Khusnullin, infrastructure planning is taking centre stage. “The pace of new construction in the Russian capital is so fast that the city is rapidly changing before our eyes,” he said.

“We took a long-term view and the initial goal was for a quantum improvement in public transport. We started on a massive transport infrastructure programme. Over nine years, we have built 160 km of new metro lines Marat Khusnullin, deputy mayor for urban development and construction for Moscow City and 79 new stations in an Government 800bn rouble [€17.4bn] metro expansion programme. enlargement in Moscow’s administrative Eventually, we are planning to provide sufficient access so that 90% area,” he said. “Among the upcoming develof Muscovites will live within walking distance opments, there will be an international financial centre of over three million sq m, with of a metro station.”

The second aspect of the Moscow transport jobs for 30,000 people, logistic centres near system development is the modernisation of airports, technoparks, and multi-office and highways and the extension of the road net- leisure projects. Realisation is estimated to work, Khusnullin said. He added: “About 80 take 20 years or more. We are just at the inikm of new roads have been opened in Moscow tial stages, but already we’re beginning to see in 2013. And we’re on course for a 20% expan- the first results.” sion in the road system. In 2014, the city will in- According to consultant Knight Frank’s The Wealth Report 2013, Moscow is in sixth place vest €2bn in road construction.”

The strategy, Khusnullin explained, is to in terms of private investment volume after make Moscow a “polycentric” city. “This is New York, Hong Kong, London, Los Angeles one the reasons for the two-and-a-half-times and Tokyo.

preview magazine I February 2014 I www.mipim.com

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i NEWS Russian regions gearing up to make major impact at MIPIM THE RUSSIAN Federation is a long-time participant at MIPIM and great attention is paid to presenting the country’s investment potential at Russia’s high-profile stand, said Igor Slyunyaev, minister of regional development of the Russian Federation.

For MIPIM 2014, the Ministry of Regional Development of the Russian Federation is preparing a large-scale exposition of the Russian

regions, which brings together more than 20 territories, regions and republics, Slyunyaev said.

In 2012 the value of private investment in the Russian regions amounted to $329bn (€243bn), having increased by 63.4% over three years.

Moscow City, the Krasnodar territory, the Khanty-Mansijsk autonomous district and Moscow region are among the main recipients.

In 2014, the Ministry of Regional Development,

Major sports events are a key part of Russia’s regional regeneration strategy, says regional development minister Igor Slyunyaev

in partnership with the National Council for Investment Climate Development and the World Association of Investment Promotion Agencies, will launch Invest In Russia. “It’s a communication tool between investors and Russian enterprises, and regional and local government authorities [to help implement] projects in various economic sectors in the field of real estate and infrastructure,” Slyunyaev said.

He added that one of the most effective instruments for attracting investment into Russia and accelerating the development of specific territories is hosting global events, such as the APEC Forum in Vladivostok in 2012, the Universiade in Kazan in 2013, the Winter Olympic Games in Sochi this year, and the FIFA World Cup in 2018.

Slyunyaev added: “More than 800 sports, tourist, transport, energy, communication and engineering projects have been constructed in Sochi, including 13 sports venues with a total capacity of 146,000 seats, and four ski resorts for 42,000 tourists. The ski pistes [cover] about 150 km. Moreover, 370 km of roads and bridges, and more than 50 hotels and other accommodation amounting to 27,000 suites have also been put in place.”

The minister concluded: “The main target that we pursue is to boost economic growth by investment activity stimulation and to reinforce confidence in the Russian economy on the world market.”

ST PETERSBURG WINS REGENERATION GAME IN ONE of Europe’s biggest urban regeneration projects, SPb Renovation was awarded a license by the city of St Petersburg in 2011 to replace and develop eight million sq m of new residential property as part of an initiative to improve the living environment for the city’s population.

The 20-year programme of development will transform nine districts, subdivided into 22 city blocks over an area of 900 ha.

With such a scale of redevelopment planned, SPb Renovation is driving a culture of change in the way such projects are delivered. A key component in its vision is to raise standards of quality and efficiency in construction and design through blending international best practice with the local construction supply chain.

14 I

The first of the St Petersburg districts to progress to full implementation is Gutenborg, where HKR Architects has been given responsibility for a courtyard block, known as Plot 35.

HKR’s design sees lower buildings along the southern and eastern flanks of the block, to allow precious sunlight to reach the heart of the scheme.

According to HKR, the aim of the Gutenborg project is to create a comfortable, vibrant, safe and sustainable living environment in the most European residential development in Russia’s most European city.

St Petersburg is undergoing a massive wave of housing replacement

preview magazine I February 2014 I www.mipim.com

11 - 14 MARCH

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MIPIM 2014 COUNTRY OF HONOUR

Country of Honour Highlights: & Conference: " ! & ! $ + ' &

# ! &

# " % % Sponsors

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i NEWS Gaya showcases A-list projects at first MIPIM MIPIM first-timer Gaya Real Estate Investments will be promoting its involvement in a number of Turkish flagship projects, including 42 Maslak in Istanbul and Mavie in Izmir on Turkey’s Aegean coast.

42 Maslak a new mixed-use Platinum LEED Certificated project developed by Bay Insaat. Designed by Chapman Taylor on a former textile factory site, the 250,000 sq m complex contains a five-star hotel, two 42-storey, 150 metre-high towers, and 430 residential units with a fitness centre. The scheme also includes a shopping mall and 57,000 sq m of A++ office units, along with leisure, commercial and cultural facilities.

Mavie is a high-rise mixed-use project located in Mavisehir, seen as one of Izmir’s up-and-coming districts, where a number of prestigious developments have taken place in recent years. Gaya is carrying out concept analysis, development and sales for the project on behalf of investor Gurpinar Grup.

Mavie, a 43-storey, 155 metre-high building with 20,000 sq m of residential area and 10,000 sq m of retail, offers residents landscaped areas, villa apartments, spacious penthouses, swimming pools, fitness and sauna facilities, playgrounds for children and views across the Aegean.

Since its establishment in 1989, Gaya Group has successfully completed over four million sq m of commercial and housing projects. The group’s scope of services includes all types of real estate projects, including plots, land, housing, shopping and business centres, hotels and plazas.

Mavie enjoys views across the Aegean 16 I

preview magazine I February 2014 I www.mipim.com

QUASAR ISTANBUL BRINGS THE PAST INTO THE FUTURE THE 197,000 sq m Quasar Istanbul mixed-use project developed by Viatrans consists of 4,000 sq m of reconstructed cultural heritage — the Mecidiyekoy liqueur and cognac factory — and 193,000 sq m of a high-end residential tower. The Fairmont Hotel tower will offer serviced apartments, Fairmont offices and a boutique retail block.

The project is located in Sislik on Istanbul’s European side, between the Mecideyekoy and Gayrettepe metro stations. Amenities include ballrooms, meeting rooms, gourmet restaurants, a spa, social clubs, a podium pool, open recreation areas and a wine cellar. All the residential units have views of the Bosphorus.

The Mecidiyekoy liqueur factory was built in 1930 and designed by the Cubist architect Robert Mallet Stevens. Both the factory’s historic legacy and its famous garden, featuring 186 monumental trees, have been preserved by repurposing the site as an international culture/art/fashion centre.

The residential tower consists of 193 different size units and rises 34 floors above a podium. The interior design is by Marcel Wanders. The Fairmont Hotel, serviced apartments and offices will have interiors designed by Wilson Associates of New York. This will be the upmarket Fairmont chain’s first hotel in Istanbul. The first Fairmont-branded offices in the world will be sited in part of the four podium levels underneath the towers.

Quasar Istanbul is the first project in Turkey to target German DGNB Gold certification.

Viatrans’ 197,000 sq m Quasar Istanbul mixed-use project

i NEWS NEWS IN BRIEF

DUBAI’S EMAAR TARGETS TURKEY TURKEY is one of the key markets for giant Dubai-based developer Emaar Properties, which has invested in property development in the country since 2006, under the aegis of its subsidiary Emaar Turkey.

One of its early flagship schemes was the masterplanned residential community development Tuscan Valley in Istanbul Buyukcekmece Lake Valley. Set in an area of over 1.7 million sq m, Tuscan Valley is a fully established community. The fourth phase of 493 world-class residences is currently being constructed.

Emaar Turkey is now developing Emaar Square, a mixed-use project consisting of residences, a shopping mall with an entertainment complex, offices and a five-star Address Hotel at Camlica.

This will be the first Address Hotel to be opened outside Dubai.

Designed as a new lifestyle and business hub in the Asian part of Istanbul, Emaar Square will comprise over 1,000 high- and low-rise residential units, a 180-room five-star hotel, 40,000 sq m of office space and a shopping mall.

Set to become one of the largest malls in Turkey, Emaar Square Shopping Mall is the trophy asset within the development, with 150,000 sq m of leasable space, and a wide range of leisure and entertainment facilities, including 400 shops, restaurants and cafes. Other attractions include a discovery centre, an underwater zoo, a 15-screen multiplex cinema and a skating rink.

Proplan helps bring Akasya project to a happy ending PROPL A N Project Management and Consultancy is involved as consultant on the Akasya development, specifically on the current Kent (city) phase of the mega-project.

Developed by REIT SAF Gyo, the Akasya project is being constructed in three phases on a 121,000 sq m area at a key intersection in Acibadem, in Uskudar on the Anatolian side of Istanbul.

There are residential blocks in the first two phases called the Gol (lake) and the Koru (grove). The third phase — Kent — includes a large 76,740 sq m shopping mall and residential/office areas comprising 458 residence/office units developed on 42,800 sq m. The shopping mall has six basement floors, a ground floor and three upper floors.

The 896 flats in the Gol and Koru phases were completed in 2012. The Kent phase is now around 75% completed.

The entire Akasya project is focused round a central park. The main tower in the Kent phase will rise above the shopping centre, which is intended to become one of the main shopping destinations on the Anatolian side of the Bosphorus. It houses a 180 metre-high residence building consisting of 40 floors, along with a horizontal block of floors, each

with floor gardens. The Kent tower offers flats suitable for use as home–offices, as well as 24 penthouse suites in different layouts and permutations, with views of the Bosphorus. The horizontal block has 16 floors, all of which have floor gardens.

Proplan recently project managed the construction of the Shangri-La Hotel on Istanbul’s European side of the Bosphorus for client Besiktas Real Estate. This was the first topdown construction project to be carried out in Istanbul — an approach made necessary by the heritage nature of the building and its location on the edge of the water, with close neighbouring properties.

Proplan was founded in 2005 with the aim of offering expertise and capabilities to Turkish contractors, which are increasingly spreading throughout the region and in to Russia. The company has its headquarters in Istanbul, with offices in Ankara and Baku, Azerbaijan.

Proplan’s expertise covers the construction and engineering spectrum. It has considerable experience in airports, subways, dams, infrastructure, railways, tunnels, residential complexes, hotels, industrial facilities, sports complexes, shopping malls, cultural and trade centres, marinas and mixed-use projects.

Green spaces bring life to Zorlu Center

Emaar Square will feature the first Address Hotel to be opened outside Dubai 18 I

PHASED opening of the 91,868 sq m Zorlu Center in Istanbul is underway, with the shopping mall opening in October 2013, while the residential element is still under construction and will open at the end of 2014.

Zorlu Real Estate appointed DS Architect as landscape architect, responsible for the project’s extensive landscaping and each component of the project aims to be a part of nature through the use of public squares and courtyards as well as private residential gardens.

In addition Zorlu’s valley park could be seen the most important new garden collection in Istanbul.

preview magazine I February 2014 I www.mipim.com

Landscaping at Zorlu Center

11 - 14 MARCH

2014 Palais des Festivals

Cannes, France mipim.com

MIPIM 2014 COUNTRY OF HONOUR

Country of Honour Highlights: Conference: Turkey - Istanbul:

the international ďŹ nancial center and hub

Sponsors

Media Partners

Contact: Edward Jervis - +33 1 79 71 95 85 - edward.jervis@reedmidem.com Erkan Ozcoban - +90 212 284 86 50 - ulas@alkas.com.tr MIPIMÂŽ is a registered trademark of Reed MIDEM. All rights reserved.

i NEWS NEWS IN BRIEF

MARICA MAKES MIPIM DEBUT

Minha Casa Minha Vida plan ignites Brazilian resi sector

MARICA City Hall will make its MIPIM debut this year with a wide array of developments, reflecting the municipality’s reputation as one of Brazil’s tourism hotspots and its proximity to Rio de Janeiro.

One of the highlights will be the Niemeyer Oceanarium, a project designed by Oscar Niemeyer, the acclaimed Brazilian architect who died last year. The mixed-use scheme involves a 75 metre-high tower and 1,000-seat, open-air concert auditorium.

The Niemeyer Oceanarium in Marica

The complex will sit on the Barra de Marica coastline — a key tourist destination — and construction is due to start this year following the recent signing of a development agreement between Marica City Hall and Instituto Niemeyer.

Another major project on the coast is Terminal Ponta Negra, this time serving the oil industry.

Private Brazilian company DTA Engenharia intends to invest almost $2.5bn in the terminal but Marica City Hall has provided key backing for the scheme, which is claimed will be the best terminal in South America. The scheme will form part of the Jacone Seaport and will be able to serve the world’s biggest oil tankers and take in 85,000 barrels of oil a day.

On the back of that oil-related expansion, Marica City Hall itself is creating a $2.5m logistics complex nearby, which will act as a support facility for the seaport operations.

In a bid to boost tourist numbers, a new cable car is planned from the seafront up to the old lighthouse at Ponta da Galeta, where visitors will be able to enjoy views along 46km of coastline.

Marica City Hall will also use MIPIM to showcase a range of infrastructure developments, including rail and tramway projects as well as plans to expand Marica Airport.

20 I

Residencial Bosque near Sao Goncalo do Amarante is EcoHouse’s latest project

ECOHOUSE Group, the London-based developer, returns to MIPIM this year on the back of an expanding residential construction programme in Brazil.

The company has embarked upon its third and most ambitious project, called Bosque, which is the largest urban development of its kind in north east Brazil and will eventually extend to nearly 2,000 homes.

Founded by British entrepreneur Anthony Armstrong Emery in 2009, EcoHouse has focused on Brazil with developments that have tapped into the government’s social housing initiative, Minha Casa Minha Vida (My House, My Life).

With this initiative the Brazilian government aims to tackle a chronic housing shortage and build three million homes by the end of 2014.

EcoHouse has become one of the major overseas players in the process while acting as a conduit for international investors keen to invest in Brazil.

The EcoHouse business model involves securing construction finance from private investors rather than conventional bank loans, which enables the developer to deliver properties more quickly than its competitors while promising a

preview magazine I February 2014 I www.mipim.com

high rate of return on investors’ funds.

By ensuring that investors’ funds are received upfront, ring-fenced and deposited in an escrow bank account so that cash is available within a very short time of expenditure being incurred, EcoHouse can mitigate risk and ensure that each stage of development is viable before construction commences.

Investment starts from £23,000 and a return of up to 17% is promised in the first year.

Repayment of the capital and payment of the interest is made 12 months from the date of the first investment.

At the same time, EcoHouse has been a regular participant at MIPIM, which has played its part in the company’s international exposure. To date, investors from as far afield as Singapore, Malaysia, China, Scandinavia, UK, Canada and the US have backed EcoHouse’s developments.

While global attention is focused on Rio de Janeiro as host city of the 2014 World Cup and 2016 Olympic Games, EcoHouse’s projects are all in the north eastern state of Rio Grande do Norte. The company’s two previous projects — Arco Iris and Casa Nova — both sold out before construction completed.

11 - 14 MARCH

2014 Palais des Festivals

Cannes, France mipim.com

MIPIM 2014 COUNTRY OF HONOUR

Country of Honour Highlights: Conference: Brazil’s expansion: after 2013

economical context changes, what situation?

What opportunities? Brazilian leaders respond

to the international community

Sponsors

Contact: Aline Barabinot - +55 (11) 3266 3631 - aline@orbiz.com.br or Sophie Mathieu - +33 1 79 71 9519 - sophie.mathieu@reedmidem.com MIPIMÂŽ is a registered trademark of Reed MIDEM. All rights reserved.

The 25 Restaurant & Beach Bar The newly refurbished Majestic Beach restaurant reopens its doors for MIPIM to become The 25 – Restaurant & Beach Bar, a premium space where registered participants can enjoy breakfasts, lunches and drinks by the beach.

Enjoy our special MIPIM25 menu !

The 25 Restaurant & Beach Bar

LERINS HALL RIVIERA HALL to ess ll Acc ns Ha Leri

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Protocol Entrance Registration Entrance

MIPIM AREA

The 25 Restaurant & Beach Bar Marina Hall Croisette Village

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Opening hours From Tuesday 11 to Thursday 13 March 2014, 9.00-18.00 & Friday 14 March 2014, 9.00-15.00 To book your table Corinne Frison: +33 (0)4 92 98 77 03 cfrison@cannesbarriere.com

i MIPIM 25 MIPIM@25

Twenty-five years in the making It’s 25 years this March since MIPIM opened its doors. Graham Parker talks to some of the pioneers that have helped it to grow from an exclusive club to a super-gathering of 20,000 real estate professionals from around the world and across the industry spectrum

I

AGENDA

N MARCH 1990 Tim Berners-Lee, a computer scientist at the CERN laboratory near Geneva, was working on plans for a new way of networking computers, which would allow scientists to collaborate on projects and share information. He had first proposed the system in 1989 and it became operational late in 1990.

It was named the World Wide Web and it has gone on to transform almost every aspect of society in ways BernersLee could never have imagined.

“Its [the WWW] biggest impact has been to break down social and business borders. And that has impacted the real estate industry as much as any. MIPIM has reflected this trend towards a global market.”

So what else was happening in 1990? Renault launched its Clio hatchback and, 25 years on, it is still going strong — as is the Nissan Primera, which launched simultaneously in the Asian, US and European markets in 1990.

In the US, Twin Peaks made its debut on the ABC network while, in France, Fort Boyard was first broadcast on Antenne 2. UK viewers watched the first episode of the BBC’s Have I Got News For You, while Mr. Bean made his debut on Thames Television.

And at the movies, the blockbusters were Home Alone, Goodfellas, Pretty Woman and Ghost. Kevin Costner’s Dances With Wolves scooped seven Oscars, including Best Picture and Best Director, while in Cannes the Palme d’Or was won by David Lynch’s Wild At Heart.

Nintendo released its Gameboy handheld console, and Italian broadcaster Rai became the first to transmit HD images — to cinemas rather than homes — as part of its coverage of the 1990 FIFA World Cup. That World Cup was won by West 11 March > 19.30 (Carlton Hotel) MIPIM 25 Years Opening Cocktail 12 March > a.m. (pre-registration required) Solidarity Race – Lend A Hand With Your Feet Organised by the GDF SUEZ Act for Employment Foundation (FAPE)

Celebrating the opening of the Euro Disney resort in Paris in 1992, CEO Robert Fitzpatrick (left) and MIPIM founders Xavier Roy and Thierry Renault (right)

Germany, playing in its final tournament because German reunification had legally started a week before the event.

From an initial attendance of around 2,000 delegates, mainly from France, MIPIM has grown by 1,000% to reach over 20,000, with delegates pouring into Cannes from around the globe. And from a small area in the Palais des Festivals, the exhibition area has expanded to cover the entire Palais complex, plus the Riviera extension and numerous external pavilions along the beachfront.

It is difficult now to remember, but there were almost no mobile telephones in 1990 and, for the few early-adopters that had them, there was no signal in the Palais. Instead, each stand had a landline telephone, with the numbers

12 March > 14.30 (Blue room, Palais) “Infrastructure Vision: 25+ years ahead” Keynote Address by urbanist Scott Burnham 12 March > p.m. (By invitation) Jubilee Concert In partnership with Amundi & the Radio France Philharmonic Orchestra.

Sponsored by Emaar

13 March > 10.00 (Grand Audi, Palais) The Big Debate: Change Perspectives?

Antonio Tajani, Carlo Ratti, and Robert Booth debate on the built environment of the coming 25 years “The 25” Restaurant and Beach Bar Conduct meetings, hold business breakfasts and lunches or simply have a drink in a unique restaurant and beach bar

www.mipim.com I preview magazine I February 2014 I 23

i MIPIM 25 published in the show guide so that delegates could book appointments. Email was also unheard of — and yet the world’s real estate investors, brokers and occupiers somehow still managed to do business.

For Mike Strong, EMEA chairman of CBRE and chair of the MIPIM Awards Jury, the most striking change over the past quarter of a century has been the globalisation of the real estate markets. “In 1990, global trade was only a fraction of what it is now,” he says. “There had been some cross-border deals into Paris, London and a few other European cities, but very little beyond that. Now, capital is mobile on a global scale.”

And that means property now has to be marketed differently. “In 1990, when selling a building in London, 95% of the potential purchasers would have been from the UK. Now, 60% or more will be from overseas,” Strong says.

Equally, he adds, the pool of investors is now far more diverse: “In the 1980s, international demand was coming from mainly the US or Japan. Now money can come from anywhere in the world. China, for instance, didn’t invest outside its own borders, but that is rapidly changing.”

Strong points out that globalisation has not just affected the investment markets — ocupiers, too, now think globally. “We should never forget that it’s occupiers who underpin

Twenty-five years in the making the property markets,” he says, “and they have organ“In 1990, when selling a building ised themselves to procure in London, 95% of the potential property in a far more mepurchasers would have been thodical fashion. They demand the same standards from the UK. Now, 60% or more wherever they operate.” will be from overseas” Twenty-five years ago, Mike Strong, CBRE there was a trend for office occupiers to relocate to out-of-town business parks. Meanwhile, futurologists were predicting that we would soon all be working from home or hot-desking. Strong believes both scenarios are now seen as trends of their time. “Today, we see companies revisiting the way they use space to attract a younger workforce,” he says. “They care about where they work, the hours they work and how they interact with others. As a result, more companies are returning to city centres and using space more efficiently, because they have to attract the best young talent.”

So what does that mean for property? “It’s good news for good-quality space and for prime real estate,” Strong replies. “But I’m not so sure it’s good for secondary real estate that cannot be repositioned.”

YVES BOUSSARD

BERNDT HEUER

“MIPIM can be proud of its number of participants”

“There’s still no substitute for personal contact”

YVES Boussard was in at the very start. “I dare say that I am one of the founding fathers of MIPIM,” he says. “Twenty-five years ago, when [Reed MIDEM CEO] Xavier Roy first came up with the concept for a real estate meeting, he tried to see if Cannes would welcome such an event. Jacques Longuet, then the president of FNAIM (Federation Nationale de l’Immobilier), was also deputy mayor of Cannes in charge of finance and a friend of Michel Mouillot, who was then mayor of Cannes. At that time, I was vice-president of FNAIM and we all contributed to support the MIPIM project and its location in Cannes.”

Boussard points out that, in the beginning, MIPIM was not the international gathering it has since become, but a national and local event. “In addition, the French government didn’t see any interest for France in such a gathering around real estate and MIPIM came very close to settling in another country,” he says.

But Boussard helped avert this: “When I became president of FNAIM, I interceded with the successive French housing ministers to promote MIPIM and I was successful enough. As a contributor to FIABCI [the International Real Estate Federation], I promoted MIPIM at an international level.”

In 25 years, MIPIM has become the largest and most successful real estate event in the world, Boussard says. “Each year, the number of French and foreign metropolises that come to MIPIM to highlight their assets and urban development schemes increases,” he adds. “And MIPIM can be proud of the number of participants who today attend the event. Think that there were a mere couple of hundred in the early days!”

Real estate consultant Berndt Heuer played a pivotal role in bringing the MIPIM concept to the attention of German exhibitors and delegates. “In 1990 German real estate wasn’t very internationally-minded,” he remembers, “and it was very residential-focused.”

But from a small exploratory party in year one, German attendance has grown until it is consistently the second-biggest delegation. “It took four or five years to fully achieve acceptance,” Heuer says. “Initially it was only brokers and only later did the investors and cities come.”

He says that a wider acceptance of MIPIM’s role happened in parallel with a growing professionalism in the German real estate sector, and this was in part driven by the demands placed upon the industry by German reunification, which coincided with the early years of MIPIM. “There’s still no substitute for personal contact,” he says. “Too often real estate is seen as a local business and MIPIM’s achievement has been to make it more international.”

24 I

preview magazine I February 2014 I www.mipim.com

MIPIM LANDMARKS Canary Wharf, London The redevelopment of the former docks in east London has been underway since the mid-1980s, with Canary Wharf emerging as a 1.2 million sq m hub for the global æQDQFLDO VHFWRU.

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i MIPIM 25

Twenty-five years in the making

PAOLA LUNGHINI

PHYLLIS SCHWARTZ

“MIPIM is the same age as your beloved mobile phone”

“It’s about making good contacts”

AS EDITOR-in-chief of Economia Immobiliare and internews. biz, Paola Lunghini has covered every edition of MIPIM. She points out that, in its 25-year history, MIPIM has seen two full real estate cycles, the first reaching its peak in 1990 — the year of MIPIM’s debut. And she says that, even during the post2008 crisis, MIPIM not only held on to its reputation, but even gained supporters because of its ability to hold a mirror up to the industry it serves. “It’s become the place to be for more and more countries interested not only in showcasing their projects, but also aiming to identify — in an intensive educational tour — the industry trends for products and services,” Lunghini adds.

Lunghini believes that, in 2014, MIPIM is more than living up to its early promise. The event’s increasing size and status is a reflection of global investors’ ever greater focus on real estate, she says. “But it is also a consequence of a new mentality and new cultural approaches that characterise the investment market, with scientific methodologies for analysing risk and return side by side with ethics and best practice,” she adds.

According to Lunghini, MIPIM is also the place to spot the first signs of recovery and the emergence of new markets: “Despite woolly regulations that limit the financing of projects, and therefore their feasibility, the last few years have delivered a good level of urban regeneration, especially in the peripheral real estate areas of the mature markets.”

So what of the Italian market? “For Italians, MIPIM became a must-attend event at the end of the 1990s,” Lunghini says.

“Before that, we were just a happy few. Then, in 2005, we set a record in terms of attendance, coming in fourth place after France, the UK and Germany. In recent years, Italy has seemed to be a ‘no-go area’ for investors. But now the Italian real estate industry is slowly beginning to emerge from the recession.”

And she concludes: “Don’t forget that MIPIM is the same age as your beloved mobile phone. But despite being 25, MIPIM just gets younger and younger.”

LAS VEGAS-based broker Phyllis Schwartz has made MIPIM a pillar of her business development activities over the past two-and-a-half decades. “When I first arrived in 1991, the thing that struck me was the calibre of the people,” she says.

“You could meet the chairman of the board, so you could get things done.”

Schwartz — a consummate networker — says that real estate is essentially a people business. “It’s about making good contacts and you have to keep working at it,” she says. “If you don’t look around the stands, introduce yourself and give out your cards, you’re missing out.”

But how do you stand out in a 20,000-strong crowd?

Schwartz says it pays to have something memorable. For example, her business card incorporates a stress tester, which means that people tend to keep it in their wallet rather than filing it away.

But she agrees that technology has made MIPIM more manageable: “You used to have to give out lots of written material, but now your website can do that. It’s better not to give people too much. I prefer to encourage them to have a conversation.”

MIPIM LANDMARKS Potsdamer Platz, Berlin The renaissance of Potzdamer Platz as Berlin’s business hub epitomised the transformation of Germany in the years after UHXQLæFDWLRQ LQ

MIPIM LANDMARKS Eurotunnel The Channel Tunnel, which opened in 1994, was a catalyst for regeneration projects in Northern France and South-East England including Euralille in Lille and, more recently, Kings Cross in London.

Eurotunnel stand at MIPIM

26 I

preview magazine I February 2014 I www.mipim.com

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i MIPIM 25

Twenty-ďŹ ve years in the making

MAURICE GAUCHOT

DIDIER UNGLIK

“The increase in numbers has been fuelled by foreign visitors�

“You need to be more organised these days to cope with the scale of MIPIM�

MAURICE Gauchot, president of CBRE France, has attended MIPIM since the very ďŹ rst year, initially with the French broker Auguste Thouard. “For me, the evolution of MIPIM is comparable to the evolution of the real estate market,â€? he says. “At ďŹ rst, it was almost purely French and it had a very French avour right up until the end of the 1990s. The increase in numbers since then has been fuelled by foreign visitors.â€?

Gauchot has also noticed increasing diversity in the type of visitor and exhibitor: “To begin with, it was only developers, brokers, architects, etc. Now, there are more and more city organisations — and that began with the French cities.�

As MIPIM has grown, Gauchot says delegates have been forced to be more organised to make the most of their time. �In 1990, we went without any agenda — in fact, we relied on people coming to us,� he remembers. “I only had one or two meetings booked and the rest of the time we were on the stand. Now, I have a meeting every 15 or 30 minutes.�

He believes technology lies behind this change. “It started with pagers in the early 1990s,� he says. “Some people were reluctant to carry them because they felt they would no longer be free to do what they wanted. But gradually, MIPIM became more professional and productive. Investors and occupiers are now very professional in the way they run their businesses.�

DIDIER Unglik, president of L’Etoile Properties, has attended every edition of MIPIM. “I came to MIPIM the ďŹ rst year, when I was on my ďŹ rst job,â€? he remembers. “It’s grown so much,â€? he says. “You need to be more organised these days to cope with the scale of MIPIM.â€?

For Unglik, that has meant, for the last 10 years, spending as much time on a boat in the ofďŹ cial moorings opposite the Palais des Festivals as he does in the Palais.

He agrees that MIPIM has changed but he adds: “It’s more serious than it was, but I still enjoy it.�

MIPIM LANDMARKS

MIPIM LANDMARKS

MIPIM LANDMARKS

La Defense, Paris La Defense, Europe’s premier purpose-built business district, has been a constant throughout the history of MIPIM and now it is seeing a new injection of life under its renewal plan.

Shanghai World Financial Center Architect KPF unveiled its plans for the world’s second-tallest building at MIPIM. Now complete, the World Financial Center is a symbol of the new-found vitality of Shanghai and China in general.

Burj Khalifa, Dubai Nothing symbolises the emergence of Dubai as a real estate powerhouse like Burj Khalifa, the world’s tallest building houses a mix of functions ZLWK KRWHO UHVLGHQWLDO RIÌFH restaurant and retail space.

EPAD (now EPADESA) stand at MIPIM

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preview magazine I February 2014 I www.mipim.com

Transform your building into a performance tool Provide a healthy and productive environment while reducing energy usage.

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Adapt along time, the equation between working modes and space evolution. > Facilitate access to collaborative space > Enable interactions > Pilot dynamically your workplace based on data, performance indicators of space usage and optimization reports,

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MIPIM Experience GRAND AUDITORIUM

Level –1

Shuttles to Hotels

THE MIPIM AWARDS Thursday 13 March 2014 18.15-20.00

1

Cr o en iset tra te nc e

GARE MARITIME

HOTEL MAJESTIC BARRIERE

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MIPIM AREA Entrance

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P RE ARI GI S ON

The 25

PORT MARINA

Restaurant & Beach Bar

Level 3

MASTERMINDS ARCHITECTURE 13 March

11.30-13.00

MIPIM INNOVATION FORUM-Green room

Mette Kynne Frandsen

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Winy Maas

Auguste van Oppen, Msc

preview magazine I February 2014 I www.mipim.com

Dominique Perrault

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GRAND AUDITORIUM

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Optimise your MIPIM Experience by preparing online, through the MIPIM database on my.mipim.com. Check out ‘must attend’ conferences and events in this magazine’s back pages and download the MIPIM app for all useful tools once in Cannes

19,000m² exhibition

2,000 Exhibiting Companies

20,500 individual participants OPENING COCKTAIL PARTY

ouretti

°3,°.9(5+°/6;,3 CANNES

4,500 Investors

Kick MIPIM 25th edition off at the

58 Boulevard de la Croisette, 06414 Cannes

Rue Fré

1^°4(9906; CANNES

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Carlton Hotel with a glittering cocktail and fireworks.

800 m from the Palais des Festivals

Tuesday 11 March 2014, 19.30

HOTEL CARLTON INTERCONTINENTAL

H MA

2

THE BIG DEBATE Thursday 13 March 2014, 10.00-11.30

Robert Booth

Harry Macklowe

Graeme Maxton

Antonio Tajani

The 25 Restaurant & Beach Bar

3

The newly refurbished Majestic Beach restaurant will reopen its doors for MIPIM to become The 25, a premium space where registered participants can enjoy breakfasts, lunches and drinks by the beach

Prof. Carlo Ratti

11 – 13 March 9.00 to 18.00 14 March 9.00 to 15.00

www.mipim.com I preview magazine I February 2014 I 31

PROJECTNEWS MIPIM is where the real estate industry comes to see the future of the built environment and the projects that will shape and define tomorrow’s cities.

Here, we profile six of the schemes that will be creating a buzz at MIPIM 2014

ECODISTRICT ARLON, BELGIUM ESPACE Didier is looking to develop an ‘ecodistrict’ in the station area of Arlon, Belgium. The project will involve the creation of around 180 housing units, which may include an assisted living block consisting of around 50 apartments. With support from Be Wallonia, Espace Didier is now seeking an investor and/or a manager. The main attractions of the project are its excellent location in the centre of town, the wide range of accommodation types envisaged and its excellent energy performance. Planning consent is expected early this year.

INCITY TOWER LYON, FRANCE SOGELYM Dixence is on site with its landmark project to provide 42,000 sq m of office space. The scheme, scheduled for completion in 2015, entails the demolition of the old UAP tower situated on the Lafayette/Garibladi corner and the reconstruction of a new 200-metre tower. Not only will it be the tallest building in Lyon but, with a double-glazed skin to ensure maximum efficiency and an emphasis on recyclable materials, it will also be the first to earn HQE (Haute Qualite Environnementale) certification. The architects are Valode & Pistre/Atelier de la Rize.

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837 WASHINGTON NEW YORK CITY, US THOR Equities will open the doors to 837 Washington, located in New York City’s luxurious yet cutting-edge Meatpacking District, in 2014. The prime corner lot features a fully restored two-storey historic brick facade enveloping a soaring six-storey building of twisting steel with a glass exoskeleton. Built with modern materials and amenities, 837 Washington offers 2,600 sq m of flagship retail space and 2,500 sq m of office/ commercial space. It is developed in partnership with Taconic Investment Partners and designed by architect Morris Adjmi.

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iPROJECTNEWS WEST HARBOUR, HELSINKI, FINLAND DESIGNED by ALA Architects for the City of Helsinki, the West Harbour urban regeneration scheme aims to restore the connection between the harbour and Helsinki city centre. The old cargo port and dockyards have been relocated and the remaining passenger port, with its new hotel and retail functions, will act as the lively hub for the revitalised area. By 2030, 22,000 new residents will have moved into the district and 10,000 new jobs created next to the port, which will service up to 10 million passengers per year.

DOWNTOWN DUBAI DUBAI, UAE EMAAR is taking its approach to developing integrated lifestyle destinations to the maximum at Downtown Dubai. This 500-acre mega-development is a striking example of architecture and modern planning. Burj Khalifa is the pivotal axis for this iconic development. The world’s tallest building features the world’s first Armani Hotel; the world’s highest restaurant, At.mosphere; and At the Top, Burj Khalifa, the world’s highest observatory deck with an outdoor terrace. Downtown Dubai also includes the Dubai Mall: the world’s largest shopping and entertainment destination and the Dubai Fountain: the world’s tallest performing fountain set in a 30-acre lake.

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BOLSHEVIK MOSCOW, RUSSIA O1 PROPERTIES is transforming this monumental red-brick building, constructed in 1855 as a confectionery factory, into a world-class business and cultural destination. The frontage will be fully reconstructed, while a new glass atrium connecting the buildings will add contemporary character to the project. In addition to 75,000 sq m of loft-style office space, Bolshevik will feature a museum of Russian impressionism and large landscaped recreation area. The complex will be fully completed by the end of 2015, but the first tenant — Groupe Publicis — will move in before the end of 2014.

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he city of Barcelona has tripled the real state inversion attraction rate during 2013, in relation to the previous year, summing up a total transactions volume of 1,222 million Euros.

From these inversions, 82% correspond to International markets, according to the data published recently by Aguirre Newman.

Catalonia received 15.6 million International tourists during 2013. This number represents an increase of 8% compared to 2012 and the 25.8% of the total tou-

rists visiting Spain, according to the Survey on touristic movements on borders (Frontur), from the Tourism, Energy and Industry Ministry. Tourists have spent in Catalonia 14,200 million Euros at the end of 2013.

Moreover, Barcelona has EHHQ SODFHG DV WKH ¿UVW FLW\ LQ the world in delegates assistance and the third on International congresses, according to the data of the International Congress and Convention Association (ICCA).

7KH ¿YH PRVW LPSRUWDQW UHDO state operations of the year were the offer for sale of the Catalan Government buil-

dings, and the acquisition of the W Hotel by Qatari Diar, the Agbar tower by Emin Capital, the Corte Ingles building in Plaça de Catalunya by the IVA Capital Partners fund or the commercial centre Diagonal Mar by the North American fund Northwood Investors, among others.

Barcelona Catalonia is the bid made by the Catalan Government –through INCASÒL- and by the Barcelona City Council to promote a set

of land inversion opportunities for economic activities, industrial areas, hotels, commercial spaces, and business buildings among the most important on the Mediterranean corridor. From the public initiative, and summing the efforts of the private sector these projects intend to place Barcelona and Catalonia as the innovation and logistics hub in Southern Europe.

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CRITICAL THINKING AT THE CRITICAL TIME™

FOCUS Sector specialists survey the scene CONTENTS BUILDING INNOVATION P39 New-build projects have set new standards in sustainability and efficiency. But how much further can improvements in building performance go without challenging the behaviour of the occupants? Peter Clucas reports P43 OFFICES As the economic recovery gathers pace, major cities are seeing an uptick in office development. Ben Cooper looks at how the industry is reacting to changing corporate requirements in an office market that remains patchy, picky and risk-averse P47 INVESTMENT Every year, investment managers gather at MIPIM to survey the investment landscape and to share best practice. So how do they see the role of real estate in institutional portfolios in 2014? Graham Parker investigates INDUSTRIAL & LOGISTICS P51 Global trade patterns are in flux. Liza Helps looks at how new port developments and airports are reacting to the shifting paradigm of manufacturing supply and consumer demand P55 HOTEL, TOURISM & LEISURE Converting redundant office buildings into hotels has enabled operators to open new space in undersupplied markets like London and Amsterdam.

But with the office sector recovering, how long can this trend continue? Chris Bown reports CITIES & URBAN DEVELOPMENT P59 As millions continue to flood into the world’s megacities, putting roofs over heads is becoming an increasingly urgent challenge. Chris Bown looks at the solutions that are starting to emerge EMERGING SECTORS P63 With too much money chasing too few opportunities, investor attention is turning to alternative asset classes. Ben Cooper, Doug Morrison and Graham Parker look at the emerging sectors that are tempting investors from the straight and narrow RESIDENTIAL P67 Investors are increasing their allocations to European residential real estate. Doug Morrison looks at one of the sub-sectors to benefit from this trend — healthcare/senior living RETAIL P68 E-commerce and multichannel retailing is not only revolutionising the way people shop, but it is also fuelling much debate over the future of retail real estate. Mia Hunt asks what’s in store for bricks and mortar retailing

What are the key trends in international real estate?

A sector-by-sector guide to the industry in 2014 Cities & Urban Development – page 59

www.mipim.com I preview magazine I February 2014 I 37

The world’s property market - 25th edition

For the second year in a row, discover the MIPIM Innovation Forum: a 4-day programme exploring the most innovative solutions and practices to increase the value of the property asset!

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GARE IME MARIT

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i FOCUS BUILDING INNOVATION

WORKPLACE DESIGN

Welcome to the ecolution New-build projects have set new standards in sustainability and efficiency. But how much further can improvements in building performance go without challenging the behaviour of the occupants? Peter Clucas reports

T

HE M A JORIT Y of office workers view sustainability as a priority in their workplace, even ahead of technological advances such as mobile working, according to a new study commissioned

by Arup. The engineering and design consultants found that 68% of office workers view sustainability as a priority in their workplace.

With 2.2 million tonnes of CO2 per annum attributed to offices in the UK alone, reducing the impact of commercial buildings is critical to tackling climate change in cities, the report concludes.

In Munich, the newly completed NuOffice has been named the most sustainable office building in the world.

Thick insulated exterior walls and triple-glazed windows provide good thermal insulation. In addition, the building uses radiant heating and cooling systems, switchable glazing and innovative insulating material.

“At the end of the year, we expect a primary energy consumption of about 30 kilowatt hours per sq m per year,” says Michael Krause, group manager of building systems engineering at the Fraunhofer Institute for Building

RELATED CONFERENCE DURING MIPIM Retrofit strategy & smart buildings: towards high performance buildings.

Wednesday 12 March > 14.30-16.30 Overview followed by 4 case studies by - 3M - BASF - Somfy Philips - GDF Suez

Physics IPB. “Conventional new office buildings range between 100 and 150 kilowatt hours per sq m per year.”

Krause claims the NuOffice is no less comfortable than a typical office building in Germany. “However, there is no humidification in winter or dehumidification in summer,” he says. “This may lead to some compromises in comfort.

But in Germany humidification is generally no longer carried out for office buildings, because it requires very high energy and sanitation input.”

A large cooling unit was not installed in NuOffice. “We simply cool the building efficiently with groundwater,” Krause says. “We cannot exclude that, on a very hot day, [natural ventilation] does not suffice. But we are quite confident that the system’s power is large enough to deal with all kinds of “An eco-office is a weather conditions.” healthier environment Architect Vincent Marani, founding member of the Czech Green Building Council and current president of the American Institute of Architects, European

for its occupants” Vincent Marani, Czech Green Building Council

www.mipim.com I preview magazine I February 2014 I 39

i FOCUS BUILDING INNOVATION Chapter, agrees that, in general, eco-offices should be just as comfortable for occupants as conventional offices.

And he claims they are also healthier.

“It is better for people to have the temperature inside in the summer two to three degrees less than outside, instead of having the inside temperature at 21 degrees while the outside temperature is 30,” Marani says. “This great difference in temperature causes people to be ill in the summer. Also, most new office buildings have operable windows that allow you to take advantage of fresh air in the transition months. For all these reasons, an eco-office is a healthier environment for its occupants.”

Efforts to lower carbon emissions can sometimes mean that individual control of temperature and air quality is lost in favour of automatic systems that take away the human element. So what’s the solution?

It’s a matter of balancing control and individuality, according to Dan Probst, Jones Lang LaSalle’s chairman of energy and sustainability services. “Because all people are different, the same temperatures will feel comfortable to some people and less comfortable to others,” he says. “In older designs, buildings brought air in and conditioned the entire space. Newer building designs are making temperature control much more individualised. This means customised conditioned air for the needs of the people in the specific space, and not conditioning air all the time — especially when it’s not needed. The challenge is how to condition air to different temperatures and deliver it to different people, requiring unique controls and delivery structures. The future will be to balance the desire for more individual control with the energy efficiencies of larger HVAC [heating, ventilation and air conditioning] systems.”

Marani agrees: “Today, buildings have very sophisticated BMS [building management systems] that reach to the needs of the occupants. The systems also give the ability for the occupants to override the system. It is very wrong to think the human element is out. Quite the opposite is true.”

management) costs by 15%.

“The point of this is that the focus should be on designing buildings and systems that make employees more productive, which will surely have a much greater MIPIM Innovation Forum impact than changing the way in which people work to with 1,000 sq m of stands incorporate the latest technology or building system,” and a full programme of Henigan says. conferences and events.

Gare Maritime, on the JLL’s Probst sums up his attitude: “If we raise employee Cannes Croisette awareness and engage them with energy conservation and activities like recycling, this really reinforces a culture that values ‘people, planet and profit’.”

And Marani shares this view: “People should care about the environment we live in. Without our planet, we do not exist. People should demand better working conditions.

You are in this environment most of your waking hours.

Employers should also want better productivity, lower expenses and more profit. When an employer is looking to rent office space, they should look at the operating expenses, not just the headline rent. You will find ecobuildings create better working environments, which create less sickness and happier employees, which in turn creates better productivity — not to mention lower energy bills to pay for better profitability. It is a win-win situation.”

“The focus should be on T he general view is designing buildings and that there is still more we can do in terms of systems that make employees sustainability and this more productive” will have a positive Steve Henigan, HOK effect on productivity — provided the work force is fully engaged with and committed to the process.

So are we reaching the limits of what we can do? Most experts agree that there is much more than can be done, but that occupiers need to buy into the concept of sustainability.

“Younger generations generally have a more forwardthinking view of sustainability and, in time, the environment they demand from an employer will raise the bar across all buildings,” says Steve Henigan, vice-president and regional leader of consulting at international architects HOK. “The key to engagement is ensuring that the objectives and demands of the occupiers match those of the organisation.”

A research paper published by HOK last year — The Obsolete Currency Of Real Estate, Henigan/Wright 2013 — demonstrated that, typically, the cost of people represents over 70% of an organisation’s cost, compared to the 15% for real estate. HOK concluded that a 0.25% increase in employee productivity would generate a greater financial benefit than reducing FM (facilities 40 I

Welcome to the ecolution

preview magazine I February 2014 I www.mipim.com

Munich’s NuOffice, named the most sustainable office building in the world

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The launch of MIPIM UK will gather 3,000+ top-level real estate players from all sectors to build partnerships, showcase projects and gain up-to-date market insight through a worldclass exhibition, conference and networking programme dedicated to doing business in the UK.

i FOCUS OFFICES THE OFFICE MARKET

Some markets more equal than others

As the economic recovery gathers pace, major cities are seeing an uptick in office development. Ben Cooper looks at how the industry is reacting to changing corporate requirements in an office market that remains patchy, picky and risk-averse

L

AST summer, suddenly, the tide seemed to an extent economically but, in all its historical and to change. After so much time fearing and geographical richness, is far from uniform. Then take the preparing for the worst, it was at last acceptable Middle East. Distinct in almost every way from Europe, it is a region characterised to talk about recovery. by many ups and downs, A new, optimistic attitude successes and failures. began to show itself and “In London, the tech and So within such a large the real estate industry and varied region, how started to talk about media sectors are leading the is the of f ic e ma rket growth in all sectors. charge in terms of demand” really emerging from the But in a global era and Dan Bayley, BNP Paribas Real Estate downturn? And how has with funds taking panoccupier demand changed regional approaches to in the five years since the their investments, defining big crash? growth is a tricky business.

In reality, growth in the EMEA region is concentrated Europe’s office market is as diverse and complex as the continent itself, which might be unified politically and on key spots rather than evenly spread. Investor

RELATED CONFERENCES DURING MIPIM Wednesday 12 March • 10.00-11.00: Workspace in transformation: which face of tomorrow’s office?

• 11.30-12.30: Financial impact of CRE: how to influence the C-suite and business strategy?

Co-organised by CoreNet Global

www.mipim.com I preview magazine I February 2014 I 43

i FOCUS OFFICES

Some markets more equal than others

has bolstered online shopping and given birth to a new generation of retail companies — and in the process new, modern technology-providers have thrived.

BNP Paribas’ head of central London offices, Dan Bayley, says: “In London, the tech and media sectors are leading the charge in terms of demand at the moment.

They are looking for innovative buildings. It’s all about the right building for the online retailers.”

These young, progressive companies are not only looking for space — they are looking for a new type of space to suit a new type of working culture. This trend is common throughout the EMEA region, with both home-grown and international companies seeking new ways of working and new ways of using office space.

Kummerfeldt adds: “There has been a structural change driven by the occupier side. People don’t have to be in the office any more. After HR, space is the second biggest cost for companies, and the corporates have realised they can use their space to support other agendas. The office can be a way of attracting and retaining talent. Companies see their office as being the embodiment of what they are all about — the feel and the image of the company.”

For c ompa n ies l i ke G o og le, A pple a nd Amazon, identity and “The office can be a way of lifestyle have become such fundamental parts attracting and retaining talent. of their power to compete Companies see their office as that these qualities need being the embodiment of what to run right through they are all about” the business, including behind the scenes.

Oliver Kummerfeldt, Jones Lang LaSalle

confidence may be slowly creeping back, but not to the extent that all options are being looked at or all levels of risk considered.

Jane Hollinshead, head of property at UK law firm Addleshaw Goddard, says that, given the disproportionate levels of growth in GDP, demand, values and rentals throughout Europe, recovery so far only applies to a very few locations. “The eurozone may have clawed itself out of recession in the second and third quarters of 2013, after a year and half of negative growth, but this does not mean that the entire continent is in the clear,” she says. “It hides an unhealthy disparity in economic performance.”

Hollinshead believes that, if activity continues as it did in 2013, there is a danger that investors will still only show interest in the safest bets and overlook the riskier options. She adds: “In many of the core markets, the euro crisis has reduced development pipelines over the last four years, which has put a premium on demand for limited prime space from tenants. But this does not mean that markets overall are recovering — and most international buyers have only focused on this limited prime space.”

Development activity has remained minimal th roug hout Eu rope.

What little that has been built has usually been done with occupiers secured in advance, putting those investors and landlords in the core locations in a strong position when it comes to negotiating leases.

But other than for a very few office tenants in a very few locations, opportunities for new space of the right kind have been sparse. Clearly this benefits developers and investors, especially if they are able to provide the sort of space now in demand.

Oliver Kummerfeldt, head of EMEA offices research at Jones Lang LaSalle, says it is still a developer’s market, despite returning confidence. “The amount of pre-lets is still comparatively high,” he observes. “Occupiers are looking to get into buildings very quickly, sometimes a year before completion, so meeting all of their corporate requirements is still fairly rare. The opportunity for investors who understand modern retail requirements is great. At the moment, the investor side is a little bit behind. The opportunity is for investors to market their builds and get the occupiers on their side.”

So who is taking the limited space still available?

And what are the modern requirements to which Kummerfeldt refers?

As is often the case, from a once-in-a-generation economic slump, a major shift in business culture has emerged. Weak consumer spend on the high street 44 I

While, as Kummerfeldt points out, the lack of development in the EMEA means developers still hold most of the cards when it comes to lease terms, as the pipeline starts to increase and space becomes less at a premium, occupiers’ ability to call the shots will become greater over time.

As companies start to demand the right type of space to suit their image, identity and, increasingly, ethical credentials, developers will have to be more accommodating in the design process, make more concessions in the negotiation of leases, and be more conscious of a building’s sustainability from the word go.

This is already the case in a few notable examples, where major names from technology and retail have broken the mould in offices. But as real growth returns beyond the absolute prime locations, the trend is likely to spread.

And with sustainable features becoming more like legal requirements than nice optional extras on a building, the whole process of office development looks set to become more complex. If they are going to continue to attract occupiers in increasingly competitive times, investors will need to start predicting, not following trends in their own markets, and ensuring their buildings are built to match.

preview magazine I February 2014 I www.mipim.com

Tour Majunga

TOUR DE FORCE

UNIBAIL Rodamco’s Tour Majunga is nearing completion in La Defense, Paris. But even before it opens Jean-Paul Viguier’s design for the €195m, 63,035 sq m tower has been showered with environmental awards.

It was the first new highrise building in Paris to be BBC (Batiment Baisse Consommation) certified in its construction phase; it was the first office tower in continental Europe to receive a BREEAM Excellent rating on conception, and it was certified Excellent on the HQE (Haute Qualite Environnementale) rankings for 11 out of a possible 14 categories.

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i FOCUS INVESTMENT INSTITUTIONAL INVESTMENT

Risk diverse, not risk averse Every year, investment managers gather at MIPIM to survey the investment landscape and to share best practice. So how do they see the role of real estate in institutional portfolios in 2014? Graham Parker investigates

T

HERE is a progressive trend for institutional investors with long-term liabilities to increase their allocation to real assets, driven partly by regulatory reform. This is the view of Deborah Shire, global head of business development at AXA Real Estate.

“Insurance companies now have more certainty about the Solvency II directive,” she adds. “The big companies are now refocusing their allocations and they see real estate as a fundamental block.”

As a result of Solvency II — which sets down the minimum levels of capital that insurance companies must hold — Shire believes the diversification of property portfolios will increase, with more cross-border activity.

Conversely, “using leverage on core domestic investment might seem less attractive”, she adds.

And she sees a growing trend for institutions to seek exposure to real estate through routes other than the traditional equity role. “The financing of real estate assets will remain attractive,” she says. “Real estate financing is a great diversifier in a fixed-income portfolio. We have seen not only insurance companies but also pension funds starting to see real estate financing as a block in their fixed-income allocation.”

Another trend that Shire expects to grow this year is the flow of global capital into Europe. She points out that, in 2013, AXA Real Estate raised close to half of its capital outside Europe, with North American, Asian and Middle Eastern investors all active.

“Two years ago it was mainly the very early US movers that would consider Europe because of the uncertainty,” she says. “It was seen as a distressed opportunity and they were looking for a 20%-plus IRR [internal rate of return]. But now we’re seeing a bifurcation in the market, with people like sovereign wealth funds looking at core for capital preservation, while the distressed investors are still active. Our conviction is that the best value currently lies somewhere between the two, with addedvalue opportunities.”

RELATED CONFERENCES DURING MIPIM Insurance Companies, Pension Funds and Sovereign Wealth Funds: Competitors or Partners?

Sponsor: Allianz Tuesday 11 March > 17.00-18.30 Rethinking asset allocations for long term investors: strategic and tactical real estate investment Sponsor: Amundi Wednesday 12 March > 16.30-18.30

AXA Real Estate’s Deborah Shire

Shire reports that, for the past couple of years, a large number of properties have been sitting on the books of the banks or closed-ended/liquidating funds with nothing being done to them. “Properties that are well located but haven’t been managed present great opportunities,” she adds.

Nicolas Simon is CEO at Amundi Real Estate. Amundi’s parent group has €700bn of assets under management, making it the number-one asset manager in Europe and www.mipim.com I preview magazine I February 2014 I 47

i FOCUS INVESTMENT

Risk diverse, not risk averse

long time and equities are volatenth in the world. But its real esVanhanen says. “Property tate arm manages a relatively pal“There is little bit more tile,” has been delivering steady retry €8bn of assets, so Simon’s first turns and often meets the needs of observation is that, “with a rela- risk appetite now” those with long-term liabilities.” tively low allocation to real estate, Pertti Vanhanen, Aberdeen Asset Vanhanen believes core assets in we have a lot of room to grow”.

Management gateway cities like London are And he believes that real estate’s beginning to look expensive, alperformance through the downturn has actually strengthened the case for increased al- though they seem to remain of interest to Middle Eastern locations. “The property market didn’t collapse,” he says. and Asian investors, as well as private money. He says others, such as the Dutch funds, are also looking at Asia “It’s showed relatively low volatility.”

As a result, Simon sees activity increasing, especial- and the US. “But are they looking at core still, or would ly in the core markets: “There’s a strong flight to qual- they go further up the risk curve to include value-add?” ity. Capital is flowing from Asia and the US to Europe. he muses.

There’s a strong focus on the three core markets of “There is little bit more risk appetite now,” Vanhanen France, Germany and the UK, due to the liquidity of concludes. “The forecast is that bond yields will remain these markets and the ease of access to the markets low and equities are near historic highs, so property looks attractive.” through regulated products and managers.”

Simon says that, as the leading asset manager in France, Amundi is well placed to capitalise on this trend. He Another investor with a firm strategy of lifting its alpoints out that Paris accounts for 10% of all European location to real estate is the German-based insurance giant Allianz. In 2008, investment turnover.

And it is not just institutional investors that are wak- when it had €17bn in real ing up to the positive attributes of real estate. In France, estate, or 4% of its asAmundi is the leading promoter of OPCIs — property sets, it made a strategic funds accessible to retail investors — with a 60% market decision to lift this to share. It has raised €200m in the past two years and now, 6%, which would give it a for the first time, it is offering its investors access to cross- €30bn portfolio. To manage this process, it set up border transactions.

At the end of 2013, Amundi bought a City of London a global real estate arm, office building in partnership with Knight Frank Allianz Real Estate, unInvestment Management, and it has also bought proper- der CEO Olivier Piani. ties in Hamburg and Munich. “A wider investment hori- Piani says the business zon allows us to manage market timing, as there is cur- is on course to meet the rently a de-correlation between the recoveries in the UK, new allocation target, Germany and France,” Simon says. “France is lagging even though it has been behind because of the difficulties in achieving structural trying to grow in a dereform, but we expect 3%-5% rental growth in London pressed European econover each of the next three years. Germany will also see omy. But he cautions about making too sweepgrowth, but at a slower rate.” ing generalisations about Pertti Vanhanen, managing director and head of fund the European real estate management, property, at Aberdeen Asset Management, market. “In my eyes, the Amundi Real Estate’s Nicolas Simon reports a definite uptick in activity. “The largest inves- European commercial tors can achieve global and sector diversification, but the property market as such smaller players have tended to stick with their home mar- does not exist,” he says. “The markets differ greatly kets, diversifying through funds and the listed market,” from country to country. While Germany is quite OK, France is suffering. Italy and Spain, for me, remain the he adds.

He also notes a trend towards club deals and joint ven- big unknown — although Spain seems to be hitting the tures, but cautions: “It’s always a challenge to find like- bottom, at least if you listen to most analysts.” minded partners. Somebody has to be the working part- And Piani feels European real estate is going through a period of structural change: “The first change is ner as well, and you need a suitable structure.”

As an example, he points to the recent Norwegian joint that the share of real estate assets financed by soverventure with the Crown Estate in London’s Regent Street. eign wealth funds will go up. And while money from “If your domestic market is relatively small, then you will the Middle East seems to be decreasing, Norwegian, Korean and Chinese sovereign wealth money is taking need to look elsewhere for opportunities,” he adds.

So what are the factors driving the recent surge in prop- over. The second change is that the big insurance comerty market activity? “Bond yields have been low for a panies like Allianz are moving into the debt market.”

48 I

preview magazine I February 2014 I www.mipim.com

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Construction and development Russia St. Petersburg and Moscow Over 26 years of successful work in the Russian real estate market GDRs listed on London Stock Exchange (ticker: ETLN) Credit rating by Standard & Poor’s: B+/Stable/B+ Etalon Group was founded in 1987. During our 26-year history,

In the MMA, the Group’s flagship Emerald Hills project is fully

we have commissioned over 3.9 million square metres across 160

on track, with 300 thousand square metres already commissioned

residential and commercial projects.

in 2011-2013. The total planned net sellable area (NSA) of the

Etalon Group is one of the few truly vertically integrated businesses in the Russian real estate sector. The Company

Emerald Hills project exceeds 800 thousand square metres. The project is set for completion in 2018.

operates in every part of the property development process, from

In St. Petersburg, we continue construction of several residential

land acquisition to sales and cash collections from its customers,

estates: Tsar’s Capital, Galant, Swallow’s Nest, Molodejny and Rechnoy.

which enables Etalon Group to maximise margins throughout the

The Group aims to increase residential real estate

value chain, and reduces exposure to cost inflation from external

commissioning to 800 thousand square metres annually by 2016.

service providers.

Etalon Group has significant scale, with 40 business units that

Today Etalon Group is a leading player in Russia’s “Golden Triangle”

employ over 4,000 people, two construction management

of St. Petersburg, Moscow and the greater Moscow metropolitan area

companies, five general contractors, 16 subcontractors, a crane

(MMA), with a dominant position in the “comfort class” segment.

company, a brick factory and a nationwide sales network.

Total deliveries in 2013 reached 468 thousand square metres,

In 2011, the Company raised USD 500 mln during an IPO on

an all-time record for the Company in its 26-year history. A total of

the London Stock Exchange. Etalon Group’s investor base includes

6,932 contracts were signed in 2013.

a wide range of well-known investment funds from the US, UK,

Looking ahead, 2014 will be another exciting year for Etalon Group,

Germany, Sweden, Russia and many other countries. In 2013 the

as we start construction of new residential projects like Samotsvety

Board of Directors approved a dividend policy aimed at paying out

and Moscow Gates in St. Petersburg and Golden Star in Moscow.

15% to 30% of IFRS net profit on a semi-annual basis.

Come and see us at our stand Level 01, zone A+, 20.11 2 Bogatirsky prospekt, St. Petersburg, Russia, 197348 +7(812)380-05-25 www.lenspecsmu.ru www.etalongroup.com

i FOCUS INDUSTRIAL & LOGISTICS PORT-CENTRIC DEVELOPMENT

Moving with the times Global trade patterns are in flux. Liza Helps looks at how new port developments and airports are reacting to the shifting paradigm of manufacturing supply and consumer demand

T

handled through seaports worldHE GLOBA L supply wide and 74% of EU trade is chain is changing — and “Over the last transported by ship. However, will continue to change. decade, it has been 58% of last year’s container This is the view of Ali Nassiri, interesting to see how throughput was concentrated in vice-president of acquisitions and just 10 ports, up 30% from 2001. research for Prologis in Europe. logistics has moved Tornow says: “Despite this conNowhere is that more true than up the value chain” centration of port throughput, in the area of global containPhilippe Van der Beken, Goodman changing dynamics in maritime er movements, which rose from transport with ever larger ships, around 90 million TEU in 1990 along with increasing feeder serto 590 million TEU in 2012 — an increase of 550%. What’s more, volume is set to double vices from larger transhipment hubs to smaller ports, is nurturing a shift in the port landscape.” by 2030.

European container port throughput is expected to in- Indeed, the continued success of a port, and hence its vicrease by more than 50% by 2030, from 95 million TEU ability, now relies on factors that include its cargo-hanin 2012 to around 150 million TEU, according to Jones dling capacity and efficiency, whether or not it is multiLang LaSalle’s latest European Seaports research. “This modal, whether it can provide a deep-water harbour for increase will result in an extra 20-30 million sq m of dis- the largest ships and whether it has warehousing to suptribution facilities by 2030, which is an increase of be- port value-added services, either on-port or via a directly tween 40%-60% on today’s existing warehouse space,” linked inland port. says Alexandra Tornow, associate director of EMEA loIncreasingly, the proximity of a container port is seen as a gistics and industrial research at Jones Lang LaSalle.

At present, 80% of global trade in volume terms is positive locational benefit. PointPark Properties secured

The port of Gdansk is an important hub for distribution into Russia as well as Poland

RELATED CONFERENCE DURING MIPIM Logistics and transportation hubs – Overview followed by case studies Wednesday 12 march 11.30-13.00

www.mipim.com I preview magazine I February 2014 I 51

i FOCUS INDUSTRIAL & LOGISTICS a new leasing deal for a total of 30,060 sq m with global logistics provider Dachser for its Savigny-sur-Clairis logistics park in Burgundy. One of the factors that drew the occupier was the park’s proximity to the multimodal container port at Sens. It is also only 18 km from the inland port of Gron, operated by P3’s partner Logiyonne.

Andrew Stacey, managing director of P3 France, says: “This means a container can be delivered from the channel port of Le Havre to Savigny approximately 25% cheaper than by road and without the associated traffic congestion, as well as with a smaller carbon footprint.”

New port-centric developments are also expected to stimulate ports. Available warehouse stock near a port is a great asset that can make a difference in shipping decisions. It is here that port-centric logistics can be carried out — an approach that is rapidly gaining momentum as a source of competitive advantage for cargo owners. This is particularly valuable today, when many ports are struggling to find new land for expansion.

The largest increases in demand are expected near those ports that upgrade their infrastructure in order to attract oceanic lines, which operate ever-larger vessels carrying thousands of containers.

It is no coincidence that DP World saw fit to ensure that London Gateway, one of Europe’s newest deep-water ports, was served by a port-centric logistics park of up

DP World’s Lonon Gateway 52 I

Moving with the times

to 950,000 sq m. Its foresight has already been rewarded with retailer M&S taking a 90,000 sq m facility.

In Hamburg, Goodman is speculatively developing a 10,000 sq m warehouse unit on Genter Ufer, which represents the first phase of development at its 65,000 sq m Goodman Interlink Hamburg site, which it bought in February 2013.

Prologis’ Nassiri observes that the problem with most ports is that there is a supply constraint on land. “You need to invest in the right ports,” he says.

It is not just lack of land that may make a port less attractive, but also lack of infrastructure to support it and move goods to other locations. Eastern European ports are less attractive, because they lack facilities and transport efficiencies to the hinterland markets. They are hampered by poor infrastructure.”

Goodman has invested in Eastern European ports with its commitment to its 500,000 sq m Pomeranian Logistics Centre, a development project located adjacent to the Gdansk Deepwater Container Terminal (DCT) in Poland.

Philippe Van der Beken, Goodman’s managing director for continental Europe, says: “We are taking the long view with regard to the strategic importance of the port at Gdansk. It is not just important for Poland — it is also a hub for distribution into Russia as well. There is a global shift in trade and in manufacturing goods, as well as where products are consumed in continental Europe. We are seeing increasing GDP growth and Central Europe is a case in point. There is more purchasing power emerging in Central and Eastern Europe and the rate of increase will only accelerate as time goes on and the markets mature.”

Van der Beken adds: “Over the last decade, it has been interesting to see how logistics has moved up the value chain from being an aspect of execution and delivery to becoming an integral part of the business model and seen as a competitive advantage.”

London Gateway commercial director Peter Ward says the factors driving the increase in port-centric development are multiple, ranging from a greater increase in offshore sourcing to buy product for retailers, consumers or manufacturers, the increase in the cost of fuel and the rise of omni-channel retailing. “All this puts pressure on the logistics network model,” Ward says. “Is the centralised model [with one distribution centre in the middle of the country] fit for purpose now?”

Amaury Gariel, managing director EMEA industrial and logistics at CBRE, says: “Ports are a crucial entry point for logistics, but there is still a need for XXL warehousing — firstly, due to the centralisation of procurement and, secondly, because of the increase in transport costs and the need to have trucks used more efficiently.

And then there is the change in consumer behaviour. The internet has given the consumer an incredible amount of choice: the world has become the market and retailers need to respond by distributing to different channels.”

preview magazine I February 2014 I www.mipim.com

PANATTONI’S POLISH PROJECT

PANATTONI Europe, Poland’s leader in the industrial property market, has laid the cornerstone for the new Castorama Polska central warehouse in Stryków. The investment was the biggest project in the Polish market of 2013 and will be one of the biggest warehouse spaces ever built in the country.

Construction is planned to be completed in the first quarter of 2014. Colliers International advised Panattoni on the deal.

The deal cemented Panattoni’s status as a leading supplier to European retailers looking to expand in Poland: it has already built 80,000 sq m for Hennes & Mauritz and 57,000 sq m for Tesco as well as 56,000 sq m for Leroy Merlin.

Robert Dobrzycki, managing partner for Central and Eastern Europe at Panattoni Europe, says: “Stryków is a location that is strategic for us as well as our clients, acting as a hub - one of Panattoni’s largest distribution centres with in excess of 100,000 sq m of space built and leased.”

Since entering the Central European market in 2005, Panattoni has built more than 1.9 million sq m of modern industrial space in Poland and Czech Republic.

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i FOCUS HOTEL TOURISM & LEISURE Motel One’s first Edinburgh hotel was created from a historic building in the city centre

OFFICE-TO-HOTEL CONVERSION

Fit for repurpose A

CROSS the globe, hotel brands are keenly expanding their operations in a sector where an established name can provide consumers with familiarity and comfort. Brands are already a major force in the US and are now increasing their penetration in European markets at the expense of individual, often family-owned hotels.

However, expansion provides a challenge. Many hotel groups have spent the last decade selling off their property assets and turning themselves into ‘asset light’ brand management companies. Instead, they have come to rely on property developers and investors to deliver new hotels. But the banking crisis of the last few years has made it harder for developers to obtain finance to create new hotel projects.

At the same time, the brands looking to grow their hotel chains in the congested urban centres of European towns and cities have been having a hard time finding sites.

Often, suitable sites are expensive or already occupied by buildings, sometimes of historic interest. The result is a growing trend to convert existing buildings to hotel use.

Other real estate disciplines, notably the office sector, have seen demand fall through the recession, with new occupiers preferring larger, open-plan spaces for their operations. In some locations, the conversion of

Converting redundant office buildings into hotels has enabled operators to open new space in undersupplied markets like London and Amsterdam. But with the office sector recovering, how long can this trend continue?

Chris Bown reports

unwanted offices to provide hotels for the chains is providing an ideal solution to two problems at the same time.

Perhaps the best example of this comes from the Netherlands, where a former office tower in central Amsterdam was among the first to be converted, to create a 446-room Ramada hotel. “This showed the market that it was possible,” says Jan Steinebach who heads CBRE’s Benelux hotels team. “It’s a great example of something that has worked.”

Others have followed the lead. Developer The Vincent Hotel Group (TVHG) is part way through a major office conversion programme to provide hotels for economy brands across the Netherlands. TVHG spotted a glut of empty office buildings and a need for new hotels. Putting together funding for the conversions, the Netherlandsbased investment, development and management company then obtained the necessary permissions for conversions and persuaded the hotel operators to sign up for the new rooms. A pipeline of 19 conversions, with a development value of €120m, is now under way.

Hotel group InterContinental has taken advantage of TVHG’s programme, opening Holiday Inn and Holiday Inn Express hotels in Amsterdam, Utrecht, Rotterdam, Arnhem and The Hague. During 2014, more are scheduled

RELATED CONFERENCE DURING MIPIM Global hotel & hospitality market: trends and foresight – Workshop by Jones Lang LaSalle Hotels followed by case studies.

Thursday 13 March > 17.00-18.30

“In most cases, you can’t tell the building was ever an office” Marc Finney, Colliers International

www.mipim.com I preview magazine I February 2014 I 55

i FOCUS HOTEL TOURISM & LEISURE to open in Amsterdam. TVHG is also building for other operators, including a 314-room hotel close to Schiphol airport, which will open in 2015 under Accor’s Novotel brand.

The development programme has been made possible by €30m of funding from private-equity investors Metric Capital Partners and Hutton Collins Partners. Also closely involved is hotel management company Interstate, which backed the initial conversions.

According to Marc Finney, director of Colliers International, these conversions have worked very well.

“In most cases, you can’t tell the building was ever an office,” he says. And the proof has come from analysing the results of the first four hotels open: “They are all performing above their competitive set.”

Christian Borusiak, project manager at construction consultancy Arcadis EC Harris, has studied the conversion market in Germany. “In Germany the predominant hotel category for conversions are budget hotels, as they fit better with the typical floor plan of an office building,” he says.

“Locations in the vicinity of the main train stations are of special interest as the demand for office space in these areas has fallen.”

In the UK, Europe’s fastest growing budget hotel brand, Premier Inn, is making extensive use of office conversions in its bid to add 10,000 rooms to its portfolio, many of them in the Greater London area. Having defined dozens of micro-markets within the UK, the Premier Inn team is looking for suitable buildings based on the ideal number of bedrooms for the location in question.

“It has been a great source for us,” says John Bates, Premier Inn’s head of acquisitions for the UK and Ireland. An 80-bed hotel, for example, needs an office building of more than 30,000 sq ft (2,787 sq m). “Then it comes down to the individual floorplate,” Bates says. He adds that, thankfully, many donor office buildings have long, narrow floorplates, which are ideal for a central corridor with rooms branching off on either side.

Bates says conversions make sense not only because of location, but because the cost is typically two thirds that of a new build — around £40,000 (€45,000) per room for a 120-150 bedroom hotel, as against £60,000-£65,000 for a new construction.

The approach has already yielded dozens of hotels for the Whitbread-owned brand, including one crafted from former serviced offices in Leicester Square. Moreover, planners tend also to be more comfortable with a conversion to a use that continues to provide employment and animate the surrounding area.

Whitbread owns three quarters of its hotels, and so is happy to buy buildings. However, in urban areas, it expects to sign leases and will sometimes work with landlords to manage the conversion. In St Martin’s Lane, near London’s Trafalgar Square, for example, Whitbread bought an office building, still let to tenants, for conversion into the first of its new Hub hotels. Hub has smaller rooms, allowing Whitbread to offer more keenly priced accommodation in high-cost urban locations. “It’s an old office block that we bought unconditionally from a fund,” 56 I

Fit for repurpose

HTL Lounge and expo with 500 sq m of stands, a lounge and a full programme of conferences and events.

Level 3, Palais des Festivals

Tired office buildings can be the perfect starting point for a hotel conversion

Bates says. “It’s a great example of being flexible.”

Having obtained permission for the change of use, the 167-bedroom hotel will open in summer 2014.

One additional reason for taking on conversions is that the buildings lend some local character to the project.

While some hotel chains prefer cookie-cutter developments that are cheap and easy to build, as well as easy to manage, hotel groups increasingly see the value of building distinctive features into their projects. Boutique hotels are at the high end of this trend, but even operators at lower price points are recognising the benefits.

Among these is German chain Motel One, which has opted for the complex conversion of a historic city-centre building in Edinburgh. Its 208-room hotel opened in late 2012 in a building along the Scottish city’s Market Street.

“For us, it’s all about getting the best sites and delivering quality,” says Motel One’s deputy head of legal, Stefan Lenze. Each project aims to draw on local connections in the design of interiors.

So will the conversion trend continue? There are signs that city planners are now thinking twice, concerned that further loss of office space could compromise economic recovery. “In Amsterdam, the municipality is regulating the market quite strictly now,” CBRE’s Steinebach warns.

“They are restricting conversions.” Similarly, London’s planning authorities have signalled that they will be more protective of office buildings, having decided that, perhaps, the city has enough visitor accommodation for the time being. The City of London’s chief planning office, Peter Rees, recently declared: “Our policies are adapting to ensure we have a much tougher regime regarding the retention of offices.”

preview magazine I February 2014 I www.mipim.com

“For us, it’s all about getting the best sites and delivering quality” Stefan Lenze, Motel One

Hub’s smaller rooms suit city-centre locations where space is expensive

2-3 DECEMBER, 2014 GRAND HYATT, HONG KONG

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i FOCUS CITIES & URBAN DEVELOPMENT

THE MEGA-CITY CHALLENGE

Raising roofs As millions continue to flood into the world’s mega-cities, putting roofs over heads is becoming an increasingly urgent challenge. Chris Bown looks at the solutions that are starting to emerge

G

than in Brazil, where 87% of the LOBALLY, people are moving to cities. It’s a “The growth is of such population lives in cities. In the country’s biggest metropolis, Sao phenomenon apparent a scale you can only Paulo, mayor Fernando Haddad not only in those parts of the call it a revolution” is planning to tackle the issue of world where rapid economic the favelas, or slums, in which development is taking place, but Sir Terry Farrell many of the city’s population in established western nations too. live illegally. He believes a mix of All of which sets a fresh challenge favourable economic conditions, for those planning, developing and managing cities and major conurbations. Where will changing demographics and central government funding these people live? Dense living requires new disciplines will help. “The combination of these three variables can and also demands that the architectural mistakes of the produce a solution to the housing problem in Sao Paulo,” he told a conference in the city in mid-2013. “I think it 20th century are not repeated.

“The growth is of such a scale you can only call it a can be done within the decade.” revolution,” says Sir Terry Farrell, whose eponymous Haddad’s mission is receiving central government design practice has masterplanned across Europe and support through the Minha Casa, Minha Vida housing Asia. “It’s very hard to grasp how big it is.” In a new programme, which has already helped to deliver more world order, Africa, India and China will soon create than one million homes and aims to add a further two dozens of new cities that will put existing global capitals million apartments and houses to this total by 2014.

These are homes for sale, with different levels of support in the shade.

Nowhere is the phenomenon of city living more prevalent designed for those on low and middle incomes.

Asian investment is driving the redevelopment of London’s Royal Albert Dock

RELATED CONFERENCES DURING MIPIM Infrastructure afternoon Wednesday 12 March > 14.30-18.00 • 14.30: Infrastructure vision +25 years ahead – Keynote Scott Burnham • 15.00: Increasing housing supply and funding in hard times – Co-organised by INTA • 16.00: Cities on the move: the next step in multimodal transport – Co-organised by World Infrastructure News • 17.00: Preparing utilities infrastructure of the future: responding to increasing needs in a constrained world – Co-organised by UNEP

www.mipim.com I preview magazine I February 2014 I 59

A frequent traveller from East to West, Farrell is well placed to offer a perspective on the global housing situation. “They are just in start-up mode,” he says of Asia’s, new mega-cities. “Everything’s of a bigger order.”

Farrell notes that different nations have very different views about homes. In cultures with top-down traditions, or a more centrally controlled style, people accept the rule of authorities, even if that means a new office block springs up next door. In the West, the ‘not in my back yard’ or NIMBY attitude means new development is often questioned by local residents — an approach others have yet to discover. “Once people start buying houses, they are going to start protecting their asset,” Farrell warns. “City states such as Singapore are going to be very interesting to follow.”

In a globalised world, Farrell also says that emerging nations are forcing the established markets to re-evaluate their attitudes. Western nations had a bad experience after architects and planners encouraged tower blocks as the solution to dense housing in the 1960s and 1970s. The public housing produced was largely judged a failure and the stigma of living in a tower block remained for years.

“Now, when you see a new tower block, the top floors are worth 10 times the lower floors,” Farrell adds. “That’s a radical change.”

Just as in London, so Chinese cities see apartments bought by the rich solely as investments — something the authorities are trying to discourage. “The Chinese look on real estate as a proxy for gold,” says Michael Klibaner, head of research for Greater China at Jones Lang LaSalle. As a result, they often buy flats only to leave them standing empty and unfinished. He adds that the authorities have introduced policies to skew the market in favour of first-time buyers and residents trading up, “and those policies have generally been successful”.

The Chinese market is already huge, delivering around one billion sq m of new homes a year. And the impact of new home-making has a strong effect on the wider economy too, Klibaner says, with the growing demand for white goods and cars largely driven by the housing market.

And while less than 20 years ago, public housing was prevalent in China — often made available alongside a job in a state factory — today the provision of public housing

Farrells’ masterplan for The Springs in Shanghai 60 I

Raising roofs

is facing the same obstacles as in Europe. “The funding of social housing has been a major challenge,” Klibaner says, adding that the Chinese authorities are now starting to ask private developers to build some public housing as a condition of winning new development sites.

Arguably top of the city league for desirability is London, which has seen a rush of international investors in recent years, keen to put their money in an established, liquid market. “London is in a unique position as the globe’s capital city,” says Adam Challis, Jones Lang LaSalle’s head of residential research.

Sao Paulo mayor Fernando Haddad But the attention is causing problems and driving up prices, exacerbated by a shortage of residential supply.

Challis puts it bluntly: “We’re not building enough homes.”

“There is a crisis, undeniably,” says Stuart Robinson, executive director of planning at CBRE. Price rises in the private sector are rendering homes unaffordable to more and more people. Meanwhile, there is also a shortage of rented accommodation. The central problem is that house-building is funded by debt, while the rental market requires equity investment.

Traditionally dominated by small players, the rental market could soon be shaken up by international players, Robinson believes: “There is money from Canada and the US. I don’t think there’s a shortage of big players.” London’s expansion will take in new Designer/masterplanner Terry Farrell areas, such as Battersea Power Station and the Royal Docks, both ironically with developments funded by Asian investors.

In a resource-hungry world, the growth of new megacities presents new challenges, according to the World Cities Network. Founder Brian Kilkelly says: “Across the globe, cities are facing incredible challenges due to demographic shifts, resource depletion, climate change and the global stresses upon our economic s ystems. I n order to “The Chinese look on real thrive, cities need to estate as a proxy for gold” become more adaptable, efficient, sustainable and Michael Klibaner, Jones Lang LaSalle connected – to become more resilient.”

“Within 40 years some 75% of the world’s population will be living in cities.

This rapid urbanisation of our world is making extraordinary demands upon the world’s resources Autonomous cities: and we need to develop new ways to address these in The quest for new order to ensure the long-term resilience and success resources, from utopia to reality. How of cities.” to maximise use of For Mark Watts, director of climate change and available resources? energ y, A rup, the resource implication of new Wednesday 12 March > development need to be managed carefully. “Resilient 10.00-14.30 (by invitation only) and successful future cities will be those that enable a higher quality of life while constraining resource consumption within ecological limits,” he says. “The critical issue will be how to foster a long-term approach that unites public strategy with private investment.”

preview magazine I February 2014 I www.mipim.com

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i FOCUS EMERGING INVESTMENT SECTORS

THE NEW ASSET CLASSES

Looking for alternatives With too much money chasing too few opportunities, investor attention is turning to alternative asset classes.

Ben Cooper, Doug Morrison and Graham Parker look at the emerging sectors that are tempting investors from the straight and narrow

Legacy uses will be key to the longterm success of the Rio Olympics

I

in alternative asset classN A crowded global mares? And which sectors are ket of investors searching “The emerging sectors providing the big opporhigh and low for income have tended to outperform tunities in this market? and returns, conventional opcommercial property by One of the reasons alterportunities are few and far benative sectors appeal to tween. And with all the normal quite some margin” investors is straightforsources still showing only nomMark Weedon, IPD ward. With less compeinal signs of improvement — tition and lower levels of and those largely limited to the prime locations — the market is exploring other options. historical fund activity, alternative assets are more fragA group of alternative sectors is emerging. Previously mented and less operationally smooth. That represents a considered unstable, undesirable or unworkable, inves- challenge but also an opportunity: assets can be picked tors are looking again at areas like student housing, resi- up more cheaply. dential care homes, healthcare and infrastructure to see Funds have a wider scope for research and more time to shop, meaning more options can be explored. And with if they can be turned around and made fit-for-purpose.

So what are the advantages — and risks — of investing many funds sitting on huge reserves of capital just waiting www.mipim.com I preview magazine I February 2014 I 63

i FOCUS

EMERGING INVESTMENT SECTORS

the economic conditions. “Student housing has proved to be a resilient counter-cyclical asset class throughout the downturn and beyond, providing reliable and positive cash flow for the investor, as well as capital growth well above inflation for the past five years,” he says.

Echoing IPD’s Weedon, Crampton believes the healthy returns made on student accommodation can be ascribed to factors beyond the direct health of the econoCross-border investor AXA Real Estate has made big my. “Most of our cities suffer from an acute shortage of moves into the alternative sector over the last five years housing stock,” he says. “Purpose-built student housing via a specialist fund that has picked up a diverse range of is seen as attractive because it alleviates the pressure on assets from police stations in Sweden to petrol stations housing supply while attracting a diverse group of highspending, well-educated citizens to our cities. Traditional in Spain, along with healthcare and housing properties.

According to AXA Real Estate’s fund manager for alter- university-owned residences are becoming increasingly native property, Dan Bowden, the move into alternatives inadequate and outdated due to years of low investment. was not only timely but has already reaped benefits. “The Consequently, the private sector is stepping in to provide fund showed a strong performance throughout the cri- socially responsible investment for much needed accomsis,” he says. “What we have seen throughout the down- modation and facilities.” turn is that these assets have been capital resilient. And And, as Weedon observes, it is an opportunity that is comparatively immune to the economic climate because the income streams have been robust.”

Another reason for their appeal is more complex. Mark there is such indisputable demand from the end users.

Weedon head of alternative real estate sectors at intelli- Moreover, he says the downturn has also weakened the gence analyst IPD, says it is the distinct demand equation mainstream retail and office sectors, because wider ecoin the alternative sectors that makes them more likely to nomic factors have left them struggling to retain occupiers or secure the types of provide returns at a time deals they would like. He when other sectors are ofadds: “Fundamental elefering only nominal growth.

“Student housing has ments of their strength, such “These emerging sectors proved to be a resilient as lease length, have dehave tended to outperform counter-cyclical asset class” creased a great deal. The tocommercial property by Bob Crampton, Knightsbridge Student Housing tal returns in the alternative quite some margin,” he says. sectors are higher overall.”

“They are linked to fundamental demand from the end user and end services in the economy. Commercial Greystar Real Estate Partners, the largest owner-operaproperty tends to be much more closely linked to the un- tor of apartments in the US, made its considerable presderlying strength of the economy. If you look at the per- ence felt in the UK residential market in 2013 with the formance of commercial property, you’ll see that capital purchase of 21 student housing blocks that had belonged values stay roughly flat in nominal terms. All of the per- to Opal Property Group for £310m.

“We like the asset class here now because there is an formance of those assets comes from the income.”

This view is vindicated by Bowden, who says that the rea- opportunity to acquire scale very quickly,” says Brett son for the strong performance of assets in these alter- Lashley, Greystar’s UK managing director. “We look at native sectors is precisely because of their ability to gen- how the industry has evolved in the US — 10,12 years ago erate income despite overall economic weakness: “It’s a the student living environment was an after-thought in needs-based asset class. You have to follow the money. the US and today it is substantially different. The student All these sectors are driven by factors other than GDP experience is differentiated by the types of amenities and we look to bring that here.” spend. They are based on demographics.”

For example, in Germany and elsewhere in Europe, a Like many of its peers, Greystar regards the UK as the problem has been building for years in the form of a lack most advanced market for purpose-built student housof student accommodation. Past under-investment in ing after the US. But Stuart Osborn, senior surveyor at the sector has presented an opportunity for the present. Jones Lang LaSalle, says there are signs of “a wider focus With student numbers increasing by nearly a million in on spreading capital across into Europe”.

Germany since the early 1990s but the level of accommo- Indeed the latest data from Real Capital Analytics show dation staying generally flat, the opportunity for the right that European transaction volumes for this sector have risen sharply since 2011, peaking at over €3bn for 2012. investor is clear.

The total for 2013 was a still creditable €2.78bn.

Knightsbridge Student Housing has invested in student Yolande Barnes, Savills’ director of world research, says accommodation throughout Europe. According to CEO that commercial property investors looking to diversify Bob Crampton, this has been a successful ploy, despite into student housing also need to assess the strength of to be invested, all options are now on the table. Once the search is spread wider, there are considerably more sectors to be considered, including student housing, care homes for the elderly, infrastructure projects , sports venues and healthcare facilities. And already these are showing much higher returns and capital value increases then orthodox commercial property assets.

64 I

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RELATED CONFERENCE DURING MIPIM Asset diversification: pushing the boundaries to incorporate infrastructure and debt – Co-organised by IPD Tuesday 12 March > 14.30-15.30

Looking for alternatives individual universities, in particular the ability to attract growing numbers of high achieving, internationally-mobile students.

That’s why, says Barnes, London, Oxford and Edinburgh will continue to attract investors. But Paris, Milan, Barcelona and Amsterdam “pose standout opportunities”.

Another sector with potential for investors looking to go off-piste is the sports sector. Sport venues are being upgraded around the world as clubs look to upgrade the spectator experience and gain new revenue streams form other events like concerts.

But Peter Flint, head of the global sport team at construction consultancy Aecom, says investors need to understand that sports clubs’ and investors’ priorities are not always aligned. “Every euro spent on the stadium is a euro not spent on a player,” he says.

But when the real estate and the operational sides of a sports business gel the results can be spectacular. Flint points to the Arsenal football club in London as an example — the club financed an enlarged stadium by developing its former ground with high-end residential. And now it is once again competing with other clubs with much greater financial resources.

Equally Flint says the completion of the Donbass Arena has been a major factor in the rise of Ukraine’s Shakhtar Donetsk to become a major player on the European stage.

Increasingly new stadiums are looking at multi-use strategies to make better use of their long stretches between matches.

Music events are increasingly important revenue streams.

With the decline in sales of recorded music artists now

have to make money from live performances. And promoters like AEG and Live Nation need arenas. “Music revenues are now bigger than sport in Europe,” says Flint.

Building on their success at the London Olympic Games and elsewhere, Flint and his team are now working on the venues for the 2016 Games in Rio. Creating venues which meet the strict requirements of the International Olympic Committee but which have a long-term future continues to be a challenge for cities considering throwing their hat into the ring for future Olympic Games.

RELATED CONFERENCE DURING MIPIM Challenges of reconverting industrial wastelands – Co-organised by ADI Wednesday 13 March > 17.30-18.30

But there is a reason that certain sectors have been deemed alternative. Unlike shopping centres, for example, which are generally large, unified construction projects with a tried-and-tested blueprint and largely predictable performance outcomes, alternative assets are a lot more piecemeal. In order to be considered viable assets, interesting enough to attract large funds, there often needs to be considerable consolidation, re-organisation and operational improvement. This costs time and money, and presents big logistical headaches — which is why investors have been unwilling to enter this market in the past.

As with any move away from the mainstream, there are new challenges. But if the last five years have shown anything, it is that the mainstream thinking behind real estate investment has not always been sound. With so much turmoil in commercial property and so little return for investors from the usual sources, it is unsurprising that many are looking to the less typical asset classes for answers. What the experience of investors such as AXA Real Estate and Knightsbridge has shown is that, when this is done right, it is worth the extra effort.

Opal’s student housing project in Nottingham bought by Greystar in 2013 www.mipim.com I preview magazine I February 2014 I 65

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i FOCUS RESIDENTIAL HEALTHCARE/SENIOR LIVING One of RHM Klinik-MPT’s 11 developments in Germany

The homes front Investors are increasing their allocations to European residential real estate. Doug Morrison looks at one of the sub-sectors to benefit from this trend — healthcare/senior living

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S PROPERTY transactions go, the $244.7m sale and leaseback by Germany’s RHM Klinik of 11 healthcare facilities may seem modest. But the deal could pave the way for a massive infusion of overseas capital into continental Europe.

The buyer was Medical Properties Trust (MPT), which completed the deal in late 2013 and, in doing so, became the first US real estate investment trust to commit major funds to the property side of German healthcare.

“There is more to come in Germany,” says David Batchelor of CBRE, the adviser to RHM Klinik, which is owned by Waterland Private Equity Investments and will maintain operational management of the assets.

MPT is one of many specialist healthcare REITs in the US that feel the need to diversify overseas after enjoying a prolonged run of bumper returns and buoyant share prices in their domestic market.

After Germany, the US REITs are likely to turn their attention to the Nordics and France, according to Batchelor, who is an executive director of CBRE’s specialist markets team. As Batchelor says, the “bridgehead” for this capital movement into Europe is the UK, which has seen £3bn of US investment into its healthcare and senior-living sectors over the past two years.

There is a blurring of lines between the two sectors in the eyes of investors, epitomised by Health Care REIT’s $844.6m takeover of Sunrise Senior Living, which has assets and operations in the US and Canada as well as the UK.

Andrew Surgenor, director of Savills’ healthcare team, says Middle and Far Eastern investors are also “currently exploring” the possibilities for breaking into the UK’s senior-living sector.

“Investors are increasingly looking at this type of opportunity and seeing the potential because these types of investment come with long-term rental agreements of 30 to 35 years,” Surgenor says. “So for the right property in the right location, the income should be a secure, longterm investment.”

For senior-living and healthcare, assets and operations are the common factors. They both come into play in a way that is unusual for mainstream European institutional investors who, when dealing with offices or retail, primarily consider the assets on their own — as long as they are let.

“The US healthcare investor has a much more detailed and hands-on understanding of the business they are investing into and therefore they have more levers to pull to drive the returns,” Batchelor says.

In this respect, he adds, US investors represent a positive influence on their European counterparts — and the spending spree is far from over. CBRE estimates that there is a further £3bn earmarked for the UK although, with the bigger portfolios and corporate deals already done, the next phase is likely to consist of add-on deals — or “granular investment”, as Batchelor puts it.

Next stop is mainland Europe.

RELATED CONFERENCE DURING MIPIM Global Healthcare real estate: the boom market of the next decades - Co-organised by Your Care Consult Thursday 13 March > 14.30-15.30

“For the right property in the right location, the income should be a secure, longterm investment” Andrew Surgenor, Savills

www.mipim.com I preview magazine I February 2014 I 67

i FOCUS RETAIL THE E-COMMERCE REVOLUTION

Have clicks killed bricks?

E-commerce and multichannel retailing is not only revolutionising the way people shop, but it is also fuelling much debate over the future of retail real estate. Mia Hunt asks what’s in store for bricks-andmortar retailing

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where it will not be able to tell HE MARKET share whether the profits are beof internet shopping “Retailers must be able ing made offline or online. is growing the world to blend e-commerce Instead, it predicts, retail will over. By percentage of total rewith bricks and mortar” evolve into one fluid channel. tail sales, UK consumers have the biggest appetite for e-comChris Tarrant, Oberfeld Snowcap So how exactly are retailers merce at 9.7%, closely followed adapting to advances in techby the US, Australia, Germany nology? And what does all this mean for the future of retail and Canada.

In these developed markets, internet shopping has proved property? to be a destabilising force for many segments of bricks- CBRE commissioned a survey of 50 leading international and-mortar retail, playing a major part in the downfall of retailers with a combined network of 32,000 stores globally. It concluded that the physical store is still playing a electronics retail chains in particular.

Europe’s Online Consumer Insight, a report by CBRE key role in this new, multichannel world. that surveyed 10,000 consumers across 10 European Seventy per cent of retailers surveyed see themselves pricountries found that 40% of the population aged between marily as bricks-and-mortar retailers. However, in two 16 and 65 years uses the internet for purchasing goods years’ time, a similar majority will have converted into fully integrated multichannel businesses and they expect and services online.

But Peter Gold, head of cross-border EMEA retail at online sales to increase from an average of 5% to 10% of CBRE, says: “Consumers do an awful lot of research in total sales. store before buying online, but they still want to touch And while investment in multichannel is important, inand feel products — and vice versa. It’s a hybrid. Not just vestment in new and existing stores remains the numberone priority, with 72% of retailers anticipating needing the one thing or the other, but both.”

“In order to be successful, retailers must be able to same or more stores in their home market in the future. blend e-commerce with bricks and mortar,” adds Chris In order to satisfy consumer demand, the store is expected Tarrant, managing director of real estate services, cen- to play a significant role in the delivery network over the tral Canada, at Oberfeld Snowcap. “If retailers are on- next two years, with two thirds of retailers intending to use line only, building trust and loyalty can be tricky — their shops to fulfil online orders, at least occasionally, acand they are two of the lynchpins of a successful brand. cording to CBRE. Meanwhile, 41% of goods bought onMaintaining loyalty and trust is going to be the key going line will be picked up from the store in the future. forward, and that entails a seamless experience between Oberfeld Snowcap’s Tarrant agrees that the social, aspirational and tactile elements of traditional shopping online and offline.”

Marks & Spencer, for instance, is planning for a future will ensure it endures, regardless of country or culture:

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preview magazine I February 2014 I www.mipim.com

RELATED CONFERENCE DURING MIPIM The digital revolution in CEE real estate: retail or logistics?

Co-organised by CEEQA Tuesday 11 March > 15.00-17.00

i FOCUS RETAIL

Have clicks killed bricks?

a meeting point with a range of opportunities rarely found anywhere else.”

So, what of the future?

An example of retail and leisure working hand-in-hand Creating an experience is billed by shopis ECE and Allianz’s Skyline Plaza in Frankfurt which ping-centre landlords as one of the most opened its doors to visitors for the first time in August effective ways to combat dwindling foot2013. The shopping mall offers around 170 specialist fall and in-store spend, with most investshops, services and restaurants over two levels and an ing in a more diverse offering, including entertainment, events and promotions, area covering 38,000 sq m. cinemas, lifestyle, Skyline Plaza is an urban meeting gym and spa fapoint with a large food court with 16 different vendors, as well as of a “So much more than cilities, increased F&B provision, pop-up shops, chilunique rooftop garden — the 7,300 a shopping mall” dren’s play areas, ample parking sq m Skyline Garden. At the heart Alexander Otto, ECE and technology services, such as of the centre is the 1,600-sq m Alex free wifi and apps. restaurant, featuring two differently designed terrace areas offering spectacular views And there is a consensus that those most worried about of the Frankfurt skyline. In February 2014 This will be the impact of e-commerce on bricks-and-mortar stores unrounded off by the 9,200-sq m MeridianSpa, including a derestimate the resilience of many types of physical retail.

As Tarrant concludes: “In 200 years, what’s changed generous rooftop terrace.

ECE chief executive Alexander Otto says: “The Skyline about shopping? In essence, it’s still a social activity.

Plaza fills me with pride because it is so much more than Sure, the technology has changed, and there are different ways to access products and different ways to pay. But a shopping mall. As the new heart of the European district, its mix in many ways, the more it changes, the more it stays the of industries, unusually diverse food court and Skyline same. Physical retail is an experience, it’s tactile and I can’t fathom a world without bricks-and-mortar stores.” garden offer “Shopping is defined as a leisure activity. It’s a social experience, while for the most part online is a soulless one.”

Skyline Plaza

www.mipim.com I preview magazine I February 2014 I 69

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MARKETINSIGHTS Real estate shows diversity in recovery As the world’s leading economies plot a path out of the financial downturn, how are the individual property markets performing?

CONTENTS

USA – page 85

FRANCE P75 A lack of consumer and business confidence led the French real estate market to shrink in 2013. Quality real estate assets continue to be a safe investment but, if nothing changes, the market in 2014 could be as depressed as it has been in 2013.

Anika Michalowska reports GERMANY P79 Powered by Europe’s strongest economy, Germany still offers plenty of investment opportunities to even the most risk-averse investors. David Sands reports P83 UK Sentiment in the UK is on the up. But while the tide has turned in London, much of the rest of the country is still paddling hard. Steve Killick reports USA P85 New York and gateway cities across the US are leading out a real estate recovery although prospects for 2014 are far from even across the various core sectors, says Mark Faithfull BELGIUM P89 Brussels’ ambitious Neo project reflects Belgium’s increasingly buoyant property market, writes Graham Parker NORDIC TERRITORIES P91 The ‘safe haven’ economies of Denmark, Finland, Norway and Sweden continue to attract, with shopping centres topping global investors’ wish lists. Graham Parker reports P92 JAPAN Japan’s economy is emerging after a long period in the doldrums, and the outlook for the real estate sector is improving

www.mipim.com I preview magazine I February 2014 I 73

i MARKET INSIGHTS FRANCE

Outlook: cloudy A lack of consumer and business confidence led the French real estate market to shrink in 2013. Quality real estate assets continue to be a safe investment but, if nothing changes, the market in 2014 could be as depressed as it has been in 2013. Anika Michalowska reports

Aéroville

B

ETWEEN Light And Shadow was the title of a Jones Lang LaSalle report analysing the French office real estate market’s first nine months of activity in 2013. However, the trend for the year 2013 as a whole could move closer to shadow than to light.

While there has been an increase in the number of transactions between €50m and €100m, with deal flow double the 2012 level, there has been a decline in the number of transactions over €100m and under €50m, largely due to a lack of quality offer. Take up in the office market in France in 2013 was back to 2009 levels, with companies preferring to renegotiate their current premises rather than to move. The volume of take-up in 2013, meanwhile, was the lowest it has been for 10 years. Rents, moreover, remained under pressure.

CBRE France has two indicators of this wait-and-see attitude: a sharp decline in the number of viewings of new premises and a reduction in the number of pitches.

Harder negotiations between occupiers and landlords are likely to continue for the foreseeable future.

France’s logistics market showed some activity in 2013 but, as there is a marked lack of quality on offer, prices are up and yield down.

The retail sector is the one area of the French market to see activity holding up. The number of openings was relatively limited during the first half of 2013 but, according to Cushman & Wakefield, France tops the Western European league table of new volume expected by end of 2014.

“When looking at the best places to invest in Europe, foreign investors start with UK, then turn to France” Laurent Lehmann, CBRE Two major shopping centres opened in October 2013 in Ile-de-France: Unibail-Rodamco’s 84,000 sq m Aeroville, featuring 200 stores, which opened near the Charles de Gaulle airport in Roissy; and the 50,000 sq m Beaugrenelle, which opened with 106 stores in the 15th arrondissement of Paris, near the Eiffel Tower. A partnership between Gecina, Apsys group, Fonciere Euris/ Rallye and Paris Orleans, Beaugrenelle is set to become a major shopping destination in the French capital.

Cushman & Wakefield estimates that 800,000 sq m of new shopping centre space is due to open in France by the end of 2014. This figure includes, during the second quarter of 2014, the shopping centre in Villeneuve-laGarenne, near Paris, which has Altarea France as developer and manager. By the end of 2015, according to the French Council of Shopping Centers (CNCC), 72 new shopping malls should have opened in France, of which 40% will be in the in Ile-de-France and Provence-AlpesCote d’Azur regions.

Immochan, the property arm of retail giant Auchan,

RELATED CONFERENCES DURING MIPIM Masterminds Europe: re-inventing Europe Wednesday 12 March > 10.00-11.30 Speakers: • Alderman Sir Michael Bear, Chairman, Regeneration Investment Organisation • Christian Delaire, CEO , AEW Europe • Stéphane Distinguin, CEO & Founder, FaberNovel • Gérard Mestrallet, Chairman and Chief Executive Officer, GDF SUEZ • Sean Tompkins, Chief Executive Officer, RICS

www.mipim.com I preview magazine I February 2014 I 75

i MARKET INSIGHTS

Outlook: cloudy

remains committed to the French market with a development pipeline of 70 projects totalling 377,000 sq m. According to Herve Motte, the company’s managing director France, Immochan is planning to invest €655m in France over three years, with 25% of this in new shopping centres. And it is making progress on the €2bn Europacity retail and leisure development to the north of Paris. Construction of the 760,000 sq m project is due to start in 2017 with completion in 2020.

The size and quality of these new shopping centres is attracting new international brands into the French market. David Mayer Naman opened its first French store in Aeroville, as did Shana. In Beaugrenelle, Kooples Sport, Uniqlo and Hollister opened their first units in a French shopping centre and the Marks & Spencer flagship store will be the sole French stockist of the new M&S fashion line Best of British.

Furthermore, this new generation of shopping centres is being matched by the extension and renovation of a number of existing retail schemes.

Despite the economic and real estate market headwinds, long-term strategic projects are continuing to make progress. For instance, Lyon is promoting the redevelopment of the Part-Dieu district around the railway station which is becoming a major European hub.

The reconfiguration of Part-Dieu involves real estate regeneration working hand-in-hand with an innovative approach to public space. For instance a building situated in the middle of place Charles Béraudier faces demolition while replacement space is built in place de Francfort.

Construction of a 450-room four-star hotel and 95,000 sq m of office space will help create the station of the future.

Despite a fall in 2013, the French office sector remains the most popular target for investors, accounting for two-thirds of the country’s investment activity. Most office investment activity was concentrated in the Ile-de-France region.

While high-end assets in the Paris CBD remain the prime target for investors, this market segment offers limited supply — a factor that explains the growing share of investments in Paris’ western suburbs, as well as the capital’s inner suburbs.

French investors account for two thirds of property investments in France. These consisted mainly of OPCIs (Organisme de Placement Collectif en Immobilier, a French mutual property investment product) and SCPIs (the French equivalent of REITs), which are generally interested in the office and retail markets in the Ile-deFrance and the regions. Property and insurance companies also contributed to the total, but to a lesser extent.

Despite its lack of economic dynamism, France continues to be attractive to foreign investors and Paris remains one of the most dynamic real estate markets in Europe.

“When looking at the best places to invest in Europe, foreign investors start with UK, then turn to France,” Laurent Lehmann, deputy general manager at CBRE France, says.

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Beaugrenelle, near the Eiffel Tower in Paris, opened with 106 stores in 2013

“Immochan is planning to invest €655m in France over three years, with 25% of this in new shopping centres” Herve Motte, Immochan

US and UK investment funds are also back in the French market, but the German open-ended funds are more often sellers than buyers. Sovereign wealth funds — mainly from the Middle East — are less active as there is a smaller number of core assets available. But the Abu Dhabi Investment Agency bucked this trend with €300m of investment in Lyon in 2013. Most of the newcomers to the French market are Asian, notably investors from Singapore, Japan and South Korea. Chinese investors are also expected to increase in the future. And some opportunistic players that were active in the 2000s — Blackstone and Apollo Real Estate, for example — have also made a comeback.

“The year 2013 could be looked at as a transition year,” says Jean-Roch Varon, the partner in charge of real estate at Ernst & Young France. But if nothing is done to improve consumer and business confidence, the outlook for 2014 is not looking too bright. However, with the relative improvement in the financial markets, a piece of good economic news, such as tax stability, an increase in the employment rate or a decrease in social pressure, could ignite the real estate market and help to drive investment activity.

But a word of caution from Olivier Gerard, CEO of Cushman & Wakefield France,: “We can’t be optimistic for the market before 2015.”

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RELATED CONFERENCE DURING MIPIM Residential in Germany: assets for value – Co-organised by Heuer Dialog GmbH Wednesday 12 March > 10.00-11.00

GERMANY

Europe’s safest haven Powered by Europe’s strongest economy, Germany still offers plenty of investment opportunities to even the most risk-averse investors. David Sands reports

Tower 185 in Frankfurt was refinanced for €300m

In line with the economic development, occupier demand for offices in 2013 remained at a relatively high level in Germany’s most important office property markets.

Across the Big Seven cities — Berlin, Frankfurt, Cologne, Stuttgart, Dusseldorf, Hamburg and Munich — office take-up came in at just 2% lower than the 2012 level.

Capital Economics’ analysts report office take-up falls of -21%, -11% and -2% over the first, second and third quarters of 2013 compared to a year previously. Thus, the rate of decline lessened by almost 10 percentage points each quarter.

“Since we are developers as well as investors, we see opportunities for further development in the country” Florian Nowotny, CA Immo

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© Credit: Thomas Woolf

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EAL estate fund manager Immobilien Europa Direkt recently acquired its first investment — a multi-let office building in Elsenheimerstrasse, Munich, paying €25.3m in a deal that reflects a 6.6% initial yield.

The vehicle is an investment group of Zurich Investment Foundation, managed and co-distributed by Schroder Property Investment Management. It was launched last year to focus on core and core-plus assets in continental Europe, where there is scope for rental growth. The fund closed recently with equity totalling €169.3m.

Tony Smedley, head of pan-European fund management at Schroder Property, says: “Germany has the strongest economy in Europe, and Munich is the strongest city with one of the biggest commercial property markets.”

The 10,000 sq m office asset, located in the western part of the city, was built in 1995 and modernised in 2010.

Smedley says: “It delivers the investment objective and provides long-term growth prospects, being let at rents one third of prime.”

Although relatively small, the purchase is an example of how attractive German real estate has become for investors. The country’s business confidence standard, the Ifo Index, rose again in September 2013 for the fifth time in succession. Robust employment figures and a good domestic economy support this confident outlook.

According to consensus forecasts, Germany’s gross domestic product increased by 0.5% in 2013, while a 1.7% rise is forecast for 2014.

i MARKET INSIGHTS According to the analysts, this downward trend in itself is not a surprise in view of the further improvement in the economic environment. But the speed of the recovery is surprising. The Big Seven achieved a combined take-up of 2.2 million sq m by the end of September 2013, meaning that the 2 million sq m threshold had already been surpassed after just nine months.

However, there are marked differences between the regions. The ‘smaller’ cities in the Big Seven achieved a significant increase in take-up, ranging from 13% in Cologne and more than 26% in Dusseldorf, through to 36% in Stuttgart. While demand in Hamburg was unchanged year-on-year at 325,000 sq m, Frankfurt and Berlin registered year-on-year declines of -9% (323,000 sq m) and -18% (329,000 sq m) respectively. After Berlin, Munich registered the strongest decline of 17% compared to the previous year, although it again recorded the highest level of take-up in absolute terms (449,000 sq m).

Market activity is dictated less by weak demand and more by a shortage of supply. One indication of this is the fact that, in Frankfurt for example, four of the 10 largest lease contracts in the third quarter took place in development projects.

Office rents are rising in Frankfurt and Munich. Cushman & Wakefield’s head of office agency Germany, Martin Drummer, puts prime levels in Frankfurt at €37 per sq m a month, for example, in the office tower Opernturm, although there is an incentive package included. Rents in Munich reached €31.50 per sq m.

The healthy investment market, too, is suffering from a lack of supply. “For the first nine months of the year, investment turnover was €19bn and we believe the fullyear figure will be around €30bn — the second best year total since 2007,” says Timo Tschammler, member of the management board at Jones Lang LaSalle in Frankfurt.

“There is a supply bottleneck, otherwise investor appetite would push the 2013 total above €30bn.”

According to Tschammler, the most active net buyers are the ‘spezialfonds’, either on their own behalf or acting on behalf of overseas investors. Of the €19bn spent on commercial real estate this year, offices took the lion’s share at 43%, followed by the retail sector at 29%.

Frank Nickel, managing partner for Germany at Cushman & Wakefield, highlights the keen interest in the residential sector, with several large portfolios trading this year. Terra Firma also floated the German residential real estate company Deutsche Annington in July.

“The commercial mortgage-backed securities segment was dead and this has come back to life because of some of the big residential deals. So far this year, €4.5bn of residential CMBS [commercial mortgage-backed securities] have been launched in refinancing of old CMBS deals,” Nickel says.

The lending market has also stabilised, Nickel says: “The pfandbrief banks are back in the market again and borrowers can get as much as 75% loan to value, although banks are a lot more picky when it comes to granting 80 I

IVG has aquired the Gallileo tower in Frankfurt for a number of South Korean institutional investors

preview magazine I February 2014 I www.mipim.com

Europe’s safest haven Vienna-based CA Immo is also intent on maintaining development loans.”

Asian buyers are “sniffing around”, Nickel says, and two and expanding its German portfolio, not least because of deals have concluded in Berlin in Frankfurt. For exam- its highly functioning lending market. CA Immo’s chief ple, IVG this year acquired the office tower Gallileo in financial officer, Florian Nowotny, says that the €300m Frankfurt in a club deal for a number of South Korean in- refinancing for its Tower 185 landmark office scheme in Frankfurt agreed with pension fund stitutional investors. The price paid Bayerische Versorgungskammer for the core property, which has a toproves there is an institutional appetal rental space of just under 40,000 “So far this year, tite for financing big-ticket core assq m and is let on a long-term basis 40% of buyers sets for the long term. to Commerzbank, is understood to In September, CA Immo also acbe €250m. have been foreign, quired the Hesse office portfolio and half of those from Germany’s Patrizia Immobilen Marco Kramer, head of property were from the US” for around €800m. risk management at German fund Marco Kramer, Real IS “We are quite bullish about manager Real IS, underlines the Germany,” Nowotny adds. “And overseas interest in the country’s since we are developers as well as inreal estate: “So far this year, 40% of vestors, we see opportunities for furbuyers have been foreign, and half of ther development in the country. We started the €70m those were from the US.” Real IS is hungry for more assets and Kramer says the office scheme Haus John F Kennedy in Berlin and plan firm wants to buy at least another €1bn of commercial real to begin work on two more sites in the city in the coming months.” estate in Europe, with Germany being the main target.

www.mipim.com I preview magazine I February 2014 I 81

i MARKET INSIGHTS

THE UK

London and the rest: a game of two halves Sentiment in the UK is on the up. But while the tide has turned in London, much of the rest of the country is still paddling hard. Steve Killick reports

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Chris Hiatt. Hiatt is astute H E SOLU T ION enough to admit that the is simple. What is “As one of the country’s improvement in the marneeded to ensure most dynamic office ket has also had a fair bit to that new office buildings markets, Greater Manchester do with the general feeling grab the attention of inwas an obvious choice” among occupiers that the ternational occupiers and economic gloom is slowly funds willing to invest in Mark Hunter, HPFM but surely starting to lift. further development activ“We still don’t have any ity is not simply a talented pre-let activity in any of the marketing team working on a top-quality product. The real clincher is having one — Big Six,” he says. “But take-up is most certainly improving, with Manchester my top tip to lead the way in 2014.” or better still two — outstanding football teams.

Why does Birmingham lag behind Manchester in terms Occupation of vacant space in Manchester has increased of rental levels and successful office letting? The an- by 11% over 12 months, with prime rents remaining levswer is easy: just compare and contrast Aston Villa el at £323 (€382) per sq m. Meanwhile, the volume of inand Birmingham City football clubs to Manchester’s vestment activity — a sure sign of confidence — leapt by 77% in 2013 on the previous year.

United and City.

It is as straightforward as that. The overall perception And international investors are also waking up to that Manchester is better than Birmingham, Leeds, Manchester’s potential. The Exchange Quay deBristol, Glasgow and Edinburgh — centres that form the velopment was acquired by Hunter Property Fund ‘Big Six’ of the UK regional office markets — is down to Management (HPFM) in November 2013 on behalf of a North American institutional investor, and £10m its football teams.

This revolutionary train of thought comes courtesy of is now being invested in a comprehensive programme Jones Lang LaSalle’s director of national office agency, of refurbishment and modernisation. At 433,637 sq ft

Quadrant 3 in London’s Regent Street: saw investment by Norway’s Government Pension Fund Global

RELATED CONFERENCES DURING MIPIM UK Afternoon Wednesday 12 March > 14.30-18.00 Driving future growth and new investment opportunities: the core cities and the impact of the knowledge economy – co-organised by GVA. Followed by UK Cities’ interactive presentations and “Question Time” moderated by Estates Gazette

www.mipim.com I preview magazine I February 2014 I 83

i MARKET INSIGHTS

London and the rest…

(41,000 sq m), Exchange Quay is one of the largest office developments in the city. It is situated at the gateway to the Salford Quays/Media City district, 1.5 miles (2.5 km) to the southwest of Manchester city centre.

Mark Hunter, managing director of HPFM, says: “Our brief was to source a project within the UK with immediate asset-management opportunities and real potential to add value. As one of the country’s most dynamic office markets, Greater Manchester was an obvious choice.

We identified that Exchange Quay occupies one of the most strategic locations in the region and, after our investment, it will offer some of the most flexible and attractive office accommodation in Greater Manchester.”

Football teams have been of very little assistance to warehousing developers, which have been doing very nicely anyway. Mark Webster, head of UK industrial and logistics at Cushman & Wakefield, says: “We have seen a huge level of activity and I really do not know of a more encouraging, exciting time across the whole board. We must grab hold of it while it is here.”

Exchange Quay is at the gateway to Manchester’s Salford Quays/Media City district Webster estimates that there is only 465,000 sq m of available space in grade-A buildsq m. Meanwhile, many provinings of over 9,300 sq m in the cial towns were struggling to cope UK, after 2013 saw 70 deals “London is still top of with a vacancy rate of over 30%. amounting to 1.44 million sq m most people’s wish lists” What is certain is that across of top quality space. the country there is far too So where has this surge in deRhodri Davies, CBRE much space available given curmand been coming from? rent demand. Even the biggest “Ninety per cent of it has come of retailers are now considering from the retail sector or the people working for them on the logistics’ side,” Webster reports. disposing of surplus accommodation, with Tesco looking Big deals include John Lewis taking 62,174 sq m at Magna to shed over £800m worth of supermarket stock that it no Park in Milton Keynes; Sainsbury acquiring 93,000 longer requires. sq m at Daventry International Rail Freight Terminal According to Rhodri Davies, head of shopping centre (DIRFT); and Travis Perkins signing up for 58,550 sq m investments at CBRE, there is now a decided split in activity, with one half being London and the other at Omega in Warrington.

And the surge in activity from occupiers is also reflected comprising the rest of the country. “London is still top in a similar increase in aggressive investment purchases of most people’s wish lists,” he says. “And given its size — and none more so than at Gazeley’s John Lewis ware- and demographics, there are plenty of really exciting house in Milton Keynes. The property attracted a bid- opportunities around the fringes.” ding war between UK and overseas institutions, result- Davies cites deals such as the £1bn joint venture between ing in the lowest yield paid since 2008. Aviva Investors Hammerson and Westfield in Croydon; British Land’s paid £76.5m, reflecting a yield of 4.75%. Similarly, Legal £40m acquisition of a 50% stake in Kingston’s Eden Walk & General Property parted with £86.6m for two units let shopping centre; and M&G’s £150m purchase of the Friary centre in Guildford. “These are big chunks that internato Next in South Yorkshire, off a yield of 5.5%.

“It is precisely this sort of activity that should provoke institu- tional funds really want to get hold of and work,” he adds. tional funds to start saying, ‘Now is the time to start forward- Underlining this demand, Norway’s Government Pension Fund Global acquired a 25% interest in the Quadrant funding speculative development’,” Webster concludes.

3 building in London’s Regent Street. The fund paid With so much of the activity in the world of logistics be- £97.5m, further expanding the Regent Street partnership ing dominated by retailers, it would be good to think that that the Norwegian pension fund and the UK’s Crown similarly sunny times are pervading the shopping streets Estate launched in 2011. of the UK. Sadly, this is not the case in far too many plac- Quadrant 3 provides 270,000 sq ft of office, retail and es outside of London, which very much remains the fo- restaurant space spread over basement, ground level and seven upper floors. The building was recently developed cus of activity.

This year saw the highest ever rent achieved on London’s by The Crown Estate and completed to a BREEAM Regent Street, where Hackett paid a reported £6,940 per Excellent environmental standard.

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i MARKET INSIGHTS USA New York, one of a number of US cities with above average office rents

Estate of the nation New York and gateway cities across the US are leading out a real estate recovery although prospects for 2014 are far from even across the various core sectors, says Mark Faithfull

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generally do well when the economy HE US real estate maris strengthening, and that is going to ket is continuing to emerge “REIT investors continue. And they do well when instrongly from the crisis algenerally do well terest rates go up, because that goes though it has not been able to fully when the economy along with a strengthening econoshake off the shackles of the downmy. That’s the real story that investurn. Typical of the mixed messagis strengthening, tors are going to see over the next es is the FTSE NAREIT All REIT and that is going to several months.”

Index, which saw its total returns continue” A ndrew Jackson, real estate drop in summer 2013 after four Brad Case, NAREIT fund manager at Standard Life straight years of out-performance.

Investment, concurs and says that Ironically, REITs suffered because the house view is that a rise in inthe Fed (The Federal Reserve) intimated that interest rates might start to rise at some un- terest rates would be “neutral” for REITs in the USA. specified moment in the future because signs of econom- “On the one hand any prospective rise in interest rates is ic recovery had finally taken hold. Brad Case, NAREIT’s potentially negative for REIT valuations,” he concedes. senior vice-president for research and industry informa- “However, we have to look at the underlying reasons for tion, notes the paradox and says: “Interest rates tend to a rise. It’s broadly a positive indicator about the econogo up when the economy is strengthening. That strength- my and that should mean income growth and capital apens the demand for commercial real estate and the earn- preciation for real estate. So our feeling is that one factor ings from owning commercial real estate. REIT investors should balance out the other.”

RELATED CONFERENCE & EVENT DURING MIPIM Wednesday 12 March • 8.30-9.30: US Breakfast (By invitation) • 10.00-11.00: Real Estate Investment into the USA Speakers: • James Kuhn, President, Newmark Grubb Knight Frank • Will McIntosh, Global Head of Research, USAA Real Estate Company • Jim Fetgatter, Chief Executive, AFIRE • Victor Kaminoff, Director, Architectural & Luxury Homes, Hilton & Hyland, Christie’s International Real Estate Moderator: • Rosemary Scanlon, Divisional Dean, New York University Schack Institute of Real Estate

www.mipim.com I preview magazine I February 2014 I 85

i MARKET INSIGHTS Despite continuing economic and political uncertainty, US commercial real estate markets are reacting favourably, although predictably, with some sectors — notably multi-family and industrial — demonstrating improvement and growth potential, according to Peter Linneman, chief economist of New Jersey-headquartered NAI Global. He notes that refurbishment of existing properties in all sectors rather than new construction is driving growth, and has helped balance supply and demand.

Notably, there is a strong industrial recovery under way, led by increased demand for e-commerce warehouses, while multi-family construction is rebounding, but remains below normal levels.

In the office sector, construction and refurbishment projects are at an all-time low and as a result vacancy rates have seen a slower decline and are expected to continue to fall as the economy improves. NAI says office rents are above average only in cities where jobs have recovered, including Dallas, Houston, Philadelphia, Los Angeles, Chicago, San Francisco, Boston, Washington DC and New York City.

Future defaults could bring additional opportunities for investors. “We need to look at 2015–2018 as the real period of projected defaults as most CMBS [commercial mortgage-backed securities] loans underwritten in 2005 through early 2008 when underwriting was more lax were 10-year loans,” Linneman says. “We’ll have to see significantly more growth in order for these loans to be refinanced, and this could result in more product across all sectors becoming available through defaults in 2016–2017.”

For New York the recovery is well under way and USbased investor Thor Equities — which has also been active in Europe — is one of those actively investing in the city. Most recently, Thor paid $52.5m for a four-storey, 33,300 sq ft building previously occupied by the relocating family-run food merchant Grace’s Marketplace.

Upper East Side landlord Allen Realty Company sold the mixed-use property on Third Avenue and 71st Street, which includes 30 residential units and a total of 17,600 sq ft of retail across two floors.

“For decades, the Upper East Side has been synonymous with luxury and upscale lifestyle,” says Joe Sitt, CEO of Thor Equities. “Thor is thrilled to take a significant step into this market and look forward to meeting and working with our new neighbours along Third Avenue.”

In another Upper East Side deal, Thor Equities agreed to buy 33,389 sq ft of retail space at 680 Madison Avenue from Extell Development for $277m in June and has also unveiled plans to launch a new residential division that will focus on acquisitions and development of residential properties, specifically Manhattan rental buildings.

“Residential real estate is booming in many American cities, presenting Thor with a one-of-a-kind opportunity to enter this expanding market,” Sitt says.

For retail, the picture is more mixed. US retail real estate is expected to continue a slow, steady recovery in 2014, 86 I

Estate of the nation

with the availability rate for neighbourhood and community shopping centres declining to 10.6%, according to a forecast from global advisor CBRE Group. That market improvement will continue into the following year, as the retail availability rate slips to 9.7% in 2015. This compares with a retail availability rate towards the close of 2013 of 12.3%, down from 12.7% at the end of 2012.

“Consumers remain cautious, as the economic recovery has not provided enough confidence for them to spend at an above-average pace,” says Abigail Rosenbaum, economist for New Jersey-based CBRE Econometric Advisors. “This caution has kept retailers from rapidly expanding, and the demand recovery at retail centres remains muted.”

CBRE projects that new retail construction will remain low next year, with total deliveries of 8.1 million sq ft nationally. The improving supply/demand picture will enable landlords to achieve rent growth in 2014, averaging 2.5%.

CBRE projects the growth in rents over the next two years will be led by San Francisco, Denver, Nashville, Austin, Dallas and Charlotte driven by healthy demand growth.

Greg Maloney, president and CEO of the Atlanta-based Americas Retail Group for Jones Lang LaSalle, says of the retail market: “We are seeing growth of between 1-3% in general and the retail recovery started in 2010, but it’s state by state and city by city.”

Noting that the cities of Miami, Fort Lauderdale, Phoenix and Las Vegas are “on fire” he cautions that “those that fell the hardest are the ones that are showing the real growth.”

While there are also many cities yet to feel that same growth propelling them forwards, the hope must be that the gateway cities across the US will drive a more widelydistributed upturn that brings with it sustained recovery.

Macy’s in Miami, a city that Jones Lang LaSalle’s Maloney says is “on fire” with regard to retail property

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BELGIUM

Belgian Pavilion with 400 sq m of stands and a full programme of conferences and events.

Debussy Hall, level 1, Palais des Festivals

Brussels raises the bar Brussels’ ambitious Neo project reflects Belgium’s increasingly buoyant property market, writes Graham Parker

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HE CITY of Brussels is shortly due to announce the selected development partner for its most ambitious regeneration programme yet. The Neo project on the Heysel plateau will see the land surrounding the King Baudouin Stadium — one of Europe’s iconic sporting venues — redeveloped for a mix of uses, including retail, residential, offices, and an international cultural and convention centre.

The regeneration of the site, which has hosted everything from the 1958 World’s Fair to the European Cup Final and the Eurovision Song Contest, has been masterplanned by KCAP Architects&Planners, with Arup as engineers. Three shortlisted developers — Codic, Soficom and Hammerson — have had a year to fine-tune their proposals before making their final pitches.

Former mayor of Brussels Freddy Thielemans underlines the importance of the project to the city’s prosperity. “Neo is a unique opportunity for Brussels and its inhabitants, offering exceptional potential for economic recovery and the creation of new employment,” he says.

“Brussels is looking for a project of outstanding urban planning and architectural quality.”

After seven years in the planning, Neo looks to be well placed to ride a new wave of optimism in the Belgian property market. According to Gregory Martin, managing director of Savills Belgium, investor demand has returned. In 2013, only a lack of stock for sale prevented the Belgian investment market substantially beating 2012’s €2bn of turnover.

Investment yields are hardening, but Martin points

out that they are still relatively attractive. Multi-let assets trade at about 6%, coming down to 5% for longer leases. “That still looks good compared to London or Paris,” he says.

And on the occupational front, Martin reports that Brussels office vacancies have fallen from 12% five years ago to 5% today — their lowest level for 15 years. This has not yet led to the return of rental growth, but it cannot be far away. “Rents have been reworked downwards for five years,” Martin adds. “Now, we are sensing a change.”

But he points out that the fall in availability is not just a function of improved office take-up. Residential values have risen to such an extent that many office buildings are being snapped up for conversion as soon as they become vacant, leading to an overall decline is office stock.

Outside the Belgian capital, the Wallonia.be inward investment agency is promoting a range of development opportunities across the Wallonia region. Perhaps the biggest of these is the HST Station District in Liege, promising a new axis of urban development of 150 000 sq m centring on the HST Station designed by Santiago Calatrava.

A call for tenders has just been launched for a first stage of 35,000 sq m of offices and housing. Other plots are available for new developments of 95,000 sq m of offices, housing and hotels.

And the Flanders Ghent Development Group is marketing Ghent as a new creative hub for Belgium with a growing number of start-up businesses in the creative and TMT - Technology Media and Telecoms - sectors.

“Neo is a unique opportunity for Brussels and its inhabitants” Freddy Thielemans, former mayor of Brussels

www.mipim.com I preview magazine I February 2014 I 89

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RELATED CONFERENCE DURING MIPIM Investing in The Nordic Countries: is it still a good choice?

Co-organised by Fastighetsnytt Wednesday 12 March > 12.00-13.00

THE NORDIC TERRITORIES

Buying time The ‘safe haven’ economies of Denmark, Finland, Norway and Sweden continue to attract, with shopping centres topping global investors’ wish lists. Graham Parker reports

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HOPPING centres right across the Nordic region are in demand with investors, as demonstrated by two major transactions that closed in the final quarter of 2013.

In Norway, Steen & Strom, the Nordic subsidiary of Klepierre, sold four shopping centres for Norwegian krone 2.063bn (€240m) to a fund managed by the Swissbased private-equity investor Partners Group. The four properties are the 9,214 sq m Halden Storsenter in Halden, the 13,593 sq m Torvbyen in Fredrikstad, the 37,699 sq m Stovner Senter in Oslo and the 9,871 sq m Markedet in Haugesund.

Far from signalling a withdrawal from the sector, Steen & Strom said the deal was part of a strategy to focus on large shopping centres across Scandinavia and that the proceeds would be re-invested in developments in Norway, Sweden and Denmark.

Meanwhile, in Finland’s largest single property deal of 2013, Cornerstone Real Estate Advisers’ Nordic Retail Fund sold a 50% share in the Kamppi shopping centre in downtown Helsinki to Allianz Real Estate. At 34,000 sq m over six floors, Kamppi is one of the largest shopping centres in Finland and, with 35 million visitors per annum, it has the highest footfall of any Finnish shopping centre.

“This is a significant transaction through which the Nordic Retail Fund achieves greater diversification within its existing asset base and provides further capital for asset management initiatives across the Fund’s portfolio,” says Charles Weeks, Cornerstone’s European CEO. Retail is equally active in Denmark, and NREP has completed Taastrup Torv, a new development next to Taastrup station providing 8,000 sq m of retail. It is anchored by a Kvickly supermarket with other tenants including H&M and Tiger. And established centres are undergoing extensions and refurbishments. For example, the successful Fields development in Orestad near Copenhagen will have a leisure component, anchored by a multiplex cinema, added by 2015.

And Sweden is not immune to this trend. AMF Fastigheter is following the successful launch of its Mood shopping centre in Stockholm city centre by extending

The opening of Stockholm’s Mood shopping centre inspired AMF Fastigheter to refurbish its holdings in local streets

“There’s lots of money out there and all property sectors are in demand” Johan Bernstrom, Savills

and refurbishing its holdings in the surrounding streets.

The 100,000 sq m retail-led regeneration project is due for completion in 2016.

Karolin Forsling, head of retail and development at AMF Fastigheter, says: “We see the creation of a ‘Mood district’ as the next logical step for downtown Stockholm.”

“There are a lot of investors looking for prime retail assets,” adds Johan Bernstrom, head of investment at Savills Sweden, “and turnover could be higher if more stock came to the market.”

Bernstrom says that a lack of prime opportunities is forcing investors to become more adventurous: “We are now seeing them moving into secondary assets, and valueadded investors are becoming more active because of the increased availability of debt.”

And according to Bernstrom, the upturn in the Swedish investment market is not restricted to the retail sector.

“Since the first quarter of 2013, the market’s turned.

There’s lots of money out there and all property sectors are in demand,” he says.

In 2013, the Swedish investment market topped Swedish kronor 100bn (€11bn) of turnover — and Bernstrom believes more is to come. “We expect even more growth in 2014,” he says. “International interest in Swedish property is strong and we expect to see a lot of portfolios — often secondary — coming to the market.” www.mipim.com I preview magazine I February 2014 I 91

JAPAN

Out of the deep freeze The Shinjuku skyline of Tokyo

Japan’s economy is emerging after a long period in the doldrums, and the outlook for the real estate sector is improving

92 I

A

AFTER more than 20 years of deflation and sluggish growth, Japan is once again “a country where there is money to be made,” according to Prime Minister Shinzo Abe, whose Liberal Democratic Party has boosted growth by means of monetary easing and massive public spending.

preview magazine I February 2014 I www.mipim.com

In 2013 Japanese stocks saw their biggest percentage rise since the mid-1980s, and profits of big corporations have increased substantially, particularly those companies that do a good part of their business overseas, due to the reduced value of the yen.

In order to sustain the recovery Abe’s administration has

© Credit: Morio

i MARKET INSIGHTS

Out of the deep freeze devised an action plan for the next three years that promotes specific fields for growth. Part of the plan includes strengthening corporate governance to help invigorate investment from overseas and removing protections from the rice market ahead of the launch of the Trans-Pacific Partnership free trade framework.

Under “Abenomics” the government wants to boost property values in urban areas by loosening building restrictions in special economic zones. The idea is to make it easier to construct residential buildings in certain business districts, thus creating opportunities to improve urban planning and attract foreign companies.

The real estate market has already seen a rebound after decades of stagnation, thanks to the BOJ’s monetary easing, as well as Tokyo’s selection as the host city for the 2020 Summer Olympics. Major Japanese beneficiaries of the Olympic windfall will be attending and exhibiting at MIPIM 2014, including developers, investment advisors, architects, and general contractors.

Vacancy rates for commercial properties in Tokyo fell from 9.01% in 2011 to 7.34% by the end of 2013. As Tatsuo Hatta, a member of the government council on special economic zones explained, the focus of building deregulation is to make “city centres comfortable

places to live”, a move that he says should attract more foreign nationals. In fact, it’s already happening. The Nihon Keizai Shimbun predicts that investment in residential properties will increase by 30% in 2014. Most of this growth will be in new luxury apartments in central Tokyo that are being built by major companies like Mitsui Fudosan and Mitsubishi Real Estate.

The government sees global events as a key means of promoting Japan as a business location and Tokyo is already famous as a prime destination for conventions and exhibitions, noted for its culture, security, and hospitality.

Moreover, thanks to a surge in activity by the J-REITs (Japan Real Estate Investment Trusts) sales of commercial property more than doubled in 2013. And the total was boosted further by investment from foreign financial institutions.

For example a fund managed by Deutsche Bank acquired a 37,000 sq m logistics property in Kawasaki, just west of Tokyo. Reflecting the strong demand for logistics properties, DB estimates sales and purchases of such properties were 710 billion yen (€5bn) in 2013, a 90% increase over 2012.

So between the Olympics and the emerging residential and logistics construction boom, Japan is ripe for many types of investment opportunities.

“A country where there is money to be made” Shinzo Abe, Prime Minister

www.mipim.com I preview magazine I February 2014 I 93

MONACO

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i 2014AWARDS

THE JURY PRESIDENT OF THE JURY Mr. Michael STRONG CBRE Executive Chairman - EMEA United Kingdom

MIPIM AWARDS 2014 Mrs. Caroline BARAT Agence Search Co-Founder France

Mr. Frank KHOO Axa Real Estate Global Head of Asia Singapore

Brightest and the best

T

HE entries are in for the 2014 MIPIM awards and close to 160 submissions from 39 countries were placed before the Jury of international real estate experts for consideration when they met in Paris in January. The judges have shortlisted four finalists (illustrated in the following pages) in each of seven categories:

Dr. Alexander KOLONTAY Government of Moscow

t Best futura project t Best innovative green building t Best office & business development t Best refurbished building

Committee for Architecture and Urban Planning Deputy Director Russia

t Best residential development t Best shopping centre t Best urban regeneration project

Mr. Günther OETTINGER European Commission European Commissioner for Energy Germany

Mr. Paolo GENCARELLI UniCredit Group Head of Procurement and Corporate Real Estate Italy

In addition, the judges have been asked to select the best projects from each of MIPIM 2014’s Countries of Honour – Brazil, Russia and Turkey.

The three winners, along with the seven category winners will be announced during a prestigious awards ceremony which will be preceded by the MIPIM Awards cocktail at the top of the famous Cannes red carpet (see agenda on the next page).

The highlight of the evening will be the presentation of two special awards: the Special Jury Award (the jury’s “coup de coeur”) and the People’s Choice Award (the public’s favourite project voted online).

Ms. Barbara KNOFLACH SEB Asset Management AG Chief Executive Officer Germany

Mr. Michael NEWEY RICS President United Kingdom

Mr. Olof ZETTERBERG Stockholm Business Region CEO Sweden

Sponsored by

www.mipim.com I preview magazine I February 2014 I 95

i 2014AWARDS BEST FUTURA PROJECT

HUALIEN RESIDENCES

AGENDA People’s Choice Award – cast your vote online Monday 3 February to Friday 7 March www.mipim.com and Facebook

Hualien, Taiwan Architect: BIG – Bjarke Ingels Group Developer: Taiwan Land Development Corporation

MIPIM Awards onsite vote Tuesday 11 March (9.00) to Thursday 13 March (noon) Awards Gallery, level -1

MIPIM Awards cocktail & red carpet Thursday 13 March (18.15) Grand Auditorium foyer, level 1

MIPIM Awards prize-giving ceremony Thursday 13 March (19.00 – 20.00) Grand Auditorium, level 1

MAX IV Lund, Sweden Architect: Fojab arkitekter and Snøhetta Developer: Fastighets AB ML4 Local authority: City of Lund

PARQUE SANTA LUCIA Monterrey, Mexico Architect: Stephan Braunfels Architekten Developer: Desarrollos Delta, Monterrey

XIHONGMEN DEVELOPMENT, DAXING DISTRICT Beijing, China Architect: Andrew Bromberg of Aedas Developer: Beijing XingChuang Zhidi Real Estate Development Co., Ltd. 96 I

preview magazine I February 2014 I www.mipim.com

NEW

BEST INNOVATIVE GREEN BEST OFFICE & BUSINESS BUILDING DEVELOPMENT

BALK VAN BEEL Leuven, Belgium Architect: Stéphane Beel Architecten Developer: Ertzberg

SANDCRAWLER One North, Singapore Architect: Andrew Bromberg of Aedas

SIXTY LONDON GARDENS BY THE BAY Singapore Architect: Grant Associates and Wilkinson Eyre Architects Developer: National Parks Board Singapore Building Services Engineering and Environmental Designer: Atelier Ten Ltd

London, United Kingdom Architect: Kohn Pedersen Fox Associates Developer: Bath House Development Limited (advised by AXA Real Estate)

TANZENDE TÜRME Hamburg, Germany

ØSTENSJØVEIEN 27 Oslo, Norway Architect: Henning Larsen Architects A/S Developer: NCC Property Development AS

TOUR MAJUNGA Paris – La Défense, France Architect: Jean-Paul Viguier et Associés Developer: Unibail-Rodamco

Architect: BRT Architekten LLP Bothe Richter Teherani, Hamburg Developer: STRABAG Real Estate GmbH, Business Unit Hamburg

UN CITY IN COPENHAGEN Copenhagen, Denmark Architect: 3XN, Denmark Developer: Harbour P/S (PensionDanmark, ATP Real Estate, CPH City & Port Development) www.mipim.com I preview magazine I February 2014 I 97

i 2014AWARDS BEST REFURBISHED BUILDING 175 PARK AVENUE – REALOGY HEADQUARTERS

BEST RESIDENTIAL DEVELOPMENT BALCONS URBAINS Paris, France Architect: Chartier Dalix et AvenierCornejo architectes associés Client: RIVP Régie Immobilière de la Ville de Paris

Madison, United States Architect: Kohn Pedersen Fox Associates, PC Developer: Hampshire Real Estate Companies

INTERCONTINENTAL MARSEILLE – HOTEL DIEU Marseille, France Architect: AAA Béchu Agency & Tangram Architects Developer: Altarea Cogedim and AXA Real Estate

THE CARVE Oslo, Norway Architect: a-lab Developer: Osu

NEW BABYLON

THE HERON

The Hague, The Netherlands

London, United Kingdom

Architect: MVSA Architects (formerly MVSA Meyer en Van Schooten Architecten) Developer: Babylon Den Haag (a cooperation between Fortress and SNS Property Finance)

TALLINN SEAPLANE HARBOUR

THE OLIV

Tallinn, Estonia

Singapore

Architect: KOKO architects Developer: Estonian Maritime Museum 98 I

Architect: David Walker Architects, RHWL Developer: Heron International

preview magazine I February 2014 I www.mipim.com

Architect: W Architects Pte Ltd Developer: TG (Balmoral) Pte Ltd

NEW

BEST SHOPPING CENTRE

BEST URBAN REGENERATION PROJECT BATTERSEA POWER STATION London, United Kingdom

CENTER 66 Wuxi, China Architect: Aedas Developer: Hang Lung Properties

EMPORIA SHOPPING CENTRE Malmö, Sweden Architect: Wingårdhs arkitekter Developer: Steen & Ström Sverige AB

POZNAN CITY CENTER Poznan, Poland Architect: Bose International Planning & Architecture, Pentagram Architects Developer: TriGranit Development Polska Sp. Z o.o.

Architect: Rafael Viñoly Developer: Battersea Power Station Development Company

BIRMINGHAM NEW STREET STATION Birmingham, United Kingdom Architect: AZPA Developer: Network Rail / Mace

KÖ-BOGEN DÜSSELDORF Düsseldorf, Germany Architect: Studio Daniel Libeskind, New York Developer: die developer Projektentwicklung GmbH, Düsseldorf

ZORLU CENTER

SAINT-MICHEL’S VILLAGE

Istanbul, Turkey

Paris, France

Architect: Emre Arolat (EAA) & Murat Tabanlioglu (Tabanlioglu Architecture) Developer: Zorlu Property Group

Architect: François Leclerq / Laurent Niget / Le Penhuel Developer: BNP Paribas Real Estate / BNP Paribas Promotion Résidentiel www.mipim.com I preview magazine I February 2014 I 99

Sixt - official car rental supplier of MIPIM

Our cars are available elsewhere.

Our prices aren’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)

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 accommodation department for preferential pricing on your lodging: +33 (0) 1 79 71 99 07/ 95 29

INSIDE: 1. USEFUL TIPS • ARRIVING IN CANNES

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

• THE EXHIBITION HALLS

Have you visited the Online Database on my.mipim.com/online-database 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?

• NETWORKING AREAS

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

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

• CONCIERGERIE

• ADDITIONAL SERVICES

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

BADGE 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.

Time zone: GMT +1 Electricity: 220 volts AC, 50 Hz. Round two-pin plugs are standard.

Measurement system: Metric.

Currency: Euro.

You can collect your badge at several badge collection points: • Registration sponsored by From Sunday 9 March, 14.00 to Friday 14 March, 13.00.

Level 0 of the Palais des Festivals.

• Nice Airport From Monday 10, 8.00, to Wednesday 12, 22.00.

MIPIM desk in Terminal 1 & 2.

• Hotels From Sunday 9, 14.00, to Wednesday 12, 19.00.

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

REGISTRATION OPENING HOURS • Sunday 9 March 14.00 - 19.00 • Monday 10 March 9.00 - 19.00 • Tuesday 11 March 8.30 - 20.00 • Wednesday 12 March 8.30 - 19.00 • Thursday 13 March 9.00 - 19.00 • Friday 14 March 9.00 - 13.00

www.mipim.com I preview magazine I February 2014 I 101

i TIPS & SERVICES MARKET OPENING HOURS • Tuesday 11 March 9.00 - 19.00 • Wednesday 12 March 9.00 - 19.00 • Thursday 13 March 9.00 - 19.00 • Friday 14 March 9.00 - 15.00 NEW 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 FOR ALL DELEGATES

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.

For assistance on a specific issue before the market, call +33 (0)1 79 71 99 99 or email customerhelpdesk@reedmidem.com

The Opening Cocktail sponsored by

Tuesday 11 March from 19.30, Carlton Hotel. Please note that your badge will be required to enter.

The MIPIM Awards Cocktail Thursday 13 March at 18.15, Foyer Grand Auditorium, Level 1, Palais des Festivals.

The MIPIM Awards Ceremony sponsored by

Thursday 13 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.

• Level -1 • Level 0 • Level 1 • Level 3 • Level 4 • Level 5 • Riviera Hall • Lerins Hall

OUTSIDE STRUCTURES • Marina Hall – Paris Region • Azur Hall • Sunset Hall – London Stand • Sea Breeze – Moscow City Government • Mistral Hall – Bouygues Immobilier • Croisette Village NEW • Palm Hall NEW – Moscow City Government • Gare Maritime – MIPIM Innovation Forum

102 I

NETWORKING AREAS

Hotel, Tourism & Leisure Lounge Palais des Festivals – Level 3 sponsored by

Open to all MIPIM participants, the HTL Lounge will be the host of many events, project pitching and highlevel 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.

ADDITIONAL SERVICES

The 25 – Restaurant & Beach Bar NEW Majestic Beach The Majestic Beach restaurant has been completely redesigned, and for its re-opening will become an exclusive space uniquely for MIPIM participants.

Open all day long, it provides an ideal setting to hold business breakfasts, lunches and more.

Business Centre Palais des Festivals – Level -1 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.

Visitors’ Club Palais des Festivals – Level -1 Open to all participants, the club 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.

Information Points Clearly signposted, information desks can be found around the Palais des Festivals.

• Level -1, Entrance • Riviera Hall • Level 0, Help Desk • Lerins Hall • Level 3

VIP Lounge sponsored by Palais des Festivals – Level -1 Reserved for investors, end users, VIPs, and directors of exhibiting companies, this private lounge offers a complimentary bar and business services. A number of hostesses will be at clients’ disposal to help organise their meetings.

NEW First Timer Information Point at Level -1, next to the escalators.

Should you have any doubts or questions, do not hesitate to ask one of our bilingual hostesses.

The MIPIM Innovation Forum Gare Maritime The MIPIM Innovation Forum will be a key destination for 2014 delegates, showcasing the most innovative solutions to increase the value of property assets.

MIPIM Logistics Pavilion Palais des Festivals – Level -1 Through a dedicated programme of conferences and networking events, the MIPIM 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 3 This facility for journalists includes computers, internet connection, a printer and the full-time presence of a staff member.

preview magazine I February 2014 I www.mipim.com

Mobile Application TAKE MIPIM TO GO! The official MIPIM app is designed to enhance your client experience by providing essential show information including: a full event schedule, exhibitor and participant lists, a floor plan to locate exhibitors and set itineraries, speaker lineups, social networking, practical event and 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

3. GENERAL MAP OF MIPIM Bouygues Immobilier

Moscow City Government

Paris Region The 25 Restaurant & Beach Bar Se En afro tra nt nc e

Croisette Village

LERINS HALL

London Stand

RIVIERA HALL to ess ll Acc s Ha in Ler

MIPIM AREA ENTRANCE

LA C ROIS ETT

PALAIS DES FESTIVALS

E

LA

Azur Hall 2

MIPIM AREA

CR

OIS

Azur Hall 1

Moscow City Government

ET

Cr En oise tra tte nc e

TE

GARE IME MARIT

Protocol Entrance

MIPIM Shuttles

Registration Entrance

mipim PREVIEW The official MIPIM magazine February 2014. Director of Publications Paul Zilk Director of Communication 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, Mia Hunt, Steve Killick, Steve McCormack, Anika Michalowska, Mark Moore, Doug Morrison PRODUCTION DEPARTMENT Publishing Director Martin Screpel Publishing Manager Amrane Lamiri Publishing Co-ordinators Nour Ezzedeen, Emilie Lambert 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 © 2014, Reed MIDEM Market Publications. Publication registered 1st quarter 2014. ISSN 1962-9974. Printed on 50% recycled paper

www.mipim.com I preview magazine I February 2014 I 103

MIPIM CONFERENCES 25 NATIONALITIES 250 SPEAKERS...

Dmitry Aksenov

BoD Chairman

RDI GROUP

Antoine Castro

Managing Director

QUANTUM GLOBAL REAL ESTATE

Anthony ArmstrongEmery President

ECOHOUSE GROUP

Philippe Chiambaretta Architect

PHILIPPE CHIAMBARETTA/ PCA

Alderman Sir Michael Bear

Dr Frank Billand

Chairman

REGENERATION INVESTMENT ORGANISATION

UNION INVESTMENT REAL ESTATE GMBH

Matteo Cidonio

Dr Marcus Cieleback

Managing Partner

Member of the Management Board

GWM CAPITAL ADVISORS LLP

Group Head of Research

PATRIZIA IMMOBILIEN AG

Håvard Bjorå Vice President

IPD

Simon Blaxland

Paul Bois

Executive Director Head of Investments Private Equity Funds

Project Director

FABERNOVEL

Emeritus Fellow

David Cox

AEW EUROPE

Prof. Greg Clark

Christian Cléret

Rob Coston

THE BUSINESS OF CITIES LIMITED

CEO

Editor

Principal

POSTE IMMO

Prof. Andrea Boltho MAGDALEN COLLEGE, UNIVERSITY OF OXFORD

LOGISTICS BUSINESS MAGAZINE

European Business Development Manager

3M

Douglas Edwards

John Feeney

James Fetgatter

Courtney Fingar

Anders Forkman

Joseph Philip Forte

Malcolm Frodsham

Dr Beatriz Garcia

Managing Director

CORPUS SIREO

Managing Director and Global Head of Corporate Real Estate

Chief Executive

Editor

Partner

Partner

Director

Head of Research

Laurent Jacquemin

Anneli Jansson

Peter Jark

Timothy Johnson

Dr Jan-Peter Kastelein

Hugh Kelly

Director, Nordics

Partner

Design Partner

Kasper Guldager JØrgensen

Victor Kaminoff

European Head of Transactions

Partner

YNNO

Clinical Professor of Real Estate

Scott Mc Millan

Jean-Denis Mège

Division Chief - International Real Estate, Capital Projects and Facilities

Promoter / Head of Topic Group Energy Savings

NVESTMENT MANAGEMENT SARL

AXA REAL ESTATE

LLOYDS BANK

GROSVENOR FUND MANAGEMENT EUROPE

Prof. John Macomber Dr Evelina Marchesini

Professor

Journalist, Special

HARVARD BUSINESS SCHOOL Reporter and Real

Estate Chief Editor

IL SOLE 24 ORE SPA

AFIRE

DLA PIPER UK LLP

Prof. Ir. Winy Maas Director-Architect

MVRDV

FDI MAGAZINE

NBBJ

VINGE

Partner 3XN and Director GXN

DLA PIPER

Director, Architectural & Luxury Homes

3XN ARCHITECTS

HILTON & HYLAND, CHRISTIE’S INTERNATIONAL REAL ESTATE

Graeme Maxton

Dr Aldo Mazzocco

Futurist, Economist & Author

CEO

Will McIntosh

BENI STABILI SIIQ

Global Head of Research

USAA REAL ESTATE COMPANY

REAL ESTATE STRATEGIES

INTERNATIONAL MONETARY FUND

INSTITUTE OF CULTURAL CAPITAL, UNIVERSITY OF LIVERPOOL

NEW YORK UNIVERSITY SCHACK INSTITUTE

EURHONET

SOME OF SPEAKERS 2014

Robert Booth CEO

EMAAR PROPERTIES EMAAR

Tor Borg Chief Economist

SBAB BANK

Steven Borncamp

Jonathan Brasse

Managing Director - Europe

Editor

Dr Duarte de Athayde

INTERNATIONAL LIVING FUTURE INSTITUTE

PERE

Massimo Brunelli

Rolf Buch

CEO

CEO

Scott Burnham

Neil Callanan

DEUTSCHE ANNINGTON IMMOBILIEN SE

Director

Reporter

Ralph DiNola

Stéphane Distinguin

Sigrid Duhamel

IDEAFIMITSGR

Thilo Cunz

Riccardo Dallolio

Christian Delaire

Sector Head of Alternatives and Special Situations

Partner

Isabelle de Ponfilly

Architect - Senior Manager International

ABREU ADVOGDOS

General Manager

CEO

Peter Grant

Gemma Haley

Jane Hamilton

Ronnie Hanna

Deputy Editor

Associate Director

Consultant

Head of Asset Recovery

LUWOGE CONSULT

THE WALL STREET JOURNAL

AXA REAL ESTATE

LOAN MARKET ASSOCIATION

HAMILTON CORPORATE REAL ESTATE ADVISORY

VITRA

AEW EUROPE

NATIONAL ASSET MANAGEMENT AGENCY

Executive Director

NEW BUILDINGS INSTITUTE

Dietrich Heidtmann

Hernandez-Colet

Global Head of Investor Relations & Capital Markets

CUATRECASAS, GONÇALVES PEREIRA

AXA REAL ESTATE

Partner

SCOTT BURNHAM STUDIO

CEO & Founder

BLOOMBERG

FABERNOVEL

Group Corporate Real Estate Director

Mike Hillis

Dr Arab Hoballah

SIOR, CCIM, President

SIOR - SOCIETY OF INDUSTRIAL & OFFICE REALTORS

PSA PEUGEOT CITROËN

Chief SCP

UNEP

...AND YOU! YOUR OPINION COUNTS Nicolai Kobliakov

Zsolt Kohalmi

James Kuhn

Member of board

Head of European Acquisitions

President

SENIOR COTTAGE

Gérard Mestrallet Chairman and Chief Executive Officer

GDF SUEZ

STARWOOD CAPITAL EUROPE ADVISERS, LLP

Henrik Meyer-Hoffmann Architect & Market Developer

BASF

NEWMARK GRUBB KNIGHT FRANK

Nicolas Michelin Architect & Urban Designer

ANMA AGENCE NICOLAS MICHELIN & ASSOCIÉS

-All panels include Q&A sessions -New this year:Mette interactive devices / Lazar real-time results Kynne Frandse Sergei Kuznetsov Evan Matthias Leube CEO & Partner Chief Architect of Moscow Co-Chairman Real Estate Head of Real Estate HENNINGwith LARSEN the hashtag COMMITTEE FOR ARCHITECTURE DENTONS #MIPIM Germany & Regional Head -Express yourself ARCHITECTS AND URBAN DEVELOPMENT of Asset Management OF MOSCOW

Prof. Ingrid Nappi Choulet Head of the Real Estate and Sustainable Development Chair

ESSEC BUSINESS SCHOOL

Richard Lowe Editor

IP REAL ESTATE

AXA REAL ESTATE

Michael Newey

Steven Norris

Liz Peace

Hannu Penttilä

Vice President

Chairman

Chief Executive

Mayor Responsible for City Planning and Real Estate

RICS (The Royal Institution of Chartered Surveyors)

BNP PARIBAS REAL ESTATE UK

BRITISH PROPERTY FEDERATION

CITY OF HELSINKI

CONFERENCES & EVENTS PROGRAMME

2014 THEME:

A

s the world changes, the real estate industry is entering a new era and facing major contemporary challenges such as: the shift of geographical powers, ‘acceleration’ of time, tensions on financial markets, increasing empowerment of world citizens and growing environmental regulations.

From these key issues arises a common need for a paradigm shift, new governance models, reactive strategies and innovative solutions.

Mipim 2014 Conference programme invite you to define and share new perspectives for the built environment of the coming 25 years.

A FORMAT FOR EVERY NEED: 30+ PANELS OF EXPERTS 45 minutes of interactive debates with the audience dispensing a real-time snapshot of the market

10+ WORKSHOPS 30 to 90 minutes sessions, each starting with an expert overview followed by case studies offering concrete solutions

6 DIFFERENT TRACKS Cities, Innovation, Asset Class, Geographical Focus, Finance & Investment, Global Real Estate

14 TOPIC-BASED BREAKFASTS & LUNCHES 60 to 120 minutes of debate around a predetermined topic by handpicked professionals chaired by an industry expert

THE “INFRASTRUCTURE AFTERNOON”

An afternoon of debate around “Shaping the city of tomorrow”

Wednesday 12th March, RED ROOM

80+ PROJECT PRESENTATIONS 20 minutes sessions to discover promising projects, Cities presenting `Logistics’ and `Hotel, Tourism & Leisure’ projects and opportunities

3 COUNTRIES OF HONOUR Brazil, Russia & Turkey

Access to MIPIM 2014 conferences is free of charge for all registered delegates, within the limit of space available.

Programme as of 24/01/2014. All information contained in this programme may be subject to change.

OPEN HERE FOR FULL E PROGRAMM

NOT TO BE MISSED! THE BIG DEBATE “CHANGE PERSPECTIVES?” Thursday 13 March I 10.00-11.30 I GRAND AUDITORIUM

A unique panel where international industry experts share their vision for the built environment of the 25 years to come.

Robert Booth

Harry Macklowe Graeme Maxton Prof. Carlo Ratti

CEO

Chairman

EMAAR PROPERTIES EMAAR

MACKLOWE PROPERTIES

Futurist, Economist & Author

Director MITSenseable City Lab & Partner, Carlo Ratti Associati

CARLO RATTIASSOCIATI

Antonio Tajani

EuropeanCommission Vice-President and Commissioner in charge of Industry and Entrepreneurship

EUROPEANCOMMISSION

MASTERMINDS EUROPE “RE-INVENTING EUROPE”

MASTERMINDS ARCHITECTURE “FLEXIBLE AND ADAPTABLE ARCHITECTURE”

Wednesday 12 March I 10.00-11.30 I RED ROOM

Economic turmoil, rapid urbanisation and a shift of financial power from West to East have left Europe in a state of flux. What do the changes mean from the continent’s economies, its employment and investment markets and its real estate? Are some cities becoming obsolete? How can the public and private sectors work together to ensure the continent stays competitive? And how should Europe’s leading businesses, politicians and its property industry respond to a period of profound change?

Alderman Sir Michael Bear

Christian Delaire Stéphane Distinguin

Gérard Mestrallet

Sean Tompkins

Damian Wild

Chairman

CEO

Chairman and Chief ExecutiveOfficer

Chief Executive Officer

RICS

Editor

REGENERATION INVESTMENT ORGANISATION

AEW EUROPE

CEO & Founder

FABERNOVEL

GDF SUEZ

(The Royal Institution of Chartered Surveyors) ESTATES GAZETTE

Thursday 13 March I 11.30-13.00 I GREEN ROOM

• What are the main changes introduced by the notion of flexibility in architecture?

• What are the impacts of flexible and modular architecture in terms of sustainability, economics, planning, prefabrication and use?

• What are the visible differences of this type of architecture in terms of design and methodology of work?

• Beyond the theoretical research on the issue, concretely, what is the importance given today to the flexibility and modularity in architecture projects?

Mette Kynne Frandsen CEO & Partner

HENNING LARSEN ARCHITECTS

More details about speakers, content and conference venues on www.mipim.com

Prof. Ir. Winy Maas Director - Architect

MVRDV

Auguste van Oppen

Dominique Perrault

O+A

SFU, DOMINIQUE PERRAULT ARCHITECTURE

MscArchitect / Partner Architecte DPL Urbaniste STRATEGIES AND ARCHITECTURE

CONFERENCES & EVENTS PROGRAMME WEDNESDAY 12 MARCH

TUESDAY 11 MARCH BLUE ROOM

RED ROOM

ORANGE ROOM

GREEN ROOM

RE-INVEST SUMMIT [3RD EDITION] Global real estate: optimising portfolios by geography, sector and strategy.

EVENT I 8.00-13.00 I CARLTON HOTEL, GRAND SALON I By invitation only* Platinum sponsor: AXA Real Estate Gold sponsor: Aberdeen Asset management Research partner: KPMG Industry partner: IP Real Estate JAPAN BREAKFAST EVENT I 8.30-10.00 I MAJESTIC HOTEL, SALON DIANEI Pre-registration required*

BLUE ROOM

RED ROOM

ORANGE ROOM

RUSSIAN BREAKFAST

UK BREAKFAST EVENT

US BREAKFAST

EVENT

8.30 -09.30 CARLTON HOTEL, LA CÔTE Pre-registration required*

GREEN ROOM

8.30 -11.30 MAJESTIC HOTEL, SALON CROISETTE Pre-registration required*

EVENT

9.00 -10.00 PALAIS DES FESTIVALS DEEP DESIGN RECEPTION LOUNGE Pre-registration required*

MAYORS’ THINK TANK [6TH EDITION] AUTONOMOUS CITY: THE QUEST FOR NEW RESOURCES, FROM UTOPIA TO REALITY. MAXIMIZE USE OF AVAILABLE RESSOURCE. EVENT I 10.00-13.00 I MAJESTIC HOTEL, SALON ROYAN 1&2 I By invitation only* In partnership with: BPF, CEMR, EUROCITIES, INTA, OECD - In collaboration with: UNEP

FOCUS ON JAPAN

REAL ESTATE INVESTMENT INTO THE USA

PANEL

10.30-11.30

GLOBAL EMERGING TRENDS IN REAL ESTATE 2014 PANEL

REAL ESTATE INVESTMENT MARKET IN RUSSIA PANEL

11.00-12.30 Co-organiser: Kommersant

11.30-12.30 Co-organiser: Urban Land Institute

PANEL

10.00-11.00 INFLUENCE OF DIGITAL AND E-COMMERCE ON LOGISTICS REAL ESTATE MARKET AND THE SUPPLY CHAIN PANEL

11.30-12.30

GETTING TO ZERO TODAY: HOW ZERO NET ENERGY BUILDINGS WILL DEFINE THE NEXT DECADE OF DEVELOPMENT PANEL

11.30-12.30 Co-organiser: New Buildings Institute

Co-organiser: New York University, Schack Institute of Real Estate

HIGHLIGHTING INNOVATION 5 HOT HOSPITALITY CONCEPTS PANEL

11.30-12.30 Co-organiser: PKF Hotelexperts

ASIA LUNCH

INVESTORS LUNCH

EVENT I 12.30 -14.00

EVENT I 13.00 -14.30

MAJESTIC HOTEL, SALON DIANE Pre-registration required* CHINA: IS IT STILL THE INVESTMENT HAVEN IT USED TO BE? THE DIGITAL REVOLUTION IN CEE REAL ESTATE: IMPACT ON OFFICE & BPO, RETAIL & LOGISTICS INVESTMENTS WORKSHOP

15.00-17.00 followed by a cocktail

PANEL

14.30-15.30 Sponsor & Coorganiser: Cushman & Wakefield

THE GLOBAL PRIVATE EQUITY REAL ESTATE MARKET PANEL

Co-organiser & Sponsor: CEEQA

16.00-17.00 Co-organiser: PERE Magazine

CARLTON HOTEL, GRAND SALON By invitation only* ASSET DIVERSIFICATION: PUSHING THE BOUNDARIES TO INCORPORATE INFRASTRUCTURE AND DEBT PANEL

14.30-15.30 Co-organiser: IPD CULTURAL FACILITIES AND INFRASTRUCTURE: IMPACT ON SOCIAL AND ECONOMIC BEHAVIOUR PANEL

16.00-17.30 Co-organiser: RDI Sponsor: Hill International JUST IMAGINE: REAL ESTATE 2030 PANEL

17.30-18.30 Co-organiser: RICS

CITIES’ TRANSFORMATION: URBAN REGENERATION STRATEGIES WORKSHOP

14.30-16.30 Overview by experts Case study 1: The UK Capital for Innovation Sponsor: Derby

INSURANCE COMPANIES, PENSION FUNDS AND SOVEREIGN WEALTH FUNDS: COMPETITORS OR PARTNERS? WORKSHOP

17.00-18.30 followed by a cocktail Sponsor: Allianz

WORKSPACE IN TRANSFORMATION: WHICH FACE OF TOMORROW’S OFFICE?

PANEL

PANEL

10.00-11.30

10.00-11.00

PANEL

Co-organiser: Heuer Dialog GmbH

10.00-11.00

LOGISTICS AND TRANSPORTATION HUBS

FINANCIAL IMPACT OF CRE: HOW TO INFLUENCE THE C-SUITE AND BUSINESS STRATEGY

INVESTING IN THE NORDIC COUNTRIES: IS IT STILL A GOOD CHOICE? PANEL

12.00-13.00 Co-organiser: Fastighetsnytt

WORKSHOP

11.30-13.00 Overview by experts Case study1 Sponsor: Barcelona City

PANEL

11.30-12.30 Co-organiser: CoreNet Global

MAYORS’ LUNCH : POLITICAL LEADERS MEET END-USERS AND OCCUPIERS

KEYNOTE COUNTRY OF HONOUR: TURKEY KEYNOTE

INFRASTRUCTURE VISION +25 YEARS AHEAD KEYNOTE

14.30-15.00

14.30-15.00 FOCUS ON TURKEY PANEL

15.00-16.00

INCREASING HOUSING SUPPLY AND FUNDING IN HARD TIMES PANEL

15.00-16.00 Co-organiser: INTA

DRIVING FUTURE GROWTH AND NEW INVESTMENT OPPORTUNITIES: THE CORE CITIES AND THE IMPACT OF THE KNOWLEDGE ECONOMY PANEL

14.30-15.30

Case-study 3

MIPIM OPENING COCKTAIL

RETHINKING ASSET ALLOCATION FOR LONG TERM INVESTORS: STRATEGIC AND TACTICAL REAL ESTATE INVESTMENT WORKSHOP

16.30-18.30 Sponsor: Amundi Pre-registration required*

CITIES ON THE MOVE: THE NEXT STEP IN MULTIMODAL TRANSPORT PANEL

16.00-17.00 Co-organiser: World Infrastructure News PREPARING UTILITIES INFRASTRUCTURE OF THE FUTURE: RESPONDING TO INCREASING NEEDS IN A CONSTRAINED WORLD PANEL

17.00-18.00 In collaboration with UNEP * contact us for more information: conferences.mipim@reedmidem.com

RESIDENTIAL IN GERMANY: ASSETS FOR VALUE

EVENT I 13.00-14.30 I MAJESTIC HOTEL, SALON CROISETTE I By invitation only *

Case-study 2

by Barcelona City

EVENT I FROM 19.30 I CARLTON HOTEL I Open to all participants

Celebrate MIPIM’s 25th anniversary and meet your peers in a convivial environment

MASTERMINDS EUROPE: RE-INVENTING EUROPE

UK AFTERNOON: CITIES PRESENTATION AND QUESTION TIME PANEL

15.45-16.30 HS2 - keeping UK growth on track?

16.30-17.00 City presentation Scottish Alliance 17.00-17.30 City presentation 17.30-18.00 Question time

RETROFIT STRATEGY & SMART BUILDINGS WORKSHOP

Part 1 14.00-15.30 Case study 1: Light Balancing in Lille: a case study on a lighting retrofit for more comfort @less energy Sponsor: Philips-Somfy Case study 2: Smart Innovation for sustainable buildings Sponsor: 3M Part 2 15.30-17.30 Case study 1: Opportunities to participate in European construction project BuildTog Sponsor: BASF Case study 2

by GDF Suez Case study 3 CHALLENGES OF RECONVERTING INDUSTRIAL WASTELANDS PANEL

17.30-18.30 followed by a cocktail Co-organiser: Association des Directeurs Immobiliers

THURSDAY 13 MARCH BLUE ROOM

RED ROOM

LEADERS’ BREAKFAST EVENT I 8.00 -9.30 MAJESTIC HOTEL, SALON DIANE Pre-registration required*

ORANGE ROOM

FRIDAY 14 MARCH GREEN ROOM

HOTEL, TOURISM & LEISURE BREAKFAST EVENT I 9.00 -10.00 PALAIS DES FESTIVALS DEEP DESIGN RECEPTION LOUNGE Pre-registration required*

GREEN ROOM MIPIM WRAP-UP EVERYTHING YOU COULDN’T MISS AT MIPIM 2014 IN 1 HOUR! PANEL

10.00-11.00 In association with: Wisconsin School of Business 10 MUST-HAVE INNOVATIVE SOLUTIONS

FUNCTIONAL DIVERSITY: SHARED BUILDINGS AND SPACES

THE BIG DEBATE: CHANGE PERSPECTIVES? WHAT VISION FOR THE BUILT ENVIRONMENT OF THE COMING 25 YEARS. PANEL

PANEL

10.00-11.30 GRAND AUDITORIUM

BRAZIL’S EXPANSION: AFTER 2013 ECONOMICAL CONTEXT CHANGES, WHAT SITUATION? WHAT OPPORTUNITIES? PANEL

ITALIAN REAL ESTATE: NEW SUPPLY, NEW DEMAND PANEL

11.30-12.30 Sponsor: IDEA FIMIT Co-organiser: Chiomenti Studio Legale

11.30-12.30 Sponsor: Siqueira Castro

10.00-11.00 In association with ESSEC Business School, Chair of Real Estate and Sustainable Development LOGISTICS AND PROPERTY: DRIVERS AND BOOMING PLACES WORKSHOP

Case study 1 by CBRE Case study 2 «Built to suit with land to grow»

ENERGY TRANSITION & REAL ESTATE: A SMARTER EUROPE PANEL

14.30-15.30 Co-organiser: Chambre Franco Allemande de Commerce & d’Industrie

CONVERSION OF HISTORICAL AND OFFICE BUILDINGS INTO HOTELS WORKSHOP

17.00-18.30 Overview followed by 2 case studies

One-to-one targeted meetings.

One to one networking events of 1 hour covering Save your time, meet your &future ‘Logistics’ and ‘Hotel, Tourism Leisure’business topics. partners.

And make your deals.

Save your time, meet your future business partners and make your deals.

Wednesday 12 March 10.00-11.00 I Hotel groups meet developers & investors

16.00-17.00 I Investors meet developers in logistics

PALAIS DES FESTIVALS DEEP DESIGN RECEPTION LOUNGE Pre-registration required* GLOBAL HEALTHCARE REAL ESTATE: THE BOOM MARKET OF THE NEXT DECADES PANEL

14.30-15.30 Co-organiser: Your Care Consult

PANEL

16.00-17.00

3 SPEED MATCHINGS TO BOOST YOUR NETWORK!

15.00-16.00 I End-users meet developers in logistics

EVENT I 13.00 -14.30 I

14.30-15.30 Co-organiser: Loan Market Association

PANEL

11.30-13.00 Co-organiser: Lordculture

ITALIAN LUNCH

BRAZILIAN LUNCH

MASTERMINDS HOTEL, TOURISM & LEISURE

PANEL

11.30-13.00

EVENT I 13.00 -14.30

LEARNING FROM THE CRISIS AND LOOKING TO THE FUTURE – PROPERTY LENDING: OVERCOMING CHALLENGES TO CREATE OPPORTUNITY

MASTERMINDS ARCHITECTURE: FLEXIBLE AND ADAPTABLE ARCHITECTURE

Sponsor: CTP

MAJESTIC HOTEL , SALON DINARD Pre-registration required*

PANEL

11.00-12.00

REBUILDING THE MARKET: THE ROLE OF «BAD BANKS» IN REVITALISING THE REAL ESTATE INVESTMENT MARKET IN EUROPE PANEL

16.00-18.00 Co-organiser: American Bar Association, International Section

SUSTAINABLE CONSTRUCTION IN EUROPE: POLICY FRAMEWORK AND SUPPORT MEASURES

6 CONFERENCE ROOMS AT MIPIM PURPLE ROOM Level -1

PANEL

14.00-14.30 Sponsor: European Commission

WORKPLACE AND SPACE MANAGEMENT: PAYING STRATEGIES

GRAND AUDITORIUM Level1 BLUE ROOM Level 3

GREEN ROOM

WORKSHOP

14.30-16.00 Overview by experts followed by 2 case studies Sponsor: Schneider Electric

Co-organiser: Jones Lang LaSalle Hotels 25TH ANNIVERSARY COCKTAIL EVENT I 18:15-19:00 I GRAND AUDITORIUM FOYER I Open to all MIPIM participants

MIPIM AWARDS CEREMONY EVENT I FROM 19.00 I GRAND AUDITORIUM I Open to all MIPIM participants

RED ROOM Level 3 ORANGE ROOM Level -1