Mipim review 2013

MAY 2013

mipim

mipim.com The official MIPIM magazine

®

r e V ieW COUNTRY OF HONOUR

REINVEST

Turkey Mixed-use leads the way SEE PAGE 25

Investment Forum In search of yield

SEE PAGE 47

Also inside:

• Key investment destinations in Russia and Brazil • MIPIM Innovation Forum • Logistics • Hotels

WINNER

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THE PERFECT LOCATION FOR

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2013

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Filippo Rean Director of MIPIM & MIPIM Asia

Dear clients

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ELCOME to the MIPIM 2013 Review magazine, bringing you the highlights of the 24th edition of the world’s leading real estate event.

The success of Turkey as MIPIM 2013’s Country Of Honour, backed by over 650 Turkish participants, 22 exhibiting companies and high-level national and regional authorities, underlined Turkey’s status as an emerging real estate powerhouse. Turkey’s potential was emphasised by the vast real estate projects on show and new regulations which should stimulate foreign real estate investment.

For this reason we will be focusing on Turkey again in 2014, alongside a special programme on two other dynamic real estate markets: Brazil and Russia.

2013 was the year that MIPIM attendance topped the 20,000 mark again despite inclement weather conditions that hit some European countries and delayed or prevented some of our clients from attending. We would like to extend our special thanks to everyone who made that extra effort to overcome the snow in order to make it to MIPIM. The strong presence this year of pension and sovereign funds and more generally of investors, shows the continuing interest in real estate as a valuable asset. And the excellent attendance at events focusing on hotel and tourism, and logistics, confirms that investors have a renewed appetite for a broader range of asset classes.

The new MIPIM Innovation Forum showcased some of the most exciting trends in urban planning, architecture and asset management and attracted some of the industry’s leading thinkers to help chart a new course for real estate.

We hope you will be able to join us in Cannes again in March 2014 as MIPIM celebrates its 25th anniversary with the will to continue highlighting best practices and the most exciting projects of the future.

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i nEWS

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Photo: Y. Mortier / 360 Medias

COntents MIPIM caught on camera. Four packed days of property events in Cannes

Stories from the newsmakers at MIPIM

i focus

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Highlighting the key trends that emerged at MIPIM 2013 Turkey: Country Of Honour

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Russia: Growth and opportunities

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Brazil: Attracting global investment

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Innovation: A glimpse into the future 36 Logistics: A buoyant sector

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Hotels: Brands expand in Europe

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REInvest: Funds gather in Cannes

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iawards

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The glittering MIPIM Awards ceremony celebrated the real estate world’s most innovative projects

Photo: Y. Coatsaliou / 360 Medias

EDITORIAL

mipim reVieW The official MIPIM review magazine May 2013. Director of Publications Paul Zilk Director of Communication Mike Williams ®

EDITORIAL DEPARTMENT Editor in Chief Graham Parker Technical Editor in Chief Hervé Traisnel Deputy Technical Editor in Chief Frédéric Beauseigneur Graphic Designer Carole Peres Sub Editor Joanna Stephens Proof Reader Debbie Lincoln Contributors Chris Bown, Ben Cooper, Mark Faithfull, Steve McCormack, Mark Moore, Doug Morrison PRODUCTION DEPARTMENT Publishing Director Martin Screpel Publishing Co-ordinators Nour Ezzedeen, Emilie Lambert, Amrane Lamiri Production Assistant, Cannes Office Eric Laurent Printer Riccobono Imprimeurs, Le Muy (France) Reed MIDEM, a joint stock company (SAS), with a capital of €310.000, 662 003 557 R.C.S. NANTERRE, having offices located at 27-33 Quai Alphonse Le Gallo - 92100 BOULOGNE-BILLANCOURT (FRANCE), VAT number FR91 662 003 557.

Contents © 2013, Reed MIDEM Market Publications. Publication registered 2nd quarter 2013. ISSN 1968-2379. Printed on 50% recycled paper

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invision

Photo: M. Johner / 360 Medias

Boris Johnson, Mayor of London

Turkey Country of Honour at MIPIM 2013

Photo: Y. Mortier / 360 Medias

Photo: Y. Coatsaliou / 360 Medias

Photo: J. Gorin / Image & Co

Photo: S.d’Halloy / Image & Co

MIPIM caught on camera

MIPIM’s Turkish-themed opening cocktail

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Photo: M. Johner / 360 Medias

Photo: V.Desjardins / Image & Co

Istanbul Mayor Kadir Topbas opens the Turkish Pavilion

Mayors’ Lunch

Photo: S.d’Halloy / Image & Co

Photo: M. Johner / 360 Medias

MIPIM Innovation Forum conference

Photo: Y. Coatsaliou / 360 Medias

Photo: S.d’Halloy / Image & Co

Photo: Y. Coatsaliou / 360 Medias

Greater Moscow’s video wall

Manchester’s Prof Brian Cox

Power meetings in the Logistics hub

Photo: S.d’Halloy / Image & Co

Photo: S.d’Halloy / Image & Co

Former French foreign minister Alain Juppe

Grand Paris Pavilion

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nEWs HAMBURG

S IMMO KEEPS ON WITH CAPITALS

MIPIM seen as opportunity to share experience and learn

CAPITAL cities “from Berlin to Bucharest” remain the focus markets for Austrian investor S IMMO, according to board member Friedrich Wachernig, with Vienna’s €300m Quartier Belvedere Central development by the new station and Berlin residential the largest projects for 2013.

Wachernig said the company’s decision to concentrate on capital cities had been vindicated in the post-crisis years. And while he noted the strength of Germany, he also said that Central, Eastern and Southern Europe were showing signs of recovery. Wachernig added: “Our shopping centre in Bucharest is performing well, and we are also operating a retail centre in Sofia. It will take some patience from investors, but these markets are showing signs that they will perform well again.”

© 2013, Stefan Groenveld. Urheberrechtlich geschützt

NEWS IN BRIEF

EU commissioner Guenther Oettinger greets Hamburg Business Development Corporation’s Jutta Ludwig at the Hamburg Stand

SMART HOUSES SAVE ENERGY

Photo: C. Alminana / 360 Medias

MORE intelligent housing, controlled by environmentally aware families, can help save energy in the residential homes of the future, MIPIM delegates were told by Christine Wallgren, programme manager for Vinnova’s transport and environment division.

The Swedish government-supported agency provides €230m to innovative businesses each year on a 50:50 basis, with the recipients matching the funding. Wallgren said that smart housing provided a major opportunity to reduce energy demand.

The session was part of a two-day programme organised by Business Sweden and the Swedish Energy Agency outlining Swedish experience in sustainable urban development.

and Joe Montgomery, CEO of ULI Europe, led a discussion entitled Energy Policy And Practice At Its Best — Does Germany Lead?

The largest single exhibitor at the Hamburg stand was once again HafenCity. The project is now 12 years into its development programme and CEO Juergen Bruns-Berentelg delivered a review of progress so far.

“At MIPIM, we wanted to showcase HafenCity’s excellent development along advanced urban and sustainability standards,” he said. “It’s an internationally leading example of best practice on how to intelligently advance and newly build a city right in the heart of a metropolis. To pursue this, we would like to win additional partners, investors, developers and users.”

ONTARIO

Durham County sets out its stall

Durham County’s Roger Anderson: “excellent contacts”

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HE H A MBURG Metropolitan Region, which comprises a liveable waterfront metropolis, is positioning itself as a solid market for investment.

But as well as promoting itself to the global occupier and investor communities, the 16 companies represented on the Hamburg stand came to MIPIM to learn. “MIPIM has certainly been developing into a forum of sustainable urban development,” Jutta Ludwig, CEO of HWF Hamburg Business Development Corporation, said. “Europe’s large cities are all confronted with similar problems and in Cannes we can share these and learn from each other.”

To reinforce this message, EU energy commissioner Guenther Oettinger, Dr Andreas Mattner, president of German property federation ZIA,

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AT MIPIM looking for potential investors was Ontario’s Durham County, which consists of eight municipalities on Lake Ontario, adjacent to Canada’s largest city, Toronto.

“We have a lot of potential hotel sites in Durham along the lake shore,” Roger Anderson, regional chair and CEO of Durham County, said.

Durham also has a lot of service land available along the new Highway 407. “Those are great situations for companies looking to expand

across the province of Ontario and Canada,” Anderson added.

Anderson, who was making his first visit to MIPIM, said that he had made some “excellent contacts” with European architects in Cannes.

He added: “Back home, architects tend to do everything too regular and square in many ways. I’ve seen some new and different architectural ideas here. It’s good to get away from design by box.”

METROPOLE RUHR

MORE THAN A PROMISE. Numerous world market leaders have their location in the Ruhr Metropolis. This

makes the region in NORDRHEIN-WESTFALEN | NRW (North Rhine-Westphalia) one of the most important economic centers in Europe. Energy, logistics, healthcare, chemicals or the creative economy – research, GHYHORSPHQW DQG SURGXFWLRQ DUH FORVHO\ OLQNHG KHUH ZLWK H[SHUWLVH VSDQQLQJ DOO VHFWRUV $QG ZLWK ž YH XQLYHU sities, 15 universities of applied sciences and an art college, the signs are already pointing clearly to the future. Interested? www.nrwinvest.com

i nEWs NEWS IN BRIEF

LEINE-CENTER LAATZEN

DUESSELDORF MOVES WITH THE TIMES

CBRE Global Investors adds Hanover centre to portfolio

DUESSELDORF is a city that is constantly changing — and never more so than in the last year while the new metro, the Werhahn-Linie, has been under construction.

“This will improve traffic circulation and free up space for development,” said Andreas Eberhoefer, Head of the Department of Company Support and Real Estate Services of the Office of Economic Development Duesseldorf.

According to Eberhoefer, Duesseldorf remains one of Germany’s key real estate development centres, with the demand for offices surpassed by the demand for residential development.

“Traditional investors are now looking for residential opportunities,” he added. “Several private companies have come together and have agreed deals at MIPIM.”

Leine-Center Laatzen: sold to CBRE Global Investors for €117m

POLISH port city Gdansk not only has the capacity to handle the new generation of supersize cargo ships, but it has also established rail and road links to eastern and northern European markets, according to DCT Gdansk’s chief commercial officer, Jean-Jacques Moyson.

Moyson said that the trend to link warehousing closely with distribution mirrored the approach taken by the Polish city in its own expansion plans. He added: “We are committed to building the infrastructure to more than double our cargo capacity by the end of 2015 or the start of 2016.

Our port-centric approach helps to reduce the cost of the final part of the supply chain, which is typically the most expensive part.”

DCT Gdansk — established five years ago to oversee the development of the port — is working with Goodman, which is developing the warehousing connected with the scheme.

Photo: Zwickert

GDANSK PORT IN EXPANSION MODE

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BRE Global Investors announced during MIPIM that it had acquired Leine-Center Laatzen, a shopping centre in Germany, for €117m at a net initial yield of circa 6.0%.

The purchaser is a joint venture between a fund managed by CBRE Global Investors and the Teacher Retirement System of Texas. The sellers consisted of a consortium led by LaSalle Investment Management.

The shopping centre, which is located in a suburb of Hanover, was originally opened in 1973 and extended in 2011. Comprising 28,161

sq m, it is let to high-quality retailers including H&M, Deichmann, Expert, DM, Adler and Douglas. It has 101 units, of which its occupancy is currently and historically close to 100%.

CBRE Global Investors also announced that it had reorganised its separate accounts business line to meet client demand for cross-border investment. The new operating model harnesses the existing experience for separate accounts into a co-ordinated and integrated approach across all regions. This will streamline the management of both single and multiple country separate account mandates.

IRAQ

Kurdistan puts out welcome mat AMBITIOUS long-term plans to transform the Kurdistan region of Iraq were unveiled at MIPIM. A raft of projects are in various stages of planning and construction, with investors being sought from the international real estate market.

Members of the Kurdistan regional government and representatives of the region’s private 8

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companies attended MIPIM for the first time this year. They were showcasing a number of major projects to reinvigorate the region’s economy, including shopping malls and industrial developments.

Kurdistan regional government director general of legal, administrative and financial affairs,

Nawroz M Muhammad Amin, said that the government was committed to making international investors and developers welcome in the region.

She added that a series of legal and tax measures had been introduced to ease international investors’ entry into the market, including the introduction of PPP (public-private partnership) deals to establish co-operative relationships with foreign companies.

i nEWs NEWS IN BRIEF

ITALY

CHINA LEADS RACE FOR SHOPPINGCENTRE SPACE

Invest In Tuscany positions region as ‘unique and vibrant’ brand

ACCORDING to new research from CBRE, 32 million sq m of shopping-centre space is currently under construction across the world, representing a 15% year-on-year increase.

Shopping-centre development activity is heavily concentrated in emerging markets, with China home to more than half of all the space under construction at 16.8 million sq m. Seven of the 10 most active development markets globally are in China. These include Chengdu (2.9 million sq m) and Tianjin (2.1 million sq m), with Shenyang, Chongqing, Wuhan, Guangzhou and Hangzhou due to deliver over one million sq m over the next three years.

“With the strong momentum driving the Chinese retail industry and the economy as a whole, it comes as no surprise that Beijing is seeing the majority of the development pipeline,” CBRE executive director, Sebastian Skiff, said.

The Fabbrichina project in Colle Val d’Elsa, designed by Jean Nouvel

ARGENTINA ON A HIGH THE ATTRACTIONS of Argentina as a destination for strategic tourism and real estate investments were explored in a MIPIM client conference entitled Argentina: The Choice To Diversify Your Investment.

Economic growth was highlighted as essential to a healthy real estate sector. Delegates learned that Argentina has had one of the fastest growing economies in the world over the past decade.

What is more, this was sustainable growth that is set to continue.

Tourism is seen as a key sector, with strong government support that has resulted in the country being recognised as the most popular holiday destination in South America for the past two years.

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Photo: Y. Coatsaliou / 360 Medias

USCANY is not only the cradle of the Renaissance but one of the most developed regions in Italy. And at MIPIM 2013, Invest In Tuscany presented a selected portfolio of high-yield real estate investment opportunities in the beautiful and historic region.

Projects on show included the expansion of the Interport in Central Tuscany; the Carrara Waterfront, which aims to improve the relationship between the harbour, the city and the coastal tourism industry; and the Fabbrichina project in the Colle Val d’Elsa municipality,

The Club Med VIP Lounge at MIPIM 2013

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where French architect Jean Nouvel has developed a new concept in urban complexes. New real estate opportunities, both in the tourist and commercial sectors, are also emerging around the port of Livorno and the airport at Pisa.

Tuscany is a politically stable and well-managed region, with a highly educated workforce.

Coupled with low costs, these attributes make it an attractive location for investors looking to expand their business.

Invest In Tuscany used MIPIM 2013 to capitalise on its status as a unique and vibrant brand with global appeal.

CLUB MED

Combining work with leisure FOR THE first time ever, Club Med hosted the VIP Lounge at MIPIM 2013.

According to development manager Gregory Lanter, designers Marc Hertrich and Nicolas Adnet rose to the challenge of offering Club Med’s unique brand of conviviality to 5,000 VIP guests in “a restrained and optimised space”.

As well as offering a haven of tranquillity amid the bustle of MIPIM, the lounge was an opportunity to showcase the Club Med product to first-class investors from every part of the

world, and to introduce Club Med as a quality real estate investment.

Lanter said: “I think we succeeded in getting our guests to realise that Club Med is not only an all-inclusive offer dedicated to our consumers, but also an offer dedicated to our partners and investors. We had the opportunity to create strong relationships with potential investors eager to benefit from Club Med’s proven sales and marketing track record, as well as its successful business model.”

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

www.fticonsulting.com

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

i nEWs J-REITS

SPAIN

Ministry’s new global arm to BARCELONA PLAYS showcase Japanese promise INNOVATION CARD JAPAN’s land ministry has launched a new international division following prime minister Shinzo Abe’s strategy to increase Japanese growth by promoting more foreign interaction in the real estate market.

“The real estate market has become global, and we need to show how promising Japanese real estate is,” Motoi Sasaki, the land ministry’s director general in charge of Japanese Real Estate Investment Trusts (J-REITS), said. “Although it’s a problem everywhere, Japan’s aging population is a major issue for us,” Sasaki added. “We need to renew the housing stock and concentrate on quality, not just quantity. We have to maintain Japan’s growth through promoting high quality investment into disaster-proof, environmentally friendly structures. We also need to create a system to develop regional cities through private financing schemes and long-term planning. “ Sasaki said investment in logistics properties, in particular, had increased noticeably and credited the boost to “Japan’s growth by providing innovative supply chains”.

Last December, Singapore’s Global Logistic Properties debuted strongly on the J-REIT market, underpinning renewed hopes for rising property prices.

INVESTORS are starting to look to southern Europe again.

Reflecting this, the BarcelonaCatalonia stand at MIPIM saw strong interest from European investors who see Barcelona and its hinterland as a safe haven, reflecting the city’s economic recovery and restructured financial model.

The BarcelonaCatalonia brand represents a commitment by the government of Catalonia and Barcelona City Council to promote the development of strategic new projects

that consolidate the Barcelona area as an innovation hub. And, for the first time, the initiative also presented the logistics spaces on offer along the Mediterranean Corridor.

BarcelonaCatalonia also showcased 19 buildings that have been put up for sale by the government of Catalonia. The buildings, totalling nearly 153,000 sq m in the centre of Barcelona, encompass retail, housing, restaurants and facilities, as well as training, healthcare and cultural schemes.

The BarcelonaCatalonia stand: strong interest

NIGERIA

Clinton praises Eko Atlantic’s ‘ingenious’ engineering

Motoi Sasaki: “concentrating on quality”

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EKO ATLANTIC — the massive new city emerging on the outskirts of Lagos, Nigeria — has celebrated the reclamation of five million sq m of land from the sea.

The project drew high-level presidential praise from both Nigerian president Goodluck Jonathan and former US president Bill Clinton during a dedication ceremony to mark the milestone event.

The Chagoury Group designed the project to protect Victoria Island from coastal erosion. The scheme has already brought back the coastline to where it was a century ago. “This is an ingenious engineering feat,” Clinton said. “This is something there will be countless numbers of people coming here to study.

It is something you can be very proud of.”

The construction of infrastructure for Eko Atlantic, which includes roads, drainage and sewage systems, has also started, as has foundation work for Eko Atlantic’s first commercial tower block. Meanwhile, developer Satellite Oil and Gas from Nigeria has started to build the Eko Energy Estate. Numerous other projects are also in the pipeline.

Upon completion, the developers and planners of the new city will have produced 10 million sq m of land ripe for development — the equivalent in size to the central business district of Manhattan.

The city will house 250,000 people and become the workplace for a further 150,000.

i nEWs THE BIG PICTURE

TURKEY

Wrap-up session confirms SPOTLIGHT ON NUROL industry’s rising optimism THE NUROL Group of Companies, consisting of over 40 subsidiaries and more than 10,000 employees, is one of Turkey’s largest conglomerates. Its subsidiary Nurol Construction ranks number 154 in US magazine Engineering News Record’s listing of the world’s Top International Contractors.

Nurol REIT is the group’s real estate investment and development arm, with projects under development valued at $600m. Its portfolio includes highprofile properties in lstanbul, Ankara and Bodrum. Nurol REIT was the fastest growing REIT on the Istanbul Stock Exchange in 2012, with the company’s market value increasing 402% year-on-year.

DR MAHDI Mokrane, head of research and strategy at AEW Europe, and Francois Ortalo-Magne, Albert O Nicholas Dean at the Wisconsin School of Business, brought MIPIM 2013 to a close with the global MIPIM wrap-up, entitled Painting The Big Picture.

Using a mixture of research results, forecasts and an electronic poll of the forum audience, the duo presented some interesting statistics that gauged the mood of the international real estate industry gathered in Cannes. Departing delegates were given food for thought on issues such as the growing importance of sustainability, concern over the eventual rise in interest rates and the news that three quarters of the polled audience thought now was the time to invest beyond core/safe assets.

Ortalo-Magne revealed that 63% of industry professionals questioned were more optimistic compared with the same time last year. This was due in part, he believed, to the “wall of money” still seeking yields and real estate investments.

He added: “There is plenty of money and few alternatives to real estate in terms of generating yield, particularly in the current environment. It is looking good for real estate.”

One of Nurol’s current projects, Nurol Tower, is an investment opportunity in lstanbul’s Central Business District on the Asian side of the city. Within walking distance of Istanbul’s new main courthouse — one of the largest in Europe — and the Florence Nightingale private hospital, it is an A class home-office project targeted directly at an affluent audience of lawyers and doctors.

Nurol Tower will be a fully serviced building featuring a total of 243 units, ranging in size from 73 sq m to 193 sq m. It will rise 32 storeys above one of the busiest sections of the E5 expressway, which is used by more than 2 million vehicles a day.

Enodo game plan proves a hit Photos: V. Desjardins / Image & Co

Photo: S. d’Halloy / Image & Co

MIPIM HIGHLIGHTS

Game on for MIPIM delegates playing Enodo’s Double Bind computer game

Dr Mahdi Mokrane

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KEN LAWRENCE, project manager at Gentbased Hooox, won a delegate place at MIPIM 2014 by becoming the highest scorer on Enodo’s Double Bind computer game.

A bank of PCs on level 01 of the Palais des Festivals saw keen gamers battle it out over four days. But as well as encouraging fierce competition, the game had a more serious purpose — to

showcase the immersive and interactive qualities of Enodo’s 3D simulations and virtual realities. Increasingly, designers are turning to games technology to model new buildings in the context of streetscapes and wider cities.

Enodo’s award-winning CryEngine 3D engine is capable of displaying the highest level of realism while maintaining perfect fluidity.

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Every month we’ll analyse the emerging trends in a FREE, easy to navigate magazine available as a digital edition or on iPad. EuroProperty Trends will not only bring you incisive comment but interactive features including image galleries, audio interviews, video and more.

Go to estatesgazette.com/eptrends to find out more and to register for your FREE subscription.

i nEWs NEWS IN BRIEF

FRANCE

GUERNSEY FLAGS UP FUND EXPERTISE

Dijon celebrates a wide menu of key investment offers

GUERNSEY Finance — the promotional agency for the Channel island’s finance industry — was in Cannes to highlight Guernsey’s ability to provide a wide range of financial services in relation to the property business.

Kathryn Gillespie, events manager at Guernsey Finance, said: “MIPIM 2013 has been a very positive event for us. We have had some very interesting inquiries, including specific questions, in particular in relation to establishing property fund structures.”

She added: “The industry practitioners on our stand made some good contacts and identified some positive leads, which they believe will translate into business for them further down the line. The response we had at the event this year exceeded my expectations.”

The Dijon tram opened in September

ARCHITECTS SEE THE LIGHT ISTANBUL-based ZK LIGHT Design Studio’s mission is to create comfort for human beings while enhancing the quality of the visual environment and the perception of space.

Lighting is becoming critical, said ZK Light Design’s principal Zeki Kadirbeyoglu, ”not just in architecture, where the design of a project without the use of a specialist lighting consultant is now unthinkable, but also in the realm of human health and wellness”.

ZK Light Design, which has worked with some of the world’s top architects, has offices in Astana, Kazakhstan and Dubai. Kadirbeyoglu said the company has carried out projects in Baku, Moscow, Kazakhstan and Libya.

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IJON in the Burgundy region of France has every reason to celebrate.

As a finalist in the Cite Internationale de la Gastronomie competition, it is now assured a place in the celebrations, alongside Paris-Rungis and Tours, the other finalists. All that remains to be seen is who will take the lead — a decision that will be made next month.

But there is much more to Dijon than its gastronomic delights. The TGV and motorway links to France and beyond make it ideally placed for investment. Now, the city’s latest infrastructure

project is complete: the tram, whose three branches link the suburban areas with the city centre. Opened last September, it is symbolic of the transformation that has occurred.

With 32,000 students, Dijon also has a burgeoning research and innovation sector, focused predominantly on ecology, pharmacology, the food industry and agriculture. With a growing population but lower than average unemployment, the Dijon region is also proving itself to be attractive to a wide range of industries and investors.

BELARUS

Minsk Lighthouse signals new era

Serbian President Tomislav Nikolic inaugurates construction on the Minsk Lighthouse development

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A HOST of developments in Belarus were showcased at this year’s MIPIM, including a number of major developments in the capital city, Minsk.

Representatives from Belarus developer Dana Holdings held a special event to highlight several key projects. Among these was the Minsk Lighthouse, which is currently under construction in the capital. Situated next to the National Library of Belarus, it will be the largest mixeduse building in Minsk.

The $1bn mixed-use scheme is being developed

by Dana Holdings subsidiary company Zomex

Investment, which is rolling out the project in stages, with overall completion set for 2014. In total, the scheme will cover 660,000 sq m on a 47 ha site, providing a mix of residential, retail and office space.

While MIPIM was under way, the president of Serbia, Tomislav Nikolic, paid a visit to the development in Minsk to officially launch construction of the 100,000 sq m shoppingmall element.

Dana Holdings is also rolling out two residential developments in Minsk — the Vivaldi and Tchaikovsky buildings.

REGISTER Before August 30th: Ă 950 MAPIC 2013 will shine a spotlight on Retail Rising Stars with dedicated conferences and events. Join us !

i nEWs LONDON

TURKEY

New food and retail outlets to anchor Covent Garden

IS GYO DISPLAYS PEARL

COVENT Garden owner Capital & Counties (Capco) is to add a new food anchor on the South West corner of the famous London retail and leisure area, along with a new retail anchor on Floral Street.

Covent Garden director Sarah-Jane Curtis said that continuing innovation and the addition of a mix of upscale, quirky and first-to-the-UK brands continued to give the area its fresh feel.

Capco has more than doubled the asset value of Covent Garden since acquiring it for €522m in 2006, having spent €97m on acquisitions to extend the area under management.

Curtis said: “You have to encourage innovation and new brands in order to keep people coming and to compete with online retailing.”

IS GYO (Is REIT) is a Turkish portfolio management company investing in real estate development projects. Its portfolio of offices, retail and hotel totals around 360,000 sq m in 22 properties.

Current projects include the 90,000 sq m Cinarli Bahce residential project in Tuzla, Istanbul; the technopark Tuzla itself; an office project in Taksim, Istanbul; the Ege Perla development in Izmir; and a mixeduse scheme in Istanbul’s new finance centre in Atasehir.

The Ege Perla — ‘Pearl of the Aegean’ — project is being developed in Turkey’s third largest city, Izmir.

Designed by Aga Khan Award-winning architect Emre Arolat, the project is being built in the new city centre between Izmir port and the Turan district. It comprises a 25,000 sq m shopping centre, 111 residences and 65 home-offices in two 46-storey and 29-storey towers overlooking the Gulf of Izmir.

The 124,500 sq m Ege Perla development in Izmir

TAHINCIOGLU REAL ESTATE

Onwards and upwards

London’s Covent Garden: “innovation and new brands”

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SPONSOR of MIPIM’s welcome bag this year, Tahincioglu Real Estate is the real estate development and investment arm of the long-established Tahincioglu group of companies, which started off in the 1920s as Turkey’s largest sugar company.

Tahincioglu is one of the most active players in the Turkish real estate market.

It is currently engaged in the development of two LEED Gold Certificate A Class office towers located on the Asian side of Istanbul — Nidakule Goztepe and Palladium Tower — as well as the Palladium Antakya shopping centre in Hatay.

Tahincioglu has seven other projects currently in the design and planning phase: two office buildings in Levent and Istanbul Finance Center, two residential projects in Cengelkoy and Seyrantepe, and three mixed-use projects in Bomonti, Kozyatagi and Adana. Four of these projects were scheduled to break ground in the first quarter.

Tahincioglu Real Estate’s Palladium Tower in Istanbul The total construction area of projects completed by Tahincioglu to date is over 1.5 million sq m. Nida Insaat, the construction arm of Tahincioglu, undertakes the general contractor role in each project.

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Covering C overing Greek Greek and New Europe’s RE market

i nEWs MEDICINE HAT

‘GAS CITY’ LOOKS TO SUN AND WIND FOR LONG-TERM ENERGY THE CITY of Medicine Hat in the Canadian province of Alberta calls itself ‘The Gas City’. And although it has vast reserves of natural gas in the neighbourhood, the city is already planning for the day the gas runs out. So said Medicine Hat’s mayor Norm Boucher at MIPIM. “We are looking to make sure that we don’t find ourselves in the position that, when we have got nothing left, we have got nothing to replace it with,” Boucher said. “We have got other advantages apart from gas under our fields. We have got the longest annual sun-hours in the whole of Canada and we have got plenty

of wind. We are now looking to work systems for those natural resources, both of which will last a lot longer than the gas.”

Boucher added: “In Medicine Hat, we have been extracting local energy from the ground for 130 years. Now it’s time to move to the next level.”

The mayor of Medicine Hat said he came to MIPIM to network, to meet the right kinds of people and to learn from the creative solutions in energy procurement conducted by other municipalities round the world.

Mayor Norm Boucher: “It’s time to move to the next level”

FRANCE

TURKEY

Normandy thinks logistically

Quasar shines a light on Istanbul

THE FRENCH cities of Rouen, Caen and Le Havre combined forces on the Paris stand for the second year running under the Normandy Avenues brand.

With the three cities located between the Paris and the coast, the region hopes to benefit from the work being done to give the French capital a more accessible connection to the sea. As part of this, the three cities presented individual opportunities and strategies for inter-regional logistics hubs.

ADEAR (Rouen Development) tertiary business development advisor Dominique Lemoine said that fast road and rail links meant that locations such as Rouen were increasingly suitable for back-office and support operations for Paris-based businesses. He also said the region as a whole could deliver a strong logistics offer.

Lemoine added: “The Normandy name is globally known and, as the concept of the Seine access route from Paris to the sea develops, then there will be even more opportunities.”

Lemoine reported that Rouen was building housing for an additional 10,000 people over the next five years. As part of this project, the waterfront is being developed and an eco quarter constructed.

QUASAR Istanbul is a fivefold development by Viatrans-Meydanbey, a Swiss-Turkish joint venture. “It’s five-fold because the project contains residence, offices, a hotel, retail and a cultural centre,” said Quasar executive Erdem Kovalak.

The Quasar project is being built on the site of the former Istanbul liqueur factory, which will be restored and refurbished as part of the project. It is located in Sislik on Istanbul’s European side, between the Mecidiyekoy and Gayrettepe metro stations.

Kovalak said: “In the scheme, two 156-metre high 41-storey towers, designed by Turkish architect Emre Arolat, will rise above a four-storey office podium with fitness facilities and luxury retail stores. There will also be a Fairmont Hotel and Fairmont Residences, as well as Quasar Residences, which will be managed by Fairmont. This will be the up-market Fairmont chain’s first hotel in Istanbul.”

Quasar Istanbul is the first project in Turkey to be awarded pre-certification of the sustainable building certification — Gold — in the German DGNB (Deutsche Gesellschaft fur Nachhaltiges Bauen) grading system.

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I review magazine I May 2013 I mipim.com

BERLIN

NEWS IN BRIEF

Kleihues + Kleihues designs vibrant future for City West

KONUTDER GIVES TURKEY’S RESI PLAYERS A VOICE

Berlin West: rediscovering a forgotten district

B

ERLIN’s City West is a popular place again. Plans are being drawn up, investments made and construction work under way. The renovation of the Bikini-Haus, the Zoo-Palast and the Zoofenster tower are bringing to life this almost forgotten western part of the city.

T he Berlin-based architectural office Kleihues + Kleihues has been preoccupied with the development of City West for many years, focussing on a 119,000 sq m site behind Bahnhof Zoo between Hardenberg- and

Mueller-Breslau-Strasse and Jebensstrasse and Fasanenstrasse.

According to the plans, a modern district with residential, office and commercial space could be created here, which will blend in harmoniously with the existing environment and enhance Charlottenburg’s Gruenderzeit district.

Josef Kleihues said: “The site offers us the opportunity to realise a comprehensive urban concept, which will serve many different interests and help revitalise the western city centre. Over 80,000 sq m of living space could be created.”

KONUTDER is an interest and lobby group representing Turkey’s residential developers.

According to Konutder co-ordinator Kadir Gungor, the organisation is the biggest of its kind in Turkey. He said: “Effectively we are the interface between Turkey’s residential developers and the government. And we have a series of subcommittees looking at various aspects — such as taxation, legislation, zoning and planning — which will act to advise our members on developments in those areas.”

Konutder keeps its members abreast of urban regeneration initiatives and legislative changes, such as Turkey’s new reciprocity law. “Our members welcome the fact that the new law is intended to make it easier for foreigners to buy real estate in Turkey,” Gungor said.

He added: “Konutder can be the first port of call for outside investors looking to get into residential development in Turkey.”

CITYWORLD MAPS THE GREEN SCENE NEWLY launched portal Cityworld.com was showcased at MIPIM 2013, providing delegates with a transparent overview of sustainability in real estate in cities around the world.

Cityworld has assembled well over 1,600 project developments in over 400 cities in its international database. It intends to create a comprehensive overview of the leading project developments in cities around the world.

With over 500 building profiles, Cityworld has already become a key reference for green buildings worldwide and a major point of access to the certification scene with regards to sustainable buildings.

ART & BUILD

From workplace to home space

Art & Build’s Just Under The Sky retail complex in Brussels

LUC DELEUZE, senior partner at the Br u s sels -headqua r tered a rch ite c t u ra l practice Art & Build, delivered a MIPIM talk entitled When Offices Become Residences, on the growing trend for redundant office buildings to be recycled for residential use.

The theme was also highlighted at MIPIM by the Brussels Capital Region and the CLI think tank which jointly published a book of case studies entitled Bureaux du Passe

Habitants du Present.

Deleuze’s practice is currently involved in several large-scale urban renewal projects, including the 100,000 sq m Universalis Park in the south-east of Brussels.

Art & Build is also responsible for the retail complex Just Under The Sky, which is also situated in Brussels. The scheme features both covered and open-air retail units, and is the first of its kind in the Belgian capital. mipim.com I review magazine I May 2013 I 21

BUSINESS GROWTH OPPORTUNITIES Brazil Russia Turkey

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Focus TURKEY COUNTRY OF HONOUR

Thinking big in Istanbul Turkey has become one of the fastest-growing economies in the world, with Istanbul playing a central role. Mark Moore looks at the driving forces behind the country’s increasing confidence and ambition Vadistanbul will incorporate five uses

A

S JACK discovered with the beanstalk, rapid growth makes you the centre of attention. It also concentrates the mind on what to do with it. In Turkey’s case, with reported annual GDP growth second only to China, government and private focus is primarily turning to infrastructure and to raising standards.

While individual developers and investors such as Nef, Eroglu, Agaoglu, Zorlu, Tahincioglu, Varyap and the Vadistanbul consortium are streaming their efforts into broad-brush so-called ‘five-fold developments’ aimed at the private sector, the government is targeting major infrastructure projects.

The force behind targeting infrastructure is a benign circle. Growth creates the spare capital (and the ability to borrow more widely and on more favourable terms) to carry out major infrastructure schemes. The improved infrastructure in turn facilitates and accelerates economic growth.

Turkey, with the trans-Bosphorus Marmaray Tunnel, the Third Bosphorus Bridge, the Bosphorus-bypassing Istanbul Kanal, the third Istanbul Airport, and the International Finance Centre, as well as an array of road and rail highspeed transport projects such as the 414-km Adapazari to Tekirdag North Marmara Highway, is laying down a marker to the world when it comes to big infrastructure ideas.

Speaking to a packed audience at MIPIM, Turkey’s deputy prime minister Ali Babacan said confidence has been the key to Turkey’s huge recent and ongoing economic growth.

“Confidence is very high in Turkey by whatever yardstick is used to measure it,” the deputy prime minister said.

“Confidence is good for investing and good for spending.

This confidence applies both to the private sector and to the central authorities.”

Babacan said this confidence was based on a number of factors. “It’s because we have clear targets, based on clear economic programmes. We’ve also removed red tape and made mipim.com I review magazine I May 2013 I 25

i focus TURKEY

Photo: M. Johner / 360 Medias

the 10th biggest economy in the it easier to invest in Turkey. We have world,” Agaoglu said. “Istanbul a strong equitable and transpar“Turkey is on course has taken on a very important role ent legal framework. And we are to become the 10th in the path toward this goal and navigating a successful course bebiggest economy in the Istanbul International Finance tween regulation and a freer marthe world” Center project, of which we are ket. These factors have helped crethe contractor, has a very imporate confidence in Turkey and are the Ali Agaoglu tant role in the realisation of this main drivers of Turkey’s economic target.” success.”

And Babacan pointed to OECD figures that indicate A Nef office project located at the heart of Istanbul’s busiTurkey will be the country with the highest growth po- ness centre on Buyukdere Avenue is Nef Offices Dortlevent 09, which includes office units and retail units in two 14-stotential in the world over not only the next 10 years but rey-high buildings. In each building, there are also shopping over the next 20 too.

This confidence was also echoed at MIPIM by the mayor areas, a common plaza, Nefmeydan basement floors set up of Istanbul Kadir Topbas. “The long-term key has been to for archives, subterranean car parking and Foldoffice units. share a vision,” Topbas told MIPIM News. “It’s the same Architect HOK worked on the design. whether you’re a family, a city, or a government. All sides The 3-km long mixed-use Vadistanbul scheme on the want to share in the success of the city, and that’s only Belgrade Forest side of Istanbul’s business district of possible where all sides agree fundamentally on how the Maslak is one of the major projects currently under way in Turkey’s largest city. Three of the leading names in Turkish city should shape itself.

“As the city government, we try to bring together all the construction — Artas Grup, Aydinli Grup and Kelesoglu stakeholders in the development of the cityscape and en- Insaat — have joined forces for one of the biggest concourage them to work together. Only then will things con- struction projects in Turkey. Vadistanbul is being developed on 424,000 sq m of land alongside the Sadabad River. tinue to get bigger and better.”

Infrastructure aside, many of the current projects changing One of the prime movers behind the creation of the the face of Turkey’s major cities are being driven by private Turkish Pavilion, put together for the first time at MIPIM developers. Rapid growth — as in China — is not only an in- 2013, was Avi Alkas, chairman of Istanbul-based Alkas dicator of healthy economics, it can also be an indication that and chairman of consultant Jones Lang LaSalle’s operation in Turkey. a country has a lot of catching up to do. The country has a lower level of shopping centres per head than other European “The Turkish attendance at MIPIM has been growing for countries, its cities have fewer high-quality residences and a number of years now,” Alkas said. “At the same time fewer top-range offices. All that is set to change, especially in we’ve seen the attention of the world focusing closely on Turkey as one of the fastest-growing economies in the the country’s largest city and business capital Istanbul.

A series of ‘five-fold’ schemes is now under development world. We wanted to bring those two forces, the internal in Istanbul. The projects are described as five-fold because growth and the external focus together.” they contain the five essential elements to modern urban living: residential, office, retail, hotel and leisure in the form of Istanbul Mayor Kadir Topbas arrives at MIPIM theatre/cinema complexes, stage and performance arts venues, exhibition halls and museum and gallery spaces.

Some of Turkey’s leading companies are engaged in massive projects across the entire topology of Istanbul. Tahincioglu has already developed over 1.5 million sq m and it currently has seven projects at the design and planning phase.

It is currently engaged in the development of two LEED Gold Certificate A-class office towers located on the Asian side of Istanbul (Nidakule Goztepe and Palladium Tower) and a shopping centre in Hatay (Palladium Antakya).

Zorlu Property Group’s Mehmet Even said its new mixed use Zorlu Center (near the end of the first bridge over the Bosphorus) is “one of the very few projects anywhere with all five functions: retail, office, leisure, hotel, and a 3,000-seat performing arts centre”. The project is set in 10.6 ha of which 7.8 ha will be green space.

Ali Agaoglu, chairman of Agaoglu, the biggest real estate developer in Turkey, highlighted two of its major projects at MIPIM, the Istanbul International Finance Center and Maslak 1453. “Turkey is on course to become

26

I review magazine I May 2013 I mipim.com

Photo: Y. Coatsaliou / 360 Medias

Thinking big in Istanbul

Deputy prime minister Ali Babacan

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i focus RUSSIA DEVELOPMENT ON A GRAND SCALE

Russia surges ahead of the pack With a schedule of developments on a grand scale, the Russian capital is expanding fast, with entire new districts being established well beyond the traditional city limits. Ben Cooper reports on Russia’s unparalleled growth and the opportunities it offers

The mixed-use Vodny development

F

OR years it was safe to describe Russia as a nation on the rebound. After decades of underdevelopment, underinvestment and instability, the country that emerged from under the shadow of the communist state had a steep road ahead.

In 2013, and with a huge pipeline of real estate development ahead of it, the term rebound is starting to feel a little out of date. Especially, as this year’s MIPIM showed, when Russia is pressing ahead with plans that far outstrip the rest of Europe in their scale and ambition.

A ‘new Moscow’ is forming, with whole new districts and towns being built in and around the capital and swathes of old buildings and neighbourhoods, relics from a different era, being torn down or redeveloped. The city is growing to fit a grand design which will double it in size and turn it into one of the world’s mega-metropolises.

Speaking to a packed audience at the conference, Moscow’s deputy mayor Marat Khusnullin expressed this vision with passion. Moscow, he said, must both outgrow its current boundaries and break out into new ground, as well as strengthening its core centre, if it is to be the

capital that he and many others have envisaged.

“The rapid development of Moscow is impossible within existing boundaries,” he said. “With the integration of new territories the city gets the opportunity to implement large-scale projects that can be successfully added to the existing metropolitan infrastructure and at the same time preserve the capital’s identity.”

Khusnullin highlighted the 12 key points of development in and around Moscow for the great potential they offer to investors, and renewed the commitment of his government to proactively work with the international real estate community to make things happen.

He said: “We offer investors a partnership with the Moscow government which assumes sharing both expenses and profits from newly-built facilities.”

As always, this year’s MIPIM provided a perfect snapshot of the industry. The brief convergence of the big players brings with it an opportunity to take stock of what is being achieved. And from this many telling points emerge.

Take the fact, revealed by international agency Jones Lang LaSalle (JLL), that Russia is responsible for a major mipim.com I review magazine I May 2013 I 29

i focus RUSSIA

Russia surges ahead of the pack

chunk of the overall retail property pipeline in Europe.

Between them Turkey and Russia account for a staggering 40% of all retail builds on stream for 2013 and 2014, with some 1 million sq m due in Moscow alone in the same period.

The overall figures are impressive, particularly given how little else is being developed in the rest of Europe, but it isn’t just Russia’s physical size that is boosting the numbers. There are major individual projects to rival any in the world.

Projects like the Avia Park, in the northwest of Moscow, on the capital’s third ring road. With a total space of 463,000 sq m, the project, which will open towards the end of next year, typifies the huge scale involved in Russia’s development.

Amma Development’s Avia Park was by no means the only project on show at MIPIM. Moscow City was a major presence at the show, with a raft of opportunities for investors and occupiers to bring to the international community.

On an even grander scale than Avia Park, the Tushino 2018 project is bringing a whole new district to the Russian capital. The overall scheme, due for completion in 2020, totals 2 million sq m and is under way on a 224 ha former airfield outside the centre.

Just under 1 million sq m of this will be residential space, a new home for 28,000 Russian Sergey Sobyanin, Mayor of Moscow people, and the rest will be made Russia’s backbone into Siberia, up of some 220,000 sq m of retail “The rapid development warehousing is being built on a builds and 304,000 sq m of office large scale. In the regions, across development. of Moscow is impossible all sectors, big projects are under Alongside Tushino are a numwithin existing way. In the Nizhny Novgorod reber of smaller projects attractboundaries” gion 400 km east of Moscow, ing attention both in Russia and Marat Khusnullin where a raft of projects includoverseas, such as the 166,300 ing a new commercial and busisq m mixed-use Vodny scheme, ness district are in development. which will bring new retail and Also championing Russia’s cause at MIPIM was regionoffice space to the city, and a little closer to completion, the 136,000 sq m Kutuzovsky Prospect shopping centre, al development minister Igor Slyunyaev. Speaking at a well-attended press conference, he reinforced the govdue to open in 2015.

Of course Russia wasn’t immune to the wider economic ernment’s pledge to make Russia a safe and profitable chaos that began with the banking crisis of 2008, but with place for international investors. so much to do and so much at stake, development has Accepting that Russia’s past, and even present reputation had often deterred investors, Slyunyaev said that big bounced back far more quickly than elsewhere.

Across all sectors Moscow is a highly active market. steps had been taken to make the country a more attracAttracting 40% of all investment, the office sector is tive prospect, including measures to promote transparbooming with an estimated 700,000 sq m of new space ency, collaboration and a strategic approach to Russian due in 2013 alone and Knight Frank Moscow predicting development as a whole.

He said: “Russia has become a safer place to do business an increase in completions of up to a quarter from 2012.

In the logistics sector too, the slack is being steadily picked in. If you comply with the laws and if you respect all the up. Warehousing, a previously unheard-of sector at least existing legislation, there is nothing to worry about. You in commercial terms, has become big business since the are very safe conducting business in Russia”. turn of the century. In Moscow, St Petersburg and the re- There is still plenty to achieve if Russians’ high hopes are gions, where 12 cities now have a population of one mil- to be achieved, and investors remain cautious despite the lion or over, waves of residential and commercial develop- positive noises coming from the world’s largest country. ment are creating huge demand for modern logistics space. But with an unprecedented period of growth and an unIn the capital alone there is up to 4.6 million sq m of rivalled level of activity under way, what is certain is that new logistics space due in the next five years, and along the ‘Big Bear’ is getting bigger.

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i focus BRAZIL KEY INVESTMENT DESTINATION

Brazil prepares to welcome the world

Already experiencing a boost as hosts for the World Cup 2014 and the Olympics 2016, Brazil is attracting growing interest from global investors. With increasing demand driven by international events and changing demographics, Steve McCormack considers the future for the country’s real estate market

B

RAZIL is set to feature strongly in next year’s 25th anniversary MIPIM, centre-stage alongside Russia and Turkey as part of the inaugural Key Investment Destinations programme.

The move to name Brazil as an Honoured Country reflects its position among the BRICS grouping of emerging economies: Brazil, Russia, India, China and South Africa.

Current ratings place Brazil sixth or seventh in the ranking of world economies and according to PricewaterhouseCoopers, it is projected to be the world’s fourth-largest economy by 2050.

Also, in a period where annual growth is expected to be no more than 2% in the advanced economies, the Economist Intelligence Unit (EIU) forecasts a long-term GDP growth of 3.9% for Brazil for the 2011-2030 period.

Against this background, what does the future hold for Brazilian real estate?

“There are many ‘Brazils’ and hence it is hard to generalise the market conditions,” Marcelo da Costa Santos, vice-president, South America for Cushman & Wakefield, said.

“However, the main driver for demand for the next 20-30 years is demographics, supported by

The Trump Towers Rio scheme in Rio de Janeiro

“The main driver for demand for the next 2030 years is demographics, supported by continuous income growth and low inflation and credit” Marcelo da Costa Santos

mipim.com I review magazine I May 2013 I 33

Brazil prepares to welcome the world

and this total is expected continuous income growth to rise by 31% by 2014 foland low inflation and cred“We are offering double-digit new completions. it. Overall, as the populareturns on investment which is lowing Sao Paulo, with 11.3 miltion gets older and richer, seeing a phenomenal response lion sq m of office space, Brazil will need more and is the largest market in better housing, more leifrom the business world” South A merica, while sure, more hospitality and Anthony Armstrong Emery Rio de Janeiro offers anretail facilities, more office other 6 million sq m. The space, industrial and logisinventory in the country’s tics, etc.”

This confidence is underpinned in part by upcoming other cities totals 5.8 million sq m. global events being hosted in Brazil, including the World Class A vacancy in Sao Paulo stood at 14.6% at the end Cup in 2014 and the summer Olympics in 2016. These of 2012, while rentals continued to rise to an average of events are expected to have a major benefit, particularly R$146.4/sq m/month ($74). In Rio de Janeiro, Class A vafor Rio de Janeiro, with legacy gains for other cities host- cancy stood at 12.1% at the end of 2012, with asking rents closing at R$129.7/sq m/month ($65). ing events across the country.

Rio has seen a resurgence recently thanks to the comBut even in advance of these events, Sao Paulo and Rio de Janeiro are ranked the two most expensive locations bined efforts of city, state and federal governments.

“Office space in Rio will be transformed in the next few for office space in the Americas and Rio de Janeiro has the fourth-highest office rents in the world on average, years as the city is being reinvented, with the Olympics and the World Cup as the icing on the cake,” Costa with Sao Paulo ranked eighth.

However, the quality of the vast majority of commercial Santos said. “Although the oil industry is the main drivproperty still falls short of international standards. This er in the Rio market, we have seen other industries move has resulted in limited large-scale property ownership and in, as well as a return of headquarters back to the city.” professional real estate platforms, with significant, unin- The Trump Towers Rio scheme — showcased at MIPIM tentional owner-occupation, but this is changing as the — will kick-start the regeneration of the city’s downtown completion of new projects improves the inventory overall. Porto Maravilha area. It comprises five, 38-storey towers Interest in the Brazilian real estate market from global providing 322,000 sq m of office space. The first phase investors is also strong. A recent survey by the global real comprising two towers is set for completion in 2016. estate organisation, the Association of Foreign Investors “There is a lot of outdated office space in Rio, and a great deal of pent-up demand,” Celina Antunes, CEO South in Real Estate (AFIRE) ranked Brazil first as the most attractive emerging market for investors — above China America at Cushman & Wakefield, said. “This scheme will raise the bar in terms of quality.” and all countries within Europe.

The residential sector is particularly strong. Speaking at The wider Porto Maravilha scheme will see the regeneraMIPIM, Brazilian developer, the EcoHouse Group ex- tion of an area of 5 million sq m by 2015. This programme plained how residential investments in Brazil were at- of work will include the demolition and replacement of 4 tracting huge international interest. “We are offering km of elevated highway with tunnels plus major investdouble-digit returns on investment which is seeing a phe- ment in water, sewer and drainage infrastructure. nomenal response from the business world,” founder and In terms of retail, Brazil is currently the world’s 11th largCEO Anthony Armstrong Emery said. “There is a huge est shopping mall market with 5 sq m of space per 100 shortfall in house building in the country and massive people. When this is compared with the market-leading US, which boasts 187 sq m per 100 people, experts congrowth in the middle class.”

Also targeting international investors at MIPIM 2013, fidently predict that Brazil’s retail sector has plenty of the State of Sao Paulo presented a portfolio of PPP (pub- scope for growth. lic-private partnership) projects to investment funds, en- Similarly, the industrial/logistics sector has undergone trepreneurs and construction companies. The state has a great transformation recently as institutional inves$30bn to support these partnerships which range from tors move into the segment. The shift away from individmajor infrastructure schemes to logistics, housing and ual ownership is introducing more professionalism and better governance, and investments such as the new Fiat hospital construction.

“Sao Paulo has the largest PPP package in Brazil — in- plant in the northeast of the country are expected to convestments with guaranteed return which also boost the tinue driving this change. development of the State,” Luciano Almeida, president Meanwhile Brazil’s hospitality sector remains highly fragmented — 70% of hotels are independently operated of investment promotion agency Investe Sao Paulo, said.

Research by Cushman & Wakefield shows that the coun- and of small scale — although here too things are changtry’s office market remains largely restricted to Sao Paulo ing with a growing presence of large hotel chains. With the government promoting the tourism sector, and the and Rio de Janeiro. The two cities account for 80% of Brazil’s Class A Inventory of 6.5 million sq m, although boost from upcoming international events, forecasters there is still room for expansion based on comparables are predicting increasing interest from global investors.

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I review magazine I May 2013 I mipim.com

Photo: C. Alminana / 360 Medias

i focus BRAZIL

EcoHouse Group’s Anthony Armstrong Emery

Investe Sao Paolo’s Luciano Almeida

“There is a lot of outdated office space in Rio, and a great deal of pent-up demand” Celina Antunes

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i focus INNOVATION FORUM THINK SMART. BUILD VALUE

A glimpse into the future The cities of tomorrow were under the spotlight at MIPIM’s first-ever Innovation Forum as pioneers from across the industry shared their thoughts on issues including sustainability, smart buildings and energy efficiency. Steve McCormack reports

T

HIS year’s inaugural MIPIM Innovation Forum more than lived up to its promise by providing a unique international focus where professionals involved in building tomorrow’s cities could meet, debate and discuss ideas.

The launch of the forum was a timely response to the increasing pressure faced by owners and occupiers to find new ways of using space and employ technology to maximise efficiency and increase the value of property assets.

Under the banner ‘Think smart. Build value’ the Innovation Forum pavilion showcased the most pioneering solutions currently available to the real estate industry from the architectural, technology and energy sectors. In an open atmosphere participants were encouraged to share knowledge to enable organisations to make informed decisions about profitable investments in sustainability.

An exclusive programme of conferences, debates and panel discussions covered topics related to the development of intelligent cities, revolving around three major themes: cities, smart buildings and energy efficiency.

The busy schedule of events brought together an impressive array of highly regarded speakers who delivered their presentations to a knowledgeable audience in the oftenpacked auditorium. These speakers were drawn from fields such as architecture, politics, business and cuttingedge technology, including input from Cisco, Mitsubishi Electric and Tata Steel.

Energy efficiency is increasingly important in all aspects of life and the subject was chosen not only for the opening

“It is almost a paradox, but when technology is everywhere, then every place can be a place for working and we can forget about it and go back to things that are important to us.”

Carlo Ratti, MIT

Photo: Y. Mortier / 360 Medias

Photo: C. Alminana / 360 Medias

keynote panel of the forum conference programme, but also the keynote address on the afternoon of day two.

Arab Hoballah, chief sustainable consumption and production, United Nations Environmental Programme, led the opening keynote panel on Energy Efficiency And Resources’ Optimisation on Tuesday morning.

Meanwhile, Wednesday’s programme of conferences saw European Commissioner for Energy, Guenther Oettinger address rapt delegates on Key Challenges Of The EU Energy Policy, looking at the huge potential for energy savings in buildings, new EU legislation and public/private funding for the renovation of buildings.

Wednesday’s attendees were also entertained by architect, Winy Maas, in his introduction to the keynote panel Can Skyscrapers Be Sustainable?

Professor Maas, director at MVRDV, challenged real estate professionals to “think outside the box” when considering the design of our future cities.

Referring to the exhibition of Lego-built skyscraper models showcased in Cannes this year, he explained how studies into the theory of “porous” developments are

MVRDV’s Winy Maas

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European Commissioner for Energy Guenther Oettinger

Architect Caroline Barat

producing a wide range of options for opening up traditional tower blocks to resemble vertical villages. Not only do these provide interesting dynamic environments to work and live, but the inclusion of pocket parks and public open spaces add to the structures’ green credentials.

He told his audience that the traditional way of construction needed to be re-evaluated and events such as the forum were important in the evolution of real estate design. “It is a good thing to host events like the Innovation Forum at MIPIM to provide comment on the main market and encourage professionals to do better,” he said.

As the conference programme progressed, speakers tackled a broad range of often contentious yet relevant topics. Thursday’s keynote address involved a panel of leading architects discussing the topic Architecture And Responsible Innovation.

The panel comprised Caroline Barat, Philippe Chiambaretta, Kengo Kuma, Juergen Mayer and Ihsan Murat Tabanlioglu. Moderator, Kent Martinussen, CEO of the Danish Architecture Centre, began by reminding the packed audience that there was more than one kind of innovation and he praised the forum organisers for placing the subject on the agenda this year.

Caroline Barat agreed: “Innovation is not all about being new and flashy. We need to strike a balance between tradition and innovation to inspire our clients.” Juergen Mayer said that innovation is only of value if it becomes transferable from one project to another, while Kengo Kuma argued that innovation and tradition are not pulling in different directions. “We should not adopt a conservative attitude,” he said, “but draw on the richness of tradition to develop solutions from the past in the future.”

Carlo Ratti’s keynote address that afternoon also asked some pertinent questions about the cities of tomorrow.

Ratti is director, MIT Senseable City Lab. His presentation Decalogue For A Senseable/Smart City explained how cities have avoided becoming the “leftover baggage from an industrial era”, as predicted by some. Instead they are thriving, integrating with new technologies to

Photo: Y. Coatsaliou / 360 Medias

Photo: M. Johner / 360 Medias

Photo: Y. Mortier / 360 Medias

Architect Kengo Kuma

MIT’s Carlo Ratti

evolve into what we call smart cities. “But all this talk about smart cities is not about technology, it is about the human component,” he said. “It is almost a paradox, but when technology is everywhere, then every place can be a place for working and we can forget about it and go back to things that are important to us.”

The MIPIM Investment Forum closed with an interactive session entitled: 10 Golden Rules to Increase the Value of the Property Asset. Quest Associates director Peter Woodward, Ernst&Young, senior adviser Erik Sonden and ESSEC student Sarah Jancot led an One of the key conclusions was that long term vision pays dividends. “Even though you are a short-term investor, you should not consider a building only through the next break option because this strategy is virtually and economically destroying value,” the panel concluded. “ Planned obsolescence in technology also goes for property.”

“Innovation is not all about being new and flashy. We need to strike a balance between tradition and innovation to inspire our clients” Caroline Barat

And delegates were encouraged to think outside traditional property silos. Real estate should drive cities’ development and not the opposite: tomorrow’s Real Estate projects have to be innovative and well thought to attract people and fit their needs. Anticipation of tomorrow’s major trends is key to the success of a city’s development.

And the Innovation Forum closed with a call for owners and occupiers of property to align their interests more closely.

Videos and an executive summary of the MIPIM Innovation Forum are availalable at mipim.com mipim.com I review magazine I May 2013 I 37

MIPIM LOGISTICS PAVILION THE EXCLUSIVE HUB FOR LOGISTICS REAL ESTATE PROFESSIONALS

THANK YOU TO ALL PARTNERS Premium partners

Gold partner

Trade association Silver partners

Press partners

MIPIM Logistics Pavilion will be back at MIPIM 2014, March 11-14!

CONTACT: Luigia De Ianni - luigia.deianni@reedmidem.com - www.mipim.com

i focus LOGISTICS PREDICTED BOOST FOR SECTOR

Logistics: The road ahead Logistics was one of the highlights of MIPIM 2013, with an industry buoyed by e-commerce expansion and infrastructure spending. Mark Faithfull examines how online retailing and international manufacturing have driven the focus towards port cities

T

approach helps to reduce the HE shifting dynamics cost of the final part of the supof global trade have had “The growth of online is ply chain, which is typically the a dramatic impact on fundamentally changing most expensive part.” the logistics industry, with port the size and shape of Similarly, Tallinn was at cities vying for position on inMIPIM to promote opportuternational trading routes and distribution centres and nities to use the port as a carthe explosion in e-commerce where they are located” go hub, with the airport, city requiring more distribution Paul Betts and major industrial parks all centres and challenging the lowithin close range of the wacation, format and size of many terfront. Development proexisting buildings.

So it was that in Cannes the logistics sector was given its jects include two new warehouse complexes, with the inown hub and conference programme, as the investment dustrial areas sited within tax-free zones. Port of Tallinn model for a rapidly changing sector was examined by the real estate business manager, Ahto Ader, said: “The city experts. And according to advisor Jones Lang LaSalle is just a 10-minute walk from the port, the airport is 20 (JLL), the dynamics will continue to support sector minutes’ drive and the main Tallinn-to-St Petersburg growth. JLL estimates that European retailers will need highway is less than 10 minutes from the port, so we have up to 25 million sq m of additional logistics space over a very well connected infrastructure.” the next five years, including mega sites of over 100,000 Meanwhile, development and expansion of the Port of sq m, specialist distribution centres and smaller, local de- Oslo is being carried out to help make logistics in Norway livery depots.

Paul Betts, head of EMEA logistics & industrial at JLL, said: “While traditional retailing is still driving demand for retail infrastructure, the growth of online is fundamentally changing the size and shape of distribution centres and where they are located.”

E-commerce and global manufacturing have also helped to re-establish the economic fundamentals of port cities and many were in evidence in Cannes, most with extensive expansion plans to leverage their locations. Polish port city Gdansk has developed the capacity to take the new generation of super-size cargo ships — making it available to the largest shipments — and has established rail and road links to eastern and northern European markets, said DCT Gdansk chief commercial officer Jean-Jacques Moyson. DCT Gdansk was established five years ago to oversee development of the port and is working with Goodman, which is developing the warehousing connected with the scheme.

“We are already committed to building the infrastructure to more than double our cargo capacity by the end of 2015 or start of 2016,” Moyson said. “Our port-centric

The Port of Tallinn in Estonia

mipim.com I review magazine I May 2013 I 39

i focus LOGISTICS

Photo: Y. Mortier / 360 Medias

more sustainable and it has already been the catalyst for become better understood as an investment asset class, a new park and waterside walkway in the city, port direc- according to Philip Dunne, president Europe, Prologis: tor Anne Sigrid Hamran said. The port has extended the “There’s now a real lack of finance for speculative develCBD through an improvement in the road connections, opment,” he said. “In the mature markets almost all the which are nearly complete. “We decided not to hide the vacant stock has been taken up.” port and machinery but to make a feature of them. So That lack of development finance is a common issue everything is of the top architectural design and the high- across Europe. AEW Europe is another looking to exest quality and we have also preserved the maritime his- pand its operations into Germany and the Netherlands, while the company will also tory,” she said. target Poland once it has esProbably the largest mastablished “critical mass” in the terplan was presented by “In my view we will see two new Western European Catalonia, with the developmarkets, according to Parisment of Barcelona’s port and yields further decrease based fund manager Remy its integration with the Catalan because of the lack of Vertupier. “For us the future rail network expected to prove supply. So the time to is not about diversifying into vital for the city and region as invest in logistics is now” many markets but of creating a major logistics gateway bestrong national portfolios,” he tween northern Europe and Remy Vertupier said. “Investors should look Africa. Elisabet Cirici, depufor strong income growth and ty director of land and housreliability. In my view we will ing, Incasol, representing the Government of Catalonia, said that the regional author- see yields further decrease because of the lack of supply.

So the time to invest in logistics is now.” ity remains keen to encourage inward investment.

“The development of the whole region — not just Such opportunities have already started to attract attenBarcelona — as a logistics gateway is vital to the eco- tion. Rockspring Property Investment Managers, adnomics of the region and we have a number of areas of vised by JLL, recently bought the Paris Oise Logistics land which are available, with developed infrastructure,” Park for €78m, while Wells Fargo provided Blackstone Cirici said. “As part of that we have already refurbished with £54.3m of financing to buy seven warehouses in the UK, with a further £13m in mezzanine finance from the port area.”

While speculative financing for logistics centres is prov- LaSalle Investment Management. Blackstone also intends to acquire assets in Germany, the Netherlands and ing an issue across Europe, investment in existing stock is a different story. Indeed, the rising demand for space by Italy, while establishing a greater presence in Poland, e-commerce suppliers and retailers has helped the sector Blackstone managing director Jonathan Lurie said.

Power meetings in the logistics hub

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Logistics: The road ahead “For the market to grow we need more institutional grade stock,” he said. “After 2008 a number of companies went through a really rough time and that pain has taken some time to work out of the market. But vacancies are low and there is a real need for more sites in central locations across Europe.”

In the UK, Henderson Global Investors has launched a UK industrial income fund in a partnership with Centurion Properties. The fund is hoping to raise circa €115m from investors with a target first close before autumn, with potential for a second close to double this.

The fund will work on a loan to value of 25%, meaning the maximum purchasing power will be €325m.

High returns and good performance have also encouraged strong investment into the German logistics market, according to Garbe Logistic CEO Christopher Garbe, who pointed to the automotive industries as particularly large users of logistics buildings last year as a result of strong exports of VW and BMW brands. However, he warned that tightening supply would make competition for acquisitions challenging for investors. “Developers are struggling to get funds for speculative development, at the moment the banks still will not finance anything speculative,” he said. “As a result the outlook continues to be for limited supply to the market.”

Barcelona used MIPIM to emphasise its credentials as a logistics hub

mipim.com I review magazine I May 2013 I 41

MIPIM 2014, choosing the right accommodation is easier than you think

2014

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© Palais des festivals de Cannes - Photo : Ajuria

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i focus HOTELS FOCUS ON EUROPE

Europe ready for brand action With the rise of international tourism and the increasingly global nature of the hotel market, key players in the sector came to MIPIM with their eyes firmly on Europe. Chris Bown reports

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Photo: Y. Coatsaliou / 360 Medias

UROPE’S hotel market is undergoing a transformation, with big brands deciding that 2013 is the year they will start to build momentum, in a marketplace that many believe now has the worst of the downturn behind it.

With global tourism on the rise, the international nature of the hotels market means that — whatever the Europeans are doing — there are plenty more visitors from Asia and South America lining up to visit Europe and do business. And Europe’s hotel market, served by a much higher percentage of non-branded hotels than is the case in the US, is now on the radar of international groups, who are looking to spread their well-known brands and support systems across the continent.

At MIPIM this year, a busy hotel and leisure lounge, managed by consultants PKF, helped to ensure that those with common interests had an opportunity to meet and

mingle. And a range of senior hotel industry executives participated in presentations and conference sessions, laying out the issues for the sector in the near future.

Keynote speaker Steve Joyce from US-based Choice Hotels made it clear that he sees Europe as the next expansion area for his company, whose hotel brands include Comfort Inn, Clarion, Quality and Ascend.

Joyce delivered his address before joining a panel discussion with Rui Barros, senior vice-president and managing director at Wyndham, and Simon Vincent, Hilton Worldwide’s EMEA president.

“We see big opportunities in Europe,” Joyce said, who favours it against Asia. “Choice loves Europe — it’s closer, the food tastes better,” and the challenge was identifying the two or three opportunities that were most relevant.

Earlier this year, Choice agreed a deal with UK hotel company Akkeron to rebrand some of its hotels, and Joyce said he was expectant of further conversion opportunities. The deal saw nine hotels convert to Choice brands, with the opportunity for more into the future.

“You can see that beginning to build in Europe. You’re seeing some of the banks stiffen. We’re seeing a couple of situations now here.”

Joyce said that alongside Choice’s brands, he also sees the chance in Europe to grow boutique-style business with the company’s Ascend collection. “We’ve had some great success in the States. We see it as a great opportunity, and we’re looking at some properties here.” For the hotels the brand was effectively virtual, it was all about buying into Choice’s technology platform and marketing channel muscle, he said. “It’s not a brand — there’s a

“Germany is a key market we are focused on” Rui Barros High level presentations in the hotels and leisure lounge mipim.com I review magazine I May 2013 I 43

Reaching Key Global Business Decision Makers FT Property Special Reports aim to address the interests of all involved in the property industry from investors and developers through to agents and the public sector. Read by our global business audience, these pull-out and keep supplements are also distributed at key industry events.

Planned Special Reports Schedule: 23 April 2013 – C+E Europe 10 June 2013 – London 07 October 2013 – Invest in Property 13 November 2013 – Retail 11 March 2014 – MIPIM Go to ft.com/reports/property to see the latest special report.

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themselves caught out by signing plaque, but you can put it up in leases close to the peak of the the men’s room, for all we care.”

“If your revenue market, management contracts “Germany is a key market we generation is dominated are now generally favoured. This are focused on,” Barros said.

by OTAs, those costs are gives the operator flexibility, and Wyndham recently agreed a deal higher than you might provides the landlord with a slice with German partner Grand of the additional business generCity Hotels to rebrand 43 of its pay to join a system” ated during the good times — hotels under a mix of Wyndham Steve Joyce but it is not easily understood by brands. And in early March, the all investors. company announced plans to launch its Super 8 budget brand into the German market. “We are a listed business, but very much a family busi“The market remains pretty fragmented in Europe,” ad- ness,” Johanna Lundstrom, development director at mitted Hilton’s Vincent, whose company is pressing hard Spanish-based group Melia, said. “Going forward, we into eastern Europe, notably Turkey and Russia. Hilton’s are looking at a much more asset-light model.” Leases fast-growing DoubleTree brand is specifically designed remain part of the mix, but she stressed that the mix deto accommodate conversions of existing buildings, hav- pends on the market. In Germany, for example, investors prefer leases. “When you look at Asia, where you have a ing more flexible brand guidelines.

Apart from rebranding the properties, major hotel different type of investor, we are looking at management groups today invest significantly in online marketing, and contracts. But we are passionate about operating our own these channels can deliver substantial business. Without assets ourselves.” such support, Joyce said local independent hotels were at the mercy of the high commissions charged by online travel agents (OTAs), such as Expedia and Booking.com.

“The distribution game is driving a reinvestment that’s difficult for a small hotel to justify. If your revenue generation is dominated by OTAs, those costs are higher than you might pay to join a system.” Barros echoed his views: “The cost of distribution can be considerable — it’s one of the things that continues to grow exponentially.”

For Choice, much of the potential will be with conversions of existing, non-branded hotel properties. But other brands prefer to convert non-hotel buildings, or else build new. Germany-based Motel One, for example, was at MIPIM in a search for sites and funding partners. The company already has a portfolio of its stylish budget hotels across Germany and has opened its first in the UK, by converting a building in central Edinburgh. With further sites in negotiation, Motel One is set to give UK budget chains such as Premier Inn and Travelodge some new competition. And Henry Gall from i.gen hotels, mas- Baku Flame Towers was acclaimed as best hotel & tourism resort in the MIPIM Awards ter franchise holder for easyHotel in Germany, was at MIPIM seeking suitable sites to convert into more of the famously orange budget hotels.

During the last decade, many major hotel groups have increased their reliance on the real estate sector, in particular looking to partner with developers and landlords, in a move to an asset-light business structure, of which Accor is a prime example. The result is that they rely absolutely on outside funding, and on developers, to deliver the new hotels they want to open. “We had 60% owned or leased 10 years ago,” Christian Karaoglanian, chief development officer at Accor, said. The company’s target is to move to 80% managed or franchised, with 20% leased.

One reason for the change, Karaoglanian said, was “we had more people interested in owning hotels”. He noted that early investors benefited most, as broadly hotel prices have risen, but room rates have not increased to match.

And with some hotel groups, notably in Europe, finding Hotels delegates relax on the terrace of the hotels and leisure lounge mipim.com I review magazine I May 2013 I 45

Photo: S. d’Halloy / Image & Co

Europe ready for brand action

Photo: Y. Coatsaliou / 360 Medias

i focus HOTELS

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MIPIM INSTITUTIONAL INVESTORS’ SUMMIT Sovereign and Pension funds from around the world gathered in Cannes

Investors remain reluctant to ‘move up the risk curve’ RE-Invest — MIPIM’s closed-door summit for institutional investors — gathered the world’s leading sovereign wealth funds and pension funds for half a day of interactive roundtable discussions. Graham Parker reports

H

OSTED by MIPIM, in partnership with IPE and KPMG and sponsored by AXA Real Estate, the second edition of RE-Invest saw decision-makers from 28 institutions across 21 countries, with a combined $435bn allocated to real estate, come together to debate the topic: Navigating Through The Uncertainty: Managing Risks And Opportunities Against Global Economic Headwinds.

Joe Walsh, faculty associate at the Wisconsin School of Business’ real estate department, sat in on the session to document the key findings. He said: “The thought leaders at the event were institutional real estate investors, including pension funds, life insurance companies and sovereign wealth funds. They represented geographically diverse capital sources from Asia, the Americas, the Middle East and Europe. They commonly seek real estate investments as an opportunity to diversify their

overall portfolios and for inflation protection. While they traditionally prefer “Like-mindedness tends to invest in core assets, high demand for not to persist over long these assets and a large influx of capiperiods of time, as tal into core markets has priced many investors out of the market. They now interests diverge” seek better investment opportunities Joe Walsh by expanding geographically and buying property beyond traditional core investments.”

The opening of the 2013 RE-Invest summit centered around managing uncertainty and unearthing strategies and opportunities that would yield attractive returns.

Most importantly, it asked whether investors were willing to move up the risk curve. For now, the answer seems to be no. Investment demand for core real estate continues to be overwhelming with some speculating that risk mipim.com I review magazine I May 2013 I 47

Photo: S. d’Halloy / Image & Co

i focus RE-INVEST SUMMIT

i focus RE-INVEST SUMMIT

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Photo: M. Johner / 360 Medias

the lack of control a woris being over-priced and rery for the investor, but conturns are being sacrificed “The RE-Invest Summit were also expressed unnecessarily. provided an inspiring setting cerns about the level of debt emPrivate-equity fundraising to share market views and ployed to achieve returns has been slowing despite an and incentives for managincreased allocation to real investment strategies” ers. Some thought leaders estate investment. Investors Tinka Kleine, PGGM also expressed scepticism have a strong preference for that large funds deploy all control over their investthe capital they raise wisely and effectively. ments, preferring joint ventures and club deals.

However, the conference did see some signs of a new will- However, funds can play a valuable role in certain ciringness to diversify. In moving away from core invest- cumstances. For example, they can provide a vehicle for ment strategies to find better pricing in the market, two exposure to emerging markets with a relatively small investment. For large investors, the initial investment can basic approaches emerged: a focus on value-added assets in core investment markets in primary cities, and the ac- build institutional knowledge and relationships in that market, which can be used to launch a direct investment quisition of core quality assets in secondary markets.

While most of the institutional investors reported an in- platform at some time in the future. For smaller investerest in expanding value-added strategies, they were tors, it can provide access to growth in emerging markets concerned that they lacked the manpower and exper- where direct investment is not feasible and publicly tradtise necessary to extend their focus beyond the tradition- ed real estate securities may not exist as an option. al gateway markets. As a result, many thought leaders are turning to co-investment opportunities through joint ventures, where a local partner provides the investment platform and local expertise needed to execute a valueadded strategy, along with significant direct investment, meaning that interests remain aligned.

The investors expressed a preference for more direct investments after the financial crisis, agreeing that they wanted to manage investments more actively. They are taking a more strategic approach with partners to find creative opportunities through more complex deals, or portfolio deals.

Walsh summed up their approach: “They recognise that, just because partners may be aligned at the beginning of Dennis G LOPEZ, Chief Investment Officer, AXA Real Estate Managers Stefan Pfister, Head Real Estate EMA, KPMG an investment or relationship, does not mean that they will remain aligned in five or 10 years. Like-mindedness tends not to persist over long periods of time, as interests REITs and other listed property company securities are diverge. Therefore, these institutional investors place a effective approaches for quickly achieving geographic diheavy reliance on governance structures and the type of versification, as well as for providing liquidity. The liquidpartner with whom they do business. The preference, not ity attribute can be especially appealing to smaller institutional investors. surprisingly, is for best-in-class operators.”

For some, a significant equity investment by the partner The session concluded that no single strategy can meet is a requirement for alignment. Accountability and align- all investors’ needs, but important trends are emerging. ment of interests becomes questionable whenever a third While core assets continue to be in high demand and are entity comes into the equation. Use of the traditional in- priced accordingly, investors are looking beyond core investment manager is precluded for participants who use vestment in the major global markets to identify better pricing and returns on value-added strategies. this approach.

However, finding reliable, well-qualified partners with Achieving greater control over investments than the trasuitably aligned strategies remains a significant chal- ditional fund structure provides is a clear mandate among lenge. Wherever possible, investors look for like-mind- most institutional investors. However, given the limited ed investors, preferably other institutional investors with size of the investment team at most of these groups and the local market expertise and a well-qualified team to exe- broad mandate for geographic and asset diversification, investing exclusively through direct investments is unrealistic, cute the strategy.

Along these lines, several of these institutional inves- forcing investors to pursue partnerships and joint ventures. tors expressed an interest in developing in-house talent. Tinka Kleine, head of private real estate Europe at Acquiring an ownership interest in a management com- PGGM, summed up the event: “The RE-Invest Summit pany may be an alternative approach to aligning interests 2013 was an excellent meeting place for large institutional Visit MIPIM.com for the investors from all over the world. It provided an inspiring full summary of REInvest with an established and skilled team.

So is there a role for the traditional fund? Not only is setting to share market views and investment strategies.” www.mipim.com/en/the-programme/investment/re-invest/

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MIPIM AWARDS 2013

Celebrating success The Jury © S. d’Halloy / Image & Co

Mr. Michael STRONG CBRE Executive Chairman - EMEA United Kingdom

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

T

he MIPIM Awards celebrate excellence from across the world of real estate and the 23rd annual awards ceremony took place on Thursday, March 14, 2013, at the Palais des Festivals in Cannes.

The judges sifted through 175 projects from 46 countries in order to draw up their shortlists. Entries were particularly strong in the futura projects and office buildings categories.

Votes from the panel of expert judges were combined with MIPIM delegates’ votes to decide the category winners. Online voting alone decided the People’s Choice Award. And the judges were able to give their own award, the Special Jury Award.

In addition, a special award was given to the Best Turkish Project, in recognition of Turkey’s role as MIPIM Country of Honour 2013.

Mr. Alan COLLETT RICS President United Kingdom

Frank KHOO Axa Real Estate Global Head of Asia Singapore

Mr. Hulusi BELGÜ Multi Development Türkiye CEO Turkey

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

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

Dr. Alexander KOLONTAY

Government of Moscow

Sponsored by

Committee for Architecture and Urban Planning Deputy Director Russia

mipim.com I review magazine I May 2013 I 51

Photo: S.d’Halloy / Image & Co

PRESIDENT OF THE JURY

Best Turkish project

Photo: S.d’Halloy / Image & Co

Photo: Y. Coatsaliou / 360 Medias

A sold-out Grand Auditorium at the Palais des Festivals was the glamorous venue for the 2013 MIPIM Awards, recognising the brightest and the best from around the world of real estate development.

BOSPHORUS CITY Istanbul, Turkey

Architect: Mimarlar Workshop Developer: Sinpas Gyo

Best office & business development

BAKU FLAME TOWERS Baku, Azerbaijan

Photo: S.d’Halloy / Image & Co

Photo: S.d’Halloy / Image & Co

Best hotel & tourism resort

THE SQUAIRE Frankfurt am Main, Germany

Architect: HOK International Developer: Azinko Development MMC Best office

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Investor/ Developer: IVG Immobilien Architect: JSK international

Photo: S.d’Halloy / Image & Co

Photo: S.d’Halloy / Image & Co

Best industrial & Best refurbished logistics development building

KING’S CROSS

WASTEWATER TREATMENT PLANT IN NORTH ALT MARESME

London, United Kingdom

Pineda de Mar, Spain Architect: Baena Casamor Arquitectes BCQ, slp Developer: Agència Catalana de l’Aigua ACA Generalitat de Catalunya

Photo: S.d’Halloy / Image & Co

Best shopping centre Photo: S.d’Halloy / Image & Co

Best residential development

Architect: John McAslan + Partners Other: Arup (Engineering), Vinci (Construction)

ISBJERGET / THE ICEBERG

MARMARA PARK

Aarhus, Denmark

Istanbul, Turkey Developer/ Investor/Builder: PensionDanmark Architect: Cebra, JDS Architects, SeARCH, Louis Paillard

Developer: ECE Projektmanagement Architect: ECE Projektmanagement

mipim.com I review magazine I May 2013 I 53

Photo: S.d’Halloy / Image & Co

Best futura project

Photo: S.d’Halloy / Image & Co

Best futura mega project

CULTURE CASBAH

MILANEO

Malmö, Sweden

Stuttgart, Germany Developer: ECE Projektmanagement, STRABAG Real Estate, Bayerische Hausbau Architect: RKW Rhode Kellermann Wawrowski Architekture + Städtebau in cooperation with ECE architects

Property owners: MKB Fastighets Architect: Lundgaard&Tranberg

Photo: S.d’Halloy / Image & Co

Special jury award Photo: S.d’Halloy / Image & Co

People’s choice award

AKASYA ACIBADEM LAKE & WOODS PARCELS

KING’S CROSS

Istanbul, Turkey

London, United Kingdom

Architect: Mimarlar Workshop Developer: SAF GYO

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Architect: John Mcaslan + Partners Other: Arup (Engineering), Vinci (Construction)

SEE YOU NEXT YEAR.

We were honored to host you at MIPIM opening cocktail.

We would like to welcome you in Istanbul as well.