No longer the glam drink ticket, Mipim may be changing its spots – and about time too, says Catrin Griffiths
It sounds as if lawyers are putting a brave face on it. For years, the Mipim festival in Cannes – the biggest property event in Europe – has attracted developers, funders, surveyors and lawyers in equal measure. Its bacchanalian reputation has not obscured the fact that deals get done there, but for the past five years law firms have ratcheted up the number of delegates – at enormous cost.
However, this year things were different. As one prominent real estate partner comments: “In March 2007 we were at the height of the boom and people were going there and didn’t have a clue why – it was all about meeting up with your mates, having a beer. Real estate was on the up, there was loads of work. In March 2008, post-Northern Rock, everyone was still there but they weren’t as sure of themselves – they knew the world had changed but they thought it would come back. Banks were still there last year but they were trying to sell their debt and get rid of their exposure, not lend.”
However, this year all that changed, and possibly for good. As the partner says: “Post-Lehmans, that put a stake through the heart of that culture.”
Berwin Leighton Paisner (BLP) real estate partner David Battiscombe elaborates. “It’s not coming back – it’s different and the people who were there this year get that. The world has changed. You have a choice – you can hide under the bedclothes and hope all this nasty stuff goes away, or you can engage with a different world – be creative. Seek out opportunities and you can find that rejuvenating. The boom – well, it wasn’t boring, but it wasn’t that challenging. A lot of real estate people relish that challenge because you have to be entrepreneurial and creative.”
With the number of delegates down, the difference was noticeable on the flights to Nice, according to numerous lawyers. As Dewey & LeBoeuf partner Graham Prentice pointed out in one of his blogs for The Lawyer last week, it was impossible to get on a waiting list for Heathrow flights last year, even economy class.
“What a joy to have a free middle seat and not be sat next to one of those keen types who feels he has to make the most of his marketing opportunities from the moment he boards the plane,” he adds.
“I thought it was really nice with half as many people,” says DLA Piper real estate head David Taylor. “Everyone there was there for a reason. We’re only going to send people who are going to do business. People seemed to have a bit more time to talk about the market.”
Lovells real estate head Bob Kidby agrees: “People were taking it more seriously and they had longer to talk,” he says. And as Trowers & Hamlins partner Michael Higginson posted on TheLawyer.com: “This was a Mipim where quality triumphed over quantity.”
Fittingly for a real estate jamboree, physical landmarks are symbolic – and no more so than Café Roma, located at the harbour end of La Croisette.
Historically a ‘Brit bar’, the place is normally rammed. This year, however, it was not.
“Crucially, you could see the floor,” says BLP’s Battiscombe in some wonder. As Dewey’s Prentice noted in his Mipim blog for The Lawyer: “The excursions into the road seemed to be more in memory of past tradition than any real need to spill onto the street.”
Meanwhile, the Martinez Bar – traditionally the site of much alcoholic excess – was easily accessible for a change. And not before time, say many delegates. “It was good this year,” says one. “In previous years it has been spilling out into the lobby and the outside was covered in broken glass and drunken surveyors – it was foul.”
But back at the business end, the number of exhibitors seemed to be smaller, anecdotally speaking. Crown Estate was there for the first time, but among the UK exhibitors the biggest draw was the general London stand, with Boris Johnson’s joke-laden speech a highlight. Various councils were present, marketing urban regeneration schemes.
“Mipim is about real places, and real places are being represented there,” says DLA’s Taylor.
The Italian Defence Ministry was keen to let it be known that it is divesting surplus property, including the Arsenale in Venice, while Bologna is regenerating; and there was a delegation from São Paolo, too.
However, the Eastern European and Middle East delegates were nowhere near as visible, say lawyers. This is no surprise, according to one City property partner. “There’s no longer any geographical hedge. It used to be that if it was shite in the UK you could go to another country – now it’s shite everywhere.”
Yet there was still residual optimism, as two of our Mipim bloggers noted. Nabarro’s Rhodri Pazzi-Axworthy says: “The talk this year was of equity-starved properties chasing new cash – rather than the wall of cash that was chasing property two years ago – and that opportunities for those who have the cash must be ‘just around the corner’. Let’s hope they’re right.”
Prentice agrees, citing surveyors and investors who said that the London property market had now bottomed out: “They’re seeing some signs of increased demand for and activity in well-let properties – strong covenants, good locations and relatively long leases – let’s hope they’re right and this will help lead the recovery.”