THE MIPIM BLOG 2008
12 March 2008
Our man in Mipim brings you the latest news and gossip from the property industry’s mega-jamboree in Cannes. Who’s got the biggest yacht? Who’s consumed the most champagne? And how do the 25,000 delegates really feel about the depressed state of the real estate market?
Coffee, chinoiserie and, er, rats
So MIPIM, which was the most exuberant of fresh-faced youths just three days ago, partying like there’s no tomorrow, has reached its autumn years and as always, this affords an opportunity for peaceful reflection and contemplation for the delegates.
What lessons were learned? Were the right choices made? Will 361 days until the next one be enough time for recovery from the liver operation?
“MIPIM was worth it,” says Trowers & Hamlins partner Mike Higgingson over coffee this morning in a relatively subdued Caffe Roma, “because I’ve managed to see more people then I would ever have had the chance to back in London. And the relationships last. You never know how a MIPIM is going to turn out. Each one is different from the next one.”
And as things wrap up, the thoughts of law firms inevitably turn to: Where the hell will we stay next year? “There’s pressure to decide in the next three or four weeks,” Mike says.
No-one would want to end up like Martineau Johnson. The Brummie firm reportedly discovered a rat the size of a small dog in their apartment, or Maples Teesdale, who paid for the privilege of staying in a subterranean basement without any windows.
“Not really the type of place that you can bring clients back to,” comments the firm’s partner Roger Thornton.
And that’s a shame, because home entertaining is part of the thrill of MIPIM. It comes with the relaxed, mi casa es su casa kind of feeling.
Wragge & Co knew what they were doing in that respect, taking an apartment on the top floor of an Art Nouveau building on the Rue d’Antibes, close to the centre of the action. Passing along the parquet floors and chinoiserie of the drawing room, one can ascend a spiral staircase to a lookout tower and a roof terrace with fantastic views of Cannes. It was packed at brunch the other day, and nobody seemed in a rush to move on.
But even getting your booking in early is no guarantee that you will actually have somewhere to stay come 2009. There’s always someone who can pay more, and hey, this is Cannes, people have dollar signs for eyes.
So perhaps the key is just to wait and see how the market pans out, who goes bust and who drops out. Leaving it until the last minute served LG partner Jon Lloyd well. He managed to pay a third of the price on flights that his more diligent colleagues did, who booked theirs last August. And to top it all off, he managed to get a room in the much coveted Carlton International for a fraction, probably, of what Martineau Johnson paid. And hopefully his room didn’t include unwelcome guests.
The three little piggies and the naughty wolf
Today Eversheds partner Stephen Sorrell is off for a nice barbecue in the sun at Urban Splash director Tom Bloxham’s iconic 60s bubble house in the outskirts of Cannes. Sorrell is hoping not to repeat last year’s mistake when such an invite ended up with him, real estate chief Lee Ranson and another colleague in a right pickle.
Hailing a taxi, the partners showed a photo of the famous house to the driver, who nodded and hit the pedal to the metal. After a journey up winding mountain roads, he dropped them off in a remote spot and sped off.
The partners descended a path to the house, but when they reached the property all was quiet, bar the snores of a sleeping guard dog. That’s strange, thought the three little piggies and they pushed the door open.
Inside, the stylish house was kitted out in anticipation of a party, but still no sound and no guests. Being polite English chaps, they didn’t uncork the champagne but instead shuffled their business cards and glanced at the Star-Trek like interior.
After about 20 minutes, came a tap on the shoulder and Sorrell turned round to see a burly security guard demanding: “What are you doing in Pierre Cardin’s house?”
Time for a swift exit. Apparently there are three bubble houses in Cannes. Oops.
Nabarro made a lucky escape the other night. The firm was dining in the imaginatively-named Naughty Wolf restaurant in the old town, when they started smelling smoke and herds of men in hard hats pushed past them to the upper floors.
A fire had broken out in the (wooden) restaurant but the fire officers luckily managed to get it under control. However, there were some casualties.
One of the team was disappointed to notice that his jacket, which had been hanging in the upstairs cloakroom was a little bit worse for wear: “The smell was so disgusting, I couldn’t sleep because of it,” he moaned.
About last night…
There are two camps of law firms at MIPIM. Those who entertain their clients (and hangers-on) in lavish, themed cocktail parties and those who whisk a select few away for intimate meetings in semi-secret locations, usually in the mountains or villages along the coast.
In terms of visibility you can’t get much more in-yer-face than DLA Piper. The law firm is the only one I know that has a branded pavillion permanently placed along the promenade.
It doesn’t matter whether you’re passing at 2am or 2pm, there is guaranteed to be deep house music pumping out of the soundsystems and David Taylor and a bunch of the partners getting on down.
The law firm hosted evening cocktail parties on three consecutive nights and a late night party. “You have to make use of the capacity,” partner Richard Crossfield said rather sheepishly.
The exposure inevitably elicits derision from some of the other firms present here, especially the fact that the tent is situated next to a carousel. “DLA are part of the fairground!” scoffed one.
Lovells is also well-known for its showpiece parties going on until the early hours. On Wednesday night the firm’s annual MIPIM fiesta had capacity for 450, but received 900 acceptances. Maybe that would explain the door policy which seemed to take its cue from the most snobby of London nightclubs.
One insurance delegate from the US was so antagonised by the demand that he return to his hotel to retrieve his purple wristband before he would be allowed entry (despite being on the invite list) that he commented: “We’ve never worked with you and we never will!”
Nevertheless Lovells was keen to prove that it takes partner-client contact very seriously, with real estate head Bob Kidby playing soulful numbers on his guitar. Apparently Nabarro’s Rhodri Pazzi-Axworthy used to play alongside Kidby, rumours that the split followed “artistic differences” are unconfirmed…
Ashurst had been due to occupy the Carlton International Hotel - a venue dripping in gold and marble but the firm had to eat humble pie when a delegation from the Krasnodar region of Russia offered a higher price, jettisoning the law firm into a marquee on the beach below.
Spanish head of real estate Cristina Calvo claims that the venue’s unpretentious, relaxed atmosphere is more in line with the firm’s culture.
Addleshaw Goddard, however, definitely wins the prize for imagination. The law firm had a “Break from the Law” party, replete with black jack tables and roulette wheels that invitees could gamble with money from the Bank of Addleshaw Goddard. Maybe some of the attendees would have preferred hard cash but nevermind.
There were screens showing Laurel and Hardy films, trilbies and feather boas for guests and a band playing bebop in a bid to recreate the smoky, illicit feel of the prohibition era. Perhaps as the market tightens, Addleshaws is looking for alternative sources of income…
But to Eversheds such parties are not worth the money they’re printed on. This firm’s strategy was to get together its choicest clients, stick them in a bus and drive them as far out of Cannes as possible, so there wouldn’t be a hope in hell of finding a taxi back, should they wish to and forcing them to talk business all evening.
“Its not about champagne and names on lists,” said head of regeneration Stephen Sorrell. “We’ve got serious Kazakh clients here! These people are the top geezers, the best of the best!” exclaimed Tim Webb in his usual laconic tone.
Breakfast under the orange tree
I said that the delegates don’t come to Cannes to do deals. Well, what I actually meant was that the lawyers don’t come to Cannes to do deals.
This morning I turn up for breakfast at Nabarro’s villa in the hillside above town. I barely set my foot in the door when two ladies in flowing oatmeal fabrics pounce on me with big smiles and shakes of the hand. How nice and friendly, I think to myself and make a beeline for the coffee pot.
I settle down to brekkie in the patio with Rhodri Pazzi-Axworthy, Deborah Lloyd, Tim Shaw, Stephen Fitzsimmons and a flush of representatives from their spanking-new international alliance.
“No, the lawyers don’t really do deals here,” Lloyd confirms, but that doesn’t stop them playing, even in times such as these. “Its still very extravagant here this year,” she adds. “People are not feeling personally hit yet, they’re still living off 2006 billings.”
Lloyd reckons the credit crunch will really take its toll on MIPIM in a year or two. And that could be as relevant for Nabarro’s partner firms in its international alliance - August & Debouzy, GSK, Nunziante Magrone and Rodes & Sala - as it is for UK firms.
Spain is experiencing an economic downturn after an over-reliance on a speculative construction market. This is having a knock-on effect on both deal size and deal structure, Rodes & Sala partner Fernando Marin Riano tells me. Italy, less hit by the credit crunch, because of its more conservative banking sector, is looking towards its “back yard” - Turkey and the Balkans - for opportunities. Ah opportunities! That euphemism for plan B.
It is a lovely chat and even included a cute photo opportunity, representatives of all the alliance firms sat under the shade of the orange tree like one big happy family.
Then the lawyers have to scoot off. And I, as alien to deal-making as the lawyers at MIPIM, am about to do the same but the oatmeal ladies enter my path. And one of them begins picking the loose stitching off my pocket and telling me that I like, all men, need a good woman…
“Errr…who are you?” I ask, happy as I am that people as nice as Rhodri and Deborah have had picked a spot to lay their heads that comes equipped with surrogate mothers.
“We want to talk with you,” one of them coos in my ear.
And then it becomes clear. This duo are the owners of this classic Provençal villa that Nabarro has skilfully managed to bag. As well as a number of other international properties. What I was about to witness was a bit of Cannes deal-making first hand.
Will the real Tim Jones please stand up…
This year marks a first for Field Fisher Waterhouse. It’s the first time, after stealing lawyers from its former best friend firms in Belgium and Germany, that the firm has representatives from its newly consolidated international presence at this property event. Like many other law firms, the London-based practice is courting foreign capital. Not Russian. Not Middle Eastern. But Danish.
“We’re possibly the firm with the largest amount of Danish funds clients, many of them involved in buying up healthcare assets,” says partner John Nelmes. I ask if this forms part of an overall hedging strategy. “No, it’s more luck!” Edward Bannister tells me.
But even in the UK, Field Fisher is still relatively busy, its delegation tells me. Not like those magic circle firms that rely on corporate and M&A work, Bannister’s colleague Anthony Phillips says. He believes the magic circle firms are unwittingly digging their own graves by sidelining a full-service real estate practice.
That wouldn’t include Freshfields Bruckhaus Deringer then. The firm is so keen to show that real estate is a valued part of its identity that it has brought along London managing partner Tim Jones to schmooze. At least I think that’s what they’ve done. The man who claims to be the aforementioned Freshfields corporate lawyer that I meet later on at their soiree is actually wearing one of those big fat passes that you don’t want to lose with the words: Tim Jones, Credit Suisse printed underneath it.
“There’s so many Tim Joneses around,” he confesses. “They just gave me the first one they could find.”
He’s even sporting a mugshot belonging to someone else, a point about which he seems unfazed: “It doesn’t matter, we’re all white, middle-aged men anyway.”
Freshfields’ Groundhog Day and Dentons’ departure
It’s not only the Russian nouveau riche that will say Excusez Moi? when you mention the phrase credit crunch. Mipim’s organisers are another crowd that might not be tightening their belts this year - and that’s not just because of copious amounts of champers followed by three helpings of chocolate mousse.
Rather, they have managed to organise an event where delegates flock despite knowing they will be unlikely to strike any deals there. Yet still they are prepared to pay huge amounts of cash just to be seen at it.
It’s pretty much impossible to find anywhere to stay in Cannes unless you a) book several years in advance and b) are prepared to pay through the roof-top terrace. And you may as well forget trying to wangle your way into certain areas, such as the marina and the exibition halls, without a pass that will set you back a grand. The beefy blokes that police the gates to these areas will give a wave of the hand with gallic indifference quicker than you can say “C’est un rip-oeuf!”
Fortunately I was kitted out with my press pass (which contains the kind reminder that if I lose it, Mipim will be forced to bill me Euro1,440 + VAT 19.60%) and was able to saunter past to meet up with Freshfields Bruckhaus Deringer.
Freshfields is staying at a villa in town but entertaining clients on board a yacht moored just a few spaces away from Lovells’ at the start of the marina.
There are some huge boats this morning doing their turns on the gleaming harbour, but Freshfields prefers to stay in port - clients start to get itchy feet if they feel they can’t escape, says partner Jeffrey Rubinoff. And anyway, its not about the size, but knowing where best to put it, he says, adding that being close to the entrance of the marina gives Freshfields better visibility
Rubinoff’s on his third or fourth Mipim and, as he points out, while client meetings are useful, after a while they can start to merge into one. “This year I took the same flight with the same people and was picked up in a taxi at the same time, we’re even using the same boat,” he tells me. “Its starting to feel like Groundhog Day.”
Some are starting to be more strategic about how they play their cards. Dentons commercial real estate partner Roland Gray, who hosted my table at his firm’s Carlton hotel lunch, was among the half of his firm’s Mipim contingent that are on a flying visit - literally. Gray flew in this morning for the lunch and will just have time to slot in a quick meeting before he heads home this afternoon. “Clients know who they want to advise them, they’re not going to change that over a glass of wine,” he tells me. “It’s about putting in a presence.”
Last year, in contrast, Gray was here for the full four-day slog. So is this a cost-cutting measure? Dentons’ answer to the CC taxi fiasco? Mipim is definitely a costly affair, he admits, but the consensus around the table is that unless you are solely focused on domestic investment work, which Dentons isn’t and few firms are, then you will not be taking such a hard hit.
And anyway, he will be back in October for the last of the Mediterranean event at Mipim’s sister event Mapic. Same organisers, same location, more-or-less the same people.
These people are on to something.
The pin-striped circus hits Cannes
The plane from London to Nice is delayed and as we take off the pilot announces turbulent conditions ahead. Mmm, how apt I think. But nevertheless the mood among the lawyers, as well as the architects, engineers, developers, investors, marketing consultants and journalists - the pin-striped circus that rely to differing extents upon this turbulent market for its livelihood - is relatively upbeat. Even if there’s part of me that wonders if its a bit like the band playing on the titanic…
Emerging markets, Sovereign Wealth, these are the buzzwords of the year. I speak with an architect on the seat to my left who talks of looking to the Gulf as a potential market for distribution centres as the UK dries up. His company is hosting a party for 250 guests at one of those sumptuous villas overlooking the bay that epitomise this region. Apparently EMW Law will be in attendance. As we are airborne he turns to his companion and asks: “What does MIPIM actually stand for?”
The taxi driver who sees MIPIM as good business after a quiet, cold winter - a run-up to the film festival both in terms of the business it generates and the amount of moet guzzled - might have some answers.
“This is where you come when you’ve been round the world and made money. The villas on the mountainsides go for hundreds of millions of euros” says the taxi driver.
Big Italian money being outdone by shiny Russian buck, he muses, and soon perhaps by the Chinese.
“Credit crunch? What credit crunch?” these people ask as they cruise the Croisette in their droves, taking another puff on their cigars.
Outside the Martinez bar, the central hub of this networking jamboree, a Herbert Smith partner is acutely aware of who he needs to be courting.
“This year it’s all about the international clients, Russia, Dubai… We’re working extremely hard and are very focused.”
I wish I could say everyone shared this man’s diligence. Inside the Martinez the scene is rather different. A figure bumps into me and then sways from side to side, another stands red-faced, propped up by a colleague who simultaneously tries to hail a taxi. And it’s only Tuesday….