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MIPIM 2017 – A round up

MIPIM, the world's largest annual real estate gathering, took place in the sunshine of Cannes earlier this month. Despite Brexit, the threat of a second Scottish independence referendum and other political and economic uncertainties across the globe, the mood was upbeat and cautiously optimistic.

DWF were there with a seven strong team of partners and directors from across the UK and Germany. Here's our take on the main talking points from this year's event:

  • There is a healthy appetite for good quality stock and there appears to be no shortage of available cash. However, 2016 saw the UK market stuck in a rut with stock holders preferring instead to work assets through increased occupancy or adding value by redevelopment. Banks had no cause to push stock to the market as interest rates remained low, enabling debt to be serviced. This, prompted by Brexit uncertainties, contributed to an overall reduction in deal volume. The first quarter of 2017, however, has shown signs of improvement.
  • Competition for assets is fierce when good quality stock does come to the market. It has not been easy to secure deals. In addition, many investors are looking for higher yields and sellers are often unwilling to sell at such levels.
  • Appetite for overseas investment into the UK is holding up well despite Brexit and interest has been buoyed by the weakened pound. Investors in the Middle and Far East still perceive London as a safe haven and are happy to accept lower yield returns as a result. Investment from inside of the UK is tending to favour regional hubs rather than the capital. Manchester, Birmingham, Bristol, Cardiff and Leeds were all noted.
  • Offices in regional hubs or on the fringe, distribution/retail warehouses, PRS and student accommodation are all en vogue. High street retail much less so.
  • From a tax perspective, the benefit of holding residential property in corporate wrappers and/or offshore vehicles has diminished due to changes in the law. The focus now is on using on-shore vehicles and unwinding historic structures. All development and trading of UK property is now taxable in the UK, even if the developer is an offshore entity. This is causing concern for overseas developers. Anti-avoidance provisions need to be looked at closely as HMRC have set up a special taskforce with significant resource to look at offshore developers.
  • In Scotland there is a weight of international money attracted to Edinburgh, but Glasgow, due to its size and scale, is seen as an attractive proposition in the medium to long term. The residential market is very robust and nowhere near as patchy as the commercial sector. PRS is on the radar in Scotland too, but is not seeing substantial traction as yet. The threat of a second referendum on Scottish independence is perceived to be a barrier for many investors.
  • The German market is considered 'hot' and there is still significant demand. Germany too is also seeing investment coming from foreign funds. The margins, particularly in the major cities, are very low and investors are now starting to look outside of these areas. 

Please do get in touch with a member of our MIPIM team below if you have any enquiries.  We're looking forward to MIPIM 2018 already!

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Geoff Stansfield

Partner - Real Estate (Investment)

I have many years’ experience in the real estate investment market in Scotland and specialise in commercial real estate investment, asset management, real estate finance, funding & acquisition and cross-border transactions.

Melanie Williams

Partner - Head of Hospitality Group

I am Head of the Hospitality sector group as well as a Partner in the Real Estate team, working from both the Birmingham and London offices.

Andrew Nichol

Partner - Executive Partner (Liverpool)

I am a leading real estate partner in the Liverpool market with over 15 years’ experience in property investment acquisitions ,disposals and management and property finance work including acquisition finance, development finance, refinancing and lending into specific structures around the Business Premises Renovation Allowance.

James Froud

Director

I specialise in all aspects of investment, development, finance and landlord and tenant matters.

Jon Stevens

Partner

I am a Partner and specialist tax lawyer with experience of advising on all aspects of tax planning related to corporate and property transactions.

David Frankland

Partner

I am a partner at DWF, specialising in providing commercial real estate advice covering a full range of transactions for developers, investors and occupiers.