Spanish opportunities for a market amid uncertainty and innovation

The international real estate sector has a date at MIPIM 2017 from March 14-17 at Cannes (France) in an environment of major global goals and with a technological revolution underway. Under the slogan, A New Deal for Real Estate this year´s edition is focused on the repercussions that those challenges, proposed by the international panorama, social changes and technology, will have on the real estate business. A scene with a high degree of uncertainty of which Spanish companies seek to take advantage in order to present themselves as a stable market, which is growing and attractive for investment. Foto: © F. Bukajlo / Image & CO.

The most important trade fair for investment and real estate development, MIPIM 2017, is once again to be held at the Palais des Festivals de Cannes (France) at an especially relevant moment for the future of business in Europe and the rest of the world. More than 23,000 promoters and professionals in the sector, 5,000 investors and representatives of international financial entities meet again at an event at which more than 2,600 firms, among which are promoters, asset management companies and public and private institutions from 90 countries, present their projects.

More than 23,000 sector professionals and 5000 investors will be at MIPIM 2017

The scale of this real estate event underscores the opportunities that the business offers. In fact, international capital will be strongly represented at MIPIM and in the Re-Invest Forum at which attendance is expected by representatives of 60 investment funds, among which, are 5 of the 6 largest sovereign funds in the world.
Nevertheless, the goals and uncertainties that investors, promoters and professionals in international real estate management detect are increasing and MIPIM 2017, will reflect that which these challenges may entail at its conferences and in its corridors.

Technology and uncertainty

Added to the relentless technological revolution that is changing the form of managing real estate, are progressive social changes that are revolutionizing the way of understanding the use of real estate assets. In addition, events such as Brexit or the arrival of Trump protectionism at the White House, add a touch of geopolitical instability to the dashboard of the international market.

The political and economic changes that are developing in Europe and in the rest of the world will have an impact on international investment as well as on new policies regarding sustainability and climate change and the evolution that cities are experiencing.

In this panoramic mix, investors and real estate professional see a need to adapt, rethink the management of the real estate business and face these changes that are already underway. This is the panorama that MIPIM 2017 has defined as “A New Deal for Real Estate”, the slogan of this edition of the trade fair.

The majority of the seminars at the trade fair will revolve around the idea of a New Deal, and many of the final projects of the prestigious MIPIM Prizes include some of the elements that foreshadow the real estate trends of tomorrow. In addition, innovation will play a greater role at this edition of the trade fair so much that the MIPIM Innovation Forum will be located for the first time in the heart of the Palais with more than 1,500 m2 and more than 60 exhibiting companies.

The opportunity to invest in Spain

In the midst of this complex international panorama the Spanish market sees an opportunity to attract investors. Spain is already a clear objective for international real estate investment as evidenced by the activity that has been being developed for various quarters by international funds in our market. Their commitment to positioning themselves in the Spanish Real Estate has been fundamental for making Spain the fourth European destination for investment in 2016 with a volume of 13.9 billion euros according to CBRE data.

Spain offers opportunities and is a clear objective for international real estate investment

In addition, Madrid is the seventh city in the world that attracts the most foreign real estate investment according to the 2017 Global Cities report by Knight Frank after receiving an influx of some 5.6 billion dollars (some 5 billion euros) according to the consultant estimate. This figure places it before other large international markets such as Berlin (5.4 billion euros) or Singapore (4.4 billion dollars).

On the other hand, Barcelona also closed a record 2016 financial year insofar as investment. The real estate market in the catalonian capital witnessed investment operations with a value of 2.5 billion euros versus 1.978 billion during the previous year, according to the data of the real estate consultant, Aguirre Newman.

The macroeconomic variables that the spanish economy demonstrates, consisting of a GNP growth of 3.3% together with political stability, guarantee the attractiveness of the Spanish real estate market for international investment. Moreover, in some national markets the absence of a quality product is attributed to a situation that may be seen as an opportunity for the promotion and rehabilitation of assets. In any case, the environment is favorable for attracting investors and the 40 Spanish companies, bodies and entities, which are exhibitors at MIPIM 2017, expect to take advantage of it.

More institutional support

Among them, relevant public entities also appear, such as SAREB that arrived at this trade fair after placing 1.565 billion euros among international investment funds in all types of real estate debt in 2016 and with a portfolio of homes in construction of 3,500 units to which they will soon add 600 homes.

Madrid-inversion
In 2016, Madrid was ranked as the seventh most attractive city for investment with 5.6 billion dollars.

Other public bodies present at this edition of the French Fair are ICEX, Nuevo Arpegio, Incasól, the Municipal Government of Málaga and the Municipal Government of Barcelona together with the Metropolitan Area of Barcelona. The large presence of public institutions at the Madrid and Barcelona stands is good news for the Spanish delegation at MIPIM 2017. This support will be epitomized by the attendance of public representatives such as the counselor of Territories and Sustainability of the Catalan Generalitat, Josep Rull, who has confirmed that he will attend the event.

On the other hand, around 330 professionals from our country will travel to Cannes in order to present their projects and investments, thereby presenting Spanish Real Estate as a market of opportunities that is growing without forgetting the lessons learned from the crisis, and the provides stability amid this environment of uncertainties in which the international real estate business operates.

The essential event for the 2017 MIPIM Spanish delegation is the Spanish Conference that Gesvalt and Roca Junyent are organizing under the title, Is Spain the New Place to Invest? On March 16 the Market Trend Room will host this event that will rely on the participation of mediator Daniel Lacalle of Think Madrid, Sandra Daza of Gesvalt, Enrique García of Merlin Properties and Roger Pla of Roca Junyent, among others. This meeting will address the present and future of the Spanish real estate market and will serve to present to international investors the investment opportunities that our market presents.

 


Global challenges that the real estate of tomorrow faces

MIPIM 2017 focuses on the challenges that the international real estate sector faces on a global level and that constitute the New Deal for real estate. These goals are summarized in four great uncertainties and the first of them has to do with the evolution of mankind. Over the next few years the world will reach a population of 8.3 billion people and more than 60% will live in cities. This will have an effect on the design and the evolution of the cities of tomorrow with changes that sector companies will have to take into account.

In addition, sustainability and need to improve the effectiveness in order to save resources are set forth as a priority above all in an environment in which energy demand will grow by 40% and half of the population will live in zones with a scarcity of water.

Another key challenge in order to understand the real estate of the future is the economic and political challenges that are being produced. Brexit and Trump protectionism, together with the uncertainty that has been experienced as a result of the french, german, italian and dutch elections among others, may have an impact on investment, policy and global cooperation.

The fourth great global challenge is the digital revolution that is already underway and that will advance with the arrival of the Internet of Things (IoT). Very soon, millions of objects will be connected to the Internet producing a large volume of data collected from users and buildings. All this, together with the remaining technological advances that are beginning to emerge in the sector will undoubtedly change the manner in which real estate professionals work.

 

More information: ESPECIAL MIPIM 2017

Spanish opportunities for a market amid uncertainty and innovation
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