Cannes was calling: Water instead of champagne

MIPIM, the world's leading property fair, proved to be a good mood barometer for the industry in 2023, with a focus on forming opinions, exchanging views and networking.

With sunshine, spring-like temperatures and more than 23,000 trade fair visitors, conditions were actually ideal for a convivial MIPIM in Cannes in the South of France, yet there was little optimism or euphoria to be sensed at the key European property fair this year. Due to inflation, the development of interest rates, the energy crisis, the war in Ukraine and now problems at banks as well, the industry is facing too many challenges at the moment – so it was no real surprise that there was more of a calm and serious atmosphere than a champagne mood at this MIPIM. "The general sentiment was one of 'wait and see' and 'watch and learn' – no one really broke cover", confirms Christof Winkelmann, Chief Market Officer of Aareal Bank. For most participants, in fact, it was a real working fair characterised more by numerous in-depth discussions rather than actual deals. The focus was on forming opinions and exchanging views, and the same questions were heard everywhere: When will the commercial property market pick up again? Is the US recovering faster than Europe? How will offices change in the days of working from home? How do we accomplish the green transformation?

Discussions from morning to night

Good advice and our expertise were in particular demand in this environment, so it was hardly surprising that our Structured Property Financing colleagues were in discussions with clients and business partners from morning to night. Aareal Bank's trade fair stand was not just very busy, though: it was also a real eye-catcher as the entire design this year centred around our 100th anniversary – as did the two traditional client lunches at the beach, which the Bank held to thank its clients for the many years of trust and cooperation. Our 100 years of financing experience is particularly valuable in times of crisis, as Christof Winkelmann confirms: "Our clients know that we still believe in them during difficult times and are by their side as a reliable partner. That binds us together".

We will start to see more transactions again this year

However, MIPIM was not solely focused on discussing the current challenges. The delegates also had their sights set firmly on the future, and there are certainly grounds for cautious optimism here, for Winkelmann too: "As soon as there is more clarity about the development of interest rates, we'll start to see more transactions again in the course of the year. Our advantage is that we principally finance high-quality properties in prime urban locations, and we believe that these will remain attractive."

There were also attractive and exciting projects to admire in the Grand Auditorium during the MIPIM Awards ceremony, the so-called "Oscars of the property industry". Cities from all over the whole world had entered projects in twelve categories, and two of the coveted awards went to Germany, with the Lanserhof in Sylt and the Atelier Gardens in Berlin both being recognised for their innovative and forward-looking property projects.

Clearly, the property industry is going through a turbulent phase but it is adaptable. MIPIM will be back in Cannes in 2024 and Aareal Bank will be there again too, so it will be interesting to see what the dominant mood at the fair will be then.

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