LESSONS FROM MIPIM: INVESTMENT HOTSPOTS
There were plenty of investment hotspots to be identified on MIPIM’s seminar programme this year, at least for those who could tear themselves away from the Cannes sunshine and corporate hospitality.
Asian residential was given a very big thumbs up by panellists in Trends in Asia Pacific Property Markets. “Vietnam is developing its tourism industry but it is the local residential housing projects which have the biggest growth opportunities,” said David Blackhall of VinaCapital Real Estate.
“Vietnam has a population of 86 million and there is a change in mindset of its people – the young are better educated and are no longer simply getting married and moving in with their in-laws, they are getting good jobs and buying apartments of their own.”
Marc Boey of the Urban Redevelopment Authority in Singapore said, “Singapore received a $20.5 billion government resilience package in 2009, which has helped cushion it from the world recession – projected economic growth in 2010 will be 4.5 – 6.5% and tourism receipts are predicted to rise by 20% this year.”
All speakers concluded that it was essential for would-be investors to partner with a local authority or local private company to overcome obstacles such as language barriers. And all agreed that the real estate market had huge potential for growth helped by the long term strength of Japan and China.
South-east Europe
South-East Europe – Riding Out the Storm was, as the name suggest, somewhat less positive, highlighting the problems of excess supply and reduced demand for housing in the region. Values in Bulgaria were down by 30%, Romania by 40% in some places and valuations in Greece dropped 10-15%.
There were some rays of hope, however, as speakers highlighted the need for stock in Ukraine and a growing recovery in Serbia, which has not suffered so much from the crisis and where residential mortgages are up by 20-30%.
Top of the pile was Turkey, where the depths of the crisis seem to have passed. Its stable financial structure and increased business with the Middle East is putting it in a stronger position than most, although it needs joint venture initiatives with the banking industry and suffers from the same liquidity problems as the rest of South-East Europe. But the fact that Turkey’s population is growing by 1.2 million every year is a boost for the residential sector.
Mixed-use projects
Turkey was also among the subjects of Mixed Use High Density Trends, which looked at how countries including the US, Japan and China were combining residential housing with retail outlets, hotels, offices, entertainment and sports facilities and even transport infrastructure.
“Japan’s population is half that of the USA, it is a much smaller country and is only able to use around a quarter of its land mass,” said Paul Katz of Pedersen Fox Associates. “Mixed-use high density projects are the future in many parts of Asia – otherwise the end result will be sprawl. Cities have to build up or spread out.”
Moderator Michael Buckley of the Columbia University Centre for High Density Development argued the design of residential buildings was lagging behind that of office developments and hotels.
Katz took this opportunity to highlight the importance of residential design. “Most buildings are designed from inside out – living space is much more important to buyers than the exterior form of a building,” he said. “And people are more likely to buy a more conventional property if they think it will sell more easily.”
Overseas Property Professional
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