With our annual MIPIM excursion complete and having had a few days to reflect on a busy week networking, we came away from Europe’s second largest real estate gathering mildly optimistic.

Not because everyone was talking about a V-shaped recovery and an imminent take-off in deal activity, but because the conversations were measured, realistic and open about the state of our sector following the interest rate shock.

We first noted this change of sentiment at Expo Real in October, referring to the sector entering the start of the acceptance phase of the Kübler-Ross grief cycle. At MIPIM, most participants from Europe and elsewhere were further down the ‘acceptance phase’, starting to explore new options with a new plan in place. The exception was German bankers, who appeared to be in public denial about the extent of their non-performing loans, which everyone else believes to be rather large.

Obviously both camps are not exclusive of each other, so any big shocks coming out of Germany, or anywhere else for that matter, are likely to impact us all.

That said, people were talking about increased deal activity as sellers become more willing and banks more comfortable that valuations have reached the bottom. Throughout this phase of the cycle, people have talked about the dry powder sitting on the sidelines, waiting for the right moment to strike, and that opinion hasn’t changed. Obviously much depends on sectors and the location and type of asset within sectors, but there is a feeling that activity will pick up later in the year and into 2025. Much still depends on the timing of interest rate declines, heavily signposted to start in June but with many saying they expect this process to take longer.

Attendee numbers were definitely down on previous years, with Caffé Roma much quieter in the evenings than we’ve ever experienced. However, there were serious meetings and conversations taking place, perhaps not in the bunker, but definitely in the apartments and villas around Cannes. Once again, there were far fewer UK local authorities and agents in attendance.

Highlights included the Panattoni Thursday night party ‘So Chic’ for glamour, and the Eurologix logistics gathering on Tuesday afternoon for numbers and optimism.

– James Verstringhe, Partner

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