The potential for investment in Europe is stronger than ever if attendances at this year’s MIPIM event are anything to go by, says Laura Latham
Property markets in Europe are thriving and, as a testimony to their power, MIPIM, the world’s largest property trade fair, had record attendance figures last year with over 21,000 participants visiting its Cannes-based venue. With residential sales showing no sign of slowing, this is a statistic the organisers are expecting to see repeated when the event rolls back into town this month.
Visitors to MIPIM work for some of the biggest global developers, financiers and government organisations, with all of them seeking new investors or opportunities. And the market is showing two definite areas of potential right now with tried-and-tested favourites such as the UK, Spain and France fighting for space alongside the emerging economies of countries such as the Czech Republic and Poland.
So, where’s the money going?
According to latest figures from the Organisation of Economic Cooperation and Development, the big player last year in terms of inward investment was the UK. London’s residential market is seeing huge gains as overseas investors put their resources into the security of its property. In addition, Britain’s large-scale regeneration schemes are also proving attractive.
One major destination is the Thames Gateway, including the location of the 2012 Olympics and earmarked for development on a massive scale. Funding is pouring in, with overseas as well as British companies involved in the creation of housing, commercial venues and infrastructure.
Peter Andrews, chief executive of the London Thames Gateway Development Corporation, says the Olympics is “a catalyst” for the region’s development. About 40,000 houses are planned for the area, along with major commercial and retail projects such as Stratford City. “There’s a lot of investment into the Lower Lea Valley, especially residential, and there’s a lot of speculative activity on the back of the Olympics,” he says. “There wouldn’t be this amount of interest if it wasn’t for the Games.”
Andrews has spent several years attending MIPIM, as a means of raising the profile of the Gateway region on the international stage, and says it’s good for networking. “The event is primarily construction companies, developers and institutions,” he says. “It’s a great place to meet people in a relaxed atmosphere.”
When it comes to inward investment, other European powerhouses are Spain and Portugal, which is surprising considering they’ve seen their property markets level off lately. However, if there’s a problem, developers haven’t noticed and new residential resorts and commercial ventures are still happening.
Paolo Bonani of Select Resorts, which represents large-scale, residential projects in both countries, says Spain is still popular with developers but some areas are seeing more investment than others. “The Murcia region, for example, is continuing to expand with more resorts coming on line,” he says.
The same is true of Portugal, where certain locations away from the overdeveloped Algarve are considered to be under-worked and ripe for good gains. “The south of Lisbon in the Troya peninsula and surrounding areas are coming up,” says Bonani. “This is going to be a growth area.” He also predicts that large resort villages, such as Praia del Rey and Beach Village, are going to make the area to the north-west of Lisbon somewhere to keep your eye on.
The emerging markets of Eastern Europe are also somewhere to watch, especially Poland, which is seeing development levels verging on the frantic. The country ranks fifth on the Foreign Direct Investment confidence index and prices for residential accommodation are galloping away. Judi Williams of sales agent Property Frontiers claims Warsaw and Krakow have seen so much development that the company is expanding into new locations. Targets for investment include cities such as Gdansk, which Williams says “offers a great deal”, adding that: “Other areas worth considering are Zakopane, Katowice, Lodaz, Wroclaw and Kolobrzeg.”
Ryan Nordell of Churchill Property Overseas agrees that Poland still has potential. The company sells new-builds in Krakow and claims that market conditions are right for growth, particularly in the buy-to-let sector as the arrival of multinationals is pushing up demand for rental property. “The likes of Tesco, BP and Motorola have all opened commercial premises recently. Plus over 100,000 students live in Krakow, many of whom require rental accommodation.”
This demand is inevitably pushing up prices. “Poland is steadily increasing when it comes to annual capital growth, with predicted figures between 10 % and 15 % over the next few years.”
This may be true, but it isn’t time to write off old favourites such as France just yet. The country is still seeing enormous amounts of overseas-funded development, though like Spain and Portugal, certain areas are doing better than others. Marseilles, for example, is getting a lot of new investment thanks to major regeneration of the city and the arrival of an international scientific research facility that will increase demand for housing. Another French hotspot, the Alps, is experiencing one of the most intense levels of investment, with ski resorts growing and demand for property outstripping supply.
“What’s becoming an issue in the Alps,” says Bertie Sanderson of ski property specialist Erna Low, “is the difficulty in purchasing land, especially in the traditional resorts.” Sanderson claims the scarcity of land means developers are buying hotels and old chalets to renovate into apartments. This has led to climbing prices.
The popularity of skiing and the availability of flights into nearby airports such as Geneva and Turin leads Sanderson to predict a boom for the market. “In the next few years there’ll be huge demand and supply issues,” she says. “Property will become more valuable, there’s a lot of potential there.”
Several of Erna Low’s development partners were discovered via MIPIM, which Sanderson sees as invaluable for finding contacts. “People use MIPIM as a connecting point,” she explains. “It’s also a real eye-opener into where business is going globally.” One of the people she met at last year’s event was Patrick Remme of Immoconcept, who builds chalets and apartments in several Alpine locations. The companies are now working on several projects together and Sanderson thinks the trade fair was key to creating the partnership. “We talked business and struck a deal,” she says, “MIPIM’s a great networking forum.”
MIPIM 2007 is running from 13-16 March. For details, tel. +33 (0)1 4190 4530 or visit www.mipim.com
Second home
Interested in buying another property? Then head to the Second Place fair at Brussels Expo (23-25 March). Visit secondplace.be for more information.
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Les marchés de l’immobilier en Europe connaissent une réelle expansion. Témoin de cette vitalité, le MIPIM, premier forum mondial des professionnels de l’immobilier, a battu tous les records de participation l’année dernière à Cannes, avec plus de 21 000 visiteurs. Dans un contexte où les ventes résidentielles ne montrent aucun signe d’essoufflement, les organisateurs comptent sur les mêmes statistiques lors du prochain salon, qui se tient ce mois de mars (13-16 mars, mipim.com).
D’après l’Organisation de Coopération et de Développement économiques (OCDE), le Royaume-Uni fut l’année dernière le grand acteur en termes d’investissements sur le marché intérieur. L’Espagne et le Portugal sont aussi des locomotives. Paolo Bonani de Select Resorts, une société active dans les projets résidentiels à grande échelle, précise que l’Espagne reste une destination prisée des promoteurs bien qu’il existe une disparité des selon les régions. “La Murcie, par exemple, continue sur sa lancée, en alignant de plus en plus de centres de villégiature,” explique-t-il.
Il faut aussi garder un œil sur les marché émergents d’Europe de l’Est. En Pologne, notamment, où les développements atteignent des sommets vertigineux.
Selon l’index de confiance des Investisseurs étrangers (Foreign Direct Investment), ce pays arrive en 5° position et les prix de l’immobilier résidentiel sont en train de flamber.
Cela ne veut pas dire pour autant que les anciennes places de choix comme la France sont à rayer de la carte. D’énormes apports de fonds étrangers affluent toujours dans des projets de développement et comme en Espagne et au Portugal, certaines régions tirent mieux leur épingle du jeu. Marseille accueille de nombreux nouveaux investissements dans le cadre de la revitalisation de la ville. Autre lieu de prédilection : les Alpes, où l’essor des stations de ski propulse la demande immobilière qui surpasse la capacité existante. A l’heure actuelle, c’est l’un des endroits en France où convergent les plus gros niveaux d’investissements.
De Europese vastgoedmarkten doen het uitstekend. Een bewijs is het succes van MIPIM, ’s werelds grootste vastgoedbeurs die elk jaar in Cannes wordt georganiseerd, en in 2006 ruim 21.000 bezoekers lokte. Aangezien de residentiële markt geen tekenen van vertraging vertoont, rekenen de organisatoren voor dit jaar op een even grote belangstelling (13-16 maart, mipim.com).
Volgens de OESO was het VK de grootste speler in termen van inkomende buitenlandse investeringen. Andere groeilanden waren Spanje en Portugal. Paolo Bonani van Select Resorts, dat in de beide landen betrokken is bij grote woonprojecten, stelt vast dat Spanje nog steeds populair is bij projectontwikkelaars, al trekken sommige regio’s meer investeerders aan dan andere. “Hou Murcia in de gaten, daar staan nog flink wat projecten op stapel”, aldus Bonani.
Verlies tegelijkertijd de Oost-Europese groeimarkten niet uit het oog, in het bijzonder Polen, waar projectontwikkeling zowat uit zijn voegen barst. Het land staat vijfde op de FDI Performance Index van de UNCTAD, en prijzen voor residentieel vastgoed zitten er in de lift.
Dat betekent niet dat klassiekers als Frankrijk zomaar afgeschreven moeten worden. Het land trekt nog altijd veel buitenlandse vastgoedbeleggers aan, maar zoals in Spanje en Portugal doen bepaalde regio’s het beter dan andere. Dankzij haar heropwaardering is Marseille bijvoorbeeld erg in trek. De Alpen zijn een andere Franse hotspot, met enorme investeringen in de skigebieden, en een vraag die het aanbod ruim overtreft.
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