IN DEPTH – MIPIM EDITOR’S DINNER: Reasons to be cheerful: un, deux, trois

By Mia Brown
News • Thoughts
12th April 24
As featured in Property Week • Sponsored by TSP

Guests at Property Week’s annual Editor’s Dinner, held this year in Cannes, discussed the near- and long-term prospects for the industry. Mel Flaherty reports.

Tucked away on a side street on the edge of Cannes Old Town, the small upstairs room of the charming Aux Bons Enfants restaurant was the setting for Property Week’s MIPIM Editor’s Dinner, which brought together a selection of some of the biggest names in the industry.

Hosted in partnership with property investment and management firm TSP, this year’s event provided a convivial environment for the guests from across the property spectrum to share their thoughts on the challenges and opportunities facing the sector.

The conversation kicked off with a show of hands to gauge optimism for the market in the year ahead and in 2025. When asked who thought this year would be better than last, almost everyone raised their hands, and the sentiment was even stronger for predicted performance in 2025 versus 2024.

Michael Bryn-Jones, managing director of Joseph Homes, noted that, according to CBRE, the volume of deals so far this year had increased “massively”, albeit from a very low base last year.

He wondered whether it had been “a case of people kicking stuff down the road and then getting to the point where, actually, it’s going to be OK – it can’t get any worse”.

James Saunders, chief executive of Quintain, countered that investors were still concerned they might not be buying at the best price, which prompted a discussion about differing key indicators for plumbing the bottom of the market.

Zac Goodman, founder and owner of TSP, said while many talked about interest rates, the UK’s prospects relative to the prospects of other safe democracies would have a bigger influence on activity in the market.

“If the election goes the way people think it will go, we will be perceived to be OK. We’re going to have five years of political stability, which might be a bit boring, but that’s very attractive to foreign investors,” Goodman added.

“I don’t think it’s all on interest rates, to be honest with you. I think it’s on UK plc, and when we stop looking like muppets on the global stage.”

Goodman also observed that “wars do end, interest rates go up and down and the cycles go round and round”, adding that uncertain situations also bring opportunities.

Disruptive influence

“I’m really excited to see what disruption there will be,” Goodman expanded. “When I came into property from banking, and I say this with the greatest respect, I thought: ‘Wow, this place is backwards.’ There is so much headroom for innovation, just to catch up with some of our sister industries.”

Marketing was one area Goodman singled out as being ripe for modernisation:

“When I look at every other aspect of life, whether it’s [selling] holidays or eyeliner, they are leveraging influencers, live content, curated content – it’s creative. And we’re still sending each other PDF brochures.”

The lack of modernisation in leasing was also discussed during the evening. Susan Freeman, partner in the real estate department at law firm Mishcon de Reya, noted that online leasing platforms were now gaining traction. TSP’s chief financial officer Anton Friedlander said he and Andy Miles, managing director of commercial and overseas at Rightmove, had discussed the increasing need for modernisation during the dinner.

“We’ve got a generation beneath all of us who want instant access [and] decisions immediately,” said Friedlander.

“They want easily understandable leases they can sign on their mobile. We need to create a frictionless move towards that way of operation.”

RICS chief executive Justin Young agreed that for users, ease of interaction with a property portal would soon become more important than the individual agencies, but argued that the people side of property would always remain key.

Goodman agreed, adding that in commercial property in particular, agents remain invaluable as “arbiters of imperfect information”, and that technology will not easily replace long-term experience and local market knowledge.

Sustainability credentials

Young also raised the issue of environmental, social and governance (ESG) and how quality of assets was another important factor in the speed of recovery in the deals market. He said recognition by companies of the potential for stranded assets within their portfolios, due to a lack of appropriate sustainability credentials, was likely “to precipitate some activity”.

This assessment prompted Real Estate Balance chair Liz Peace to raise concerns about lesser properties being bought by investors who don’t care about quality. Young agreed it was vital that just as new builds needed to be of the right quality for people to want to invest in and tenants to lease, the same amount of effort must be put into retrofit to bring existing stock up to the right standard.

Property Week editor Lem Bingley pointed out that planning presumptions and tax incentives to encourage retrofit of commercial properties have failed to materialise.

Attracting the right calibre of people to work in property was a recurring topic, with TSP managing director Jonathan Vanstone-Walker observing that the industry remained poorly understood.

This highlighted the need to increase diversity, as underlined by Simon Chadowitz, partner in real estate development at law firm Fladgate, who cited the importance of “having a broad church of opinions”.

Peace agreed, adding: “Diversity leads to difference of thought in how we treat property.”

Urban Splash chairman Tom Bloxham raised the issue of local authority funding, arguing that the current council tax system was not sufficiently progressive. He suggested that residential properties should be revalued annually, and additional top bands added to ensure wealthy homeowners contributed more.

Miles said his dinner conversation with Honor Barratt, chief executive of later-living build-to-rent developer Birchgrove, made him realise that getting older people to downsize was a challenge that needed to be addressed.

Barratt said: “Andy [Miles] had this incredible stat from last year that for every unit that goes on the market, there are 32 people trying to rent it. My return stat was that tonight in the UK there are nine million bedrooms in the houses of people who are 65 and over that don’t have anybody sleeping in them.

“The combination of these two stats [means] it just can’t be right that we’re trying to get planning permission on the green belt, because we have enough homes between us; we’re just not living in the right-sized homes.”

Despite the various challenges identified, guests at the dinner remained optimistic that the road ahead will become easier as the rest of the year unfolds.

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