With the sunny climes of MIPIM 2024 now behind us, Iceni Projects are turning our attention to UKREiiF in Leeds where we will be out in force to meet with contacts, take the pulse of the industry, and contribute to discussion on these key issues. There is still plenty of work to do, but many reasons to be optimistic for the future.
Reflections from MIPIM 2024: Plenty To Be Hopeful For
19 Mar 24
The property industry has seen a lot of doom and gloom over the previous 1-2 years, however during MIPIM last week there were signs that the industry is weathering the storm and a sense of hope in the air.
The industry’s struggles have been a result of construction cost inflation, slumping values and finance rates that many see as prohibitively expensive. Last week in Cannes, the caution and tightening of purse strings was manifest in the comparatively fewer number of delegations who had made the trip.
Despite the sombre mood of recent times, many of the clients, contacts and delegates we met all shared a sense of optimism. Lots felt that we are now over the hump in terms of inflation, with interest and finance rates predicted to fall. The slump in construction rates will drive increased values due to supply and demand imbalances, particularly in top quality offices in major cities as well as the ongoing housing supply shortage. There seems to be a lot of pent-up demand – where will our growing populations live and work if nothing is being built?
This positive outlook was echoed in announcements from Goldman Sachs and Blackstone last week. Both stated that the market was now at it’s nadir and, for those who can, now is the perfect time to buy.
While there was a lot of discussion on environmental sustainability, the M&S High Court decision and the general lack of clarity regarding retrofit versus demolition, we were pleased to hear that the ‘S’ in ESG is now taking centre stage. How development can positively impact the communities in which they are located is increasingly being asked, not only by local authorities, but by investors who wish to see their money making a positive impact on communities.
Another topic which elicited much discussion was that of the forthcoming UK general election. While there is a general sense of optimism associated with a new incoming Government, there are still worries relating to the structural challenges facing UK local authorities. Any incoming Government will need a plan to appropriately resource key local authority functions if they are to ensure meaningful action on tackling issues in the planning system.
With the sunny climes of MIPIM 2024 now behind us, Iceni Projects are turning our attention to UKREiiF in Leeds where we will be out in force to meet with contacts, take the pulse of the industry, and contribute to discussion on these key issues. There is still plenty of work to do, but many reasons to be optimistic for the future.
