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Blog Post: April 2017

MIPIM 2017 - Brexit in a Bottle

  • 20th Apr 2017
  • Daniel Callaghan

Sunshine returned to La Croisette, once again, for MIPIM 2017 following the dismal downpour of 2016's version and it was reflected in a more upbeat mood amongst the investors, speculators, journalists and public sector workers keen not to be seen, by taxpayers at home, enjoying the plentiful fizz on offer.

Even hardened inward investment professionals, relentlessly stalking the Real Estate Whales in attendance, briefly forgot their woes to sporadically indulge in a spot of 'Wine and Whine' at the beach bars lining the Strip.

Brexit, of course, was a word never far from anyone's lips but it seems that, from a straw poll of various hues of political persuasion, you can have your pick from:

  1. "Hard Brexit is inevitable and to Hell with freedom of movement (Immigration), UK-land border with EU (Goods/Customs), passporting rights for Financial Institutions (Services) and the Scottish question";
  2. "Both parties need a Soft Brexit to preserve good will, consumer confidence and decades of peace and prosperity from Galway to Gdansk"

The key message was property investors should not push the panic button in response as the market increasingly adjusts to extended political uncertainty. Many investors seeking alternative destinations to London were, I'm told, more likely to look at New York, Singapore or Hong Kong rather than European capitals and the Brexit-risk to investors is a small part of a much larger risk of a fragmented EU and increasing Eurozone instabilities.

Conversely, sector-wise, there were many informed that the continued strengths and opportunities being driven by structural change are unaffected by political events.

The truth, as ever, will be found somewhere in-between such polarities and likely not in any hurry with many attendees believing an elegant fudge, of some sort or other, will enable us to sneak pass the two-year deadline for negotiation - since declared as March 29, 2019 - as no rational European - of any position - believes that a radically weakened Europe should emerge fighting for its geo-political position from challenges posed from East, South and West. Investors also advised much holding of breath in the upcoming elections in France, Italy and Germany.

Despite the gloom-mongering there is always something uplifting to be found at MIPIM and it, indeed, often feels like the best way to see 'Europe in a Day'; for where else can you sip tea with the Brits for Breakfast, brunch on Croissants with the French, lunch with Italians at their stupendously-appointed modular pavilions and enjoy Polish hospitality for dinner; all within 10,000 steps a day (everyone compares their iPhone and FitBit readings at these events)? And this was only on St. Patrick's Day; so there was still appetite to retrace steps back across Europe to ensure a sun-downer at Cannes finest Irish Pub - 'Ma Nolans' Belfast-inspired bar; where many lamented the seemingly real prospect of a re-opened hard border between Northern Ireland and its, EU-remaining, southern neighbour.

A day of such adventure could reinvigorate even the most strident Euro-skeptic; illustrating the sense of common purpose - both commercial and cultural - amongst Europe's peoples; at least enough to admit that whilst, arguably, the structures, institutions and 'personalities' could do with severe realignment; there is much to celebrate along that route from Galway to Gdansk. Future generations may curse our choices of today and tomorrow if we sleepwalk into fractious brinkmanship by the Summer of 2019.

For the UK's part, there was a noticeable spring in the step of the IPAs from Manchester, Liverpool, Sheffield and Leeds; with each successfully bringing a local-feel to their globally-focused investment portfolio of opportunities. This was the largest UK presence yet experienced at MIPIM yet with +900 UK exhibiting companies and cities and over 5,600 attendees.

The cities of Edinburgh and Glasgow also found themselves the centre of attention from conference participants on Day 2 as First Minister - Nicola Sturgeon - announced her intention to hold a second, Brexit-inspired, Independence Referendum. Just the kind of uncertainty you'd suppose that you don't need when pitching your proposition to risk-averse investors; but the representatives coped admirably and emerged unscathed with one even remarking that there is a point where businesses have-to "focus on the day to day".

All this in less than a week...let MIPIM 2018 lead the way once again.

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