Keeping it Real22 Mar 2018
Reflecting on last week’s successful MIPIM conference in Cannes, Ocorian’s Global Head of Alternative Investments - Simon Burgess - shares his insights and highlights.
Ocorian’s MIPIM team has spent this week in recovery mode with slightly earlier nights and fewer glasses of rosé reflecting on themes of our week on the Croisette.
Top of the list being the direction of travel for valuations and deal prices. Particularly, the tick up in swap rates, both actual and forecast pressuring up yields. Question is whether this will adversely impact on values or on lenders’ margins (or both). Probably both.
DISRUPTIVE REAL ESTATE TECHNOLOGY
The other big topic conversation with managers, particularly their CFOs and investor relations teams, is how technology is disrupting traditional reporting models. At Ocorian our tech roll-out linking property manager’s data with the ultimate investors is our case-in-point aggregating financial and non-financial data speeding up accurate and ever more timely MI. If you’re not planning for this shift, you risk being left behind. Call me and I’ll happily tell you more especially our secret weapon zRobert!
EASY FUND RAISING, REALLY!
ScSp, RAIF and JPF were the order of the week. Luxembourg and Jersey especially were on most lips of many investors attracted to the high compliance standards, transparent and easy to set up fund structures where commercially sensitive deal information is not available to competitors. Our clients have had great success this year finding themselves oversubscribed. In Luxembourg, we are establishing more and more ScSp’s (limited partnerships to you and me) and Reserved Alternative Investment Funds (RAIF) are gaining traction too where enhanced fund regulation is important. Whereas in Jersey, the Jersey Private Fund (JPF) operates in a similar way relying on Ocorian’s regulatory status. Of course, many of our deals this year have been structured via the humble limited liability company in any of our 14 jurisdictions around the world.
TRANSFORMATIONAL OPERATING MODELS - SEEKING ALPHA
Real Estate Managers we talked to are continuing to rethink the way they do business by refocusing on their core competencies. Something that is keeping us at Ocorian very busy at MIPIM and at home. Helping clients shed non-core activities via our project management and tech teams is fascinating work - provided there is a commitment to change conventional thinking. Transformational projects are not for everyone, but when they are that’s when magic happens.
AND EVERYTHING ELSE
Of course, MIPIM covered many other subjects too including the odd reference to Brexit and CGT, the wall of capital still flowing in from Asia and the Middle East and the occasional far more serious spell in a Cannes Irish Pub singing along Karaoke Wonder Wall: Thank you to my good MIPIM Friends from Lux and Berlin, David, Georg and Kristin for the latter. Until next year, adieu.
Simon Burgess BSc MRICS ACIArb