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Financing Property - The View From MIPIM

Financing Property - The View From MIPIM

Whilst there was no shortage of liquid at MIPIM this year there certainly was a liquidity problem in the opinion of most investors, developers and property professionals who made the annual trek to the renowned property conference.  Other than for a select band dealing with (and only with) prime London property, the general view on the prospects for property finance was at best one of relief that the funding landscape was not as bad as it might have been.

The annual week long property conference in Cannes was down in numbers but perhaps slightly more upbeat than in the last couple of years.  That said the absence of the traditional lenders was still a cause for concern for those present.  Long gone are the days when the Scottish banks would lead the charge with lavish entertainment in private villas or gin palaces before agreeing finance deals running into hundreds of millions.

In their place in discreet corners of Cannes, Fund Managers, Sovereign Wealth Funds and Foreign Investors were busy discussing possible joint ventures with UK based property investors, and otherwise exploring opportunities to step into the space left by the banks.  These new debt providers were the source of conservative optimism.  The continued good investment performance of London coupled with the availability of funding for London deals (and proportionately for Aberdeen also) however, did bring some good cheer.

Whether the mainstream banks can be persuaded to return full scale to the property sector remains to be seen but the emergence of alternative sources of funding and alternative funding models provides much needed market stimulus, increased competition and most of all deal turnover.

The challenge ahead will be to persuade those with funds that London and Aberdeen are not the only pockets of the UK offering opportunity to the property industry.

Nick Naddell
Partner

LChalmers