MIPIM Set To Host 27,000 Real Estate Executives Despite Coronavirus Fears. Attendees Aren't So Sure.
A number of leading global real estate firms are weighing whether to send staff to the 27,000-strong MIPIM real estate conference beginning 10 March in Cannes, France, as the coronavirus outbreak continues to spread, and picks up pace in Europe.
MIPIM is one of the largest real estate events globally, is attended by delegates from across the world, and is renowned for its glamorous location and hard partying. The conference organiser, events company Reed Midem, has insisted the event will open as planned on 10 March, and is introducing increased safety measures intended to protect attendees.
But a number of major firms told Bisnow they are monitoring the spread of the virus and the advice being provided by bodies like the World Health Organisation about travel and employee safety at large events, and will take decisions on staff attendance accordingly.
More generally, investors are starting to prepare for the impact that coronavirus will have on the global real estate investment market, and the potential for reduced capital flows, particularly out of Asia.
“I said it two or three weeks ago, and now I really believe it, that the coronavirus could be the black swan that we’ve all been wondering about,” Hines European Chief Executive Lars Huber said at Bisnow’s London Investment Agenda event Tuesday morning. “Stock markets have reacted dramatically, look at the Italian stock market. So yes, something will trigger a correction, we all know that, and this could be it.”
He said the firm would gauge later this week whether to send staff to MIPIM.
“The first thing we’ll see is if MIPIM happens, that’s in two weeks, and right now all bets are off,” he said. “I don’t know yet if we’ll go. We’ll decide Friday.”
The recent spike in coronavirus cases is of particular concern for firms deciding whether to attend MIPIM, given Cannes is only a one-hour drive from the Italian border. Italy’s Civil Protection Agency said on Tuesday that there had been 322 cases in the country so far, predominantly in the north of the country. The first cases have also been reported in mainland Spain, Germany and Switzerland. There have been 14 cases in France and no deaths.
Globally there have been more than 2,700 deaths from coronavirus out of 80,000 confirmed cases. The majority have been in China, but the number of cases has spiked in countries like South Korea and Iran.
Bisnow contacted several large real estate brokerages to ask about their attendance at MIPIM.
“As of today [25 February] Colliers International intends to attend MIPIM as planned although we will be issuing practical guidelines on precautions people can take to help safeguard them against the coronavirus,” Colliers told Bisnow in a statement. “However, the health and safety of our employees is our number one priority so we are very closely following the latest guidance from local and national authorities as well as the World Health Organization (WHO) as it relates to the coronavirus and travel to and participation in MIPIM, so if necessary we will change our plans if the situation escalates.”
“The health and safety of our employees and our clients remains our priority and we are following public health guidance in relation to coronavirus,” Cushman & Wakefield said. “We are keeping our attendance at events including MIPIM under review and will respond to changes in the situation and/or guidance accordingly.”
“Amid the ongoing coronavirus outbreak, the health and safety of our staff is our primary concern and we continue to monitor and assess CBRE’s attendance at upcoming events and associated travel,” CBRE said.
Reed Midem said the event will go ahead as planned, with increased safety measures to try and ensure the health of delegates.
“MIPIM will open as scheduled on 10 March,” Reed Midem Director of Communication Mike Williams told Bisnow. “So far we have had no cancellations and in terms of attendance it is in fact tracking ahead of last year.”
When asked about the impact that large-scale cancellations would have on the festival, Williams said that if firms have bought a ticket but choose not to attend, then that was “their choice”.
“We have worked hand in hand with the city of Cannes for 50 years," he added. "We are used to security or other challenges. We are confident that together we have the measures in place to ensure that our clients have a safe and productive MIPIM.”
Though the WHO has not issued guidelines against large gatherings in areas that have not had confirmed cases of coronavirus, other major conferences around the world have cancelled, including the Mobile World Conference in Barcelona. The fate of the Tokyo Summer Olympics is in question.
In a note to delegates Tuesday, Reed Midem outlined the additional safety measures that were put in place. These include on-site signage and trained staff to remind delegates of WHO hygiene recommendations, reinforced cleaning of all zones within the Palais des Festivals venue, hydro-alcoholic hand gel in all public spaces and a reinforced presence of dedicated medical specialists within the MIPIM venue.
Global equity and bond markets fell sharply for a second day on Tuesday, as worries grow that the outbreak of coronavirus will hit the global economy hard.
At Bisnow’s London event, Huber outlined why he felt that coronavirus could be the unforeseen event that investors have cautioned could signal an end to the otherwise benign economic conditions for real estate.
“I do think that we’ll just have markets generally correcting a bit,” he said. “We’ve seen it with SARS, we’ve seen it with other situations, markets correct and then six months later they rebound, and I think we’ll see a similar situation here. But if the Chinese economy goes at half speed for six to 12 months then that must have an impact on the global economy. And we will feel it.”
The outbreak of SARS between November 2002 and July 2003 is a parallel that is often drawn for the impact coronavirus could have on real estate. Outbound investment from Asia to the U.S. and UK did decline in 2002 and 2003 before rebounding in 2004, according to Real Capital Analytics, but the company declined to give exact figures because it collected data in a different way then than it does today.
Seaforth Land Chief Executive Tyler Goodwin worked for investment bank JP Morgan in 2003 in Hong Kong, the epicentre of the outbreak. The entire office was relocated to Thailand for five weeks to quarantine staff, even though none of them contracted the virus.
“When you’re in the middle of it, your focus is just on managing your business and on your team, and it is very hard to think about anything else,” he said at the event. “You are not really thinking about anything else.
“If it arrives here then it will of course have an impact on our industry. But then it becomes the new normal. I lived through it in Hong Kong, and like all exogenous events, like natural disasters, once it happens you get used to it. It happened in Hong Kong, we have had viruses throughout history, and it will happen again.”
CORRECTION, FEB. 26, 7.35 A.M. ET. In an earlier version of this story we said that 23,000 people were expected to attend MIPIM in 2020. Reed Midem informed Bisnow that its projection is for 27,000 people to attend. We also said that South Korea is the country of honour at the event, which is not the case: this year there is no country of honour.