Back in the 1980’s they used to dub GE chairman Jack Welch “Neutron Jack” for his penchant for eliminating employees while leaving the buildings intact. Germany is currently afflicted by the opposite problem. While unemployment falls to near record lows as the economy powers ahead – with one leading economic forecaster going so far as to even predict full employment as early as 2013 – it’s not jobs that are being eliminated, but buildings.

How can this be? Surely more jobs means more demand for office space, means higher rents, means investors prepared to pay higher prices to buy the buildings? Well, only up to a point, m’lud. Things aren’t really working out like that, much though we would like them to.

Let’s have a look at what’s happening. As we report in several articles in our REFIRE Intelligence Report throughout January, all the professional opinionators – from the consultancy groups such as KPMG and Ernst & Young, the specialist property advisory groups, and the economic think-tanks – are unanimous in their view that demand for German real estate will rise significantly this year, and with it, peak rents and prices in the prime business locations. Continue Reading

This year’s MIPIM was good fun, as always. Nearly anybody we wanted to talk to was there, and most seemed to have time for a chat. We found the pace of the fair agreeable, and highly hospitable in a manner much less frenetic than in earlier years. We attended a wide range of pre-selected events, had plenty of our own appointments, and there still seemed to be enough time for spontaneous, unplanned gatherings, leading to new faces and ideas. Call it serendipity if you wish  - we always associate it with Cannes, and it was there in plenty this year.

Even the entertainment was low-key, in keeping with the buttoned-down tenor of the industry these days. Only the lawyers seemed to have no qualms about making a late-night splash on their harbour-side motor yachts, or in Cannes’ better class of hotel – but then, it’s good to be the winners, whether the market is leveraging up, or trying to negotiate its way out of a lost cause. Somebody has to salvage the MIPIM’s reputation as a glamour event, after all – now that the Russians no longer appear quite so keen to entertain all and sundry, and Europe’s now-nationalised banks have to be seen to be acting suitably chastened. Continue Reading