Weather can't dampen cautious optimism for UK real estate at MIPIM 2025

I don't know if the weather was behind it, continuing geopolitical turbulence or other factors but MIPIM 2025 seemed a bit more focused and bit more serious than previous years.  Huddling under awnings and umbrellas to escape the rain, conversations got straight to the point but the overall mood was cautiously optimistic for UK real estate for the remainder of 2025 and for some who dared to look beyond that.  Key take aways included:

• Investors - UK investor sentiment is better than it has been for quite a long time; some even suggested we are at the start of a new cycle with vendor pricing becoming more palatable.  Foreign investors are still attracted to UK real estate and not surprisingly there has been an uptick in US interest since the start of the year.  Overall transaction numbers are still muted but there was a general expectation it would start to pick up in Q2 and beyond.  A key message is that London is open for business and investment in London real estate can be a catalyst for growth in all areas. 
   
• Living - on everyone's lips and there is enormous appetite for it in the UK (at least in theory) particularly given the political momentum behind it.  However, there are still major impediments to schemes being taken forward.  These range from existing and planned regulatory and legislative hurdles (conversations about the Building Safety Act and Renters' Rights Bill requiring a large gulp of wine to swallow),  high construction costs (not helped by November's budget), the availability of funding (equity and debt – where are these bullish investors?) and sector specific issues such as the decline in foreign students for PBSA schemes (although events in the US might offer a silver lining).
   
• Lending – there was fantastic representation from across the lending space with multiple lenders, some established, some brand-new, keen to offer very flexible and attractive terms to the right borrower and the right asset or scheme.  Competition between them is fierce and some with an international reach are seeing better value outside of the UK but UK developers and investors still have plenty of options.
   
• Diversity – to the extent that you could see them beneath the sea of branded brollies, the blue suits and gilets were still in the vast majority.  However, MIPIM2025 attendance was notably much more diverse than even only a few years ago.  Howard Kennedy were delighted to lead the way on this with our women attendees outnumbering the men 3 to 2 and our women's only dinner becoming our annual event.
   
• Caution – whilst there were plenty of reasons to be optimistic there were also reasons to be cautious.  Interest rates have not and will not reduce at the pace they were expected to before the November budget so cost of debt and competing investment returns are still on point.  There were mixed views on the increasingly uncertain international landscape.  The threat of trade wars and potentially world wars is not a comforting backdrop to making investment decisions for some but to others, the fact that everything has become so unpredictable means that you might as well get on with it.

The majority of UK attendees would have taken cautious optimism (if not the rain) before they went out to MIPIM 2025 and will be buoyed by it on their return to their desks (or remote workspaces).  It is the world's most important real estate event but one that is a particular focus for the UK.  It takes the temperature of the UK market and that temperature is definitely warmer than Cannes itself was last week.  It will only get warmer still if that sentiment spreads throughout the rest of the industry now everyone is back.  It seemed genuine and considered and certainly this year cannot just be put down to the sunshine and rose.