MIPIM 2023 Report
Dear business partners and investors,
I would like to share with you some of the impressions I gathered at MIPIM 2023 in Cannes from March 14 to 17. This year, the European landmark real estate exhibition attracted more than 23,000 visitors, a good 10% more than in 2022. Nearly 100 participants came from Japan.
The Japanese German Real Estate Investment Roundtable Meeting, a biennial event at the start of MIPIM and Expo Real since 2015, was held for the 14th time. The Japanese Ministry of Land, Infrastructure, Transport and Tourism opened the meeting by emphasizing the importance of international cooperation and communication.
Mr. Andreas Schulten, Chief Representative of bulwiengesa AG, presented the status of the German development market in a dialog with Mr. Hendrik Staiger, Speaker of the Executive Board of Beos AG (link to presentation). Next, Mr. Kenji Matsushita, Managing Officer of Corporate Strategy Planning at Takenaka Corporation, explained the inflation, though predominantly supply-related cost increases for the Japanese developer and construction industry, which are similar to those in Germany. All discussions confirmed that the trend toward considering ESG goals in development is stronger than ever. The meeting concluded with a discussion on CO2 management through wood-based construction led by Mr. Seita Kisanuki, Executive Director of Sumitomo Forestry.
The “Focus on Japan” conference on the central day of MIPIM 2023 attracted a full house (link to flyer). On behalf of the Japanese delegation, Ms. Suzuka Hata, Deputy General Manager of Nippon Steel Kowa Real Estate, confirmed Japan’s commitment to international communication, symbolized by participating in events such as MIPIM. Regarding Japan as an investment market, the country was able to confirm a decoupling from the European and US markets. Transaction volumes in 2022 remained at the same high level as in 2021, with overseas investors increasing their volume by 12%. According to CBRE, foreign investors accounted for 44% of all investments over JPY 10 billion (link to presentation).
Mr. Masanori Kobayashi, Director of General Affairs Division at the City Bureau at MLIT, spoke about “Achieving Sustainable Cities with Multi Stakeholders” with the aim of building green infrastructure for climate-friendly cities. The ministry’s strong commitment to sustainability was underscored by presentations from two private sector representatives on the ESG focus of contractors and developers.
In most conversations at MIPIM 2023, inflation fears, capital cost concerns, and energy worries were prominent. ESG criteria have moved to the center of investment decisions. While all European markets have seen a downward trend in transaction volumes, residential and logistics assets have been less affected than retail and office. An atmosphere of cautious, forward-looking confidence pervaded MIPIM. The following quote from Dr. Sven Eggers, CEO of AIF Partner KVG, captured the mood: “There is a clear appetite to invest in opportunities that already account for the current interest rate situation and the prospect of a reduction in inflation. International and European investors in particular are looking for niche expertise.”
Dr. Leonard Meyer zu Brickwedde
We are excited and looking forward to joining MIPIM 2023, bringing the ‘Focus on Japan’ with a top level discussion on sustainable urban development
Kensho Investment Group acquires housing brokerage for foreigners
Press release – Kensho and KGAL collaborate to support Japanese investors
MIPIM 2022 in Cannes – Review by CEO Dr. Leonard Meyer zu Brickwedde
Dear friends, dear colleagues, dear investors,
Please allow me to share some impressions I recently gathered at the MIPIM 2022 from March 15 to 18 in Cannes. This European landmark exhibition took place for the first time in three years. With the easing of pandemic restrictions, business was back to almost normal with 20,000 visitors, only a quarter less than in 2019. In October, its Munich-based friendly competitor Expo Real had come back to life successfully with 19,000 guests.
Japan was visibly present in Cannes. We saw the revival of the Japanese German Real Estate Investment Roundtable Meeting, a biannual event at the start of MIPIM and Expo Real since 2015. Japanese investors, developers, and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) decided to join via a video link due to the national arduous quarantine rules.
After a kick-off presentation by Mr. Andreas Schulten of German research champion bulwiengesa AG, the roundtable participants discussed the potential impact of both COVID-19 and the Russian war against Ukraine on global investment diversification. In 2020 and 2021, cross-border transaction volumes had continued to increase, but there were notable winners (logistic and residential) and obvious losers (hospitality and retail).
A Japanese presentation on smart city developments during the ‘Focus on Asia’ conference (with me as MC) on the first MIPIM day attracted a large audience. Mr. Shinichi Goto, Director, General Affairs Division, City Bureau, MLIT, presented a spatial planning technology for future cities to increase energy efficiency and quality of life. Mr. Kazuya Sawamoto, CEO of Daiwa House Europe, showcased Japan’s first net-zero energy community Harumidai with 65 single homes on 17 hectares built in Osaka.
Many MIPIM visitors, including myself, were very positively surprised that the “Japan Lounge” in the exhibition area did not promote the national real estate market. Instead, six very informative presentations reflected the experiences and findings of the pandemic and drew lessons from it. This Japanese approach to not just leave the pandemic behind but to prepare for future virus threats was refreshing and thought-provoking to almost everyone.
The lounge presentations covered relevant findings of the “COVID-19 AI & Simulation Project”. The topics ranged from visualizing contact risks to deep-learning-based models of virus transmission. This ongoing governmental project aims to balance economic activities and prevention measures against the virus spread.
Overall, while the developments in Ukraine were present in most discussions, MIPIM visitors focused on re-establishing old contacts and pondering upon the business challenges. For example, the issue of ESG has definitely moved to the core of investment decisions. Investors, developers, and regulatory bodies are still searching for a clear definition of the term and a fair balance between environmental, social, and governance factors. However, the commitment to ESG has become so strong that it even overrides current concerns about high energy costs.
Leonard Meyer zu Brickwedde
German real estate expert Dr. Meyer zu Brickwedde builds new bridges between Japan and Germany for professional investors by founding the Kensho Investment Group
Tokyo – Japan real estate specialist Dr. Leonard Meyer zu Brickwedde is realising a long-held vision by founding the Kensho Investment Group: “We form the centre of competence for institutional investors for cross-border real estate transactions between Japan and Germany,” explains the experienced consultant, asset manager and fund developer at the launch of his new venture. Kensho invests German institutional capital in residential real estate in Japan and accompanies Japanese investors to Germany and Europe.
In its field of business, the new group starts as a heavyweight: its founder, president, and CEO builds up the new business together with first-class partners in Japan and Germany. “As the only German-speaking direct investor in Japan, we are very well connected on many levels in both countries,” Meyer zu Brickwedde emphasises.
Japanese residential real estate has proven to be a particularly resilient asset during the pandemic providing stably high returns. Meyer zu Brickwedde positions Kensho as a focused specialist for this market and develops the optimal investment strategy together with the investor, adapted to his risk profile. By gradually building up a property portfolio, Kensho creates added value compared to individual investments and large-scale projects. An in-house research team provides the data for a fully transparent property selection. “We can create value-adding alliances because there are no conflicts of interest for us,” Meyer zu Brickwedde explains.
With his group, the German also supports Japanese investors during their entry to Germany and Europe. To this end, Kensho and the Berlin-based analysis company bulwiengesa have founded the information portal “Japanese German Real Estate Bridge”. It brings together real estate experts from both countries. In addition, Kensho cooperates with the KGAL Group, based in Grünwald near Munich, a leading investment and asset manager for assets of over 15 billion euros.
Meyer zu Brickwedde has been at home in Japan for almost three decades. As the head of the Kensho predecessor Kenzo Capital Corporation, he launched the first German special fund for Japanese residential real estate in 2017. Before that, he had built up the Japan subsidiary of Hypo Real Estate into the largest non-Japanese real estate lender from 2004. He entered real estate financing as head of Hypovereinsbank’s Japan branch in 2000 when the institutional real estate market in Japan began to develop.