Canadian fast food franchiser MTY Food Group Inc. announced on February 1, 2012 the opening of its very first food court in Toronto.  This new mall concept will include seven different MTY franchises under one roof in one of Toronto’s busiest areas. Visitors to the food court will be able to enjoy a wide range of food, including Mediterranean food, Thai food, Chinese food, sushi and sandwiches from seven restaurant brands operating under the MTY banner.

About MTY Food Group Inc.

With its 27 food brands, MTY represents Canada’s most important franchiser in the food industry.  A developer of quick service concepts, MTY has been launching and acquiring franchises for 25 years.  MTY brands offer various types of foods and beverages, and operate restaurants like Tiki-ming, Cultures, Taco Time and Thai Express, as well as coffee shops (Country Style, Croissant Plus), and juice and ice cream shops. MTY Group recently acquired Mr. Submarine as well as Koryo Korean Barbeque, adding yet more diversity to its brands.

MTY and MAPIC

Looking to expand its fast-paced eating concept at an international level, MTY attended MAPIC in 2010. The fast-growing company currently offers business opportunities to international investors interested in MTY franchises.  With a 22% increase in its quarterly dividend, the company is doing well!

Read more about food franchising companies in North America.

Image: Hobolens

India intends to open the country’s retail industry to foreign supermarkets, a cabinet minister confirmed in the week following MAPIC, although the much-delayed reform, designed to tap the potential of the market, was subsequently delayed in parliament yet again.

The government wants to allow 51% FDI in the multi-brand retail sector, Food Minister KV Thomas said.

Click here to read the full article in our MAPIC 2011 Review magazine, page 7.

In MORE Vision 4, we discussed the top trends in the retail industry in 2012. One of these trends was retailers focusing on existing customer’s needs rather than tackling huge new projects that most likely will never see the light of day. It’s more expensive to find and attract a new customer than hold on to an old one—so keep your current shoppers interested and engaged!

Launched in the US in November 2011, RNKD offers retailers a truly unique customer reward programme, with discounts and gifts based on items consumers have already purchased. Users log in via Facebook, email or by downloading the iPhone app, and are then awarded points for uploading photos of clothes and accessories in their closet–listing brands and place of purchase. Users also earn points for items added by friends they referred to the site, and they can “follow” friends to discover new brands.

Retail giant J.C. Penney went in a new direction this year when it announced a total marketing overhaul, which will forgo gimmicks and heavy discounts in favour of three prices: “every day,” “month-long value,” and “best prices” for clearance. The company is also slashing promotions to from 590 per year to just 12, as it moves to invest millions in lowering its prices in store. The campaign paid off—J.C. Penney stocks rose 15% after the announcement was made.

And finally, US-based Nordstrom launched an app for iOS and Android devices designed to enhance the shopping experience for the fashion retail chain’s customers. Users can shop on the go, browse personalised product suggestions and find information on nearby stores, in-store events and product availability. Customer reviews are also featured in the app, and once in store, it’s possible to scan codes to access more information on products, as well as reviews.

Watch this space for the next MORE Vision!

Every two months, MORE Vision by MAPIC will contribute to the retail real estate community’s knowledge base by exploring a key trend influencing retail property strategy today. Each issue of this multichannel and multi-tool service will include a presentation of a trend, with history, key figures and useful links. Questions raised will be opened up for debate on our social media platforms – the best comments and discussions will be summarised and published here on the MIPIMWorld blog.

MORE Vision 1 – Social shopping

MORE Vision 2 – Citysumers

MORE Vision 3 – Culture, leisure: traffic generator?

View more presentations from MIPIMWorld

Join the debate on Twitter and LinkedIn.

Don’t miss out! Register now to be notified about the next publication. 

Image: LancerE

In MORE Vision 4 we looked at the retail renaissance, focusing on seven key trends to look for in 2012. Major opportunities lie in one such trend: regional development, and focusing on secondary cities.

In the 2012 MIPIM Preview, we discovered that markets in regions such as Turkey, Russia, China and Poland are prime targets for today’s savvy investors.

In Europe, Cushman & Wakefield predicts that an upturn in shopping centre development on the continent is on the horizon, fuelled by improving retailer demand and concerns about potential shortages of prime retail space.

But while retail could be the new driver behind economic growth, it can’t be the only driver, a subject covered at length in the MAPIC 2011 Preview.

One article details how retail can lead to urban regeneration, specifying that development needs to focus on communities, not just malls. According to Nigel Poad, director of Insite Asset Management, regeneration must go beyond mall renovations—it should involve regenerating an entire area, and not necessarily a major urban centre.

“You need only to look at Liverpool to see that the large-scale regenerations have taken off in the UK,” he told us.

Back in the MIPIM Preview, Chris Brown discusses how savvy investors are targeting less-than-prime real estate markets to find success and growth in turbulent times.

Brown writes that according to financial giant DTZ, there is plenty of capital potential stalking opportunities in non-prime property. The group’s Great Wall of Money report from late 2011 noted:

“With over a third of capital raised before 2008, we expect many fund managers to be under increasing pressure to deploy legacy capital over the next twelve months or risk returning it to investors.”

This means investors are on the hunt for hot new investment markets—and countries like China, Russia, Poland and Turkey are at the top of their lists.

Watch this space for the next MORE Vision!

Every two months, MORE Vision by MAPIC will contribute to the retail real estate community’s knowledge base by exploring a key trend influencing retail property strategy today. Each issue of this multichannel and multi-tool service will include a presentation of a trend, with history, key figures and useful links. Questions raised will be opened up for debate on our social media platforms – the best comments and discussions will be summarised and published here on the MIPIMWorld blog.

MORE Vision 1 – Social shopping

MORE Vision 2 – Citysumers

MORE Vision 3 – Culture, leisure: traffic generator?

View more presentations from MIPIMWorld

Join the debate on Twitter and LinkedIn.

Don’t miss out! Register now to be notified about the next publication. 

Image: Eric the Fish (2011)

There’s an expectant air on London’s Olympic Park. The London Organising Committee have taken the site over from the Olympic Delivery Authority, the final test events are underway, and temporary overlay is being put in place to prepare the 500-acre site for the world’s greatest festival of sport.

For the Olympic Park Legacy Company, the Olympic and Paralympic Games are not just an astonishing event, but also the springboard for the creation of a new city quarter in the heart of East London, with new homes and workplaces being built alongside the retained venues and parkland.

In 2005, London’s legacy plans helped to win the honour of hosting the Games. As summer approaches, the Legacy Company is fully focused on showing how major events can be used to catalyse and accelerate urban development. But making this happen is not an automatic process. From the outset, London’s plans for the 2012 Games were conceived as a response to the city’s strategic needs – for growth and expansion eastwards, but also for a fundamental improvement in the social and economic fortunes of East London.

This meant planning venues and parkland with legacy uses in mind, and building in programmes to help local people and businesses grab the opportunities presented. In 2008, the Mayor of London decided to establish the Olympic Park Legacy Company to develop, advocate for, and deliver the legacy plans for the Olympic Park. Now the Company is entering a new phase of our programme, preparing for delivery on site and being re-formed as a mayoral development corporation, which will bring planning and compulsory purchase powers together with our existing land ownership.

London’s legacy plans are more advanced than any other host city’s plans, and the next three years will be critical for us. After the Games, we have to clear the site of its Olympic and Paralympic infrastructure, reconnect it with surrounding neighbourhoods by constructing roads, paths and cycleways, and complete the conversion of permanent venues, bridges and parklands.

When we re-open, as the Queen Elizabeth Olympic Park, from spring 2013, our aim is to make the Park a successful and sustainable visitor destination, drawing people from the local area and beyond from day one. An active park and venues, which engages local people and visitors alike, will form a strong foundation for building 8,000 homes in five new neighbourhoods.

It is now 10 years since London began seriously to consider a bid for the 2012 Games, and we are 20 years away from completing the regeneration of the Park. Major sporting events offer unparalleled opportunities to put places on the map and accelerate their development, but you need to take a long view.

At MIPIM 2012, don’t forget to attend the dedicated conference” 2012: London’s year of opportunity”!

Check out the special programme “Sports by MIPIM” at this year’s show.

More blog posts looking at the effects on a city of hosting the Olympics.

Image: E G Focus

The Ankara Chamber of Commerce (ACoC) took a large stand at MAPIC and brought senior, local and national politicians to Cannes in a move to promote the city and to “share our vision” said ACoC president Salih Bezi.

Bezi emphasised the potential of the Turkish market and said “Turkey is very dynamic, it is growing very fast, the population is very young and these factors are very important for the retail market.”

As a developer himself, in his new role with the Chamber of Commerce, Bezi said it was important for international companies to develop strong relationships with brokers and developers.

Click here to read the full article in MAPIC 2011 Review, page 7.

Just five years ago the name of the city of Sochi was barely known outside Russia. Then suddenly in June 2006, the Russian city won the right to host the 2014 Olympics in a competition with Saltzburg, Austria and Pyeongchang, South Korea. It is only two years until the Winter Olympics in Sochi, but many people are asking themselves the same question: why Sochi?

From the outset the project was fraught with politics. In the eyes of the rest of the world, Russia is primarily known by its two largest cities, Moscow and St Petersburg. The two cities enjoy the most international tourists; they are the hubs that attract the most significant portion of all financial flows and greatest number of talents from the rest of the country.

A few years ago the Federal Government set a course for the development of new regional points of growth by means of conducting mega-events. Not the cheapest strategy for developing new regional brands that position Russia internationally. Already this year Vladivostok, a city at the Far East of Russia, will host the APEC Russia 2012 summit. In 2013, the Universiade will take place in Kazan. In 2018, in eleven cities in Russia—the list of which will be finalised in March 2013—will be hosting the FIFA World Football Cup. Yekaterinburg recently submitted a candidacy application for the right to host World Expo 2020.

In light of the above, the Sochi 2014 project appears to be justified. Sochi is a resort with a unique climate and a century of history behind it. Its proximity to both the sea and the mountains allows it to be open for year-round tourism. Sochi’s coastline stretches for almost 150 kilometres, and 80 percent of the land around the city is a nature reserve. It is the most popular vacation destination for Russians. Annually, over 4 million tourists come here. In addition, the summer residence of the Russia’s President is located in Sochi. So, since the Soviet era it was the most prestigious holiday spot for Russian political elites, government monopolies, and large corporations. However, after the collapse of the USSR the city suffered from underdeveloped infrastructure and couldn’t compete for international tourists.

The idea that Sochi will be reborn as an internationally significant resort after 2014 has been one of the key components of the strategy for the legacy of the Olympic Games. The Sochi-2014 project should deliver sustainable and positive changes in the wide scope of dividends, from governance to new construction standards. After the Games innovative projects that will first be realised in Sochi are expected to be implemented throughout the rest of Russia. (Read more about the strategy of the Games). 

The Olympics in Sochi is projected to be the most expensive event of the entire history of the Winter Olympics. Today, the total costs to prepare to this mega-event are estimated to be more than 30 billion US dollars. Besides the construction of new sports venues, the Olympic Park in Imeretin Valley, and ski resorts in Krasnaya Polyana, a great deal of investment will be channelled toward improving the city’s infrastructure.

New roads and high-speed trains will help bring together the virtually unconnected territories of Greater Sochi. The highways and the railroad will provide fast link between Sochi’s downtown area with the Olympic Village on the Black Sea coast, the mountain range for ski events, and a new international airport. The capacity of the city’s power infrastructure is estimated to increase by 2.5 times. The broadband connection will bring high-speed internet and new quality of telecommunication services to the city. New hotels will be built, the embankment will be redeveloped, and a marina for 400–500 sailboats will also be constructed.

Olympic venue in detail

Source: Sochi 2014 Organising Committee

The intangible legacy of the Games is even more important than the development of infrastructure. Special attention has been paid to implementing standards of steady development such as green building standards, and zero-waste and climate-neutral approaches. This is particularly important in light of the overall low level of awareness of problems of environmental preservation in Russia.

A great deal of efforts is being put into making Sochi a tolerant and accessible city for international guests of the Games. The entire service personnel is undergoing intensive training in English to break down the language barrier. As the host of the Winter Paralympic Games, Sochi will be able to welcome, and fully cater to, people with disabilities. What’s more, Sochi will also become one of Russia’s cultural hubs. Since 2010, the city has been holding the Cultural Olympiad for Russian and international music, stage, and film stars.

Source: Sochi 2014 Organising Committee

Needless to say, all this positive news does not alleviate the healthy scepticism of observers toward the projects that are being initiated by the Russian government. The main question is: will Sochi become a “white elephant”, a fail of an Olympic host city?

So far, the market’s reaction has been positive. Ever since Sochi has been approved as the host of the 2014 Winter Olympics, real estate value has skyrocketed. Today, Sochi enjoys one of the highest costs for residential property in Russia, averaging at over $3,000 per square meter (10 square feet). (For comparison, the average cost of one square meter in Moscow is slightly over $5,000.) It is unclear how the cost will be affected by the emergence of residential housing in the Olympic Village and mountain cluster on the market which is already available for purchase.

The development of hotel businesses in Sochi also looks very promising. Until recently Sochi only had cheap (1- or 2-star) hotels, and a very few deluxe hotels. Now large hotel chains are expanding their presence in the city. In the end of January 2012, Marriott International announced that it would be opening three hotels in Sochi. The Rezidor Hotel Group will open a Radisson Blu Resort & Congress Hall for 500 rooms in 2013. The construction of two hotels of the Group—Radisson and Park Inn Radisson—in the mountains, and two hotels under the Park Inn by Radisson brand in downtown Sochi, is already underway.

Taking into account the fact that Sochi is already one of the most popular locations for conferences and exhibits, seasonability will not be an issue after the Olympics. The big congress and exhibition centre and amusement park will be the main anchors of post-Olympic development of Imeretin Valley. More exotic options for stimulating year-round high-capacity operation of hotels are being discussed. For example, hosting events of the Formula One.

Let us not forget that currently most of the investors in Olympics venues are big Russian corporations. Participation of international capital in Russian megaprojects is often hindered by the lack of transparency and rule of law in the country. Will Sochi set a positive example in this regard? This will become clear in the very near future.

Find out more about the special Sports by MIPIM programme at this year’s show!

Read more articles about the effect of the Olympic Games on cities and the real estate market.

Source top image: Olympstroy State Corporation

Cushman & Wakefield predicts that an upturn in shopping centre development in Europe is on the horizon, fuelled by improving retailer demand and concerns about potential shortages of prime retail space.

And with Central and Eastern Europe having accounted for 58 % of new space in the first half of 2011, Russia, Turkey and Poland are topping the league with strong development levels.

This was reinforced by CBRE’s Shopping Centre Stock in Europe report, which found that of the 146 shopping centres under construction in Europe in July 2011, Turkey accounted for 26 schemes, Russia for 19, and Poland for 21.

Nearly one fifth of the first half of 2011’s European development total, just over 400,000 sq m, was completed in Russia. And Moscow accounted for 36% of that new space with the opening of AFIMALL City and two other shopping centres. Jones Lang LaSalle estimates the Russian shopping centre pipeline for the remainder of 2011-2013 to be about 3.5m sq m, of which 25% will be constructed in Moscow and the surrounding region.

CBRE puts Russia’s highly active development market down to a healthy consumer environment and strong occupier demand. Russia has moved up from sixth position to become the third most targeted place for retailers in CBRE’s “How active are retailers in EMEA?” survey.

“Russia will soon join the World Trade Organisation which will improve consistency, transparency and clarity,” says Peter Gold, CBRE ‘s head of EMEA cross border retail. “There are still a lot of opportunities in Moscow and St Petersburg and plenty of other cities with populations of over a million.

“It’s a top target for retailers so there’s a need for development – it’s big, it’s emerging and it’s getting easier to do business.”

High rents in sought-after locations is one of the factors persuading retailers and developers to target the larger regional cities, many of which are still under supplied in terms of shopping centre space.

Jones Lang LaSalle predicts that the share of stock in smaller regional cities will increase from 24% to 27% by the end of 2013, with developer interest moving outside Moscow to the regional cities including Saratov, Ulyanovsk, Barnaul, Tyumen, Ryazan, Astrakhan, Sochi, Orel, Surgut and Nyagan.

In Turkey more than 800,000 sq m is under construction, most of which is located in Istanbul. And much like Russia and Poland, it’s faring well economically, compared to its European counterparts, suffering from the fallout of the Eurozone crisis.  

 “The current economic position of Turkey is relatively stronger than other European countries,” says Nesil Akman Aybar, director of business development at Savills, Turkey. “Purchasing power has been increasing and demography has been growing too.

“The young population who like Western-style shopping and entertainment are one of the main drivers and relatively high retail rent figures make shopping centre developments attractive when compared to other commercial properties.”

But he warns that while both primary and secondary cities have potential for retail development, there is a risk of oversupply in some regions.

“In Istanbul, the total number of shopping centres is 101 and this number will reach 160 as of 2013,” he says. “In Ankara, there are 35 shopping centres, expected to reach 37 in 2013.”

By measuring shopping centre density by GLA per 1000 inhabitants, Aybar identifies Izmir, where there is 71 sq m – the Turkish average is 105 – as having high potential for retail developments. In Istanbul the density is well above the national average with 234 sq m per 1000 inhabitants, as is Ankara with 221 sq m.

“Most of the developments have been regional scale shopping centres but we believe small scale neighbourhood shopping centres with good design and brand mix will be successful and gain importance in the near future,” he says.

Poland is another highly active market. 

According to Colliers International data, by mid-2011 construction was under way on more than one million sq m of retail space, 700,000 sq m of which is scheduled to be completed by the end of the year.

According to the Investing in Poland 2012 Trendbook, in association with PwC and The Polish Information and Foreign Investment Agency, secondary cities, which are often plagued by a serious shortage of modern retail space, are set to see a surge in mall construction and retail real estate investment in the coming months.

In the second quarter of 2011, no major retail project was completed in any of the eight largest cities in Poland. On the other hand, deliveries in the smaller, regional cities in 2011 included Opole’s Turawa Park, Random’s Galeria Sloneczna, Leszno’s Galeria Leszno, Slupsk’s Galaria pod Wiatrakami and Zamosc’s Galeria Twierdza.

“Poland has a strong economy and a strong appetite for retail brands but there’s not as much in the pipeline as there could or should be, considering it’s stability and the number of prime locations,” says Gold.

According to Peter Evans, leasing director at Helical Poland, shopping centre development was kick-started by French hypermarkets like Carrefour and later Tesco. It was only 12 years ago that the first modern malls began to open. 

“Galeria Mokotow was one of the first examples,” he says. “Followed by others in Wroclaw and Lodz, Poland’s second biggest city, where two to three shopping centres have been built in the last few years.

“Warsaw is still the most sought after city for retailers followed by the top five biggest cities. Development began in the West and is now slowly moving east along the main highways. The North is also an area of interest, with bigger cities. And the South is densely populated.”

With promising economic outlooks, large, often young populations crying out for international retailers and strong occupier demand Russia, Turkey and Poland are attractive markets for the development of new retail destinations, and are leading the way with active pipelines.

But as with the mature markets, landlords who have previously stuck to the main cities are starting to look elsewhere, spurred on by the threat of oversupply in some regions and the congestion of large cities where the infrastructure is struggling to cope. A move towards regional schemes will only unlock a further potential.

For many conferences on specific European markets, check out the “Territories” track at MIPIM 2012.

Read more about retail in emerging markets. 

Image: Михал Орела

PKP and HP Reavis showcased the Warsaw Zachodnia Station and office complex at MAPIC this year.

This scheme will create a new railway station by the end of 2014, and a mixed-use centre of retail, office and residential buildings.

PKP is also working with private investors in Katowice and Ponzan, with a company representative saying there are great opportunities to combine transport hubs and commercial space.

Click here to read the full article in MAPIC 2011 Review, page 10.

Designer outlet The West, situated to the west of Paris and less than 10 km away from the Chateau de Versailles, adjacent to a large retail park with over 100 major retailers, is promising a “new generation” outlet experience.

Advantail CEO Franck Verschelle said at MAPIC that the scheme is “very modern and design-oriented, with a look and feel that is delibertately a stage from current designer outlets.”

Click here to read the full article in MAPIC 2011 Review, page 9.

As with many western cities, Montreal’s industrial and commercial past is an inescapable part of its character. Many sites are clear reminders of this past. But the city plans to make the most of these sites and their great development potential by creating new transit-oriented neighbourhoods boasting excellent quality of life. Le Triangle is one such neighbourhood. Thanks to extensive revitalisation work valued at $1,2 billion, it will soon become a huge green urban space.

The city is looking to create a lush, green living environment in the Côte-des-Neiges—Notre-Dame-de-Grâce borough. It plans to increase the amount of greenery and better define the use of public and semi-public space for new residents and businesses.

To achieve this ambitious objective, Montreal launched a cross-Canada urban design competition, with the goal of revitalising and developing the public domain in this area. The competitors came up with new ideas and explored various approaches for revamping the public thoroughfares. The focus of the winning project, by Catalyse Urbaine architecture et paysages, is to create a park in the heart of the neighbourhood as a way of promoting outdoor activities, fostering social exchanges and creating a strong identity for the neighbourhood.

But much more than a green space, Le Triangle is also a living environment where some 4,200 units will eventually be built in an area of about 40 hectares. To date, nine residential projects are under construction or on the drawing board. There will also be a large proportion of community housing. Measures paid for by the developers have already been taken to encourage the construction of community housing, in fact.

This rather neglected commercial district will be transformed into a popular neighbourhood with high residential density, well served by public transit and local businesses. It’s sure to be a superb place to live!

If the Great White North is your centre of interest, read more here!

Our latest Property Influencer says investors should target secondary cities in emerging markets and focus on sustainability in order to recover after the economic crisis.

Professor François Ortalo-Magné is the Albert O. Nicholas Dean of the Wisconsin School of Business, and has contributed to the understanding of the housing market through his theoretical work. He is called upon regularly by policy-makers for contributions to housing and agricultural policy debates.

Dr. Ortalo-Magné shares his real estate insights in this exclusive video interview. He warns that the West’s aging population is another factor that must be considered in today’s sustainable, modern urban development.

He also advises investors to look to emerging markets and think outside the box—targeting smaller markets like Australia, New Zealand and China’s secondary cities could pay huge dividends.

Click here to view the video on YouTube.

Short on time? Skip straight to the questions that interest you here!

What are your primary objectives in attending MIPIM Asia?

Globally, how do you see those questions having an impact on the market over the coming year?

What other trends have you noticed across sectors?

A lot is said about the aging population what impact will that have on China?

Do you see sustainable development as a key issue?

See other Property Influencer videos

François Ortalo-Magné will be leading the MIPIM 2012 wrap-up. Friday March 9, 10.30.

What is secondary property? Everyone agrees on what is prime – the well-located building let on a long lease to a company that appears financially stable over the long term. City centre offices and shops are indisputably in that league, as are major industrial buildings let to the right occupier.

At the other end of the scale is a tired development of buildings needing refurbishment, a long way from the city, with occupiers coming to the end of leases. But away from these clear definitions, the description can be flexible. At the depth of the market in 2009, there were few buildings considered prime, says Matthew Weiner, investment director at Development Securities. With improving sentiment, things have changed. “The capital that wants to get into the market redefines prime.”

And, according to agents DTZ, there is plenty of capital potentially stalking opportunities in non-prime property. Its Great Wall of Money report from late 2011 noted: “With over a third of capital raised before 2008, we expect many fund managers to be under increasing pressure to deploy legacy capital over the next twelve months or risk returning it to investors.” And DTZ expects banks to start releasing more secondary property: “Having made headway in dealing with problematic loans on prime assets, we see a growing level of opportunities emerging from the banks focussing on more secondary assets.”

Charles Smith, DTZ’s head of valuation, London & South, notes: “There is an increasing quantity of secondary stock either on the market or anticipated to land shortly. This combined with a tough leasing market means that investors are becoming increasingly selective and very careful attention is being paid to the capital expenditure that properties require – if so, purchasers are seeking higher returns and lower prices or are walking away.”

“The secondary market is multi-layered ranging from the ‘good secondary’ with well-located buildings but shortening income profiles where opportunities exist to enhance value through refurbishment and re-letting – to the ‘poor secondary’ or tertiary where properties are often suffering from functional obsolescence, are in peripheral locations with short lease terms to poor covenants. The best located and best quality properties within the micro-locations with the best re-letting story will outperform in 2012.”

Peter Damesick, EMEA chief economist at CBRE, warns that it is going to take some tough price cuts to deliver property the market will want to buy: “Conditions are turning against the weaker parts of secondary, particularly properties in weak locations,” he says.  “A lot of pricing there is untested. When it is tested, achievable pricing will be less than expected.” In some instances, investors are going to want equity-style returns. “The problematic situation is a single tenant”; whereas a multi-let property has better potential to work the asset.

He warns : “A lot of the stock has been cash-starved,” as owners short of funds cut back on non-essential maintenance. “Those are the type of assets some investors see as an opportunity. We’ve moved from the market where investors were looking to the market to deliver capital growth.”

One big fan of secondary property is Development Securities. The London-listed property company has, in the last three years, invested £350m in secondary property across the UK, as part of a deliberate strategy to uncover value from unloved buildings.

The start of the strategy in 2009 was a to ask shareholders for funds; and this, combined with a second cash call in 2010 gathered £150m ($232m) to get to work with. “We had one slide in that presentation to shareholders that summarised it all,” says Mathew Weiner of DevSecs, “and that showed the gap between prime yields, and secondary yields.”

The DevSecs model has been to invest in geographical areas they feel they understand, but to be flexible about property type; and to choose small lot sizes, limiting the risk on individual transactions. “We stick to our core disciplines of risk analysis and likely return,” says Weiner. “It is a specialist play – capital on the sidelines shouldn’t move into the market without a partner.”

DevSecs has used its own cash sometimes, and where practical has worked with a funding partner or raised bank debt to leverage its buying power. Investors in the top tier of the market are simply looking for capital preservation, says Weiner. “One of the problems investors have is what’s a good covenant these days?”

DevSecs looks for opportunities to create an enhanced return by intensive work – negotiating a change of use, repositioning the property. At the Manchester Arena, bought in the summer of 2010, the company wasted no time in extracting value. “We restructured the lease while we conducted our due diligence,” says Weiner. The $97m purchase was a joint venture with Patron Capital Partners, backed by a $75m loan.

Weiner says any purchase has to have an exit plan: “It’s always about recycling.” Often that means turning the risky product they buy into something that has a place in the portfolio of an investor looking for a safe, steady return. “There is no doubt it is risky,” he acknowledges, and each opportunity needs to be appraised individually. But the risk is spread: the $235m raised has been invested across 40 deals: “We’ve taken lots of small bets.”

In terms of product choice, “we’re very cautious,” says Weiner. The company is comfortable in the south east of the UK, and in other regions such as greater Manchester, where aspects such as a proactive local authority lend confidence. “Some towns will be very difficult going forward,” he says. Property type is flexible, although “to a degree we have avoided secondary offices. We like food store-anchored developments, or those where a food store can be created.” The portfolio has also added a hotel, care home, and student housing. “You’ve got to be like that.”

Weiner also sees a much closer focus than in the last few years, on how occupiers use buildings and how that can influence the property’s fortunes. The prop-co/op-co splitting that was popular in the last decade does not make sense in today’s environment, he says. “We’re going to spend a lot of time putting that back.”

“A lot of stuff is functionally obsolete,” warns Weiner, mentioning one un-named shopping centre that was up for sale in 2007 for $60m. Today, it is available probably for between $15m and $22m. “Would I buy it now? No, I wouldn’t.”

Read more about the special conference and event programme for investors at this year’s MIPIM.

More on the impact of public spending on corporate relocation.

Hear from Property Influencer Mike Whitby, Leader of Birmingham City Council.

Read the full MIPIM 2012 Preview.

Image: AndyRobertsPhotos

Make your voice heard

Head to our brand new MIPIM Facebook page for all the details on awards participants, entrants, finalists and MIPIM 2012 more generally! Through Facebook, anyone can have their say on who wins the People’s Choice Award, regardless of whether or not they are attending MIPIM! Even better, everyone who votes will have their name entered in a draw to win a tablet device! Voting will close at midnight on March 1.

The MIPIM Awards

Each year, the most innovative, ambitious and exciting real estate projects battle it out in the prestigious MIPIM Awards.

This year features an impressive mix of projects from across the world competing in eight categories, four of which are new and focus on some of the industry’s high-potential sectors.

The finalists

BEST HOTEL & TOURISM RESORTS

Six Senses Con Dao, Ba-Ria, Vietnam

The Bulgari Hotel & Residences, London, United Kingdom

Victoria Tower Hotel, Kista, Sweden

BEST INDUSTRIAL & LOGISTICS DEVELOPMENT

Distribution Park Dutra, Belford Roxo, Brazil

Lavoisier, Brussels, Belgium

McLaren Production Centre, Woking, United Kingdom

BEST OFFICE AND BUSINESS DEVELOPMENT

Heron Tower, London, United Kingdom

Main Point Karlin, Prague, Czech Republic

TNT Centre, Hoofddorp, The Netherlands

BEST REFURBISHED BUILDING

Palazzo Aporti, Milan, Italy

Refurbishment “Alte Post”, Hamburg, Germany

 “The Library” – New Community Center and Library, Copenhagen, Denmark

BEST RESIDENTIAL DEVELOPMENT

Midi-Suède, Brussels, Belgium

Reflections at Keppel Bay, Singapore

‘Residence le 19’ in the Claude Bernard area in Paris, France

BEST SHOPPING CENTRE

Cubus, Hong Kong

D-Cube City, South Korea

Morocco Mall, Casablanca, Morocco

BEST FUTURA PROJECT

Air-Floating Villas & Suites, Doha, Qatar

Hôtel de Police – Charleroi/Danses Performing Arts Center, Charleroi, Belgium

IN/OUT, Boulogne-Billancourt, France

BEST FUTURA MEGA PROJECT

Express Rail Link West Kowloon Terminus, Hong Kong

Jeju Airest City, Seogwipo, South Korea

Marina South, Singapore

BEST GERMAN PROJECT

Conversion of church Herz-Jesu, Mönchengladbach-Pesch, Mönchengladbach, Germany

Maintor – The Riverside Financial District, Frankfurt am Main, Germany

Refurbishment “Alte Post”, Hamburg, Germany

Group votes from a jury of leading real estate professionals and MIPIM participants are given equal weight in the regular awards. This year’s country of honour, Germany, will also receive special recognition during our spectacular awards ceremony.

Disasters are getting bigger, and the damages to cities and human settlement worse than in any other period in human history. The world population is now dominantly living in cities and metropolitan regions in high-risk coastal areas creating both the cause and consequence of this growing menace to all human life and property. As we build our sites, we are creeping on to landscapes that are increasingly hazardous because of their proximity to rivers, the sea and mountain areas that were un-buildable only half a century ago. Modern technology has made it possible to build in locations that were off-limits in past centuries because the terrain was too densely covered with vegetation and animal life, the slopes were too high, or the river current and sea tides too dangerous. But we have found ways to overcome these difficulties in order to accommodate larger populations in sprawling settlements. Nature has not changed, we have. Now we have to learn to live with the consequence of our settlement choices.

In a new book entitled Managing Urban Disaster Recovery: Policy, Planning, Concepts and Cases (Crisis Response Press, 2012), we put forward a comprehensive analysis of how to deal with post-disaster social, economic, physical and emotional issues. The book is not a recipe but a well developed multi-national and multidisciplinary presentation on how to deal with urban post-disaster situations no matter where they occur in the world. In putting the book together, we learned a great deal from one another and distilled this information into manageable pieces for teachers, trainers and practitioners. In essence, the book aims to be the post-disaster reference and manual. It is also intended to trigger more contributions and more cases built from future disaster rebuilding work. We all know disasters will continue to occur at greater frequency and with greater impacts on urban environments.

In this book about Cities Recovering from Disasters the authors recognise that urbanisation will continue and disasters will grow in frequency with climate change and related factors. The book also puts forth some lessons that need to be factored into the recovery processes to employ as we build and re-build settlement both pre- and post-disaster.

Firstly, every community needs to have a pre-thought out disaster strategy prior to any event, be it man-made or natural. We use the term strategy to describe the courses of action and not a rigid set of rules or plans that cannot be adapted to the circumstances. A strategy is a well developed set of principles that guide the community. These principles should take into consideration the human and ecological needs of the place. These principles should form the basis for both current developments and post-disaster recovery.

Secondly, all communities need to have long-term master plans that set out a future direction but have within them contingencies for natural or man-made destructive interventions. So, the community should organise adequate water, power and food supplies for at least one week for all households in every neighbourhood. To the extent possible, mitigations and resilience should be the bedrock of all community plans. The long-term plan should reduce the dependencies of fossil fuels and natural resources. Finally, communities can and should prepare for more distributed and less centralised systems of infrastructure for water and power.

Thirdly, since recovery is about the restoration of both people and places the robustness of the communication system will determine the outcome of the rebuilding process. Communities that embrace social media and other forms of communications technologies will be able to reduce casualties and rebound faster than those that have not put such systems in place.

Fourthly, disasters present opportunities to re-position a local economy. In the global marketplace, communities that re-tool their economies post disaster can regain their populations and economic wellbeing much faster than those that attempt to restore the past economic base.

Finally, we place a good deal of emphasis on capacity-building within the community to construct the requisite leadership to survive and thrive post disaster. But local leadership has to know how to use skilled international resources for both rescue and rebuilding. When communities use external resources well, from celebrities to international agencies, donors and international experts, they can rebuild a more resilient base reducing the potential impacts of future disasters.

No community is disaster proof. So, vigilance and preparation are essential. Our book, we think, is one of the components of good preparation to ensure a robust future.

Edward J Blakely is honorary professor of urban policy at the United States Studies Centre at the University of Sydney. He is the author of three recent books on post disaster recovery; My Storm: Managing the Recovery of New Orleans in the Wake of Katrina (The City in the Twenty-First Century, U Penn Press); and The Master of Disaster: Lessons from Katrina to Japan (Crisis Response Press) and Editor of Managing Urban Disaster Recovery: Policy, Planning, Concepts and Cases (Crisis Response Press). He also has a podcast site BlakelyCityTalk.

Also appearing in a slightly different version in Crisis Response Journal.

MIPIM 2012 features a special series of events and conferences focusing on building, enhancing and regenerating cities. Find out more!

Image: USACEpublications