Brett Alegre-Wood reports for PropertyGuru from the third day of MIPIM, the annual conference for the world’s property industry.
One of the keynote presentations on day three at MIPIM in Cannes, France, focused on future proofing your property investment – a professional’s gaze into the next 25 years of the property world.
Today I spent a large part of the day exploring the various thoughts and debates about how the property industry can adapt to the fast-moving international market that we now live in.
It is apt that 25 years ago yesterday, MIPIM was born in Cannes, and at the same time the worldwide web came into existence. If you could have predicted then what the market looks like now you would be very wealthy indeed. But let’s not look back but forward at what the next 25 years will hold for all of us as investors in property.
The challenges we face in the next 25 years can be summed up into three rather simple challenges:
Low Economic Growth: We’ve all taken for granted high levels of growth in the developed world, but this has come at a cost. If you look at the curve of economic growth it’s a long, slow downward slide. The four key considerations here are; (1) The cost of the debt hangover which governments and people around the world are now left with; (2) We are dealing with limited resources, and this will mean price rises; (3) The ageing population means that older people spend less and therefore consumption is down; and (4) Climate change and its effects on spending on repairs. This will mean higher taxes, higher insurance premiums and less growth.
Climate Change: Is it real? Is it man-made? The overriding answers are yes, but the main question is how do we mitigate the risks associated with it.
New Machine Age: This was the most interesting topic; the other two were very matter of fact. There was little debate about their effects but the ‘New Machine Age’ is where thoughts ranged from pure science fiction to pragmatic, conservative directions. Regardless, all thought leaders tended to agree that the speed of change is the biggest thing that property investors need to accommodate.
Some positive things to come out of the debate were that fundamentals don’t change, however the noise surrounding it does. Patient money, good property and good design will still be valued in 25 years, just as it was "back when cavemen inhabited caves".
Some specific predictions are already coming into play. The nature of employment will change as mechanised and partly-mechanised technology takes over our day-to-day tasks. Cities will become where people live more and more, so how to design new cities and adapt old ones will be a massive challenge. The phone will become your bank, your computer, and of course your means of communication.
All in all the panelists presented a positive future. As long as you remain aware of the changes and adapt with them, you will be naturally positioned to benefit from the changes. However, this is only as long as you address the three challenges that I mentioned above.
MIPIM, the world’s property market, brings together the most influential players from all international property sectors. The 2014 event is taking place in Cannes, France, between March 11 and March 15.
Singapore-based Brett Alegre-Wood is an author, entrepreneur and property educator. He is the founder and Managing Director of Your Property Club and author of The 3+1 Plan, winner of the 2010 People’s Book Prize. www.ypc-group.com
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