Geopolitics and the Real Estate Market: A Climate of Uncertainty at MIPIM
“What do you think of the atmosphere this year? ” That was the question on everyone’s lips in the aisles of MIPIM, the world’s largest real estate trade show, which just wrapped up in Cannes. This question stemmed directly from events in the Gulf and recent conflicts in the Middle East. Indeed, several participants feared that these geopolitical tensions might slow the decline in interest rates, cause a spike in the cost of materials, and dampen investors’ appetite for risk—just as the economic outlook finally seemed to be improving. A sign that times are changing: industry professionals are now following defense news just as closely as they do the business pages.
The affordable housing crisis: a major challenge for European cities
International conflicts, however, were not the only cause for concern. Architects and local elected officials discussed at length the shortage of affordable housing affecting many major cities in Europe. Ian Mulcahey, global director of cities and urban design at Gensler, emphasized that this is the most complex problem in the majority of metropolitan areas he visits. “Every city where we work seems to be facing a housing crisis, and I still struggle to fully understand all the reasons behind it. As a society, we still haven’t found the formula to build enough homes for our fellow citizens,” he said.
The scale of the problem was confirmed by London’s deputy mayor for housing and residential development. He revealed that while the British capital needs 88,000 new homes each year, housing starts last year barely reached the 4,000 mark. During its opening day dedicated to housing, MIPIM invited leaders from major cities—from Barcelona to The Hague—onto the stage to try to outline solutions. Clearly, there is still a long way to go.
New Horizons: Rethinking Luxury and Radical Sustainability
Despite these challenges, some in the industry expressed marked optimism and saw real opportunities for transformation. Giorgos Karampelas, creative director of the Athens-based firm K-Studio, explained that their vision of luxury—minimalist, highlighting the nobility of materials, and rooted in local identity—appeals to an audience far beyond Greece’s borders.
For his part, Kjetil Thorsen, co-founder of the prestigious firm Snøhetta, noted that his architecture firm now selects only clients committed to drastically raising standards of environmental responsibility. This is the case with Mehmet Kalyoncu, developer of the Ion Riva project on the shores of the Black Sea. “I don’t think we’ve ever taken environmental studies this far on a site,” Kjetil Thorsen explained. “We know the site’s topography down to the smallest detail, right down to the precise path of a drop of water running down the hill. Our goal is to enhance these natural assets by letting the environment dictate where it makes sense to build and where we should refrain from doing so.”
The Technological Revival of Southern Europe
The dynamism and confidence displayed by certain regions, particularly in Southern Europe, were also palpable. A large number of Italian elected officials made the trip. City officials from places like Rome and Genoa spoke about the transformation of their municipalities, which are gradually becoming true hubs of technological innovation, capable of attracting new talent while realizing their environmental goals. Raffaele Laudani, deputy mayor in charge of urban planning in Bologna, elaborated on this urban repositioning.
“Bologna has established itself as an essential strategic European hub for big data and artificial intelligence. We are home to Leonardo, the world’s second-most-powerful supercomputer dedicated to AI, around which an entire ecosystem of knowledge and technology is developing,” he stated. “We account for 80% of Italy’s computing power and nearly 30% of Europe’s capacity. With the active involvement of universities and research centers, we are redefining our public policies around this flagship project, which we have named the ‘City of Knowledge.’”
A Resilient Sector Focused on the Long Term
While the overall atmosphere seemed tense at times this year, the real estate sector remains an industry accustomed to taking a long-term view and weathering periods of geopolitical turbulence. Furthermore, major growth drivers remain very strong: whether it’s the explosive demand for data centers (conferences on this topic were, in fact, packed to capacity) or the infrastructure needed to address an aging population. This is undoubtedly why the vast majority of professionals left the Palais des Festivals feeling determined, while still taking the time to savor one last glass of rosé on the Croisette before flying back to their capitals, from Berlin to Baku.