MIPIM 2018: Despite being on two different sides of the Atlantic, two of the world’s most powerhouse cities, London and New York, are facing similar challenges.
The lack of affordability and their subsequent ability to attract and retain talent are issues that both are struggling with according to panellists at EG Global’s London vs New York debate on the London Stand at MIPIM yesterday.
“Both cities have a long way to go to make sure they are providing the number of homes needed to keep the economy ticking, keeping people coming and staying,” said Michael Allen, director of build to rent at Quintain, who has lived in London and New York. “PRS is helping to provide those more accessible homes and it will be part of the picture in London.”
Real estate in both cities will also have to adapt to the needs and wants of a new generation of millennial end users in order to be successful. This is both in the form of repurposing office buildings to be more attractive co-working spaces to prevent people from just working from home, and also by developing co-living and PRS concepts that deliver the level of service that is now being demanded.
“Institutional lenders are now getting comfortable with new concepts and that [co-working] is a market that is going to be very profitable going forward,” said Peter Orlic, real estate partner at Reed Smith.
The two markets also are twinned by their recent political instability caused by the surprise rise to presidency of Donald Trump and the vote to leave the European Union. Despite these both markets have seen most investors continue to progress with confidence.
“Is instability an issue [as a result of Trump]? Yes. Could it be the black swan event? Yes. but generally the market is still doing very well,” said Giacomo Barbieri, managing director and senior regional head of New York investments.
He said that instead of Trump, at present the main factors stifling his city’s progress were the Metropolitan Transportation Authority and the Port Authority of New York and New Jersey, which he cited as inadequate and had become “political footballs”.
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