Diary of an Agent at MIPIM 2024

Jamie Harris of Harris Associates reports on the key takeaways for Built to Rent, Co-living and purpose-built student accommodation (PBSA) from MIPIM, Cannes.

Jamie Harris from Harris Associates | BTR News
Jamie Harris from Harris Associates.

Last week, the great and the good of the property industry gathered in MIPIM for a global meet up to discuss ideas and network with new people. 

By Jamie Harris, Head of Student Accommodation Capital Markets, Harris Associates

While each year is important, 2024 seemed to have taken a greater meaning due to the economic and geopolitical uncertainty we have been witnessing over the past 18 months from unprecedented inflation to conflict. 

Buzz words of 2023, such as ‘Price Discovery’, ‘Yield Widening’, and ‘Distress’, did not make an appearance in any conversation I had over the three days at MIPIM. Investors, many of whom are sitting on vast swathes of capital, are now looking to spend, and do so meaningfully. 

Throughout last year, those investors active in the market wanted ‘digestible’ assets and portfolios, rather than the pervasive term ‘scale’ that global funds have sought up until recent times. MIPIM showed that we are starting to see a return to aggregation strategies, specifically in the student housing sector. 

New names from the US, Asia and the Middle East are all targeting this attractive sector in the UK market, with a sharper focus on core locations than ever before.  

For years, agents have been forecasting that at some point, funds will become less siloed in investing in only Build to Rent, only co-living or only student housing, and start to deploy across the Living sectors in the same strategy. We are now seeing this hypothesis being born out.

For instance, in recent weeks, BlackRock have invested in Build to Rent, Co-living and PBSA, all under the same umbrella. MIPIM has showed us that sovereign wealth funds, private equity funds and family offices want beds, and they are looking beyond only one avenue to achieve this. 

In a twist of fate, MIPIM highlighted that we are now starting to witness the UK pension funds re-emerging as major players in the PBSA market after a long hiatus. Up until a decade ago, UK Pension Funds were always the stalwart of the student accommodation market, purchasing long-leases to universities or nominations agreements, until the direct let market emerged and the private equity funds entered. 

Over the past few years, Build to Rent has been the asset class of choice, although this appears to have changed. It seems capital with lower returns are now targeting the student housing sector, an exciting prospect and one that may bring yields back down again in time. It remains to be seen the effect of this on the market, but it is a trend we are tracking closely. 

Change is afoot and the next 12 months will be an interesting ride.